<PAGE> 1
As filed with the Securities and Exchange Commission on December 31, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
CALIFORNIA MICROWAVE, INC.
(Exact name of registrant as specified in its charter)
-----------------
DELAWARE 94-1668412
(State of Incorporation) (I.R.S. Employer
Identification No.)
-----------------
1143 BORREGAS AVENUE
SUNNYVALE, CALIFORNIA 94089
(Address of principal executive offices)
-----------------
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
(Full title of the plan)
KENNETH J. WEES
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CALIFORNIA MICROWAVE, INC.
1143 BORREGAS AVENUE
SUNNYVALE, CALIFORNIA 94089
(408) 732-4000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
THOMAS Z. REICHER, ESQ.
CYDNEY POSNER, ESQ.
COOLEY GODWARD LLP
ONE MARITIME PLAZA, 20TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111-3580
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(1)(2) REGISTRATION FEE
------------------- ------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock and
related Common Stock 1,000,000 $8.437 $8,437,500 $2,346
Purchase Rights (par
value $.10)
Common Stock
interests in the
California Microwave (3) (3) (3) (3)
Tax-Deferred Savings
and Deferred Profit
Sharing Plan
</TABLE>
(1) The shares of Common Stock of California Microwave, Inc. (the
"Registrant") being registered consist of shares to be acquired in open
market purchases under the California Microwave Tax-Deferred Savings and
Deferred Profit Sharing Plan (the "Plan").
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rules 457(c) and 457(h) of the Securities
Act of 1933, as amended (the "Securities Act"). The price per share and
aggregate offering price are based upon the average of the high and low
prices of Registrant's Common Stock on December 28, 1998 as reported on
the Nasdaq National Market.
(3) In addition, pursuant to Rule 416(c) under the Securities Act, this
Registration Statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the Plan described herein.
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are hereby incorporated by reference into
this Registration Statement:
(a) The Registrant's latest annual report on Form 10-K for the fiscal
year ended June 30, 1998, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, filed pursuant to Section 13(a) of the Exchange Act;
(c) All other reports, if any, filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act since June 30, 1998; and
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A dated September 25, 1973, as amended by the
Form 8 dated February 19, 1993, as filed pursuant to the Exchange Act; the
description of Registrant's Common Stock Purchase Rights appearing in the
Registrant's Registration Statement on Form 8-A dated August 1, 1989; and any
amendment or report filed for the purpose of updating any such descriptions.
All reports and other documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered hereunder have been sold or which deregisters all securities
then remaining unsold under this registration statement, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such reports and other documents.
DESCRIPTION OF SECURITIES
Not Applicable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act. The Registrant's bylaws provide for indemnification of officers,
directors and employees, and the Company has entered into an indemnification
agreement with each officer and director of the Registrant (an "Indemnitee").
Under the bylaws and such indemnification agreements, the Registrant must
indemnify an Indemnitee to the fullest extent permitted by Delaware law for
losses and expenses incurred in connection with actions in which the Indemnitee
is involved by reason of having been a director or employee of the Registrant.
In certain circumstances, the Registrant is also obligated to advance expenses
an Indemnitee may incur in connection with such actions before any resolution of
the action, and the Indemnitee may sue to enforce his or her right to
indemnification or advancement of expenses.
The Registrant also maintains an insurance policy insuring its directors
and officers against liability for certain acts and omissions while acting in
their official capacities.
As permitted by section 102 of the Delaware General Corporation Law, the
Registrant's certificate of incorporation eliminates a director's personal
liability for monetary damages to the Registrant and its stockholders arising
from a breach or alleged breach of a director's fiduciary duty, except for
liability under section 174 of the Delaware General Corporation Law or liability
for any breach of the director's duty of loyalty to the Registrant or its
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, or for any transaction
from which the director derived an improper personal benefit. The effect of this
provision in the certificate of incorporation is to eliminate the rights of the
Registrant and its stockholders (through
<PAGE> 4
stockholders' derivative suits on behalf of the Registrant) to recover monetary
damages against a director for breach of fiduciary duty as a director (including
breaches resulting from negligent or grossly negligent behavior) except in the
situations described above.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- --------
<S> <C>
4.1* Restated Certificate of Incorporation of the Company.
4.2** Bylaws of the Registrant.
4.3+ California Microwave, Inc. Tax-Deferred Savings and Deferred
Profit Sharing Plan, with Amendments.
4.4+ California Microwave, Inc. Tax-Deferred Savings and Deferred
Profit Sharing Plan Trust Agreement, with Amendments.
23.1 Consent of Ernst & Young LLP, independent auditors.
24.1 Power of Attorney is contained on the signature pages.
</TABLE>
UNDERTAKING PURSUANT TO ITEM 8(b). The Registrant undertakes to have the Plan
and all amendments to the Plan submitted to the Internal Revenue Service in a
timely manner and to make all changes required by the Internal Revenue Service
in order to maintain the qualification of the Plan under section 401 of the
Code.
- ---------------------
* Filed as an exhibit to the Registrant's Form 8, dated February 19, 1993,
constituting Amendment No. 1 to the Registrant's Registration Statement on
Form 8-A for the Common Stock, and incorporated herein by reference.
** Filed as an exhibit to the Company's Form 10-K for its fiscal year ended
June 30, 1994, and incorporated herein by reference.
+ Management contract or compensatory plan or arrangement.
UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
<PAGE> 5
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the issuer pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
<PAGE> 6
The Plan. Pursuant to the requirements of the Securities Act of 1933, as
amended, the California Microwave, Inc. Administrative Committee, the
administrator of the Plan, has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Sunnyvale, State of California, on December 29, 1998.
CALIFORNIA MICROWAVE TAX-DEFERRED
SAVINGS AND DEFERRED PROFIT SHARING PLAN
By: /s/ Kenneth J. Wees
---------------------------------------
Title: Committee Member
-----------------------------------
<PAGE> 7
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sunnyvale, State of
California, on December 29, 1998.
By: /s/ Frederick D. Lawrence
-----------------------------------------
Frederick D. Lawrence
Title: President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Frederick D. Lawrence and Kenneth J.
Wees, and each or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Frederick D. Lawrence President, Chief Executive December 29, 1998
- ------------------------------------ Officer and Chairman of the
Frederick D. Lawrence Board (Principal Executive
Officer and Director)
/s/ Donna S. Birks Chief Financial Officer December 29, 1998
- ------------------------------------ (Principal Financial and
Donna S. Birks Accounting Officer)
/s/ Leslie G. Denend Director December 29, 1998
- ------------------------------------
Leslie G. Denend
/s/ George A. Joulwan Director December 29, 1998
- ------------------------------------
George A. Joulwan
/s/ William B. Marx, Jr. Director December 29, 1998
- ------------------------------------
William B. Marx, Jr.
/s/ Terry W. Ward Director December 29, 1998
- ------------------------------------
Terry W. Ward
/s/ Fredrick W. Whitridge, Jr. Director December 29, 1998
- ------------------------------------
Fredrick W. Whitridge, Jr.
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
4.1* Restated Certificate of Incorporation of the Company.
4.2** Bylaws of the Registrant.
4.3+ California Microwave, Inc. Tax-Deferred Savings and Deferred Profit
Sharing Plan, with Amendments
4.4+ California Microwave, Inc. Tax-Deferred Savings and Deferred Profit
Sharing Plan Trust Agreement, with Amendments
23.1 Consent of Ernst & Young LLP, independent auditors.
24.1 Power of Attorney is contained on the signature pages.
</TABLE>
* Filed as an exhibit to the Registrant's Form 8, dated February 19, 1993,
constituting Amendment No. 1 to the Registrant's
* Registration Statement on Form 8-A for the Common Stock, and
incorporated herein by reference.
** Filed as an exhibit to the Company's Form 10-K for its fiscal year ended
June 30, 1994, and incorporated herein by reference.
+ Management contract or compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 4.3
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
AND TRUST AGREEMENT
(As Amended and Restated Effective July 1, 1989)
THIS TRUST AGREEMENT (the "Agreement") is made and entered into by
and between CALIFORNIA MICROWAVE, INC. (Employer) and BANK OF AMERICA, N.T. &
S.A. (Trustee).
ARTICLE 1
NAME, EFFECTIVE DATE, PURPOSE AND CONSTRUCTION
1.1 Plan Name
The Plan set forth in this Agreement shall be designated
as the CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS AND DEFERRED PROFIT SHARING
PLAN (the "Plan") and TRUST AGREEMENT.
1.2 Effective Date
(a) In General
The Effective Date of this amended and restated Plan and
Trust Agreement shall be July 1, 1989.
(b) Specific Articles
Notwithstanding the above, certain Articles within this
Plan and Trust Agreement are effective as of the dates specified within those
Articles. In addition, the following Articles have the following specific
Effective Dates:
(i) Article 4.1 shall be effective July 1,
1987.
(ii) Article 4.2(a) shall be effective July 1,
1987.
(iii) Article 4.4 shall be effective July 1,
1987.
(iv) Articles 4.5 - 4.9 shall be effective July
1, 1987.
(v) Article 5.3(a) shall be effective July 1,
1987.
(vi) Article 6.4 shall be effective July 1,
1991.
1.3 Purpose and History
(a) Purpose
The Plan and Trust Agreement are intended to qualify as a
Profit Sharing and 401(k) Plan under Code Sections 401(a) and 501(a) and are
created and maintained for the exclusive benefit of
1-1
<PAGE> 2
Eligible Employees of the Employer and Member Employers and their Beneficiaries
to enable them to share in Employer and Member Employer profits, to provide
Eligible Employees with a means to accumulate retirement savings, to provide
retirement funds, and to provide benefits in the event of the death or
Disability of the Employee.
(b) History
The original Plan and Trust Agreement was first effective
July 1, 1984 and was subsequently amended on April 22, 1986 and on August 3,
1988.
(c) Purposes of Restatement
The principal purpose of this amendment and restatement is
to comply with the requirements of TRA '86 and all regulations in effect by the
time of this amendment and restatement. Further, this amendment and restatement
is made to allow the addition of Employer Profit Sharing Contributions effective
for the Fiscal Year ended June 30, 1994 and to amend the Plan name.
1.4 Construction
The following miscellaneous provisions shall apply in the
construction of this Plan and Trust Agreement:
(a) State Jurisdiction
All matters respecting the validity, effect,
interpretation and administration of this Plan and Trust Agreement shall be
determined in accordance with the laws of the State of Delaware except where
preempted by ERISA or other federal statutes.
(b) Gender
Wherever appropriate, words used in the singular may
include the plural or the plural may be read as the singular, the masculine may
include the feminine, and the neuter may include both the masculine and the
feminine.
(c) Application of ERISA and Code References
All references to sections of ERISA or the Code, or any
regulations or rulings thereunder, shall be deemed to refer to such sections as
they may subsequently be modified, amended, replaced or amplified by any federal
statutes, regulations or rulings of similar application and import enacted by
the Government of the United States or any duly authorized agency of the
Government.
(d) Enforceable Provisions Remain Effective
If any provision of this Plan and Trust Agreement shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions of the Plan shall continue to be fully effective.
1-2
<PAGE> 3
(e) Headings
Headings are inserted for reference only and constitute no
part of the construction of this Agreement.
1.5 Employment Relationship Not Affected
Nothing in the Plan or Trust Agreement shall be deemed a
contract between the Employer, any Member Employers, any Associated Employers
and any Employee, nor shall the rights or obligations of the Employer, any
Member Employers, any Associated Employers or any Employee to continue or
terminate employment at any time be affected hereby.
1.6 Terminated Participants Not Affected
Notwithstanding anything to the contrary contained herein,
any person who was a Participant under the Plan prior to the effective date of
this amendment and restatement and who is not both a Participant and an Eligible
Employee under the amended and restated Plan document, as it is made effective,
will have his rights and remedies, if any, determined by the terms and
conditions of the Plan in effect as of the date his participation ceased or the
date he ceased to be an Eligible Employee, whichever has occurred first.
1-3
<PAGE> 4
ARTICLE 2
DEFINITIONS
Definitions
Terms which are used only in a single Article (beginning with Article
3) are generally defined at the beginning of that Article. Article 2 lists the
terms so defined. The following words and phrases are used throughout this Trust
Agreement and are defined below:
2.1 "Account" means the aggregate of all records maintained by the
Committee for purposes of determining a Participant's or Beneficiary's interest
in the Trust Fund and shall include the Employer Account and Employee Account,
as adjusted by such other amounts properly credited or debited to such Account.
Each sub-account is defined alphabetically in Article 2.
2.2 "Adjustment Factor" means the cost of living factor prescribed by
the Secretary of the Treasury under Code Section 415(d) for years beginning
after December 31, 1987, as applied to such items and in such manner as the
Secretary shall provide. For purposes of the OBRA '93 annual compensation limit
under Section 401(a)(17) of the Code, the Adjustment Factor shall be applied as
provided in Section 401(a)(17)(B) of the Code for calendar years after 1994.
2.3 "Associated Employer" means any corporation which is a member of
a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer, any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer,
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer, any other entity required to be aggregated with the Employer pursuant
to regulations under Code Section 414(o) or any other entity (whether or not
incorporated) so designated by the Employer.
2.4 "Allowable Compensation" for purposes of determining the
Top-Heavy minimum contributions, and for purposes of determining the limitations
on allocations pursuant to Article 5.3, means the total of all wages, salaries,
fees for professional services and other amounts paid by the Employer or a
Member Employer during a Limitation Year to a Participant for services actually
rendered in the course of employment including (but not limited to) bonuses,
overtime, commissions and incentive compensation, but excluding amounts which
are contributed to a retirement plan, deferred compensation plan or other plan
and which are not included as taxable income for such year, or amounts which are
not deemed to be income for current services rendered such as amounts realized
from the sale, exercise or exchange of Employer or Member Employer stock or
stock options. Allowable Compensation shall not include amounts which a
Participant elected to have the Employer or a Member Employer
<PAGE> 5
contribute on his behalf for the Fiscal Year as a salary deferral contribution
under Article 4.5. Notwithstanding the foregoing, amounts earned in the
Limitation Year but paid during the first few weeks of the next year because of
the timing of pay periods and pay days may be included on a uniform and
consistent basis in the Allowable Compensation of all similarly situated
Participants for the Limitation Year. In addition, for Limitation Years
beginning before December 31, 1991, the requirement that the amounts accrued
must be paid in the first few weeks of the next year shall not apply.
2.5 "Alternate Payee" means any spouse, former spouse, child or other
dependent of a Participant recognized by a domestic relations order as having a
right to receive all, or a portion of, a Participant's benefits under the Plan.
2.6 "Beneficiary" means any person designated by a Participant to
receive benefits upon the death of such Participant, subject to the provisions
of Article 0.
2.7 "Board" shall mean the Board of Directors of the Employer.
2.8 "Break in Service" means for purposes of Article 6, a Fiscal Year
and for purposes of Article 3 an Eligibility Computation Period in which an
Employee is credited with no Hours of Service. Effective July 1, 1993, a Break
in Service means a one-year Period of Severance.
2.9 "Code" means the Internal Revenue Code of 1986, as amended (and
regulations issued thereunder).
2.10 "Committee" means the Administrative Committee designated under
Article 12.
2.11 "Date of Hire" means the date on which an Employee first
performs an Hour of Service for the Employer or a Member Employer.
2.12 "Deferred Retirement Date" means the date of actual retirement
from the Employer or a Member Employer by a Participant who remains in the
employ of the Employer or a Member Employer after attaining his Normal
Retirement Date.
2.13 "Determination Date" means, with respect to any Fiscal Year, the
last day of the preceding Fiscal Year, except that in the case of the first
Fiscal Year of the Plan, the term means the last day of such first Fiscal Year.
If the Employer or Member Employer maintains two or more qualified plans which
have different fiscal years and which either must be aggregated or which are
allowed to be aggregated when determining top-heaviness pursuant to this Trust
Agreement, the Determination Date to be used for this Plan for aggregation
purposes shall be the Determination Date which falls within the same calendar
year as the determination dates for all such plans which are required or
permitted to be aggregated.
2.14 "Direct Rollover" means a payment by the Plan to the eligible
retirement plan specified by a Distributee.
2.15 "Disability" means the permanent incapacity of a Participant, by
reason of physical or mental illness, to perform his usual duties for the
Employer or Member Employer, resulting in termination of his
<PAGE> 6
service with the Employer or Member Employer. Disability shall be determined by
the Committee in a uniform and nondiscriminatory manner after consideration of
such evidence as it may require, which shall include a report of such physician
or physicians as it may designate.
2.16 "Distributee" means an Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the Alternate Payee under a
qualified domestic relations order, as defined in Section 414(p) of the Code,
are distributees with regard to the interest of the spouse or former spouse.
2.17 "Eligible Employee" has the meaning set forth in Article 2.
2.18 "Eligible Participant" means:
(a) An Eligible Employee who completed at least 1,000
Hours of Service in the Fiscal Year and who is an Employee and a Participant on
the last day of the Fiscal Year, or
(b) A Participant who was an Eligible Employee, and who
terminated employment during the Fiscal Year due to death or Disability, or
after having reached his Normal Retirement Date, or
(c) In the event the Plan does not meet the coverage
requirements of Code Section 410(b) for a Fiscal Year, and to the extent the
Committee determines it necessary to meet such requirements, each other Eligible
Employee who:
(i) Is a Participant at any time during the
year, and/or
(ii) Completes a number of Hours of Service (as
determined by the Committee) during the Fiscal Year, which is less than 1,000.
(d) Solely for purposes of Articles 2(a) and (b),
Participants who were Eligible Employees at any time during the Fiscal Year but
did not meet the requirements of (a) or (b) above.
2.19 "Eligible Rollover Distribution" means any distribution of all
or any portion of the balance to the credit of the Distributee, 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 Distributee or the joint
lives (or joint life expectancies) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a 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 includible in gross income
(determined without regard to the exclusion for net unrealized appreciation with
respect to Employer securities).
2.20 "Eligible Retirement Plan" means an individual retirement
account described in Section 408(a) of the Code, an annuity plan described in
Section 403(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee'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.
<PAGE> 7
2.21 "Employee" means any person in the Service of the Employer or
Member Employer including officers, but excluding directors who are not in the
Employer's or Member Employer's employ in any other capacity. Sub-categories of
"Employee" are defined alphabetically in Article 2.
2.22 "Employee Account" means that portion of an Account attributable
to a Participant's Salary Deferral Account and Rollover Account, including net
earnings on such accounts.
2.23 "Employer" means CALIFORNIA MICROWAVE, INC. and such of its
successors or assigns as may expressly adopt this Plan and Trust Agreement and
agree in writing to continue this Plan and Trust.
2.24 "Employer Account" means that portion of an Account attributable
to Employer and Member Employer contributions and Forfeitures and earnings on
such accounts. A Participant's Employer Account shall include such Participant's
Matching Account, Non-Elective Account and Top-Heavy Account. Effective July 1,
1993, the Employer Account will also include the Profit Sharing Account and
earnings on such accounts.
2.25 "Employment Commencement Date" means each of the following:
(i) The date on which an Employee first performs an Hour
of Service for an Employer with respect to which such Employee is compensated or
entitled to compensation by the Employer.
(ii) In the case of an Employee who incurs a Period of
Severance and who is subsequently reemployed by the Employer, the term
Employment Commencement Date means the first day following such Period of
Severance on which such Employee first performs an Hour of Service for the
Employer with respect to which he is compensated or entitled to compensation.
2.26 "Entry Date" means January 1, April 1, July 1, October 1 and
such other dates as the Committee may decide. For purposes of the contributions
of Article 2 Entry Date means the first day of each month.
2.27 "ERISA" means the Employee Retirement Income Security Act of
1974.
2.28 "Fiscal Year" means the accounting year of the Plan and Trust,
which is the 12-consecutive month period ending June 30.
2.29 "Forfeiture" is described in Article 2.
2.30 "General Trust Fund" means that portion of the Trust Fund other
than property and income held as or for segregated Accounts or under separate
investment funds under the provisions of this Trust Agreement.
2.31 "Hour of Service" has the meaning set forth in Article 2.
2.32 "Inactive Participant" means a Participant who remains an
Employee, but who ceases to be an Eligible Employee because of a change in
employment status. Accounts of Inactive Participants shall share in allocations
of contributions and Forfeitures to the extent provided in Article 5, and such
Accounts shall continue to be adjusted by other amounts properly credited or
debited to such Accounts pursuant to Article 7. Inactive Participants shall not
be permitted to have salary deferral contributions made on their behalf.
2.33 "Key Employee" means, with respect to a Fiscal Year, any
Employee or former Employee (including any deceased Employee) who at any time
during the "testing period", consisting of the Fiscal Year
<PAGE> 8
containing the Determination Date and the four preceding Fiscal Years, is or
was:
(a) Officer
An officer, or an Employee with the authority
of an officer, of the Employer or Member Employer with Testing Compensation of
more than 50% of the applicable dollar limit under Code Section 415(b)(1)(A) for
the applicable Fiscal Year. However, no more than 50 Employees (or if less, the
greater of 3 Employees or 10% of the total number of Employees, including Leased
Employees, who performed services for the Employer or Member Employer at any
time during the "testing period") shall be treated as officers. In addition,
such Employees who meet the requirements of this paragraph and who had the
largest annual Testing Compensation from the Employer or Member Employer in any
Fiscal Year during the "testing period" shall first be counted as officers,
without regard to whether they are Key Employees for any other reason; or
(b) Owner
(i) A 5% owner; or
(ii) A 1% owner with annual Testing
Compensation from the Employer or Member Employer for the applicable Fiscal Year
of more than $150,000 (multiplied by the Adjustment Factor);
(iii) A 1/2% owner who (1) is one of the 10
Employees who have the largest ownership interest in the Employer or Member
Employer, (2) has annual Testing Compensation from the Employer or Member
Employer which is greater than the dollar limitation under Code Section
415(c)(1)(A) for the applicable Fiscal Year, and (3) does not meet the criteria
in (i) or (ii). For purposes of this (iii), if two Employees have the same
ownership interest in the Employer or Member Employer during the "testing
period", then the Employee with the greater annual Testing Compensation from the
Employer or Member Employer for the Fiscal Year during which the ownership
interest existed shall be considered to have a larger ownership interest in the
Employer or Member Employer.
(c) Beneficiary
A Beneficiary of a deceased Key Employee shall
be considered to be a Key Employee, and a Beneficiary of a deceased Non-Key
Employee shall be considered a Non-Key Employee. Notwithstanding the above, the
Committee shall be guided by the Code in determining Key Employees for any
Fiscal Year and shall maintain records adequate to determine Key Employees for
any Fiscal Year.
2.34 "Leased Employee" means any individual who would not otherwise
be considered an Employee but who has provided services to the Employer or
Member Employer of a type historically performed by employees in the Employer's
or Member Employer's field of business, pursuant to an agreement between the
Employer or Member Employer and any other entity, on a substantially full-time
basis for a period of at least one year. However, effective July 1, 1987, Leased
Employees will not be considered Employees if they constitute less than 20% of
the Employer's or Member Employer's Non-Highly Compensated Employees and if they
are covered by
<PAGE> 9
a plan described in Code Section 414(n)(5).
2.35 "Matching Account" means that portion of an Account attributable
to Employer or Member Employer matching contributions and attributable
Forfeitures.
2.36 "Member Employer" shall mean any Associated Employer which has
adopted this Plan in accordance with the terms and conditions set forth herein.
2.37 "Non-Elective Account" means that portion of an Account
attributable to the Employer's or Member Employer's Non-Elective contributions
as provided in Article 2.
2.38 "Non-Key Employee" means any Employee who is not a Key Employee,
including Employees who are former Key Employees.
2.39 "Normal Retirement Date" means the date of a Participant's 65th
birthday.
2.40 "OBRA '93" means the Omnibus Budget Reconciliation Act of 1993.
2.41 "Owner" means any person who owns (within the meaning of Code
Sections 318 and 416(i)(1)(B)), or has owned within the four Fiscal Years prior
to the Fiscal Year under consideration, a portion of the outstanding stock or
voting power of the Employer or Member Employer. The ownership percentage of a
"5%" Owner means greater than a 5% interest, that of a "1%" Owner means greater
than a 1% interest and that of a "1/2%" Owner means greater than a 1/2%
interest.
2.42 "Participant" means any Employee or former Employee who has
entered the Plan in accordance with Article 3, and whose Account, if any,
hereunder has not subsequently been liquidated.
2.43 "Period of Service" shall mean the period of time commencing on
the first day an Employee is credited with an Hour of Service on his Employment
Commencement Date and ending on his Severance Date. Periods of Service shall be
measured under the elapsed time method as authorized under regulations
promulgated by the Secretary of Labor.
Periods of Service shall also be subject to the following:
(i) If an Employee severs from service by
reason of quit, discharge or retirement and returns to service within
twelve (12) months, that Period of Severance shall be considered as
part of that Employee's Period of Service. An Employee is considered
to have returned to service on his new Employment Commencement Date.
(ii) Notwithstanding the rule in subparagraph (i)
above, if an Employee severs from service by reason of quit,
discharge or retirement during a period of absence from service of
twelve (12) months or less, which period of absence occurred for
reasons other than a quit, discharge or retirement, such Period of
Severance shall be considered as part of the Employee's Period of
Service only if such Employee performs an Hour of Service within
twelve (12) months of the date on which the Employee was first absent
from service.
(iii) If an Employee is employed by an Affiliate,
the period of such
<PAGE> 10
employment shall be considered a part of the Employee's Period of
Service only for the period during which such Affiliate and the
Employers are members of a controlled group of corporations or are
under common control.
(iv) If an Employee is employed by a company
(hereafter, "Predecessor Company") heretofore or hereafter merged or
consolidated or otherwise acquired by an Employer, or all or a
substantial part of the assets or business of which have been or
shall be acquired by an Employer, then the period of such employment
shall be considered a part of the Employee's Period of Service:
(A) to the extent such employment
with the Predecessor Company is required to be treated as employment
with the Employer under regulations prescribed by the Secretary of
Treasury; or
(B) to the extent granted by the
Board in its sole discretion effected on a nondiscriminatory basis as
to all persons similarly situated.
2.44 "Period of Severance" means the period of time commencing on an
Employee's Severance Date and ending on the Employee's Employment Commencement
Date, if any, following thereafter. However, if an Employee severs from service
because 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 adoption of the
child by the Employee, or for the purpose of caring for such child by the
Employee for a period immediately following birth or placement, the one year
period following the Employee's Severance Date shall not constitute a Period of
Severance for purposes of determining whether the Employee has incurred a Break
in Service, provided that the Employee provides the Committee with such timely
information as the Committee may reasonably require to establish that the
absence is for a reason described in this Article 2.
2.45 "Plan" means the Plan created by this Trust Agreement.
2.46 "Plan Administrator" means the Administrative Committee.
2.47 "Plan Compensation" for any Fiscal Year, for purposes of Article
4.5 means all amounts paid or accrued by the Employer or Member Employer to an
Eligible Employee with respect to services rendered during such Fiscal Year
including all amounts which a Participant elected to have the Employer or Member
Employer contribute on his behalf for the Fiscal Year as a salary deferral
contribution. Plan Compensation shall not include reimbursement for relocation
or other expenses, stock transactions of any sort, royalty payments, foreign
service allowances or amounts contributed or credited to any non-qualified
deferred compensation arrangement. Notwithstanding the above, Plan Compensation
shall not exceed $200,000 multiplied by the Adjustment Factor. For Fiscal Years
beginning on or after January 1, 1994 Plan Compensation shall not exceed the
OBRA '93 annual compensation limit of $150,000, multiplied by the Adjustment
Factor. The total of the Plan Compensation received by (1) a 5% Owner and/or a
highly compensated employee who is one of the 10 most highly compensated
<PAGE> 11
Employees, (2) his spouse, and (3) his lineal descendants, who have not attained
the age of 19 by the end of the Fiscal Year, shall not exceed $200,000 ($150,000
for Fiscal Years beginning on or after January 1, 1994) multiplied by the
Adjustment Factor.
Notwithstanding the foregoing, effective July 1, 1993, for purposes of any
allocation to the Profit Sharing Account of any Participant pursuant to Article
5.2(c), Plan Compensation means the Participant's hourly rate multiplied by
2,080 or such actual hours worked subsequent to meeting the eligibility
requirement set forth in Article 3.2(c) if less than 2,080 hours in any Fiscal
Year. Such amount shall be adjusted for leaves of absences during the Fiscal
Year. Plan Compensation shall further be adjusted for Service while not a
Participant in the Plan.
2.48 "Profit Sharing Account" means that portion of an Account
resulting from Employer and/or Member Employer Profit Sharing Contributions and
attributable Forfeitures.
2.49 "Qualified Domestic Relations Order" ("QDRO") has the meaning
set forth in Code Section 414(p).
2.50 "REA" means the Retirement Equity Act of 1984.
2.51 "Rollover Account" means that portion of an Account attributable
to an Employee's rollover contributions and to the direct transfer of benefits
to this Plan from another qualified plan on an Employee's behalf.
2.52 "Salary Deferral Account" means that portion of an Account
attributable to salary deferral contributions.
2.53 "Service" has the meaning set forth in Article 10.
2.54 "Severance Date" means, for an Employee, the earlier of (i) the
date on which he quits, retires, is discharged or dies, or (ii) the date on
which falls the first anniversary of the first day of his period of absence from
service for reasons other than a quit, retirement, discharge or death, such as
vacation, holiday, sickness, disability, leave of absence or lay off.
2.55 "Spousal Consent" means the revocable written consent of the
Participant's spouse to an action taken by the Participant hereunder which
requires such consent under the terms of the Plan; provided that:
(i) Such consent shall acknowledge the
Beneficiary designated by the Participant and the effect of such
consent;
(ii) Any change in the designated Beneficiary,
other than to make the spouse the Beneficiary of 100% of the
Participant's vested Account, shall require a new spousal consent;
(iii) Such consent shall be effective only with
respect to that spouse;
(iv) Such consent shall be witnessed by a Plan
representative or a notary public; and
(v) Such written consent shall not be required if
it is established to the satisfaction of a Plan representative that
such consent cannot be obtained because (1) there is no spouse or,
(2) the spouse cannot be located, or (3) such other circumstances
exist as may be prescribed by
<PAGE> 12
applicable regulations.
2.56 "TEFRA" means the Tax Equity and Fiscal Responsibility Act of
1982.
2.57 "Testing Compensation" for purposes of determining (1) whether
an Employee is a Key Employee, (2) whether an Employee is a Highly Compensated
Employee, and (3) each Participant's Contribution Percentage and Deferral
Percentage pursuant to Articles 4.1(c) and 4.1(d), means Allowable Compensation,
except as adjusted as follows:
(a) Amounts contributed by the Employer pursuant to a
salary reduction agreement which are not includable in the Employee's income
under Code Section 125, 402(a)(8), 402(h) or 403(b) shall be included.
(b) Amounts attributable to periods during which an
individual was not eligible to be a Participant shall be excluded for purposes
of determining his Contribution Percentage and Deferral Percentage under Article
4.1(c) and Article 4.1(d).
Testing Compensation shall not exceed $200,000, multiplied by the Adjustment
Factor. For Fiscal Years beginning on or after January 1, 1994, Testing
Compensation shall not exceed the OBRA '93 limit of $150,000, multiplied by the
Adjustment Factor. The total of the Testing Compensation received by (1) a
highly compensated employee in a group consisting of the 10 most highly
compensated Employees and/or a 5% Owner and (2) his spouse, and (3) his lineal
descendants who have not attained the age of 19 by the end of the Fiscal Year,
shall not exceed $200,000 ($150,000 for Fiscal Years beginning on or after
January 1, 1994), multiplied by the Adjustment Factor.
2.58 "Top-Heavy Account" means that portion of an account
attributable to Employer and Member Employer Top-Heavy contributions as required
in Article 4.2.
2.59 "Top-Heavy Plan" means the Plan during a Fiscal Year in which
the aggregate value of the Accounts of Key Employees exceeds 60% of the
aggregate value of all Accounts under the Plan as of the Determination Date for
such Fiscal Year. For purposes of determining the value of Employees' Accounts
in the Plan, the following shall be excluded: (1) rollover contributions from a
non-related employer; (2) the Accounts of Participants who have not performed
any services for the Employer or Member Employers within the five year period
ending on the Determination Date; and (3) the Account of any individual who was
a Key Employee with respect to the Plan for any prior Fiscal Year but is not a
Key Employee with respect to the Plan for the applicable Fiscal Year. For
purposes of determining the aggregate value of Accounts and/or accrued benefits
under this Article, distributions made within a 5 year period ending on the
Determination Date and Participants' voluntary contributions shall be included
to the extent required by applicable law and regulation.
(a) Required Aggregation To Determine Top-Heaviness
If (1) a Key Employee is a Participant in this Plan for
any Fiscal Year and the Employer or Member Employer maintains or has maintained
any other plans (including terminated plans) in which a Key Employee is a
participant within the 5 year period ending on the Determination Date, or (2)
the Employer or
1-12
<PAGE> 13
Member Employer maintains or has maintained during this period any other plans
(including terminated plans) which must be combined with this Plan in order to
meet the requirements of Code Sections 401(a)(4) or 410 for any Fiscal Year,
then this Plan's top-heaviness shall be determined for such Fiscal Year by
aggregating the Accounts and/or present value of accrued benefits of
participants in this Plan and all other such plans.
(b) Permissive Aggregation To Determine Top-Heaviness
If the Employer or Member Employer maintains or has
maintained any plans (including terminated plans) other than one described in
(a) above, the Committee may aggregate the accounts and/or present value of
accrued benefits of participants in any such plan with those of this Plan to
determine whether this Plan is a Top-Heavy Plan for any Fiscal Year, provided
that the requirements of Code Sections 401(a)(4) and 410 would continue to be
met by treating this Plan, any plan that must be aggregated with the Plan under
(a) above and any other plan referred to in this sentence as one unit. In
determining top-heaviness and the aggregate value of Accounts and/or accrued
benefits under this Article, the Committee shall be guided by the provisions of
the Code, including but not limited to Code Section 416(g)(3)(B).
2.60 "TRA '86" means the Tax Reform Act of 1986.
2.61 "Trust" means the legal entity created by this Trust Agreement
as part of the Plan.
2.62 "Trust Agreement" means this Agreement.
2.63 "Trust Fund" means all property and income held by the Trustee
under the Trust Agreement.
2.64 "Trustee" means BANK OF AMERICA, N.T. & S.A. and any duly
appointed successor, as provided in Article 14.
2.65 "Valuation Date" means the last day of each Fiscal Year and such
other date as may be designated as provided in Article 7 for the revaluation of
Participants' Accounts.
2.66 List of Terms Defined Elsewhere: Article
(a) "Annual Addition" 5.1
(b) "Average Contribution Percentage" 4.1
(c) "Average Deferral Percentage" 4.1
(d) "Contribution Percentage" 4.1
(e) "Deferral Percentage" 4.1
(f) "Eligible Employee" 3.1
(g) "Eligibility Computation Period" 3.1
(h) "Employer Matching Contribution 4.2
(i) "Employer Profit Sharing Contribution 4.2
(j) "Excess Contribution" 4.1
(k) "Excess Deferral" 4.1
1-13
<PAGE> 14
(l) "Family Group" 4.1
(m) "Highly Compensated Employee" 4.1
(n) "Limitation Account" 5.1
(o) "Limitation Year" 5.1
(p) "Non-Elective Contribution" 4.2
(q) "Non-Highly Compensated Employee" 4.1
(r) "Restoration of Contribution" 4.2
(s) "Salary Deferral Contribution" 4.5
(t) "Top Heavy Minimum Contribution" 4.2
(u) "Top Paid Group" 4.1
(v) "Year of Eligibility Service" 3.1
<PAGE> 15
ARTICLE 3
ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION
3.1 Definitions
(a) "Eligible Employee" means any Employee of the Employer
or Member Employer, except:
(i) An Employee whose compensation and
conditions of employment are established by the terms of a collective
bargaining agreement to which the Employer or any Member Employer is
a party and which does not specifically provide for coverage of such
Employee under the Plan.
(ii) Leased Employees.
(b) "Eligibility Computation Period" means the 12
consecutive month period beginning with the Employee's Employment Commencement
Date and each anniversary thereafter.
3.2 Participation
(a) Continuing Plan Participation
Each individual who was an Eligible Employee and a
Participant in the Plan immediately preceding the effective date of this
amendment and restatement shall continue to be a Participant on such effective
date.
(b) Plan Entry
(i) Each Eligible Employee who is a temporary
or contract employees shall become a Participant in the Plan on the Entry Date
coinciding with or next following the last day of the Eligibility Computational
Period in which he completes 1,000 Hours of Service.
(ii) Each other Eligible Employee shall become
a Participant in the Plan on the Entry Date coinciding with or next following
the completion of six (6) full calendar months of continuous service.
(c) Eligibility For Profit Sharing Contributions
The requirements of this Article 3.2(c) shall
apply to participation in the allocation of Employer Profit Sharing
Contribution. Each Eligible Employee shall become a Participant on the date
following the last day of the Eligibility Computation Period in which he
completes a 1 year Period of Service.
(d) Period of Severance for Participation
If an Employee has a 12-month Period of
Severance before satisfying the eligibility requirements of this Article 3.2,
Service before such Period of Severance will not be taken into account.
3-1
<PAGE> 16
3.3 Beneficiary Designation
(a) Designation Procedure
Each Eligible Employee, upon becoming a
Participant, shall designate a Beneficiary or Beneficiaries to receive benefits
under the Plan after his death. A Participant may change his Beneficiary
designation at any time. Each Beneficiary designation shall be in a form
prescribed by the Committee and will be effective only when filed with the
Committee during the Participant's lifetime. Each Beneficiary designation filed
with the Committee will cancel all previously filed Beneficiary designations.
(b) Spousal Consent
In the event that a married Participant wishes
to designate a Beneficiary other than his spouse, such designation shall include
Spousal Consent (as defined in Article 2) and such Spousal Consent shall be
required each time a Participant changes his Beneficiary to name a non-spousal
Beneficiary.
(c) Lack of Designation
In the absence of a valid designation by an
unmarried Participant or if no designated Beneficiary survives an unmarried
Participant, his interest shall be distributed to his estate. In the absence of
a valid designation by a married Participant or if no designated Beneficiary
survives a married Participant, his interest shall be distributed to his
surviving spouse, or if there is no surviving spouse, then to his estate.
3.4 Change from Ineligible to Eligible Employee
An Employee who is excluded under Article 3.1 for any
period shall be eligible to participate on the first date he is no longer
excluded, provided that the requirements of Article 3.2 have been satisfied, but
not earlier than the Entry Date on which he would have entered the Plan had he
not been excluded under Article 3.1.
3.5 Former Employee Rehired
A former Employee who had completed the eligibility
requirements of Article 3.2 with the Employer or any Member Employer and who is
reemployed by the Employer or any Member Employer shall become a Participant as
of the date of reemployment as an Eligible Employee, but not earlier than the
Entry Date on which he would have entered the Plan had his employment not
terminated.
3.6 Committee Determines Eligibility
Compliance with the eligibility requirements shall be
determined by the Committee, which shall also inform each Employee of his
becoming a Participant. The Committee shall provide each Participant with a
summary plan description not later than 90 days following the date he enters the
Plan or within such other period as may be prescribed by applicable law or
regulation.
<PAGE> 17
ARTICLE 4
CONTRIBUTIONS
4.1 Definitions
(a) "Average Contribution Percentage" ("ACP") means the
average of the Contribution Percentages of a group of Eligible Participants.
(b) "Average Deferral Percentage" ("ADP") means the
average of the Deferral Percentages of a group of Eligible Participants.
(c) "Contribution Percentage" means the ratio (expressed
as a percentage) of matching contributions allocated to a Participant's Accounts
for such Fiscal Year, to (ii) his Testing Compensation for such Fiscal Year. The
determination and treatment of the Contribution Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.
(d) "Deferral Percentage" means the ratio (expressed as a
percentage) of (i) the contributions made under the Plan to a Participant's
Salary Deferral and Non-Elective Accounts for such Fiscal Year, including Excess
Deferral Amounts, to (ii) such Participant's Testing Compensation for such
Fiscal Year. The determination and treatment of the Deferral Percentage of any
Participant shall also satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
(e) "Excess Contributions" mean salary deferral
contributions that exceed those permitted by the non-discrimination tests in
Article 4.5(c).
(f) "Excess Deferrals" mean salary deferral contributions
for a calendar year that exceed the dollar limit provided under Article 4.5(a).
If salary deferral contributions were made on behalf of a Participant under two
or more plans during a calendar year and the sum of these amounts exceeded the
dollar limit in Article 4.5(a), then the Committee shall establish a claims
procedure so that the Participant can designate the amounts and the plans from
which such Excess Deferrals shall be returned. The Participant's claim shall be
in writing; shall be submitted to the Plan Administrator not later than the
following April 15th; shall specify the amount of the Participant's Excess
Deferrals for the preceding calendar year; and shall be accompanied by the
Participant's written statement that if such Excess Deferrals are not
distributed, the amounts deferred under this Plan and other plans or
arrangements described in Code Sections 401(k), 408(k), or 403(b), will exceed
the limit imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred.
(g) "Family Group" means a group of two or more
Participants which includes a 5% Owner and/or one of the 10 most Highly
Compensated Employees, and one or more of his family members. For this purpose,
a Participant's family members include his spouse, his lineal ascendants and
descendants and spouses of
<PAGE> 18
such lineal ascendants and descendants.
(h) "Highly Compensated Employee" ("HCE") for a Fiscal
Year includes:
(1) A 5% Owner in the current or the preceding
Fiscal Year;
(2) An Employee whose Testing Compensation
exceeds $75,000, multiplied by the Adjustment Factor in the current
or the preceding Fiscal Year;
(3) An Employee (A) whose Testing Compensation
exceeds $50,000, multiplied by the Adjustment Factor in the current
Fiscal Year, and (B) who is currently a member of the Top Paid Group,
or (C) who met both of the requirements of (A) and (B) in the
preceding Fiscal Year;
(4) An officer described in Article 2.33(a);
however, "Testing Compensation" in Article 2.33(a) shall be replaced
with "Plan Compensation" when determining who is an officer for
purposes of this Article 4.1(h). If no officer meets the compensation
requirement of Article 2.33(a) and this Article 4.1(h), then the
highest paid officer shall be treated as a Highly Compensated
Employee regardless of his Testing Compensation.
Notwithstanding the foregoing, an Employee who is not a 5% Owner in the current
or the preceding Fiscal Year, who is not in the top 100 Employees of the
Employer when ranked by Testing Compensation in the current Fiscal Year and who
was not a HCE in the preceding Fiscal Year will not be considered a HCE in the
current year. The Employer may elect to determine who is a HCE on the basis of
the calendar year coinciding with or ending within the current Fiscal Year.
Notwithstanding the foregoing, for Fiscal Years beginning in 1987 and 1988,
HCE(s) shall include only those who (1) are 5% Owners during such Fiscal Year
and/or (2) have Testing Compensation in excess of $50,000 for such Fiscal Year.
"Top Paid Group" for a Fiscal Year is equal to 20% of the
total number of Employees of the Employer and Member Employers for the Fiscal
Year. In determining the total number of Employees for such year, the following
Employees are excluded:
(1) Those who have not completed six months of service at
the end of such year;
(2) Those who normally work less than 17 1/2 hours per
week;
(3) Those who normally work less than six months per year;
(4) Those who have not reached their 21st birthday;
(5) Non-resident aliens; and
(6) Collectively bargained Employees, provided that this
exclusion may be used only if at least 90% of the Employees of the
Employer and Member Employers are covered by bona fide collective
bargaining agreements.
The Top Paid Group will be determined by listing all of the Employees of the
Employer and Member Employers
<PAGE> 19
(including those excluded above) in descending order by Testing Compensation and
selecting the 20% of the total number of Employees as determined above who are
the highest paid. An Employee may be in the Top Paid Group even though he falls
in one of the groups which have been excluded in determining the number of
Employees.
The resolution of any ambiguity relating to the
determination of HCE(s) shall be based on IRS regulation 1.414(q).
(i) "Non-Highly Compensated Employee" ("Non-HCE") means an
Employee who is not a Highly-Compensated Employee.
4.2 Employer Contributions
(a) Employer Profit Sharing Contributions
As of the last day of each Fiscal Year, the
Employer may make a profit sharing contribution to the Trust in such amount as
is determined by the Employer. The profit sharing contribution shall be reduced,
if necessary, by any amounts in Limitation Accounts under Article 5 attributable
to profit sharing contributions. These contributions will be allocated to
Participants' Profit Sharing Accounts as provided in Article 5.2.
(b) Non-Elective Contributions
The Employer and Member Employers may make and
allocate non-elective contributions in accordance with Article 4.5(d)(ii); such
non-elective contributions shall be allocated to Participants' Non-Elective
Accounts.
(c) Employer Matching Contributions
As of the last day of each Fiscal Year, the
Employer and Member Employers may make a matching contribution to the Trust
which, when combined with amounts in Limitation Accounts under Article 5, shall
be sufficient, in total, to provide an allocation equal to 50% of the salary
deferral contributions made for each Eligible Participant provided that the
matching contribution for each Eligible Participant shall not exceed $600 in any
Fiscal Year. Such matching contribution may, at the discretion of the Board, be
changed to any amount, including zero. Effective July 1, 1994, the match amount
shall change to an amount equal to 66-2/3% of the salary deferral contributions
made for each Eligible Participant, provided that the matching contribution for
each Eligible Participant shall not exceed $800 in any Fiscal Year.
(d) Restoration Contributions
The Employer and Member Employers shall make
the contributions required to restore the Accounts of Participants as described
in Article 5.4 and Article 6. These contributions will be allocated in
accordance with their purpose.
(e) Top-Heavy Minimum Contributions
For any Fiscal Year during which the Plan is a
Top-Heavy Plan, the sum of the Employer's and Member Employer's profit sharing
and non-elective contributions and Forfeitures allocated on behalf
<PAGE> 20
of each Participant who is a Non-Key Employee, but is employed by the Employer
or a Member Employer as an Eligible Employee on the last day of the Fiscal Year,
shall not be less than the lesser of:
(1) 3% of the Allowable Compensation paid or
accrued to such Employee during the Fiscal Year; or
(2) the highest percentage of Allowable
Compensation which is allocated during the Fiscal Year on behalf of
any Key Employee in the aggregate:
(A) to his Employer Account under
Article 5.2 of this Plan; and
(B) to his Salary Deferral Account
under this Plan; and
(C) from contributions by the
Employer or any Member Employer to his account in any other defined
contribution plan.
To the extent that these minimum allocations
are not provided by other provisions of this Plan, the Employer and Member
Employers shall make a minimum contribution in an amount which is determined to
meet the requirements of this Article 4.2(e), which shall be allocated to the
Accounts of Participants who are Non-Key Employees in accordance with this
Article.
4.3 Timing of Limitations on and Return of Employer Contributions
(a) Amount and Timing of Contributions
Employer and Member Employer contributions
shall not exceed an amount which is estimated to constitute the maximum
allowable deduction under Code Section 404(a). Employer and Member Employer
contributions shall be paid to the Trustee on or prior to the last day for
filing such Employer's or Member Employer's federal income tax return for such
year, including any extensions of time granted for such filing. Contributions
shall be made in cash.
(b) Contribution Limited by Code Section 401(a)(4)
In any year in which it is necessary that the
profit sharing portion of the Plan comply with the anti-discrimination
requirements of Code Section 401(a)(4), and these requirements would not
otherwise be met in such year, the profit sharing contribution in Article 4.2
shall be restricted to such amount as would cause the Plan to comply with Code
Section 401(a)(4).
(c) Return of Employer Contributions
If an amount is contributed by the Employer or
a Member Employer due to a mistake of fact, such Employer or Member Employer
shall be entitled to recover such amount within one year of the date such
contribution is made. Unless otherwise provided in a resolution of the Board,
any amounts contributed by the Employer or a Member Employer which are
disallowed as a deduction under Code Section 404 shall be returned to the
Employer or Member Employer within one year of the date such deduction is
disallowed. Trust income attributable to the amount to be recovered shall not be
paid to the Employer or Member Employer, but Trust loss
<PAGE> 21
attributable thereto shall reduce such amount.
4.4 Participants' Voluntary Contributions
The Plan shall accept no voluntary contributions.
4.5 Salary Deferral Contributions
(a) General Rules
Each Participant may elect in writing to have
the Employer or any Member Employer make salary deferral contributions on his
behalf in an amount from 1% to 20% of such Participant's Plan Compensation. Such
contributions shall be in whole percentage increments. The Committee, in its
discretion, may reduce the 20% limit in order to comply with Section 415 and
401(k) of the Code. Notwithstanding the foregoing, effective January 1, 1987, no
more than $7,000 (multiplied by the Adjustment Factor) of salary deferral
contributions may be made on behalf of any Participant during any calendar year.
(b) Administrative Guidelines
The Committee has the power to establish
uniform and nondiscriminatory rules and from time to time to modify or change
such rules governing the manner and method by which salary deferral
contributions shall be made, as well as the manner and method by which salary
deferral contributions may be changed or discontinued temporarily or
permanently. All salary deferral contributions shall be authorized by the
Participant in writing, made by payroll deduction, deducted from the
Participant's Plan Compensation without reduction for any taxes or withholding
(except to the extent required by law or the regulations) and paid over to the
Trust by the Employer and Member Employers within a reasonable period following
the date of deduction, but in no event later than 90 days after the date on
which such salary would otherwise have been paid. All salary deferral
contributions shall be credited to such Participant's Salary Deferral Account
and shall be treated as Employer and Member Employer contributions for purposes
of their deductibility and tax treatment under the Code.
<PAGE> 22
(c) Nondiscrimination Tests For Elective Deferrals
The Deferral Percentages for any Fiscal Year
shall satisfy the table below:
<TABLE>
<S> <C>
If ADP of Then, ADP of
Eligible Participants Eligible Participants
Who Are NON-HCE(s) Who Are HCE(s)
is: Cannot Exceed:
(1) (2)
Less than 2% Two times column (1)
ADP
2% but less than 8% Column (1) ADP plus 2%
1.25 times column (1)
8% or greater ADP
</TABLE>
provided that:
(i) A single Deferral Percentage shall apply to
all members of a Family Group and shall be determined by totalling
the amounts credited to the Salary Deferral Accounts of all members
of the Family Group and dividing by the sum of the Testing
Compensation received by such members.
(ii) Amounts allocated to a Participant's
Non-Elective Account for a Fiscal Year may be included in computing
his Deferral Percentage.
(iii) Amounts added to a Participant's Employer
Matching Account which meet the requirements of Code Section
401(k)(2)(B) and (C) may be included in computing his Deferral
Percentage.
(iv) The Deferral Percentage for any Employee who
is a Participant under two or more Code Section 401(k) arrangements
of the Employer or Member Employer shall be the sum of the Deferral
Percentages for such Employee under each of such arrangements.
(v) In the event that this Plan satisfies the
requirements of Code Sections 401(a)(4) and 410(b) only if aggregated
with one or more other plans, or if one or more other plans satisfy
the requirements of Code Sections 401(a)(4) and 410(b) only if
aggregated with this Plan, then this Article 4.5(c) shall be applied
by determining the Deferral Percentages of Eligible Participants as
if all such plans were a single plan. All such plans must have the
same plan year, starting with the Fiscal Year that commences in 1989.
(vi) Notwithstanding the foregoing, if the above
test would otherwise not be met, for Plan Years beginning before
January 1, 1992 the Committee may restructure the Plan
<PAGE> 23
into component plans based on employee groups in accordance with
Internal Revenue Service Proposed and Temporary Regulations
1.401(a)(4) - (9). Each such component plan must meet the tests in
(c).
(d) Corrective Actions
(i) If the salary deferral contributions for
any Fiscal Year would otherwise cause the Plan to fail to meet the
nondiscrimination tests of this Article 4.5 then the Committee may at its
discretion within the period permitted by applicable law or regulation:
(1) Reduce as necessary salary
deferral contributions made on behalf of Participants who are HCE(s)
for the remainder of the Fiscal Year; or
(2) Return Excess Contributions to
the affected Participants in accordance with Article 4.5(f).
(ii) The Employer and Member Employers may make
a non-elective contribution for any Fiscal Year. Such contribution shall be
allocated to the Non-Elective Accounts of Eligible Participants who were
Non-HCE(s) on the last day of such Fiscal Year or a group of Eligible
Participants who are Non-HCE's and who are selected on a basis that is not
prohibited by law or by regulation. Each Participant who is entitled to share in
such contribution for a Fiscal Year shall receive an allocation in the same
ratio to such contribution as his Testing Compensation bears to the Testing
Compensation of all those eligible for such an allocation.
(iii) If the Committee has restructured the
Plan into component plans in accordance with (c)(vi), the Committee may take the
actions in (d)(i) with respect to the HCE's of any component Plan which would
not otherwise pass the non-discrimination tests of Article 4.5 or the Employer
and Member Employers may make a non-elective contribution which shall be
allocated in accordance with (d)(ii), but only to Participants who are included
in any component plan which would not otherwise pass the non-discrimination
tests of Article 4.5.
(e) Determination of Excess Contributions
(i) The maximum Deferral Percentage for a
Participant who is a HCE is calculated by reducing the Deferral Percentage of
the HCE with the highest Deferral Percentage to the extent required to (1)
enable the Plan to satisfy the non-discrimination test in Article 4.5(c), or (2)
cause such HCE's Deferral Percentage to equal the Deferral Percentage of the HCE
with the next highest Deferral Percentage. This process will be repeated as
necessary until the Plan satisfies the non-discrimination test in Article
4.5(c).
(ii) The reduction of the Deferral Percentage
of members of a Family Group, if required under (i), shall be accomplished by
making proportionate reductions in the amounts allocated to the Salary Deferral
Accounts of each member of the Family Group.
(iii) A HCE's Excess Contribution is equal to
the difference between (1) the amount of contribution actually made under the
Plan to his Salary Deferral Account for such Fiscal Year, and
<PAGE> 24
(2) the amount determined by multiplying the maximum Deferral Percentage
calculated in (i) by such HCE's Testing Compensation.
(iv) If the Committee has restructured the Plan
into component plans in accordance with (c)(vi), the computations in (e)(i),
(ii) and (iii) shall be made only for the HCE's of any component plan which does
not otherwise meet the non-discrimination tests of Article 4.5.
(f) Corrective Payments
(i) Payment of Excess Deferrals
Notwithstanding any other provision
of the Plan, Excess Deferral Amounts plus any income or less any loss allocable
thereto, as determined under Article 4.7, may be paid to Participants who have
such Excess Deferrals for a calendar year no later than the following April 15.
If not paid by such date, these amounts must remain in the Participant's Account
until otherwise withdrawable or payable under the terms of the Plan. Because of
the double income tax treatment that a Participant will encounter if these
amounts are not returned to him by the following April 15th, the Committee shall
make every effort to meet this deadline.
(ii) Payment of Excess Contributions
Notwithstanding any other provision of
the Plan, Excess Contributions, plus any income or less any loss allocable
thereto, as determined in Article 4.7, shall be paid in accordance with the
following procedures:
(1) Excess Contributions for a Fiscal
Year shall be paid to Participants on whose behalf such Excess
Contributions were made, no later than the last day of the succeeding
Fiscal Year.
(2) The Excess Contributions which
would otherwise be paid shall be reduced, in accordance with
regulations, by any Excess Deferral Amounts paid to the Participant.
(3) Payments under this Article
4.5(f) shall be made from the Participant's Salary Deferral Account.
4.6 Nondiscrimination Tests For Employer Matching Contributions
(a) General Rule
Employer matching contributions for any Fiscal
Year shall satisfy the table below:
<PAGE> 25
<TABLE>
<S> <C>
If ACP of Then, ACP of
Eligible Participants Eligible Participants
Who are Non-HCE(s) Who Are HCE(s)
is: Cannot Exceed:
(1) (2)
Less than 2% Two times column (1)
ACP
2% but less than 8% Column (1) ACP plus 2%
1.25 times column (1)
8% or greater ACP
</TABLE>
provided that:
(i) A single Contribution Percentage shall apply
to all members of a Family Group and shall be determined by totalling
the amounts credited to the Matching Accounts of all members of the
Family Group and dividing by the total of the Testing Compensation
received by such members.
(ii) Any amounts allocated to Participants'
Non-Elective Accounts for a Fiscal Year and not used to meet the
tests in Article 4.5(c) shall be included in the Contribution
Percentage.
(iii) Any matching contributions which have been
used to meet the tests in Article 4.5(c) must be subtracted from the
matching and supplemental matching contributions used to determine
the Contribution Percentage.
(iv) The Contribution Percentage for any Employee
who is a Participant under two or more Code Section 401(m)
arrangements of the Employer or Member Employers shall be the sum of
the Contribution Percentages for such Employee under such
arrangements.
(v) In the event that this Plan satisfies the
requirements of Code Sections 401(a)(4) and 410(b) only if aggregated
with one or more other plans, or if one or more other plans satisfy
the requirements of Code Sections 401(a)(4) and 410(b) only if
aggregated with this Plan, then this Article 4.6 shall be applied by
determining the Contribution Percentages of Eligible Participants as
if all such plans were a single plan. All such plans must have the
same plan year, starting with the Fiscal Year which commences in
1989.
(vi) Notwithstanding the foregoing, if the Plan
has been restructured into component plans in accordance with Article
4.5(c)(vi), the same component plans must be used for purposes of
this Article 4.6 and separate tests performed for each component plan
under Article 4.6(a)
<PAGE> 26
and (b). In a similar fashion, Corrective Actions under (c) below,
Determination of the Amount of excess Matching and Supplemental
Matching Contributions under (d) below and Corrective Payments under
(e) below shall apply only to HCE's of any component plans that do
not meet the tests in Article 4.6(a) and/or (b).
(b) Multiple Use of Alternative Limitation
(i) If the provisions of Articles 4.5 and 4.6
apply to one or more HCE(s) and if both the ADP and the ACP of HCE(s) exceed the
corresponding ADP and ACP of Non-HCE(s) multiplied by 1.25, then an additional
non-discrimination test must be met, as follows:
(1) The sum of the ADP and ACP of
Eligible Participants who are HCE(s) shall not exceed the sum of A & B; where A
= 1.25 times the greater of the ADP or the ACP of Eligible Participants who are
Non-HCE(s), and B = two times the smaller of the ADP or ACP of Eligible
Participants who are Non-HCE(s) or, if less, two percent plus such smaller
percentage.
(2) The ACP(s) and ADP(s) used in
this Article 4.6(b) shall be determined after any corrective distributions have
been made of Excess Deferral Amounts and Excess Contributions and after any
recharacterization of Excess Contributions required without regard to this
Article 4.6(b).
(3) Notwithstanding the provisions
of (1) above, the words "greater" and "smaller" in (1) above may be transposed.
(c) Corrective Actions
(i) If the matching contributions for any Fiscal
Year would otherwise cause the Plan to fail to meet the
nondiscrimination tests of this Article 4.6, the Committee may at its
discretion within the period permitted by applicable law or
regulation, take one or more of the following actions, but only as
necessary:
(1) Reduce the salary deferral
contributions that would otherwise be permitted for HCE's for the
remainder of the Fiscal Year and the matching contributions that
would have been made based on such salary deferral contributions.
(2) Pay any fully vested matching
contributions to the affected HCE(s), as provided in Article 4.6(e).
(3) Forfeit any non-vested matching
contributions that were made on behalf of the affected HCE(s).
(ii) If salary deferral contributions for any
year would otherwise cause the Plan to fail to meet the multiple use
of alternative limitation provisions of (i) above, procedures similar
to those detailed in Article 4.5(d), (e) and (f) shall be used to
bring the Plan into compliance with such provisions; provided that
recharacterization shall not be permitted. Any salary deferral
<PAGE> 27
contributions which must be returned to Participants pursuant to this
Article 4.6(c) shall be considered Excess Contributions for purposes
of this Plan.
(d) Determination of the Amount of Excess Matching
Contributions
(i) The maximum Contribution Percentage for a
Participant who is a HCE is calculated by reducing the Contribution
Percentage of the HCE with the highest Contribution Percentage to the
extent required to (1) enable the Plan to satisfy the
non-discrimination tests in Articles 4.6(a) and (b), or (2) cause
such HCE's Contribution Percentage to equal the Contribution
Percentage of the HCE with the next highest Contribution Percentage.
This process will be repeated, as necessary, until the Plan satisfies
the non-discrimination tests in Articles 4.6(a) and (b).
(ii) The reduction of the Contribution Percentage
of members of a Family Group, if required under (i), shall be
accomplished by making proportionate reductions in the Matching and
Supplemental Matching Contributions allocated to the Account of each
member of the Family Group.
(iii) A HCE's excess matching contribution is
equal to the difference between (1) the amount of matching and
supplemental matching contribution actually made to his Account under
the Plan for such Fiscal Year and (2) the amount determined by
multiplying the maximum Contribution Percentage calculated in (i)
above by such HCE's Testing Compensation.
(e) Corrective Payments
Notwithstanding any other provisions of the
Plan, excess matching contributions, plus any income and less any loss allocable
thereto, as determined under Article 4.7, shall be paid or forfeited in a
nondiscriminatory manner and in accordance with the following procedures:
(i) Excess matching and supplemental matching
contributions shall be paid, if appropriate, to Participants for whom
such contributions have been made during a Fiscal Year, or forfeited,
if appropriate, no later than the last day of the succeeding Fiscal
Year. If such matching contributions are not vested, they will be
forfeited. If such matching contributions are vested, they will be
paid to the Participant.
4.7 Adjustment to Corrective Payments
Excess Deferrals, Excess Contributions, and excess
matching and supplemental matching contributions (as provided in 4.6(a)) shall
all be paid to the appropriate Participants, together with an investment
adjustment computed as follows:
<PAGE> 28
(1) The total income or loss for the Fiscal Year in which
the deferral or contribution has been made, which is attributable to
the Account or Accounts to which such deferral or contribution has
been added shall be determined and shall be I.
(2) The excess deferral or contribution shall be E.
(3) The value of such account or accounts shall be
determined as of the end of such Fiscal Year and shall be V.
(4) The income or loss on the excess deferral or
contribution for such Fiscal Year shall be:
E
------- x I
V-I
(5) The amount of income or loss in (4) shall be adjusted
for the period from the end of such Fiscal Year up to the date of
payment as follows:
Amount in (4) x 10% x Number of elapsed months In
determining the number of months that have elapsed between the end of
such Fiscal Year and the date of payment, sixteen days or more shall
be considered an elapsed month.
Effective July 1, 1993, Excess Deferrals, Excess
Contributions and excess matching contributions shall all be paid to the
appropriate Participants, together with an investment adjustment. Such
adjustment shall be computed by the Committee based on the procedures described
in Article 7 to establish a proportionate crediting of Trust income or loss
between the excess amounts and the amounts which are not to be returned for the
Fiscal Year in which such excess occurred.
4.8 Overriding Limitations
(a) Corrective Actions
When salary deferral contributions made on
behalf of Participants who are HCE(s) are reduced for the remainder of a Fiscal
Year, no matching contributions shall be made with respect to the salary
deferral contributions not permitted because of such reduction.
(b) Excess Deferrals
When Excess Deferrals (as defined in Article
4.1) are paid to a Participant, any matching or supplemental matching
contributions that are attributable to such Excess Deferrals shall be forfeited.
(c) Excess Contributions
When Excess Contributions (as defined under
Article 4.1) are paid to a Participant, any matching or supplemental matching
contributions that are attributable to such Excess Contributions shall be (i)
paid to the Participant to the extent that they are vested and (ii) forfeited to
the extent that they are not vested.
<PAGE> 29
4.9 Record Requirements
The Employer and Member Employers shall maintain such
records as may be needed to prove that for each Fiscal Year, commencing with
July 1, 1987, the requirements of Article 4.5 and Article 4.6 are met.
4.10 Rollover Contributions
(a) Rollover Contributions Permitted
The Committee may authorize the Trustee to
accept a rollover contribution from an Employee who is or is to become a
Participant, if such payment qualifies as a Direct Rollover under Section
401(a)(31) or a rollover under Section 402(a) or (c) or 408(d)(3)(A)(ii) of the
Code.
(b) Non-Qualifying Rollover
If it is later determined that a payment made
pursuant to (a) above did not in fact qualify as a rollover under Section 402(a)
or (c) or 408(d)(3)(A)(ii) or a Direct Rollover under Section 401(a)(31) of the
Code then, the balance credited to the Rollover Account shall immediately be (i)
segregated from all Plan assets (ii) treated as a non-qualified Trust
established by and for the benefit of the Participant, and (iii) distributed to
the Participant. A non-qualifying rollover shall be deemed never to have been
part of the Trust.
(c) Rollovers Credited to Rollover Account
A rollover contribution shall be credited to
such Rollover Account as of the date such contribution is received. Such
Rollover Account shall be fully vested and shall share in Trust gains or losses
pursuant to Article 7.
(d) Investment of Rollover Contributions
If a Participant makes a rollover contribution
to the Trust, the Trustee shall invest the contributions as part of the Trust
Fund.
(e) Direct Transfer From Another Trust
The Committee may instruct the Trustee to
accept on behalf of any Participant, or Employee who is to become a Participant,
the direct transfer of amounts from any other trust qualified under Code Section
501(a), which is part of any plan qualified under Code Section 401(a). In no
event, however, may the Committee authorize a direct transfer from (i) a defined
benefit pension plan, (ii) a defined contribution plan subject to the minimum
funding standards of Code Section 412, or (iii) any other defined contribution
plan to which the requirements of Code Section 401(a)(11)(A) apply with respect
to such Participant or Employee, unless such a direct transfer may be made under
applicable law and regulation without jeopardizing this Plan's exempt status
under Code Section 401(a)(11)(B).
<PAGE> 30
ARTICLE 5
ALLOCATION OF CONTRIBUTIONS AND FORFEITURES
5.1 Definitions
(a) "Annual Addition" means the sum for the Limitation
Year to which the allocation pertains (whether or not allocated in such year) of
all Employer, Member Employer and Employee contributions and Forfeitures
allocated to the Participant's Account for such year from this Plan and any
other similar contributions to any other defined contribution plan maintained by
the Employer or Member Employer, including Excess Contributions, excess matching
contributions and Excess Deferrals if not returned or otherwise corrected by the
April 15 following the Calendar Year in which made.
(b) "Limitation Account" means an account expressly set up
and maintained to hold excess Annual Addition amounts contributed in error
pursuant to Article 5.3(b).
(c) "Limitation Year" means the Fiscal Year.
5.2 Allocation Methods
(a) Salary Deferral, Top-Heavy Minimum, Restoration and
Non-Elective Contributions
Salary Deferral, top-heavy minimum, restoration
and Non-Elective contributions are allocated as provided in Article 4.
(b) Matching Contributions
Employer Matching Contributions and amounts in
Limitation Accounts attributable to Employer Matching Contributions for any
Fiscal Year shall be allocated as of the last day of such Fiscal Year to the
Matching Account of each Eligible Participant in an amount equal to 50%, or such
other amount, including zero, as may be decided by the Board, of such Eligible
Participant's Salary Deferral Contributions during such Fiscal Year; provided
however, that the Matching Contribution for any Eligible Participant shall not
exceed $600.00 for the Fiscal Year or such other amount as the Board shall
decide. Effective July 1, 1994, the match amount shall change to an amount equal
to 66-2/3% of the salary deferral contribution made for each Eligible
Participant, provided that the matching contribution for each Eligibility
Participant shall not exceed $800 in any Fiscal Year.
(c) Employer Profit Sharing Contribution Allocation
Employer Profit Sharing Contributions,
Forfeitures, and amounts in Limitation Accounts attributable to Profit Sharing
Accounts for any Fiscal year shall be allocated as of the last day of such
Fiscal Year to the Profit Sharing Account of each Eligible Participant in the
ratio that each such Eligible Participant's units
<PAGE> 31
bears to the total units credited to all Eligible Participants for the Fiscal
Year. For purposes of this allocation, each Eligible Participant shall be
credited with (a) .3333 units for each calendar month of Service completed with
the Employer or Member Employer; and (b) one-tenth (1/10th) of a unit for each
one hundred dollars ($100) of Plan Compensation (as defined in Article 2.47 for
profit sharing purposes).
(i) Service will be counted from the first day of
the month following the Employee's Employment Commencement Date.
(ii) Units for Service will be rounded to the
nearest tenth of a unit.
(iii) One-tenth (1/10th) unit will be credited
for each complete $100 of Plan Compensation received by the
Participant. No credit for Plan Compensation of $1 to $99 will be
received.
(iv) The allocation of units must be done in a
manner such that the average allocation rates, as provided under
applicable Code and Regulation, for Highly Compensated Employees does
not exceed the average of the allocation rates for nonhighly
compensated employees. For this purpose, allocation rates will
include all Employer contributions and Forfeitures allocated to the
account of each Eligible Participant.
(v) If the allocation of profit sharing
contributions and Forfeitures would otherwise cause the Plan to fail
to meet the nondiscrimination test of this Article 5.2(c), for any
Fiscal Year, then the Committee may reduce as necessary the profit
sharing contributions and Forfeitures made on behalf of Participants
who are Highly Compensated Employees for such Fiscal Year.
(d) Overriding Top-Heavy Minimum Allocation
For any Fiscal Year during which the Plan is a
Top-Heavy Plan the requirements of Article 4.2(e) shall be met.
5.3 Limitations on Annual Allocations
(a) Limitation Amount
Notwithstanding any other provision of this
Plan to the contrary, the Annual Addition to a Participant's Account for any
Limitation Year shall not exceed the lesser of 25% of the Employee's Allowable
Compensation (as defined in Article 2) or $30,000 (or, if greater, 1/4 of the
dollar limitation in effect under Code Section 415(b)(1)(A)), or such other
amount for the Limitation Year as may be established by regulations under Code
Section 415(d).
(b) Treatment of Excess Annual Addition Made in Error
In the event that (as a result of the
allocation of Forfeitures, a reasonable error in estimating a Participant's
compensation or other limited facts and circumstances which the Internal Revenue
Service finds to be applicable) an amount would otherwise be allocated which
would result in the Annual Addition limitation being exceeded with respect to
any Participant, the excess amount shall be eliminated:
<PAGE> 32
(i) First, by returning to such Participant, to
the extent necessary any unmatched salary deferral contributions made
on his behalf, with investment gains attributable to such salary
deferral contributions determined as provided in Article 4.7.
(ii) Second, by returning to such Participant, to
the extent necessary any matched salary deferral contributions made
on his behalf. A return of matched salary deferral shall include
investment gains attributable to such contributions determined as
provided in Article 4.7.
(iii) Third, by holding any remaining excess
matching and/or profit sharing amounts in a Limitation Account as
appropriate. Any amounts in the Limitation Accounts shall be
reallocated among the appropriate Accounts of Eligible Participants
pursuant to Article 5.2 as of the last day of each succeeding Fiscal
Year until the excess is exhausted, provided that the Annual Addition
limitation with respect to any Participant may not be exceeded in any
Limitation Year. No allocation of Employer or Member Employer
contributions may be credited to the Accounts of Eligible
Participants in succeeding years until such excess has been
exhausted.
5.4 Restoration Procedures
(a) Computing Amounts
In the event that a Participant's Account was
improperly excluded in any year from an allocation of Employer or Member
Employer contributions and Forfeitures pursuant to Article 5.2, such
Participant's Account shall be restored to its correct status by the addition of
amounts that are determined as follows:
(i) First, an amount will be computed on the same
basis as Employer and Member Employer contributions and Forfeitures
that were allocated to the Accounts of other Eligible Participants
under Article 5.2 in each year for which restoration is necessary,
and
(ii) Second, Trust Fund income, gain or loss
attributable to amounts that should have been allocated under (i)
above will be computed on the same basis as Trust Fund income, gain
or loss was allocated to other Participants' Accounts under Article
7.1 in each year for which restoration is necessary.
(b) Income, Gain or Loss
In the event that a Participant's Account was
improperly excluded in any year from an allocation of Trust Fund income, gain or
loss pursuant to Article 7, such Participant's Account shall be restored to its
correct status by the addition or subtraction of amounts that should have been
allocated under Article 7 in each year for which restoration is necessary.
(c) Source of Amounts
Such amounts shall be restored first from
Forfeitures, if any; and then, if necessary, the Employer and/or Member Employer
shall contribute an amount which is necessary to fully restore each improperly
excluded Account. No Employer or Member Employer contributions or Forfeitures
shall be
<PAGE> 33
allocated pursuant to Article 5.2 to the Account of any Participant
until each improperly excluded Account has been fully restored.
<PAGE> 34
ARTICLE 6
VESTING OF ACCOUNTS
6.1 Automatic Vesting
(a) Retirement, Disability or Death
The value of a Participant's Employer Account
shall become fully vested when the Participant attains his Normal Retirement
Date while an Employee, or upon his termination of employment by reason of death
or Disability.
(b) Employee, Matching and Non-Elective Accounts
A Participant's Employee, Matching and
Non-Elective Accounts shall be fully vested at all times.
6.2 Vesting Based on Service
A Participant's Profit Sharing and Top-Heavy
Accounts shall become vested in accordance with the following schedule:
<TABLE>
Year of Service Vested Percentage
--------------- -----------------
Less than 1 year 0%
<S> <C>
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
</TABLE>
<PAGE> 35
Effective July 1, 1993, a Participant's Profit Sharing and
Top-Heavy Account shall become vested in accordance with the following schedule:
<TABLE>
<CAPTION>
Period of Service Vested Percentage
----------------- -----------------
Less than 1 year 0%
<S> <C> <C>
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
</TABLE>
Notwithstanding the foregoing a Participant's vested percentage shall be the
greater of the percentage determined above, or the total of the following:
(a) A number of years equal to the number of Years of
Service credited to the Participant immediately prior to July 1, 1993, and
(b) The Service taken into account as determined under
Article 6.2.
6.3 Years of Service for Vesting
(a) Year of Service
An Employee shall be credited with one year of
Service for each Fiscal Year in which he has at least 1,000 Hours of Service.
(b) Termination Prior to Vesting
If the vested percentage applicable to a
Participant's Employer Account is 0% at the time his service terminates his
Service prior to such termination shall be disregarded for vesting purposes if
he is reemployed after he has incurred 5 consecutive Breaks in Service.
(c) Service Prior to Break in Service
If an Employee is reemployed after a Break in
Service, Service prior to the Break in Service shall not be credited for
purposes of vesting until he has completed one year of Service after his
reemployment.
<PAGE> 36
6.4 Period of Service for Vesting
(a) Period of Service
An Employee shall be credited with a Period of
Service as described in Article 2.43.
(i) If an Employee quits, is discharged or
retires and again performs an Hour of Service for the Employer within
twelve (12) months, for purposes of this Article 6 he shall be
treated as though his Service had not terminated.
(ii) An Employee who is absent from work for
reasons other than those in (i) above shall be credited for purposes
of this Article 6 with service as described in Article 10 from the
date he was first absent from work to the earlier of the anniversary
of that date or his reemployment date with the Employer.
(b) Termination Prior to Vesting
If an Employee's Service terminates prior to
his earning any vested percentage, his Service prior to such termination shall
be disregarded for vesting purposes in the event of a renewal of Service once
the Participant has incurred 5 consecutive one-year Periods of Severance.
(c) Service Prior to Period of Severance
In the case of an Employee who has a one-year
Period of Severance followed by a renewal of Service, Service prior to the
one-year Period of Severance which is eligible to be credited to the Employee on
renewal of Service shall not be credited for purposes of vesting until he has
completed a one year Period of Service after renewal of Service.
6.5 Forfeitures and Restorations
(a) Forfeitures
Any remainder of a terminating Participant's
Account which is not vested shall be forfeited on the earliest to occur of the
following dates:
(i) The date of termination of the Participant,
provided that this date applies only if the Participant did not then
have a vested interest in his Account.
(ii) The date on which the terminated Participant
receives payment of his vested interest.
(iii) The date on which the Participant completes
five consecutive one-year breaks in service or the date he completes
five consecutive one-year Periods of Severance.
(b) Profit Sharing Contribution Forfeitures Reallocated
Forfeitures attributable to Profit Sharing
Accounts during a Fiscal Year which are not used to restore Participant's
Accounts as of the last day of such Fiscal Year shall be added to the Employer's
and Member Employer's Profit Sharing Contribution for such year and be allocated
as of the last day of the Fiscal
<PAGE> 37
Year to the Profit Sharing Accounts of Eligible Participants as provided in
Article 4.
(c) Reemployment After Forfeiture
If the Participant is reemployed before
incurring 5 consecutive Breaks in Service or before incurring 5 consecutive
one-year Periods of Severance, the forfeited amount shall be treated as follows:
(i) Restoration If No Distribution. In the event
the Participant did not receive a distribution of his vested
interest, his Account shall be fully restored as provided in (iv)
below and shall be recredited as of his reemployment date.
(ii) Restoration If Total Distribution Repaid. In
the event a distribution of his entire vested interest was made to
the Participant, his Account shall be fully restored as provided in
(iv) below if he makes an after-tax contribution which shall not be
subject to Code Section 401(m) of the full amount of the prior
distribution before the date which is 5 years after he is reemployed
by the Employer or Member Employer or before the date on which he
incurs 5 consecutive Breaks in Service, if earlier. If the
Participant does not make full repayment of the prior distribution by
that date, his Account will not be restored.
(iii) Full Restoration in Event of Partial
Distribution. In the event a distribution was made to the Participant
of less than his entire vested interest, his Account shall be fully
restored if he repays the full amount of the prior partial
distribution before the date which is 5 years after he is reemployed
by the Employer or Member Employer or before the date on which he
incurs 5 consecutive Breaks in Service, if earlier.
(iv) Source of Restored Amounts
(A) If the Suspense Account
established for a Participant has not yet been forfeited, such
Suspense Account shall be used to restore the Participant's Account.
(B) Otherwise, amounts to be
restored for any Fiscal Year may be restored from Forfeitures as of
the last day of a Fiscal Year, from additional Employer and Member
Employer contributions for such Fiscal Year, from Trust income, or
from a combination of these methods, as determined by the Committee.
(d) No Partial Repayments Permitted
A Participant shall not be permitted to repay
part of a distribution.
(e) No Restoration After 5 Consecutive Breaks in Service
If a Participant is reemployed after 5
consecutive Breaks in Service (or 5 consecutive one-year Periods of Severance),
no portion of his non-vested Account shall be restored and any undistributed
vested interest shall be maintained as a separate fully vested Account.
<PAGE> 38
6.6 No Divestment
Except as provided under Articles 4.3 and 6.8, a
Participant's vested rights shall not be subject to divestment for any reason.
6.7 Amendment to Vesting
Notwithstanding any other provisions of this Article 6,
the vested percentage of an individual who was a Participant immediately
preceding the effective date of any amendment to the Plan is determined by the
provisions of the Plan existing immediately prior to such amendment if such
provisions provide a greater vested percentage at any relevant time.
6.8 Lost Participants
(a) Participant's Account
If all or a portion of a Participant's Account
becomes payable under Article 9 and the Committee, after a reasonable search,
cannot locate the Participant or his Beneficiary (if such Beneficiary is
entitled to payment), the vested Account shall:
(i) be used to establish an Individual
Retirement Account in the Participant's name; or
(ii) remain in the Plan for a sufficient period
of time so that under state law the Account would escheat, at which
point the Account shall be forfeited and reallocated, in accordance
with Articles 4 and 5, as of the day the Participant incurred a Break
in Service, or such later date as the Committee may decide.
(b) Search for Participants
The Committee shall make a reasonable attempt
to find such a Participant, including securing any assistance available from the
Internal Revenue Service.
(c) Restoration
If an Account is forfeited under this Article
6.8, and the Participant or his Beneficiary subsequently presents a valid claim
for benefits to the Committee, the Committee shall cause the vested Account,
equal to the amount that was forfeited under this Article 6, to be restored.
<PAGE> 39
ARTICLE 7
ALLOCATION OF TRUST INCOME OR LOSS
7.1 Determination of Net Income
As of each Valuation Date, the Committee shall determine
the net income or loss of the Trust Fund based on a statement from the Trustee
of the receipts and disbursements of the Trust Fund since the immediately
preceding Valuation Date and of the fair market value of the Fund as of the
Valuation Date. If one or more separate investment funds have been established
as provided in Article 13, each fund shall be valued separately on each
Valuation Date and the net income or loss of each fund shall be allocated to
each Account invested in such investment fund.
7.2 Valuation
As of each Valuation Date and prior to any allocation of
contributions and Forfeitures to be made as of such date, the net income or loss
of the General Trust Fund since the immediately preceding Valuation Date,
including net appreciation or depreciation and any expenses paid by the Trust,
shall be allocated to each Account in the ratio that the value, as of the
immediately preceding Valuation Date, of each such Account invested in the
General Trust Fund bears to the value, as of the immediately preceding Valuation
Date, of all Accounts invested in the General Trust Fund. If one or more
separate investment funds have been established, the net income or loss of each
fund shall be allocated to each Account invested in such investment fund in
proportion to the value of each Account invested in such funds as of the
immediately preceding Valuation Date. The Committee shall adopt equitable
procedures to establish a proportionate crediting of Trust income or loss to
those portions of Participants' Accounts in the case of contributions,
transfers, loans, rollovers or withdrawals that have occurred in the interim
period since the immediately preceding Valuation Date. Amounts held in
Limitation Accounts established pursuant to Articles 5.3 shall not share in
Trust Fund income or loss.
7.3 Valuation Dates
The General Trust Fund and any separate investment funds
shall be valued as of the last day of each Fiscal Year and as of any other date
the Committee directs the Trustee to value the Trust Fund, as provided in
Article 7.4.
7.4 Special Valuation Dates at Committee Discretion
The Committee may direct the Trustee to determine the fair
market value of the Trust Fund and may make a determination of Trust income or
loss as of any date other than the last day of a Fiscal Year. If the allocation
of such Trust income or loss will produce a significant change in the value of
Participants' Accounts, and if such valuation shall affect a distribution, then
such date shall thereupon be deemed a Valuation Date, and Trust
<PAGE> 40
income or loss shall be allocated to Participant's Accounts in accordance with
the provisions of Article 7.2.
7.5 Accounts to be Valued
All sub-accounts of all Participants shall be valued at
each Valuation Date.
<PAGE> 41
ARTICLE 8
PARTICIPANTS' ACCOUNTS
8.1 Separate Accounts
The Committee shall open and maintain a separate Account
for each Participant. Each Participant's Account shall reflect the amounts
allocated thereto and distributed therefrom and such other information as
affects the value of such Account pursuant to this Agreement. The Committee may
maintain records of Accounts to the nearest whole dollar.
8.2 Statement of Accounts
As soon as practicable after the end of each Fiscal Year,
the Committee shall furnish to each Participant a statement of his Account,
determined as of the end of such Fiscal Year. Upon the discovery of any error or
miscalculation in an Account, the Committee shall correct it, to the extent
correction is practically feasible. Statements to Participants are for reporting
purposes only, and no allocation, valuation or statement shall vest any right or
title in any part of the Trust Fund, nor require any segregation of Trust
assets, except as is specifically provided in this Agreement.
8.3 Valuation of Account When Payment Due
(a) Accounts Which Are Not Segregated
(i) When employment is terminating and payment is
not deferred, the amount of the payment shall be based on the value
of the Participant's Account as of the Valuation Date next following
his termination date.
(ii) When employment is not terminating, the
amount of the payment shall be based on the value of the
Participant's Account as of the Valuation Date immediately preceding
the date of request for payment plus any contributions subsequently
credited to such Account and less any distributions subsequently made
from the Account.
(iii) When employment has terminated and payment
has been deferred, the amount of the payment shall be based on the
value of the Participant's Account as of the Valuation Date
immediately following the date of request for payment.
<PAGE> 42
ARTICLE 9
DISTRIBUTIONS AND WITHDRAWALS
9.1 General
Benefits under the Plan shall be distributed solely from
the Trust. The Employer and Member Employers have no liability or responsibility
for Plan benefits or for the Trust. No distribution shall be made or commenced
prior to the Participant's termination of employment, except as required under
Articles 9.3(d) and 16.2(b) and except for withdrawals in accordance with
Article 9.10. Distributions can also be made upon termination of the Plan
subject to the provisions of Article 9.11.
All distributions from the Plan will be made in accordance
with Code Section 401(a)(9) and the regulations thereunder including the
transition rules in proposed regulation 1.401(a)(9)-1I and the incidental death
benefit requirements of proposed regulation 1.401(a)(9)-2. The provisions of
Code Section 401(a)(9) shall override any distribution option under the Plan
which might be inconsistent with such provisions. A distribution to a
Participant shall be made solely from his Account. When a distribution is to be
made his Account shall be valued in accordance with Article 8.3. The amount to
be paid shall be based on his vested interest as determined in Article 6.
9.2 Administrative Rules
(a) Authority
Distributions shall be made by the Trustee only
in accordance with the directions of the Committee. The Committee has the
authority to direct the distributions in accordance with the terms and
conditions of the Plan, but the Committee shall have no power of discretion or
consent with regard to a Participant's or Beneficiary's choice of the form or
timing of a distribution, except as specifically stated herein or to the extent
that the Committee is constrained by the options available under the Plan or by
the requirements of law or regulation.
(b) Claims
A Participant, Beneficiary or Alternate Payee
has the right to file a claim for benefits as set forth in Article 13.6.
9.3 Timing of Distributions
(a) Cashout of Amounts Under $3,500
If the Participant's vested Account does not
exceed $3,500, and at the time of any prior distribution, if any, has not
exceeded $3,500, distribution shall be made in a lump sum as soon as practicable
after the amount can be determined in accordance with Article 8.3.
<PAGE> 43
(b) Amounts Over $3,500
If the Participant's vested Account does not meet
the cashout requirements of Article 9.3(a) the Participant may elect to:
(i) Commence distributions as soon as practicable
after the amount can be determined, or
(ii) Defer receipt of payments until his Normal
Retirement Date, or
(iii) Defer receipt of payments as provided in
(c) below.
Unless otherwise elected by the Participant under (d) below, the
payment of benefits under the Plan to the Participant will not begin later than
the 60th day after the end of the Fiscal Year in which the latest of the
following occurs:
(1) The date on which the
Participant attains the earlier of Age 65 or his Normal
Retirement Date,
(2) The date which is the 10th
anniversary of his commencement of participation in the
Plan, or
(3) The date of termination of his
service with the Employer;
However, if the amount of the payment cannot be ascertained and/or
the Participant can not be located by the date required above, payment shall be
made within 60 days after all of these facts are known.
Notwithstanding the foregoing, no payments may be made to a
Participant prior to his Normal Retirement Date or his 62nd birthday, whichever
is later, if his vested Account does not meet the cashout requirements of
Article 9.3(a) unless the written consent of the Participant is obtained by the
Committee within the 90-day period prior to commencement of the distribution.
(c) Information and Rights
The following applies to the Participant's written
consent:
(i) The Participant must be informed of his
right to defer receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer commencement of the
distribution.
(ii) Notice of the rights specified herein shall
be provided no less than 30 days and no more than 90 days before the
first day on which all events have occurred which entitle the
Participant to such distribution.
(iii) Written consent of the Participant to the
distribution must not be made before the Participant receives the
notices and must not be made more than 90 days before the first day
on which all events have occurred which entitle the Participant to
such distribution.
(iv) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who does not
consent to the distribution.
<PAGE> 44
(v) If a distribution is one to which Section
401(a)(11) and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(1) the Plan Administrator clearly
informs the Participant that the Participant has a right
to a period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
(2) the Participant, after receiving
the notice, affirmatively elects a distribution.
(d) Deferring Distributions
A Participant who meets the requirements of
Article 9.3(b) may defer the commencement of a distribution by providing the
Committee with a written, signed notice specifying the date on which the
distribution is to commence and the distribution method to be used, provided
that:
(i) No distribution method chosen by the
Participant shall provide any payment in an amount less than that
required under Article 9.6; and
(ii) Distributions shall commence no later than
the April 1 following the last day of the calendar year in which a
Participant attains age 70 1/2 even though such Participant may still
be an Employee; provided that this requirement shall not apply in the
case of a Participant who is not a 5% Owner and who attained age
70 1/2 before January 1, 1988.
9.4 Treatment of Deferred Amounts
Where the distribution of all or any portion of a
Participant's Account is to be deferred, the vested portion shall continue to be
held and invested as an unsegregated Account of the Trust subject to revaluation
as provided in Article 7. However, at the written request of a Participant or
his Beneficiary, such Account shall be transferred to an insured savings
account, to a certificate of deposit or to another similar instrument, which
shall be part of this Trust and shall be subject to all the provisions hereof.
Interest earned by any such insured savings account, certificate of deposit or
similar instrument shall be credited to such Participant's Account.
9.5 Methods of Distribution
(a) Methods
Distribution to any Participant or Beneficiary
shall be made, in whole or in part:
(i) In a lump sum;
(ii) In installments, payable at least annually
and not more frequently than quarterly, over a period of years
meeting the requirements of Article 9.6;
(iii) In the form of a nontransferable annuity
contract providing for a
<PAGE> 45
monthly guaranteed income for a period certain;
(iv) In any combination of the foregoing methods
of distribution.
(b) Participant Choice
The Participant may choose any of the methods
described in (a); provided that in the event that the Participant's vested
Account meets the cashout requirements of Article 9.3(a) payment will be made in
a lump sum.
(c) Equal Value
All methods of distribution with respect to a
Participant or Beneficiary shall be of equal value as of the date payments are
to commence.
(d) Timing
If the amount of a distribution cannot be
determined by the date specified under Article 9.3, payment of benefits,
retroactive to such date, shall be made or shall begin no later than 60 days
after the earliest date on which the amount of the distribution can be
determined.
9.6 Distribution in Periodic Payments
(a) Minimum Distributions
If the distribution to a Participant includes
periodic payments, the amounts shall be calculated in accordance with the life
expectancy of the Participant or life expectancies of the Participant and his
Beneficiary, except as provided in 9.7(b) below. As provided in Article 9.1, the
provisions of Code Section 401(a)(9) and the regulations thereunder shall govern
the minimum amount of distributions payable. For purposes of the computation of
minimum distributions, the life expectancy of a Participant and his spouse may
be redetermined annually, to the extent permitted by applicable law and
regulation.
9.7 Distribution Upon Death of Participant
(a) Distribution Made to Participant's Beneficiary
The portion of any Participant's Account which
remains undistributed at his death shall be distributed to the Participant's
Beneficiary in accordance with the provisions of this Article 9.7.
(b) General Rules
(i) If distribution to the Participant has
commenced as periodic payments and such Participant dies before
receiving his entire vested interest, then the remaining
undistributed vested interest shall continue to be distributed at
least as rapidly as the schedule being used at the Participant's date
of death, and
(ii) If a Participant dies before distributions
have commenced, his Account shall be distributed within 5 years after
the death of the Participant. However, the prior sentence shall not
apply with respect to such portion of the Participant's Account as is
payable to his designated Beneficiary over a period not exceeding the
life or life expectancy of such Beneficiary
<PAGE> 46
beginning not later than 1 year after the Participant's death (or
such later date as prescribed by applicable regulation). In addition:
(1) If the Beneficiary is the
deceased Participant's surviving spouse, distributions may
be deferred until the date on which the Participant would
have attained age 70 1/2, and
(2) If such surviving spouse dies
before receiving any distributions, the provisions of this
Article 9.7 shall be applied as if such spouse were the
Participant.
(iii) Notwithstanding the foregoing, if a
Participant dies before distributions have commenced and the amount
in his Account meets the cashout requirements of Article 9.3(a)
payment will be made in a lump sum to his Beneficiary.
9.8 Distributions to Minors or Legally Incompetents
In case of any distribution to a minor or to a legally
incompetent person, the Committee may (1) direct the Trustee to make the
distribution to his legal representative, to a designated relative, or directly
to such person for his benefit; or (2) instruct the Trustee to use the
distribution directly for his support, maintenance, or education. The Trustee
shall not be required to oversee the application, by any third party, of any
distributions made pursuant to this Article 9.8. Distributions made under this
Article 9.8 shall be in accordance with the provisions of this Article 9.
9.9 Tax Information To Be Provided
The Committee shall provide to each Participant,
Beneficiary or Alternate Payee who receives an eligible rollover distribution
(as defined in Code Section 402(f)), at the time such distribution is made, a
written explanation of the (1) provisions under which the distribution will not
be subject to tax if timely transferred to an eligible retirement plan and, if
applicable; (2) provisions regarding the availability of 5-year averaging tax
treatment of the distribution or any other method as prescribed by applicable
rules and regulations.
9.10 In Service Withdrawals
(a) Committee Establishes Rules
The Committee has the power to establish
uniform and nondiscriminatory rules and from time to time to modify or change
such rules governing the manner and method by which in service withdrawals may
be made.
<PAGE> 47
(b) Consent Required
All withdrawals are subject to written
Participant Consent to the extent required by applicable law and regulation.
(c) Withdrawal Charged to Participant's Account
The Committee shall direct the Trustee to make
a distribution to a Participant of the amount which such Participant is eligible
to withdraw, and the amount of such withdrawal shall be charged by the Committee
against the Salary Deferral or Rollover Accounts of the Participant. Withdrawals
under this Article 9.10 will be charged against the Participant's Account as of
the specified date of withdrawal, but no interest or other income credit shall
accrue with respect to such amounts to be withdrawn on account of any period
elapsing between the withdrawal date and the actual date of payment.
(d) Withdrawals Permitted for Hardship
(i) At the request of a Participant, the
Committee shall authorize a withdrawal at any time from his Salary Deferral or
Rollover Account, provided that authorization for such withdrawal and the amount
thereof shall be given only on account of hardship incurred by the Participant
which imposes immediate and heavy financial needs which may not reasonably be
met by the Participant's other resources. Such withdrawal shall not exceed the
amount required to meet the immediate financial need created by the hardship
including a reasonable estimate of federal and state taxes that will be payable.
The amount which may be withdrawn from such Participant's Salary Deferral
Account shall not exceed the lesser of:
(1) The value of his Salary Deferral
Account; or
(2) The value of his Salary Deferral
Account as of December 31, 1988, plus the total of the salary
deferrals made for the Participant since December 31, 1988, less any
amounts withdrawn after such date.
(ii) A distribution shall be deemed to be due to
an immediate and heavy financial need if it is on account of:
(1) Medical expenses incurred or
anticipated by the Employee or his spouse or other dependent;
(2) Costs directly related to the
purchase of the Employee's principal residence excluding mortgage
payment;
(3) Payment of tuition for the next
12 months of post-secondary education for the Employee or his spouse
or other dependents;
(4) The need to prevent the eviction
from or the foreclosure on the mortgage of the Employee's principal
residence;
(5) Payment of funeral expenses of a
family member; or
(6) Such other needs to be added by
the Commissioner of
<PAGE> 48
Internal Revenue.
(iii) A distribution shall be treated as
necessary to satisfy a financial need if the Employee represents that
the need cannot be relieved:
(1) Through reimbursement or
compensation by insurance or otherwise;
(2) By liquidation of the Employee's
assets to the extent that such liquidation would not cause an
immediate and heavy financial need;
(3) By cessation of elective
contributions under the Plan; or
(4) By other distributions or loans
from this Plan or any other plan or by borrowing from commercial
sources on reasonable terms unless the effect of such loan would be
to increase the amount of such need.
(e) Withdrawals Permitted Without Hardship
The provisions of this Article are not now
operative and shall become operative at the sole discretion of the Committee and
upon unanimous vote of the Committee.
(i) A Participant may withdraw his Total
Account balance from the Trust regardless of hardship by giving the
Committee notice of his intention to make such a withdrawal at least
30 days prior to the withdrawal, provided the Participant has
attained age 59 1/2 and his Account is fully vested.
9.11 Limitations on Distributions Upon Plan Termination
Distributions of a Participant's Salary Deferral and
Non-Elective Accounts upon termination of the Plan shall not commence prior to
the Participant's termination of employment or his attainment of age 59 1/2
except for hardship withdrawals in accordance with Article 9.10, unless payment
is made in a lump sum and (i) no successor defined contribution plan is adopted;
(ii) the only successor plan is an ESOP as defined in Code Section 4975(e)(7);
or (iii) the distribution is:
(1) After the date of sale of all Employer or
Member Employer assets used in its trade or business to a
non-Associated Employer by whom the Participant is still employed;
(2) After the date of sale of an incorporated
Associated Employer's interest in a subsidiary by whom the
Participant is employed; or
(3) Otherwise permitted by applicable law and
regulations.
<PAGE> 49
ARTICLE 10
SERVICE
10.1 Definitions
(a) "Service" means an Employee's total period of
employment with the Employer, Member Employer or an Associated Employer. For all
purposes, for Employees of Microwave Radio Corporation, Service will be credited
from the later of the Participant's Date of Hire or September 28, 1986.
Employees of California Microwave TeleCom Transmission Systems, Inc. will be
credited with Service from the later of the Participant's Date of Hire or
October 31, 1983.
(b) "Day of Service" means any day in which an Employee
performs an Hour of Service. If an Employee's Service terminates and he
subsequently performs an Hour of Service again for the Employer, broken periods
of Service of less than a full month shall be aggregated, with 30 Days of
Service equal to 1 Month of Service. "Period of Service" is defined in Article 6
for purposes of vesting and in Article 3 for purposes of eligibility.
(c) "Hour of Service" means:
(i) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer,
a Member Employer or an Associated Employer.
(ii) Each hour for which an Employee is paid, or
entitled to payment, by the Employer, a Member Employer or an
Associated Employer on account of a period of time during which no
duties are performed (regardless of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty
or leave of absence; provided that no Hours of Service shall be
credited to an Employee:
(1) For a period during which no
duties are performed if payment is made or due under a plan
maintained solely for purpose of complying with applicable worker's
compensation, unemployment compensation, or disability insurance
laws;
(2) On account of any payment made
or due an Employee solely as reimbursement for medical or medically
related expenses incurred by the Employee.
(iii) Each hour not otherwise credited under the
Plan for which back pay, irrespective of mitigation of damages, has
either been awarded or agreed to by the Employer, a Member Employer
or an Associated Employer. Such hours are to be credited to the
period or periods to which the award or agreement pertains. If this
provision results in an Employee becoming an Eligible Participant for
a Fiscal Year in which he was not otherwise an Eligible Participant
under Article 5 or if
<PAGE> 50
this provision results in an increase in the vested percentage
applicable to a Participant's Suspense Account which has been
forfeited under Article 6, the Committee shall establish equitable
procedures for determining and allocating any resulting amounts to
such Employee's Account.
(iv) Solely for purposes of determining whether a
Break in Service has occurred, each hour not otherwise credited under
the Plan that would have been credited if the Employee had not been
absent:
(1) By reason of pregnancy or the
birth of a child of the Employee;
(2) By reason of the placement of a
child with the Employee in connection with his adoption of such
child; or
(3) For purposes of caring for any
such child for a period beginning immediately following such birth or
placement;
In any case in which the Employer, a Member Employer or an Associated Employer
is unable to determine the number of hours which would otherwise normally have
been credited to such Employee (but for such absence), such individual shall be
credited with 8 Hours of Service for each day of such absence. The hours
described in this Article 10.1(c)(iv) shall be treated as Hours of Service only
in the Eligibility Computation Period in which the absence from work begins if
the Employee would thereby be prevented from incurring a Break in Service in
such Eligibility Computation Period or, in any other case, in the next following
Eligibility Computation Period.
(v) Each hour for any period during which an
Employee is not paid but is on an approved leave of absence, military
duty or is temporarily laid off, provided that the Employee:
(1) Returns to the employ of the
Employer, a Member Employer or an Associated Employer immediately
after the expiration of the leave or layoff, or in the case of
military duty, within 120 days or such longer period as may be
prescribed by applicable law, after first becoming eligible for
military discharge, and
(2) Remains in the employ of the
Employer, a Member Employer or an Associated Employer for at least 30
days after such return, or
(3) Fails to return or remain
employed as provided above by reason of his death, Disability or
Normal Retirement.
Hours credited for such periods shall be based on a 40-hour week or, if
different, on the Employee's normally scheduled hours per week. However, if the
Employee fails to return to the employ of the Employer, a Member Employer or an
Associated Employer or to remain in the employ of the Employer, a Member
Employer or an Associated Employer for at least 30 days after his return for
reasons other than his death, Disability or Normal
<PAGE> 51
Retirement, then his original leave date shall be deemed to be his termination
date.
10.2 Crediting of Hours Subject to DOL Regulation
The calculation of the number of Hours of Service to be
credited under Articles 10.1(b)(ii) and (iii) for periods during which no duties
are performed, and the crediting of such Hours of Service to periods of time for
purposes of computations under the Plan, shall be determined by the Committee in
accordance with the rules set forth in the Department of Labor Regulation
Section 2530-200b-2 paragraphs (b) and (c), which rules shall be consistently
applied with respect to all employees within the same job classifications.
10.3 Hours of Service Equivalency
Hours of Service for Employees under Articles 10.1(c)(i),
(ii) and (iii) shall be determined by crediting each Employee with 190 Hours of
Service for each month in which the Employee would have been credited with at
least 1 Hour of Service under Articles 10.1(c)(i), (ii) or (iii). However, for
classes of Employees paid on an hourly basis and for Employees for whom records
of hours are maintained, Hours of Service under Articles 10.1(c)(i), (ii) and
(iii) shall be determined on the basis of hours for which Plan Compensation is
paid or due.
<PAGE> 52
ARTICLE 11
FIDUCIARY RESPONSIBILITY
11.1 Named Fiduciaries
The authority to control and manage the operation and
administration of the Plan shall be allocated as provided in this Trust
Agreement between the Board, the Committee and the Trustee, all of whom are
named fiduciaries under ERISA.
In addition, procedures for the appointment of another
fiduciary, an investment manager, are set forth in Article 13.4.
11.2 Fiduciary Standards
Each fiduciary shall discharge its duties with respect to
the Plan solely in the interest of the Participants and Beneficiaries as
follows:
(1) For the exclusive purpose of providing benefits to
Participants and their Beneficiaries;
(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;
(3) By diversifying the investments of the Trust Fund so
as to minimize the risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
(4) In accordance with this Trust Agreement.
11.3 Fiduciaries Liable for Breach of Duty
A fiduciary shall be liable, as provided in ERISA, for any
breach of his fiduciary responsibilities. In addition, a fiduciary under this
Plan shall be liable for a breach of fiduciary responsibility of another
fiduciary under this Plan as provided under ERISA Section 405.
11.4 Fiduciary May Employ Agents
Any person or group of persons may serve in more than one
fiduciary capacity with regard to the Plan. A fiduciary other than the Trustee
may, with the consent of the Board, employ one or more persons to render advice
and assistance with regard to any function such fiduciary has under the Plan.
The expenses of such persons may be paid by the Trust, if not paid by the
Employer.
11.5 Authority Outlined
(a) Employer Authority
The Employer has the authority to amend and
terminate the Plan, to appoint
<PAGE> 53
and remove members of the Committee and to appoint and remove a Trustee.
(b) Committee Authority
The Committee has the authority to:
(i) Allocate the Employer's and Member
Employers' Contribution;
(ii) Establish rules pertaining to salary
deferral contributions and their withdrawals;
(iii) Determine the amount and allocation of
the Trust income or loss;
(iv) Direct the Trustee with respect to
additional valuations;
(v) Maintain separate Accounts for
Participants;
(vi) Furnish, and correct errors in, statements
of Accounts;
(vii) Direct the Trustee with respect to the
method, timing and media of distributions pursuant to
Article 9;
(viii) Direct the segregation of assets;
(ix) Direct distribution of the interests of
incompetent persons and minors;
(x) Construe the Plan and the Trust Agreement
and determine questions thereunder;
(xi) Establish a funding policy;
(xii) Appoint and delegate duties to an
investment manager;
(xiii) Employ advisors and assistants;
(xiv) Direct the Trustee with respect to its
duties and investments; and
(xv) The Committee is the Plan Administrator
and has the additional duties outlined in Article 11.7.
Article 12 further describes the authority and duties of the Committee.
(c) Trustee Authority
The Trustee has the authority to establish the
fair market value of the Trust Fund, to value segregated Accounts, to employ
advisors, agents and counsel, to hold the Trust assets and to render accounts of
its administration of the Trust. Article 14 further describes the authority and
duties of the Trustee.
11.6 Fiduciaries Not to Engage in Prohibited Transactions
A fiduciary shall not cause the Plan to engage in a
transaction if he knows or should know that such transaction constitutes a
prohibited transaction under ERISA Section 406 or Code Section 4975, unless such
transaction is exempted under ERISA Section 408 or Code Section 4975.
11.7 Duties of Plan Administrator
The Committee is the Plan Administrator under ERISA and
shall have the duty and
<PAGE> 54
authority to comply with those reporting and disclosure requirements of ERISA
and TEFRA which are specifically required of the Plan Administrator. The Plan
Administrator is the agent for the service of legal process.
The Plan Administrator shall keep on file a copy of this
Plan and Trust Agreement, including any subsequent amendments, all annual and
interim reports of the Trustee and the latest annual report required under Title
I of ERISA for examination by Participants during business hours. The Plan
Administrator hereby specifically delegates to the Trustee the responsibility
for income tax withholding, and to withhold the appropriate amount, if any, from
any payment made from the Trust to a Participant, Beneficiary or Alternate Payee
under the provisions of applicable law and regulation. The Plan Administrator
shall furnish the Trustee with all information necessary to such withholding
function, as set forth in regulations, or, if such information is not provided
the Trustee, the Plan Administrator shall assume all relevant liability.
11.8 Duties of Plan Administrator
The Plan Administrator hereby specifically delegates to
the Trustee the responsibility for income tax withholding, and to withhold the
appropriate amount, if any, from any payment made from the Trust to a
Participant, Beneficiary or Alternate Payee under the provisions of applicable
law and regulation. The Plan Administrator shall furnish the Trustee with all
information necessary to such withholding function, as set forth in regulations,
or, if such information is not provided the Trustee, the Plan Administrator
shall assume all relevant liability.
<PAGE> 55
ARTICLE 12
ADMINISTRATIVE COMMITTEE
12.1 Appointment of Administrative Committee
The Board shall appoint an Administrative Committee to
manage and administer this Plan in accordance with the provisions hereof, each
member to serve for such term as the Board may designate or until a successor
member has been appointed or until removed by the Board. Vacancies due to
resignation, death, removal or other cause shall be filled by the Board. Members
shall serve without compensation for committee service. All reasonable expenses
of the Committee shall be paid by the Trust Fund.
12.2 Committee Operating Rules
The Committee shall act by agreement of a majority of its
members, either by vote at a meeting or in writing without a meeting. By such
action, the Committee may authorize one or more members to execute documents on
its behalf and direct the Trustee in the performance of its duties hereunder.
The Trustee, upon written notification of such authorization, shall accept and
rely upon such documents until notified in writing that the authorization has
been revoked by the Committee. The Trustee shall not be deemed to be on notice
of any change in the membership of the Committee unless notified in writing. A
member of the Committee, who is also a Participant hereunder, shall not vote or
act upon any matter relating solely to himself. In the event of a deadlock or
other situation which prevents agreement of a majority of the Committee members,
the matter shall be decided by the Board.
<PAGE> 56
12.3 Committee Powers
The Committee has the power and duty to do all things
necessary or convenient to effect the intent and purpose of this Plan, whether
or not such powers and duties are specifically set forth herein. Not in
limitation but in amplification of the foregoing, the Committee shall have the
full and exclusive discretionary power to construe the Plan and the Trust
Agreement and to determine all questions that shall arise hereunder, including,
particularly, directions to and questions submitted by the Trustee on all
matters necessary for it to discharge its power and duties properly. All
actions, interpretations and decisions of the Committee made in good faith upon
any matters within the scope of its authority shall be final and binding on the
Employer, the Member Employers, the Trustee, the Participants, their
Beneficiaries and all others and shall be given the maximum possible deference
allowed by law. The Committee shall at all times act in a uniform and
nondiscriminatory manner in making and carrying out its decisions and
directions, and may from time to time prescribe and modify uniform rules of
interpretation and administration. The Committee is the Plan Administrator and
has the duties outlined in Article 11.7.
12.4 Committee to Establish Funding Policy
The Committee shall establish a funding policy for the
Trust Fund bearing in mind both the short-run and long-run needs and goals of
the Plan. The Committee shall review such policy prior to the end of each Fiscal
Year for its appropriateness under the circumstances then prevailing. The
funding policy shall be communicated to the investment manager of the Trust
Fund, if one has been appointed, so that the investment policy of the Trust Fund
can be coordinated with Plan needs.
12.5 Committee May Retain Advisors
The Committee may from time to time or on a continuing
basis, retain such agents or advisors including, specifically, attorneys,
accountants, actuaries, investment counsel, consultants and administrative
assistants, as it considers necessary to assist it in the proper performance of
its duties. The expenses of such agents or advisors shall be paid by the Trust
Fund; provided that only reasonable expenses of administering the Trust may be
paid from the Trust.
12.6 Claims Procedure
(a) Claim Must Be Submitted Within 60 Days
The Committee shall determine Participants',
Alternate Payees' and Beneficiaries' rights to benefits under the Plan. In the
event of a dispute over benefits, a Participant, Beneficiary or Alternate Payee
may file a written claim for benefits with the Committee, provided that such
claim is filed within 60 days of the date the Participant, Beneficiary or
Alternate Payee receives notification of the Committee's determination.
(b) Requirements For Notice of Denial
If a claim is wholly or partially denied, the
Committee shall provide the claimant with a notice of denial, written in a
manner calculated to be understood by the claimant, setting forth:
<PAGE> 57
(i) The specific reason for such denial;
(ii) Specific references to the pertinent plan
provisions on which the denial is based;
(iii) A description of any additional material
or information necessary for the claimant to perfect the claim with
an explanation of why such material or information is necessary; and
(iv) Appropriate information as to the steps to
be taken if the claimant wishes to submit his or her claim for
review.
The notice of denial shall be given within a reasonable time period but no later
than 90 days after the claim is filed, unless special circumstances require an
extension of time for processing the claim. If such extension is required,
written notice shall be furnished to the claimant within 90 days of the date the
claim was filed stating the special circumstances requiring an extension of time
and the date by which a decision on the claim can be expected, which shall be no
more than 180 days from the date the claim was filed. If no notice of denial is
provided as herein described, the claimant may appeal the claim as though the
claim had been denied.
(c) Claimant's Rights if Claim Denied
The claimant and/or his representative may
appeal the denied claim and may:
(i) Request a review upon written application
to the Committee;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing;
provided that such appeal is made within 60 days of the date the claimant
receives notification of the denied claim.
(d) Time Limit on Review of Denied Claim
Upon receipt of a request for review, the
Committee shall provide written notification of its decision to the claimant
stating the specific reasons and referencing specific plan provisions on which
its decision is based, within a reasonable time period but not later than 60
days after receiving the request, unless special circumstances require an
extension for processing the review. If such an extension is required, the
Committee shall notify the claimant of such special circumstances and of the
date, no later than 120 days after the original date the review was requested,
on which the Committee will notify the claimant of its decision.
(e) No Legal Recourse Until Claims Procedure Exhausted
In the event of any dispute over benefits under
this Plan, all remedies available to the disputing individual under this Article
12.6 must be exhausted before legal recourse of any type is sought.
12.7 Committee Indemnification
To the fullest extent permitted by law, the Employer and
Member Employers agree to indemnify, to defend, and hold harmless the members of
the Committee, individually and collectively, against any liability whatsoever
for any (1) action taken or omitted by them in good faith in connection with
this Plan and Trust
<PAGE> 58
or their duties hereunder, and (2) expenses or losses for which they may become
liable as a result of any such actions or non-actions, unless resultant from
their own willful misconduct. The Employer and Member Employers may purchase
insurance for the Committee to cover any of their potential liabilities with
regard to the Plan and Trust.
<PAGE> 59
ARTICLE 13
INVESTMENTS AND LOANS
13.1 Investment Authority
The Committee is hereby granted full power and authority
to direct the Trustee to invest and reinvest the Trust Fund or any part thereof
in accordance with the standards set forth in Article 11. Without limiting the
generality of the foregoing, the Committee may direct the Trustee to invest in
bonds, notes, mortgages, commercial paper, preferred stock, common stock, or
other securities, rights, obligations or property, real or personal, including
shares and certificates of participation issued by investment companies or
investment trusts, shares, units or certificates of participation in commingled
common funds established by the Trustee, or in accounts which bear a reasonable
rate of interest and are maintained by the Bank of America, National Trust and
Savings Association. The Committee may direct the Trustee to cause any part or
all of the assets of this Trust to be commingled with the assets of a similar
Trust qualified under Section 401(a) and 501(a) of the Internal Revenue Code by
causing such assets to be invested as part of a common fund of the Trustee or
other fiduciary. To the extent that Trust assets are invested in (i) the Bank of
America Investment Commingled Trust for California Employee Benefit Trusts, (ii)
the Bank of America, International Pooled Investment Fund for Employee Benefit
Trusts, and (iii) any other or future collective investment fund established and
maintained by the Trustee for which the Trust is eligible, the declaration of
trust establishing such fund, as amended from time to time, will be part of this
Agreement. Any assets of the Trust that are invested in any such fund will be
held and administered by Trustee under the terms of that fund's governing
instrument. The Committee may authorize the Trustee to hold such portion of the
Trust Fund as may be deemed necessary for the ordinary administration of the
Trust and disbursement of funds by depositing the same in any bank (including
the savings or commercial department of any bank named as Trustee) or savings
and loan institution subject to the rules and regulations governing such
deposits. A deposit in the savings or commercial department of any bank named as
Trustee shall only be made with the express authorization of the Committee.
<PAGE> 60
13.2 Trustee May Hold Necessary Cash
The Committee may authorize the Trustee to hold in a cash
or cash equivalent account such portion of the Trust Fund as may be deemed
necessary for the ordinary administration of the Trust and disbursement of
funds. Such funds may be deposited in any bank or savings and loan institution
subject to the rules and regulations governing such deposits.
13.3 Trustee to Act Upon Committee Instruction
The Trustee shall make investments promptly upon receiving
instructions from the Committee, and shall retain such investments until
instructed differently by the Committee. The Trustee shall comply promptly with
instructions from the Committee to sell, convey, exchange, transfer, pledge,
mortgage or otherwise dispose of or encumber any real or personal property held
by it. To the extent permitted by law, the Trustee shall not be liable for
damages arising out of the making of any investment at the direction of the
Committee, for the retention of any such investment in the absence of directions
from the Committee to dispose of it, or for the disposal or encumbrance of any
investment at the direction of the Committee.
13.4 Appointment of Investment Manager
The power of the Committee to direct, control or manage
the investment of the Trust Fund may be delegated to an investment manager
appointed by the Committee. Such investment manager, if appointed, must
acknowledge in writing that he is a fiduciary with respect to the Trust Fund and
shall then have the power to manage, acquire, or dispose of any asset of the
Trust Fund. An investment manager must be a person who is (1) registered as an
investment advisor under the Investment Advisors Act of 1940; (2) a bank, as
defined in that Act; or (3) an insurance company qualified to perform such
services under the laws of more than one state. If an investment manager has
been appointed, the Trustee shall neither be liable for acts or omissions of
such investment manager nor be under any obligation to invest or otherwise
manage any asset of the Trust Fund. The Committee shall not be liable for any
act or omission of the investment manager in carrying out such responsibility
except to the extent that the Committee violated Article 11.2 of this Trust
Agreement with respect to:
(1) Such designation,
(2) The establishment or implementation of the procedures
for the designation of an investment manager, or
(3) Continuing the designation, in which case the
Committee would be liable in accordance with Article 11.3.
13.5 Loans to Participants or Beneficiaries
The provisions of this Article 13.5 shall be operational
only to the extent of loans transferred into the Plan and Trust from the former
Plan of TeleScience Transmission Systems, Inc. For all other purposes, the
provisions of this Article 13.5 are not now operational and shall become
operational at the discretion of the Committee and upon unanimous vote of the
Committee.
<PAGE> 61
(a) Limit on Amount of Loan
The Trustee shall, when so directed by the
Committee, make a loan or loans to a Participant or Beneficiary of a deceased
Participant (the Borrower) upon such terms as the Committee may determine in a
uniform and non-discriminatory manner. Such loan or loans shall be limited to
the lesser of (1) 50% of the Borrower's vested Account, or (2) $50,000. However,
the amount of any new loan shall not exceed $50,000, reduced by the highest
outstanding loan balance of the Borrower during the preceding 12 months. In
determining whether the limitations of this Article have been exceeded at any
date, all loans made at any time from the Plan to the Borrower and still
outstanding on such date shall be aggregated, and the Borrower's vested interest
in all qualified plans maintained by the Employer, a Member Employer, or an
Associated Employer shall be aggregated.
(b) Terms of Loan
The terms of any loan shall provide that
repayment is to be made within five years of the date of the loan, unless the
loan is used to acquire a dwelling to be used within a reasonable time (as
determined at the date of the loan) as the principal residence of the
Participant, in which case the term of such loan shall be arrived at by mutual
agreement between the Committee and the Participant.
(c) Loan Requirements
All loans shall be secured by the Borrower's
vested Account balance and shall be evidenced by the Borrower's promissory note.
Such note shall provide for repayment of principal and interest in installment
payments made at least quarterly. The rate of interest shall be a market rate of
interest, determined by the Committee, according to the procedures set forth in
Article 13.5(i).
(d) Loan is Lien on Account
A loan shall be a lien on all interests of the
Borrower in the Trust. All Borrowers shall receive a clear statement of all
charges involved in the loan transaction.
(e) Loan Requires Spousal Consent
Any loan or renegotiation, extension, renewal or
other revision of a loan made to a Borrower shall require Spousal Consent to the
extent required by applicable law and regulation. Any such Spousal Consent shall
acknowledge the possibility that a subsequent amount to be paid under Article 9
might be reduced (pursuant to (d) above) by the amount of the outstanding
balance of the loan and interest due thereon, and such Spousal Consent shall be
given within 90 days before the loan is made. If such Spousal Consent is given
at the time that the loan is made, any such subsequent reduction of a
distribution shall be made (without any Spousal Consent), even if the Borrower
is married to a different spouse at the time of the subsequent reduction. If an
unmarried Borrower agrees to a subsequent reduction of a distribution at the
time that the loan is made, any such reduction shall be valid, even if the
Borrower is married when the distribution is reduced.
(f) Loans are Segregated
Any loan under this Article 13.5 shall be
accounted for as a segregated loan
<PAGE> 62
Account in the Trust. Repayments of the principal amount of the loan will (1)
reduce the total amount of principal due in the segregated loan Account by the
amount of such payments, and (2) increase by an equal amount the value of the
Borrower's Account in the General Trust Fund. Payments of interest on such loan
will reduce the total amount of interest due in the segregated loan Account.
Such interest payments will be credited directly to the Borrower's Account in
the General Trust Fund.
(g) Restriction on Loans to Owner-Employees
In no event may a loan be made to any Borrower
who is an Owner-Employee (as defined in Code Section 401(c)(3)) or a
shareholder-employee (as defined in Code Section 1379(d)) as in effect
immediately prior to the date of enactment of the Subchapter S Revision Act of
1982, except to the extent permitted by applicable law and regulation.
(h) Loans Made Prior to October 19, 1989
Notwithstanding the foregoing, any loan made
pursuant to the rules in effect prior to October 19, 1989 must comply only with
the requirements of the Plan and the laws in effect at the time the loan was
made, until such time as that loan is repaid or renegotiated.
(i) Loan Policies and Procedures
The Participant loan program will be administered
in a uniform and nondiscriminatory manner by the Plan Administrative Committee.
The Committee shall establish policies and procedures covering all aspects of
the loan program not otherwise described in this Article 13.5 including:
(i) The procedure for making an application for a
loan,
(ii) Any limitations on the amount and purpose
for a loan,
(iii) The interest rate to be charged on the
loan,
(iv) The security for the loan,
(v) Default procedures, and
(vi) Loan fees.
These policies and procedures shall be recorded by the Committee in a section of
the minutes of the Committee which shall be designated to be part of the Plan.
The Committee, acting in a uniform and nondiscriminatory manner, may alter these
policies and procedures to meet the requirements of any new laws or regulations
or to improve the operation of the Plan.
13.6 Separate Investment Funds
(a) Committee May Establish Separate Funds
The Committee may, in its sole discretion,
direct the Trustee to create one or more separate investment funds, having such
different specific investment objectives as the Committee shall from time to
time determine. The Committee shall determine and may from time to time
redetermine the number of investment funds and the specific objectives of said
funds and the investments or kinds of investment which shall be
<PAGE> 63
authorized therefor.
(b) Participant Direction Permitted
Each Participant has the right to instruct the
Committee to direct the Trustee in writing to invest his Salary Deferral,
Matching, Profit Sharing, Top-Heavy, Non-Elective or Rollover Account in one or
more separate investment funds, provided, however, that if any Participant fails
to make a direction pursuant to this Article as to all or any part of such
Account, the undirected portion of a Participant's Account shall be invested in
the fixed income fund. Each directed investment Account shall be valued
separately by the Trustee under the provisions of Article 7.
(c) Committee To Establish Rules
The Committee may at any time make such uniform
and nondiscriminatory rules as it determines necessary regarding the
administration of each directed investment option. The Committee shall develop
and maintain rules governing the rights of Participants to change their
investment directions and the frequency with which such changes can be made.
<PAGE> 64
ARTICLE 14
TRUSTEE
14.1 Trustee Duties
The duties of the Trustee shall be confined to receiving
and paying funds of the Trust, safeguarding and valuing Trust assets, investing
and reinvesting the Trust Funds, as provided in Article 13, and carrying out the
directions of the Committee or of the investment manager if one has been
appointed pursuant to Article 13.4. The directions of the Committee shall be in
writing and bear the signature of one or more members designated as its
authorized signator or signators, as provided in Article 12.2. The directions of
an investment manager shall be in writing or in such other form as is acceptable
to the Trustee. The Employer may, however, authorize the Trustee to act with
respect to any specific matter or class of matters by delivering to the Trustee
a certified copy of a resolution authorizing the Trustee so to act.
14.2 Indicia of Ownership Must Be in United States
The Trustee shall not maintain the indicia of ownership of
any Trust assets outside the jurisdiction of the district courts of the United
States, except as authorized by regulations issued by the Department of Labor.
14.3 Permissible Trustee Action
In the discharge of its duties, the Trustee has all the
powers, authority, rights and privileges of an absolute owner of the Trust Fund
and, not in limitation of but in amplification of the foregoing, may (i)
receive, hold, manage, invest and reinvest, sell, exchange, dispose of,
encumber, hypothecate, pledge, mortgage, lease, grant options respecting,
repair, alter, insure, or distribute any and all property in the Trust Fund;
(ii) borrow money, participate in reorganizations, pay calls and assessments,
vote or execute proxies, exercise subscription or conversion privileges and
register in the name of a nominee any securities in the Trust Fund; (iii) renew,
extend the due date, compromise, arbitrate, adjust, settle, enforce or foreclose
by judicial proceedings or otherwise or defend against the same, any obligations
or claims in favor of or against the Trust Fund; (iv) exercise options, employ
agents; and, (v) whether herein specifically referred to or not, do all such
acts, take all such actions and proceedings and exercise all such rights and
privileges as if the Trustee were the absolute owner of any and all property in
the Trust Fund. The Trustee has no authority or duty to determine the amount of
the Employer or Member Employer contribution or to enforce the payment of any
Employer or Member Employer contribution to it.
14.4 Trustee's Fees For Services and Advisors Retained
The Trustee's fees for its services as Trustee shall be an
amount mutually agreed upon by the Committee and the Trustee, and such fees
shall be paid by the Trust Fund, with the exception that individual
<PAGE> 65
Trustees shall serve without compensation for their service as such. However,
with the approval of the Committee, the Trustee may from time to time or on a
continuing basis, retain such agents or advisors, including specifically
accountants, attorneys, investment counsel and administrators, as they consider
necessary to assist them in the proper performance of their duties. The expenses
of such agents or advisors and all other expenses of the Trustee shall be paid
by the Trust.
14.5 Annual Accounting and Asset Valuation
Within 60 days or within a reasonable period following the
close of each Fiscal Year, the Trustee shall render to the Employer an
accounting of its administration of the Trust during the preceding year. The
Trustee shall also report to the Committee regarding determinations of the value
of the Trust Fund, as provided in Articles 7.1 and 7.2. Notwithstanding any
other provisions of this Agreement, if the Trustee finds that the Trust Fund
consists, in whole or in part, of property not traded freely on a recognized
market or that information necessary to ascertain the fair market value thereof
is not readily available to the Trustee, the Trustee shall request the Committee
to instruct the Trustee as to the fair market value of such property for all
purposes under the Plan and Trust Agreement. In such event, the fair market
value placed upon such property by the Committee in its instructions to the
Trustee shall be conclusive and binding. If the Committee shall fail or refuse
to instruct the Trustee as to the fair market value of such property within a
reasonable time after receipt of the Trustee's request so to do, the Trustee
shall take such action as is required to ascertain the fair market value of such
property including the retention of such counsel and independent appraisers as
it considers necessary; and in such event the fair market value so determined
shall be conclusive and binding.
14.6 Trustee Removal or Resignation
The Trustee may resign at any time upon 30 days written
notice to the Employer and the Committee or such shorter period as may be
agreeable to the Employer. Upon receipt of instructions or directions from the
Employer or the Committee with which the Trustee is unable or unwilling to
comply, the Trustee may resign upon written notice to the Employer and the
Committee, given within a reasonable time under the circumstances then
prevailing. After its resignation, the Trustee shall have no liability to the
Employer, the Committee, or any person interested herein for failure to comply
with any instructions or directions. The Employer may remove the Trustee without
cause at any time upon 30 days written notice. In case of resignation or removal
of the Trustee, the Trustee shall have the right of a settlement of its
accounts, which may be made at the option of the Trustee, either by judicial
settlement in an action in a court of competent jurisdiction or by agreement of
settlement between the Trustee and the Employer. The Trustee shall not be
required to transfer assets of the Trust Fund to a successor Trustee under
Article 14.8 or otherwise until its accounts have been settled.
14.7 Approval of Trustee Accounting
The written approval of any Trustee accounting by the
Employer or Committee shall be final as to all matters and transactions stated
or shown therein and binding upon the Employer, the Member
<PAGE> 66
Employers, the Committee, and all persons who then shall be or thereafter shall
become interested in this Trust. Failure of the Employer or Committee to notify
the Trustee of its disapproval of an accounting within 90 days after it has been
received shall be the equivalent of written approval.
14.8 Trust Not Terminated Upon Trustee Removal or Resignation
Resignation or removal of the Trustee shall not terminate
the Trust. If the Trustee has resigned or been removed, the Committee shall
appoint a successor Trustee. Any such successor Trustee shall have all the
powers and duties herein conferred upon the former Trustee. The title to all
Trust property shall automatically vest in a successor Trustee without the
execution or filing of any instrument or the doing of any act, but the former
Trustee shall, nevertheless, execute all instruments and do all acts which would
otherwise be necessary to vest such title in any successor. The appointment of a
successor Trustee may be effected by amendment to this Trust Agreement or by a
board resolution of the Employer, with the agreement of the successor Trustee to
act as such being evidenced by its execution of such amendment or acceptance of
such board resolution.
14.9 Trustee May Consult With Legal Counsel
The Trustee may consult with legal counsel (who may or may
not be counsel to the Employer or Member Employers) concerning any question
which may arise with reference to its duties under this Agreement.
14.10 Trustee Not Required to Verify Identification or Addresses
The Trustee shall not be required to make any
investigation to determine the identity or mailing address of any person
entitled to benefits under this Agreement and shall be entitled to withhold
making payments until the identity and mailing address of any person entitled to
benefits are certified by the Committee. In the event that any dispute shall
arise as to the identity or rights of persons entitled to benefits hereunder,
the Trustee may withhold payment of benefits until such dispute has been
determined by a court of competent jurisdiction or shall have been settled by
written stipulation of the parties concerned.
14.11 Indemnification of Trustee and Insurance
To the fullest extent permitted by law, the Employer and
Member Employers agree to indemnify, to defend, and to hold harmless the Trustee
against any liability whatsoever for any action taken or omitted by such Trustee
in good faith in connection with this Plan and Trust or duties hereunder and for
any expenses or losses for which the Trustee may become liable as a result of
any such actions or non-actions unless resultant from willful misconduct.
14.12 Income Tax Withholding
In making payments from the Trust, the Trustee shall be
liable for federal income tax withholding, and shall withhold the appropriate
amount of tax, if any, as provided by applicable law and regulation, from any
payment made to a Participant, Beneficiary or Alternate Payee, unless the
Committee does not provide the Trustee with the necessary information as set
forth in regulations, in which case the Committee shall assume all
<PAGE> 67
relevant liability.
<PAGE> 68
ARTICLE 15
AMENDMENT, TERMINATION AND MERGER
15.1 Trust is Irrevocable
The Trust shall be irrevocable but shall be subject to
amendment and termination as provided in this Article 15.
15.2 Employer May Amend Trust Agreement
The Employer reserves the right to amend this Plan and
Trust Agreement to any extent and in any manner that it may deem advisable by
action of its Board of Directors. The Employer, the Member Employers, the
Trustee, all Participants, their Beneficiaries and all other persons having any
interest hereunder shall be bound by any such amendment; provided, however, that
no amendment shall:
(1) Cause or permit any part of the principal or income of
the Trust to revert to the Employer or Member Employers or to be used for, or be
diverted to, any purpose other than the exclusive benefit of Participants or
their Beneficiaries;
(2) Change the duties or liabilities of the Trustee
without its written assent to such amendment;
(3) Adversely affect the then accrued benefits of any
Participants; or
(4) Eliminate an optional form of distribution for Account
balances accrued before such amendment, except as allowed under the Code.
15.3 Employer May Terminate Plan and Trust Agreement or Discontinue
Matching and Profit Sharing Contributions
The Employer has established the Plan with the bona fide
intention and expectation that the Plan will continue indefinitely, and that it
will be able to make its matching and profit sharing contributions indefinitely,
but the Employer shall be under no obligation to continue its matching or profit
sharing contributions or to maintain the Plan for any given length of time. The
Employer or any Member Employer, in its sole discretion, may increase, reduce,
or completely discontinue its contributions or participation in the Plan or the
Employer may terminate the Plan at any time without any liability whatsoever. In
the event of the earlier of (1) the termination of this Plan, or (2) the
complete discontinuance of contributions hereunder as evidenced by a Board
resolution to the effect that the Employer will no longer make any contributions
to the Plan and Trust, the full value of the applicable Accounts of all
Participants shall become fully vested and nonforfeitable; provided that this
provision shall not apply to any Participant who previously received a
distribution from his Accounts and has not repaid it at the time of Plan
termination, in accordance with Article 6.5(c). In the event of partial
termination of this Plan, the full value of the
<PAGE> 69
applicable Accounts of the Participants involved in the partial termination
shall become fully vested and nonforfeitable.
15.4 Timing of Plan Termination
The Plan shall terminate:
(a) By Written Notice
Upon the date specified in a written notice of
such termination, executed by the Employer and delivered to the Trustee; or
(b) Purpose of Trust Accomplished
Upon the earlier of (i) the complete
accomplishment of all purposes for which the Plan was created, or (ii) the death
of the last person entitled to receive any benefits hereunder who is living at
the date of execution of the Trust Agreement. However, if, upon the death of
such last survivor, the Trust may continue for a longer period without violation
of any law of the jurisdiction to which the Trust is subject, the Trust shall
continue until the complete accomplishment of all the purposes for which the
Plan and Trust are created, unless sooner terminated under the other provisions
hereof.
15.5 Action Required Upon Plan Termination
Upon the termination of this Plan and after payment of all
expenses of the Trust, including any compensation then due the Trustee and
agents of the Committee, the Trust assets and all Participants' Accounts shall
be revalued according to the procedures provided in Article 7. Limitation
Accounts held pursuant to Article 5 shall be allocated as of the date the Plan
is terminated in accordance with Articles 4 and 5. Suspense Accounts will be
allocated to the Accounts of the Participants for whom they were established.
The Trustee shall hold and distribute such Accounts as directed by the Committee
in accordance with the provisions of Article 9. Upon such termination, if the
Employer has ceased to exist, all rights, powers, and duties to be exercised or
performed by the Employer shall thereafter be exercised or performed by the
Committee, including the filling of vacancies on the Committee and the amending
of the Plan. In the event the Committee is unable to perform, all rights, powers
and duties shall be performed by the Trustee.
15.6 Nonreversion of Assets
Except as provided in Article 4.3(b), in no event shall
any part of the principal or income of the Trust revert to the Employer or any
Member Employers or be used for or diverted to any purpose other than the
exclusive benefit of Participants or their Beneficiaries.
15.7 Merger or Consolidation Cannot Reduce Benefits
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 benefits, if such other plan were then to
terminate, are at least equal to or greater than the benefits which the
Participant would have been entitled to had this Plan been terminated
immediately
<PAGE> 70
before such merger, consolidation or transfer.
<PAGE> 71
ARTICLE 16
ASSIGNMENTS
16.1 No Assignment
Except as provided in Article 13.5 regarding loans and
below, the interest herein, whether vested or not, of any Participant, former
Participant or Beneficiary, shall not be subject to alienation, assignment,
pledging, encumbrance, attachment, garnishment, execution, sequestration, or
other legal or equitable process, or transferability by operation of law in the
event of bankruptcy, insolvency or otherwise.
16.2 Qualified Domestic Relations Order Permitted
The provisions of Article 16.1 above shall not prevent the
creation, assignment or recognition of any individual's right to a benefit
payable with respect to a Participant pursuant to a Qualified Domestic Relations
Order (QDRO).
(a) Not All Domestic Relations Orders Qualify as QDROs
The Committee shall establish reasonable
procedures to determine whether a domestic relations order is a QDRO and to
administer distributions under a QDRO. If any domestic relations order is
received by the Plan, the Committee shall promptly notify the Participant and
each Alternate Payee that the order has been received, and shall determine
within a reasonable period after receipt of the order whether it is a QDRO and
notify the Participant and each Alternate Payee of the Committee's
determination.
(b) Payments May Occur Before Termination of Service
The Plan may make benefit payments to an
Alternate Payee under a QDRO before the Participant's termination of Service if
such payments are made on or after the earlier of (i) the date specified in the
QDRO; (ii) the earliest date on which the Participant is entitled to a
distribution under the Plan; or (iii) the later of (A) the Participant's 50th
birthday, or (B) the earliest date on which the Participant could begin
receiving benefits under the Plan if the Participant separated from Service; in
accordance with applicable law or regulations.
(c) Separate Accounting of Alternate Payee's Account
During any period in which the issue of whether
a domestic relations order is a QDRO is being determined by the Committee, a
court of competent jurisdiction or otherwise, the Committee shall separately
account for (herein referred to as "the separate amounts") the amounts which
would have been payable to the Alternate Payee during such period if the order
had been determined to be a QDRO. If the order, or a modification of the order,
is determined within the 18 month period described herein to be a QDRO, the
Committee shall pay the separate amounts (as adjusted by attributable investment
income or loss), in accordance with the Plan's
<PAGE> 72
provisions, to the entitled individual(s). If, within the 18 month period
described herein, the order is determined not to be a QDRO or its status as a
QDRO is not resolved, the Committee shall return the separate amounts (as
adjusted by attributable investment income or loss) to his Account; or if
applicable, the Committee shall pay such separate amounts to the individual(s)
who would have been entitled to receive such amounts absent such order. Any
determination that an order is a QDRO made after the close of the 18-month
period described herein shall be applied prospectively only. For purposes of
this Article 16, the 18-month period shall be the 18-month period beginning with
the date on which the first payment would be required to be made under the QDRO.
(d) Consent Requirements
Except as otherwise provided in a QDRO,
payments made to an Alternate Payee shall not be subject to (1) Spousal Consent,
or (2) consent of the Alternate Payee.
(e) Committee Delegates Responsibility to Trustee
The Committee shall direct that payments under
a QDRO be made by the Trustee. The Committee may delegate to the Trustee the
responsibility for income tax withholding with regard to an Alternate Payee
pursuant to Article 14.
<PAGE> 73
ARTICLE 17
ADOPTION OF THE PLAN BY ASSOCIATED EMPLOYERS
17.1 The purpose of this Article 17 is to describe the terms and
conditions under which an Associated Employer may adopt and become a Member
Employer under this Plan for the benefit of its Eligible Employees.
17.2 Any Associated Employer may, with the written consent of the
Employer, become a Member Employer under this Plan and Trust Agreement by
executing this Plan and Trust Agreement or a Subscription Agreement under which
it shall agree:
(a) To be bound by all the provisions of the Plan and
Trust in the manner set forth herein;
(b) To pay its share of the expenses of the Plan and Trust
as they may be determined from time to time in the manner specified in this
Article 17; and
(c) To provide the Employer, Committee and the Trustee
with full, complete and timely information on all matters necessary to them in
the operation of this Plan and Trust.
17.3 In the event of the adoption of this Plan and Trust by an
Associated Employer, the following shall apply with respect to the participation
of such Associated Employer as a Member Employer hereunder:
(a) All the terms and conditions of the Plan and Trust as
set forth in the preceding Articles 1 through 16 shall apply to the
participation of such Associated Employer and its Employees in the same manner
as set forth for the Employer and its Employees, except as follows:
(i) The right to designate an Associated
Employer is specifically reserved to the Employer.
(ii) An Associated Employer which becomes a
Member Employer may, at the discretion of the Employer, have the
right to designate for purposes of Article 3 alternative requirements
which shall be met by its Eligible Employees in order to qualify as
Participants. In the event that no such designation is made, the
current requirements set forth in Article 3 shall apply to Employees
of such Member Employer.
(iii) The right to appoint the Administrative
Committee is specifically reserved to the Employer so long as the
Employer participates under the Plan; provided that a Member Employer
may appoint an advisory committee on any matters affecting such
Member Employer or its Employees who are Participants under the Plan.
The Committee shall be entitled to rely on any information furnished
it by any such advisory committee in the same manner as if furnished
by the
<PAGE> 74
Member Employer appointing such advisory committee, but in no event
shall the existence of any such advisory committee modify or
otherwise limit any of the powers or duties of the Committee under
the Plan.
(iv) The right to direct, appoint, remove,
approve the accounts of or otherwise deal with the Trustee is
specifically reserved to the Employer so long as the Employer
participates under the Plan.
(v) The right to amend the Plan and Trust is
specifically reserved to the Employer so long as the Employer
participates under the Plan, and any such amendment, unless otherwise
specified therein, shall be fully binding with respect to the
participation of any Member Employer, provided that this reservation
shall in no event be construed to prevent any Member Employer from
terminating at any time its participation as a Member Employer in
this Plan and Trust.
(b) In the operation of the Plan with respect to a Member
Employer, the term "effective date" shall mean the effective date set forth in
this Agreement or such other date as specified in such Member Employer's
Subscription Agreement.
(c) The Committee shall at all times maintain separate
Accounts reflecting the participation of the Eligible Employees of the Employer
and any Member Employer, and in no event shall there be a commingling of the
Accounts of the Eligible Employees of any Member Employer with those of the
Employer; provided that this requirement shall in no event be construed to be a
limitation on the commingling of any Contributions or of the Trust Fund for
investment purposes nor shall it require the Trustee to maintain separate
accounts with respect to the Trust Fund except as otherwise provided herein.
(d) Notwithstanding any other provisions of this Agreement
to the contrary, it is specifically understood that the participation of any
Associated Employer hereunder, the obligation of such Employer to make
Contributions hereunder, and the vesting and entitlements of any Participant
based on such Contributions are conditional to the extent that if such
Associated Employer receives an initial notification from the United States
Treasury that its Subscription Agreement as part of this Plan, or the same as it
may have been amended, is not part of a qualified plan under Section 401 of the
Code, as amended by ERISA, with respect to its participation, such Associated
Employer shall not be a Member Employer hereunder and the then value of any
Contributions made by such Employer or its Employees shall be returned from the
Trust Fund, and no Participant hereunder or his Beneficiary shall have any
vested interest in, or be entitled to, any benefit payments based on such
Contributions. Further, it is understood and provided that upon receipt of an
initial notification from the United States Treasury Department that such
Subscription Agreement and this Plan and Trust, as they may have been amended in
order to receive such notification, are qualified and exempt from taxation under
the applicable sections of the Code, the participation of such Employer as a
Member Employer and the vestings and entitlement of all Participants employed by
such Member Employer and their Beneficiaries shall be retroactive to the date of
their occurrence in accordance
<PAGE> 75
with the other provisions of this Plan, and this Article 17.3 shall be of no
further force or effect with respect to such Employer and its Employees.
17.4 Any Member Employer may at any time elect to terminate its
participation in this Plan and Trust, or the Employer or any Member Employer may
elect at any time by appropriate amendment or action affecting only its own
status hereunder to disassociate itself from this Plan and Trust but to continue
the Plan and the portion of the Trust as it pertains to itself and its Employees
as an entity separate and distinct from this Plan and Trust if otherwise
permitted by law. Termination of the participation of any Member Employer and/or
the Employer shall not affect the participation of any other Member Employer
and/or the Employer nor terminate the Plan or Trust with respect to them and
their Employees; provided that, if the Employer shall terminate its
participation, or disassociate itself, then each remaining Member Employer shall
make such arrangement and take such action as may be necessary to assume the
duties of the Employer in providing for the operation and continued
administration of the Plan and Trust as the same pertains to the Member
Employer.
17.5 Each Member Employer shall be liable for and shall pay at least
annually to the Employer its fair share of the expenses of operating the Plan
and Trust, including its share of any Trustee's fees. The amount of such charges
to each Member Employer shall be determined by the Committee in its sole
discretion; provided that, except with respect to charges incurred solely on
account of a Member Employer's segregated transaction, no Member Employer shall
be charged with a greater proportion of any expenses of Plan operation than the
ratio that the number of Participants who are or were its Employees bears to the
total of all Participants nor for a greater proportion of any Trustee's fees
than the ratio that the portion of the Trust Fund pertaining to its
participation bears to the total Trust Fund.
<PAGE> 76
IN WITNESS WHEREOF, the Employer, each Member Employer listed below and the
Trustee have caused this Agreement to be executed by their respective duly
authorized officers on this 15th day of May, 1995.
CALIFORNIA MICROWAVE, INC. SATELLITE TRANSMISSION SYSTEMS, INC.
(Employer) (Adopting Employer)
By /s/ George L. Spillane By /s/ George L. Spillane
------------------------------------ -----------------------------------
By By
------------------------------------ -----------------------------------
MOBILE SATELLITE PRODUCTS CORPORATION
EF DATA CORPORATION (Adopting Employer)
(Adopting Employer)
By /s/ George L. Spillane By /s/ George L. Spillane
------------------------------------ -----------------------------------
By By
------------------------------------ -----------------------------------
CALIFORNIA MICROWAVE-TELECOM
TRANSMISSION SYSTEMS, INC.
MICROWAVE RADIO CORPORATION (Adopting Employer effective October
(Adopting Employer effective 1, 1993)
July 1, 1994)
By /s/ George L. Spillane By /s/ George L. Spillane
------------------------------------ -----------------------------------
By By
------------------------------------ -----------------------------------
CALIFORNIA MICROWAVE NAVIGATION BANK OF AMERICA, N.T. & S.A.
SYSTEMS, INC. (Trustee)
(Adopting Employer)
By /s/ George L. Spillane By /s/ Trustee
------------------------------------ -----------------------------------
By By
------------------------------------ -----------------------------------
Date:
----------------------------------
<PAGE> 77
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
AND TRUST AGREEMENT
(As Amended and Restated Generally Effective July 1, 1989 with some provisions
effective July 1, 1987, as required by the Tax Reform Act of 1986)
<TABLE>
<CAPTION>
Article Commencing
Number Description on Page
<S> <C> <C>
1. NAME, EFFECTIVE DATE, PURPOSE AND CONSTRUCTION................................... 1-1
2 DEFINITIONS...................................................................... 2-1
3. ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION........................... 3-1
4. CONTRIBUTIONS.................................................................... 4-1
5. ALLOCATION OF CONTRIBUTIONS AND FORFEITURES...................................... 5-1
6. VESTING OF ACCOUNTS.............................................................. 6-1
7. ALLOCATION OF TRUST INCOME OR LOSS............................................... 7-1
8. PARTICIPANTS' ACCOUNTS........................................................... 8-1
9. DISTRIBUTIONS AND WITHDRAWALS.................................................... 9-1
10. SERVICE.......................................................................... 10-1
11. FIDUCIARY RESPONSIBILITY......................................................... 11-1
12. ADMINISTRATIVE COMMITTEE......................................................... 12-1
13. INVESTMENTS AND LOANS............................................................ 13-1
14. TRUSTEE.......................................................................... 14-1
15. AMENDMENT, TERMINATION AND MERGER................................................ 15-1
16. ASSIGNMENTS...................................................................... 16-1
17. ADOPTION OF THE PLAN BY ASSOCIATED EMPLOYERS..................................... 17-1
</TABLE>
<PAGE> 78
FIRST AMENDMENT TO THE
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
The California Microwave Tax-Deferred Savings and Deferred Profit Sharing Plan
is hereby amended, effective November 2, 1995, as follows:
1. A new Article 3.3(d) shall be added to read as follows:
(d) Accounts Transferred form Microwave Radio Corporation
Notwithstanding anything contained in this Article 3.3, an
election to have a beneficiary other than the spouse of a Participant will be
valid only if made after the calendar year in which the Participant attains age
thirty-four (or the Participant's earlier separation from service) and before
his death. Any election or revocation under this subsection may be revoked or
changed in writing anytime during this election period, but thereafter may be
changed only with the consent of the Plan Administrator, which consent need not
be given. An election or revocation made by a spouse affects only that spouse
and not any subsequent spouse. An election of a non-spouse beneficiary shall
state the specific beneficiary, class of beneficiaries, or contingent."
2. Article 4.10(e) shall be amended to delete the last sentence from such
Article and replace it with the following:
"To the extent that a direct transfer is made by and on behalf of
a Participant or an Employee who is to become a Participant is made from (i) a
defined contribution plan subject to the minimum funding standards of Code
Section 412, (ii) any defined contribution plan to which the requirements of
Code Section 401(a)(11)(A) apply, or (iii) any other defined contribution plan
to which the requirements of Code Section 411(d)(6) apply with respect to such
Participant or Employee, a separate Account within such Participant's or
Employee's Rollover or other Account shall be maintained for the transferred
benefits. All income, gain and loss on this separate Account shall be valued as
of the last day of the Fiscal Year and income, gain or loss shall be based on
the assets constituting such portion of the separate Account. Only the direct
transfer and income attributable to the direct transfer shall be subject to the
rules regarding Joint and Survivor Annuity under Article 9.5.l. After receipt,
the Trustee shall treat such amounts as a rollover contribution otherwise
meeting the requirements above."
3. Article 9.5(a) shall be amended to add the following:
"(v) Substantially equal installments to the Participant and
thereafter to his surviving spouse of his properly designated beneficiary for a
term certain equal to the life expectancies of the Participant and his spouse or
his properly designated beneficiary unless the Participant designated otherwise
before 1984, but only to the extent required by Article 4.10(e)."
4. Article 9.5(b) shall be amended to add the following:
"In addition, the consent of the Participant's spouse is required
for the Account of any Participant who is subject to the separate accounting for
transferred benefits under Article 4.10(e)."
1.
<PAGE> 79
5. A new Article 9.5.1 shall be added as follows:
"9.5.1 Spousal Consent
Each Participant with Accounts subject to the separate
accounting of Article 4.10(e) and his or her spouse will be furnished with a
written explanation of: the benefit options, the right to make and the effect of
an election to waive an option, the right of the Participant's spouse to consent
or refuse to consent to a waiver, and the availability of the election and the
effect of a revocation of an election. The written explanation will be provided
within a reasonable period before the annuity starting date.
Any election or revocation under this subsection shall be
in writing and shall clearly indicate that both the Participant and his or her
spouse are electing to receive all or part of the benefits in some optional
form. However, no spouse's election shall be needed if there is no spouse, the
spouse cannot be located, the spouse is legally separated from the Participant
under a court decree, the Participant has been abandoned by the spouse and the
abandonment has been recognized under a court decree, or because of other
circumstances which may prevent the spouse from making a written election. The
spouse's election shall acknowledge the effect of such election and shall be
witnessed by a Plan representative or a notary public. An election of an
optional form of benefit must specify the particular optional form selected."
6. A new Section 9.10(d)(iv) shall be added to read as follows:
"(iv) Hardship Withdrawals Permitted for Terminated Participants
Notwithstanding the provisions contained within this Article
9.10, a Participant who has separated from Service from the Employer and who has
met the requirements for a hardship withdrawal under this Section 9.10(d) may
request a hardship withdrawal of all or a portion of his or her total vested
Account balance, as determined under Article 6.1 and 6.2, provided that the
amount of the withdrawal shall not be limited by the restrictions of Section
9.10(d)(i)(1) and (2)."
2.
<PAGE> 80
SECOND AMENDMENT TO THE
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
The California Microwave Tax-Deferred Savings and Deferred Profit Sharing Plan
is hereby amended, effective July 1, 1996, as follows:
Article 4.2(c), describing Employer Matching Contributions, is amended to add
the following:
"Effective July 1, 1996, the match amount shall change to an
amount equal to 66-2/3% of each Eligible Participant's salary deferral
contributions up to $1,500, plus 50% of his salary deferral
contributions between $1,500 and $1,900, for a maximum matching
contribution of $1,200."
4.
<PAGE> 81
THIRD AMENDMENT TO THE
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
The California Microwave Tax-Deferred Savings and Deferred Profit Sharing Plan
is hereby amended, effective January 23, 1997, as follows:
1. Article 2.43 is amended by adding the following new paragraph to the end
thereof:
(v) An Employee's Period of Service shall be the aggregate of all
separate Periods of Service which he may have, except for any which can
be disregarded due to five (5) consecutive Breaks in Service.
2. Article 4.6 is amended by deleting all references to "supplemental matching
contributions" therein.
3. Article 4.7(5), describing the formula for earnings or loss adjustments on
refunds for the period between the end the Fiscal Year and the date of payout,
is amended by adding the following new formula thereto and deleting the existing
formula:
"Amount in (4) x 10% x Number of elapsed months, divided by 12."
5.
<PAGE> 82
FOURTH AMENDMENT TO THE
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
The California Microwave Tax-Deferred Savings and Deferred Profit Sharing Plan
is hereby amended, effective July 1, 1997, as follows:
Article 4.2(c), describing Employer Matching Contributions, is amended to add
the following:
"Effective July 1, 1997, the match amount shall change to an
amount equal to 66-2/3% of each Eligible Participant's salary deferral
contributions up to $1,500, plus 50% of his salary deferral
contributions between $1,500 and $2,300, for a maximum matching
contribution of $1,400."
6.
<PAGE> 83
FIFTH AMENDMENT TO THE
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS
AND DEFERRED PROFIT SHARING PLAN
The California Microwave Tax-Deferred Savings and Deferred Profit Sharing Plan
is hereby amended, effective July 1, 1998, as follows:
Article 4.2(c), describing Employer Matching Contributions, is amended to add
the following:
"Effective July 1, 1998, the match amount shall change to an
amount equal to 66-2/3% of each Eligible Participant's salary deferral
contributions up to $1,500, plus 50% of his salary deferral
contributions between $1,500 and $2,700, for a maximum matching
contribution of $1,600."
7.
<PAGE> 1
EXHIBIT 4.4
TRUST AGREEMENT
BETWEEN
-----------------------------------------------------------------------
CALIFORNIA MICROWAVE, INC.
AND
FIDELITY MANAGEMENT TRUST COMPANY
-----------------------------------------------------------------------
CALIFORNIA MICROWAVE TAX-DEFERRED SAVINGS AND
DEFERRED PROFIT SHARING PLAN
TRUST
DATED AS OF JANUARY 1, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
1 TRUST..................................................................2
2 EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS ..............2
3 DISBURSEMENTS..........................................................2
(a) Administrator Directed Disbursements
(b) Participant Withdrawal Requests
(c) Limitations
4 INVESTMENT OF TRUST....................................................3
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
Participant Loans
Guaranteed Investment Contracts
Reliance of Trustee on Directions
Trustee Powers
5 RECORDKEEPING AND ADMINISTRATIVE SERVICES TO BE PERFORMED .............8
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
6 COMPENSATION AND EXPENSES..............................................9
7 DIRECTIONS AND INDEMNIFICATION.........................................9
(a) Identity of Administrator and Named Fiduciary
(b) Directions from Administrator
(c) Directions from Named Fiduciary
(d) Co-Fiduciary Liability
(e) Indemnification
(f) Survival
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
8 RESIGNATION OR REMOVAL OF TRUSTEE......................................11
(a) Resignation
(b) Removal
9 SUCCESSOR TRUSTEE......................................................11
(a) Appointment
(b) Acceptance
(c) Corporate Action
10 TERMINATION............................................................11
11 RESIGNATION, REMOVAL, AND TERMINATION NOTICES..........................12
12 DURATION...............................................................12
13 AMENDMENT OR MODIFICATION..............................................12
14 GENERAL................................................................12
(a) Performance by Trustee, its Agents or Affiliates
(b) Entire Agreement
(c) Waiver
(d) Successors and Assigns
(e) Partial Invalidity
(f) Section Headings
15 GOVERNING LAW..........................................................13
(a) Massachusetts Law Controls
(b) Trust Agreement Controls
SCHEDULES
A. Administrative Services
B. Fee Schedule
C. Investment Options
D. Administrator's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Existing GICs
H. Telephone Exchange Guidelines
I. Operational Guidelines for Non-Fidelity Mutual Funds
J. Blended Fund Guidelines
</TABLE>
-ii-
<PAGE> 4
TRUST AGREEMENT, dated as of the first day of January, 1998, between
CALIFORNIA MICROWAVE, INC., a Delaware corporation, having an office at 1143
Borregas Avenue, Sunnyvale, California 94065 (the "Sponsor"), and FIDELITY
MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an office at 82
Devonshire Street, Boston, Massachusetts 02109 (the "Trustee").
WITNESSETH:
WHEREAS, the Sponsor is the sponsor of the California Microwave
Tax-Deferred Savings and Deferred Profit Sharing Plan (the "Plan"); and
WHEREAS, the Sponsor wishes to establish a trust to hold and invest Plan
assets under the Plan for the exclusive benefit of participants in the Plan and
their beneficiaries; and
WHEREAS, the Trustee will accept the assets held in the Morely Stable
Value Funds as of February 1, 1998, and this Agreement will be subsequently
amended to reflect the addition to the Trust of the fund and to add operational
guidelines within which the Trustee will administer the fund; and
WHEREAS, California Microwave, Inc. (the "Named Fiduciary") is the named
fiduciary of the Plan (within the meaning of section 402(a) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")); and
WHEREAS, the Trustee is willing to hold and invest the aforesaid Plan
assets in trust among several investment options selected by the Named
Fiduciary; and
WHEREAS, the Sponsor wishes to have the Trustee perform certain
ministerial recordkeeping and administrative functions under the Plan; and
WHEREAS, the Administrative Committee (the "Administrator") is the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA); and
WHEREAS, the Trustee is willing to perform recordkeeping and
administrative services for the Plan if the services are purely ministerial in
nature and are provided within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by the Administrator.
<PAGE> 5
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor and the Trustee
agree as follows:
SECTION 1. TRUST. The Sponsor hereby establishes the California Microwave
Tax-Deferred Savings and Deferred Profit Sharing Plan Trust (the "Trust"), with
the Trustee. The Trust shall consist of an initial contribution of money or
other property acceptable to the Trustee in its sole discretion, made by the
Sponsor or transferred from a previous trustee under the Plan, such additional
sums of money as shall from time to time be delivered to the Trustee under the
Plan, all investments made therewith and proceeds thereof, and all earnings and
profits thereon, less the payments that are made by the Trustee as provided
herein. The Trustee hereby accepts the Trust on the terms and conditions set
forth in this Agreement. In accepting this Trust, the Trustee shall be
accountable for the assets received by it, subject to the terms and conditions
of this Agreement.
SECTION 2. EXCLUSIVE BENEFIT AND REVERSION OF SPONSOR CONTRIBUTIONS. Except as
provided under applicable law, no part of the Trust may be used for, or diverted
to, purposes other than the exclusive benefit of the participants in the Plan or
their beneficiaries or the reasonable expenses of Plan administration.
SECTION 3. DISBURSEMENTS.
(a) Administrator-Directed Disbursements. The Trustee shall make
disbursements in the amounts and in the manner that the Administrator directs
from time to time in writing. The Trustee shall have no responsibility to
ascertain such direction's compliance with the terms of the Plan or of any
applicable law or the direction's effect for tax purposes or otherwise; nor
shall the Trustee have any responsibility to see to the application of any
disbursement.
(b) Participant Withdrawal Requests. The Sponsor hereby directs that,
pursuant to the Plan, a participant withdrawal request (in-service or full
withdrawal) may be made by the participant by telephone, or in such other manner
as may be agreed to from time to time by the Sponsor and Trustee, and the
Trustee shall process such request only after the identity of the participant is
verified by use of a personal identification number ("PIN") and social security
number. The Trustee shall process such withdrawal in accordance with written
guidelines provided by the Sponsor and documented in the Plan Administrative
Manual.
(c) Limitations. The Trustee shall not be required to make any
disbursement in excess of the net realizable value of the assets of the Trust at
the time of the disbursement. The Trustee shall
2
<PAGE> 6
make cash disbursements in accordance with the applicable source and fund
withdrawal hierarchy as documented in the Plan Administrative Manual, unless the
Administrator has provided a written direction to the contrary.
SECTION 4. INVESTMENT OF TRUST.
(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any person in connection with the selection of
such options.
(b) Available Investment Options. The Named Fiduciary shall direct the
Trustee as to the investment options in which the Trust shall be invested during
the period beginning on the date of the initial transfer of assets to the Trust
and ending on the date of the completion of the reconciliation of participant
records ("recordkeeping reconciliation period"), and the investment options
which Plan participants may invest following the reconciliation period, subject
to the following limitations. The Named Fiduciary may determine to offer as
investment options only: (i) securities issued by the investment companies
advised by Fidelity Management & Research Company and certain securities issued
by investment companies not advised by Fidelity Management & Research Company
(collectively, "Mutual Funds"), (ii) notes evidencing loans to Plan participants
in accordance with the terms of the Plan, (iii) guaranteed investment contracts
heretofore entered into by the Sponsor or predecessor trustee and specifically
identified on Schedule "G" attached hereto ("Existing GICs"), and (iv)
collective investment funds maintained by the Trustee for qualified plans.
The Named Fiduciary hereby directs the Trustee to continue to hold such
Existing GICs until contract maturity or until the Named Fiduciary directs
otherwise, it being expressly understood that such direction is given in
accordance with Section 403(a) of ERISA. The Trustee shall be considered a
fiduciary with investment discretion only with respect to Plan assets (including
the proceeds from any existing GICs) that are invested in guaranteed investment
contracts chosen by the Trustee or in collective investment funds maintained by
the Trustee for qualified plans.
The investment options initially selected by the Named Fiduciary are
identified on Schedules "A" and "C" attached hereto. The Named Fiduciary may add
additional investment options with the consent of the Trustee and upon mutual
amendment of this Trust Agreement and the Schedules thereto to reflect such
additions.
(c) Participant Direction. As authorized under the Plan, each Plan
participant shall direct the Trustee in which investment option(s) to invest the
assets in the participant's individual accounts.
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<PAGE> 7
Such directions may be made by Plan participants by use of the telephone
exchange system maintained for such purposes by the Trustee or its agent, in
accordance with written Telephone Exchange Guidelines attached hereto as
Schedule "H". In the event that the Trustee fails to receive a proper direction,
the assets shall be invested in the investment option set forth for such purpose
on Schedule "C", until the Trustee receives a proper direction.
(d) Mutual Funds. The Named Fiduciary hereby acknowledges that it has
received from the Trustee a copy of the prospectus for each Fidelity Mutual Fund
selected by the Named Fiduciary as a Plan investment option or short-term
investment fund. All transactions involving Mutual Funds not advised by Fidelity
Management & Research Company (Non-Fidelity Mutual Funds) shall be done in
accordance with the Operational Guidelines attached hereto as Schedule "I".
Trust investments in Mutual Funds shall be subject to the following limitations:
(i) Execution of Purchases and Sales. Purchases and sales
of Mutual Funds (other than for exchanges) shall be made on the date on which
the Trustee receives from the Administrator in good order all information,
documentation and wire transfer of funds (if applicable) necessary to accurately
effect such transactions. Exchanges of Mutual Funds shall be made in accordance
with the Telephone Exchange Guidelines attached hereto as Schedule "H".
(ii) Voting. At the time of mailing of notice of each
annual or special stockholders' meeting of any Mutual Fund, the Trustee shall
send a copy of the notice and all proxy solicitation materials to each Plan
participant who has shares of the Mutual Fund credited to the participant's
accounts, together with a voting direction form for return to the Trustee or its
designee. The participant shall have the right to direct the Trustee as to the
manner in which the Trustee is to vote the shares credited to the participant's
accounts (both vested and unvested). The Trustee shall vote the shares as
directed by the participant. The Trustee shall not vote shares for which it has
received no directions from the participant.
During the Recordkeeping Reconciliation Period, the Named Fiduciary
shall have the right to direct the Trustee as to the manner in which the Trustee
is to vote the shares of the Mutual Funds in the Trust. Following the
Recordkeeping Reconciliation Period the Named Fiduciary shall continue to have
the right to direct the Trustee as to the manner in which the Trustee is to vote
the Mutual Fund shares held in a short-term liquidity reserve for a unitized
investment option.
4
<PAGE> 8
With respect to all rights other than the right to vote, the Trustee
shall follow the directions of the participant and if no such directions are
received, the directions of the Named Fiduciary. The Trustee shall have no
further duty to solicit directions from participants or the Named Fiduciary.
(e) (i) Participant Loans. (General Purpose) The Administrator shall act
as the Trustee's agent for participant loan notes and as such shall (i)
separately account for repayments of such loans and clearly identify such assets
as Plan assets and (ii) collect and remit all principal and interest payments to
the Trustee. To originate a participant loan, the Plan participant shall direct
the Trustee as to the term and amount of the loan to be made from the
participant's individual account. Such directions shall be made by Plan
participants by use of the telephone exchange system maintained for such purpose
by the Trustee or its agent. The Trustee shall determine, based on the current
value of the participant's account on the date of the request and any guidelines
provided by the Sponsor, the amount available for the loan. Based on the
interest rate supplied by the Sponsor in accordance with the terms of the Plan,
the Trustee shall advise the participant of such interest rate, as well as the
installment payment amounts. The Trustee shall distribute the loan agreement and
truth-in-lending disclosure with the proceeds check to the participant. To
facilitate recordkeeping, the Trustee may destroy the original of any promissory
note made in connection with a loan to a participant under the Plan, provided
that the Trustee first creates a duplicate by a photographic or optical scanning
or other process yielding a reasonable facsimile of the promissory note and the
Plan participant's signature thereon, which duplicate may be reduced or enlarged
in size from the actual size of the original promissory note.
(e)(ii) Participant Loans. (Primary Residence) The Administrator shall
act as the Trustee's agent for the purpose of holding all trust investments in
participant loan notes and related documentation and as such shall (i) hold
physical custody of and keep safe the notes and other loan documents, (ii)
separately account for repayments of such loans and clearly identify such assets
as Plan assets, (iii) collect and remit all principal and interest payments to
the Trustee, and (iv) cancel and surrender the notes and other loan
documentation when a loan has been paid in full. To originate a participant
loan, the Plan participant shall direct the Trustee as to the type of loan to be
made from the participant's individual account. Such directions shall be made by
Plan participants by use of the telephone exchange system maintained for such
purpose by the Trustee or its agent. The Trustee shall determine, based on the
current value of the participant's account, the amount available for the loan.
Based on the interest rate supplied by the Sponsor in accordance with the terms
of the Plan, the Trustee shall advise the participant of such interest rate, as
well as the installment payment amounts. The Trustee shall forward the loan
document to the participant for execution and submission for approval to
5
<PAGE> 9
the Administrator. The Administrator shall have the responsibility for approving
the loan and instructing the Trustee to send the loan proceeds to the
Administrator or to the participant if so directed by the Administrator. In all
cases, approval or disapproval by the Administrator shall be made within thirty
(30) days of the participant's initial request (the origination date).
(f) Guaranteed Investment Contracts. Trust investments in guaranteed
investment contracts ("GICs") shall be subject to the following limitations:
(i) Collective Investment Funds. To the extent that the Named
Fiduciary selects as an investment option the Managed Income Portfolio of the
Fidelity Group Trust for Employee Benefit Plans (the "Group Trust"), the Sponsor
hereby (A) agrees to the terms of the Group Trust and adopts said terms as a
part of this Agreement and (B) acknowledges that it has received from the
Trustee a copy of the Group Trust, the Declaration of Separate Fund for the
Managed Income Portfolio of the Group Trust, and the Circular for the Managed
Income Portfolio.
(ii) Existing GICs blended with MIP. The funds shall
consist of existing GICs and the Managed Income Portfolio. All transactions
involving the "Blended Fund" shall be done in accordance with the Operating
Procedures attached hereto as Schedule "J".
(g) Reliance of Trustee on Directions.
(i) The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from any participant's exercise or
non-exercise of rights under this Section 4 over the assets in the participant's
accounts.
(ii) The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the Named Fiduciary's exercise or
non-exercise of rights under this Section 4, unless it was clear on their face
that the actions to be taken under the Named Fiduciary's directions were
prohibited by the fiduciary duty rules of section 404(a) of ERISA or were
contrary to the terms of the Plan or this Agreement.
(h) Trustee Powers. The Trustee shall have the following powers and
authority:
(i) Subject to paragraphs (b) and (c) of this Section 4,
to sell, exchange, convey, transfer, or otherwise dispose of any property held
in the Trust, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase
6
<PAGE> 10
money or other property delivered to the Trustee or to inquire into the
validity, expediency, or propriety of any such sale or other disposition.
(ii) Subject to paragraphs (b) and (c) of this Section 4,
to invest in Investment Contracts and short term investments (including interest
bearing accounts with the Trustee or money market mutual funds advised by
affiliates of the Trustee) and in collective investment funds maintained by the
Trustee for qualified plans, in which case the provisions of each collective
investment fund in which the Trust is invested shall be deemed adopted by the
Sponsor and the provisions thereof incorporated as a part of this Trust as long
as the fund remains exempt from taxation under Sections 401(a) and 501(a) of the
Internal Revenue Code of 1986, as amended.
(iii) To cause any securities or other property held as
part of the Trust to be registered in the Trustee's own name, in the name of one
or more of its nominees, or in the Trustee's account with the Depository Trust
Company of New York and to hold any investments in bearer form, but the books
and records of the Trustee shall at all times show that all such investments are
part of the Trust.
(iv) To keep that portion of the Trust in cash or cash
balances as the Named Fiduciary or Administrator may, from time to time, deem to
be in the best interest of the Trust.
(v) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.
(vi) To borrow funds from a bank not affiliated with the
Trustee in order to provide sufficient liquidity to process Plan transactions in
a timely fashion; provided that the cost of such borrowing shall be allocated in
a reasonable fashion to the investment fund(s) in need of liquidity.
(vii) To settle, compromise, or submit to arbitration any
claims, debts, or damages due to or arising from the Trust; to commence or
defend suits or legal or administrative proceedings; to represent the Trust in
all suits and legal and administrative hearings; and to pay all reasonable
expenses arising from any such action, from the Trust if not paid by the
Sponsor.
(viii) To employ legal, accounting, clerical, and other
assistance as may be required in carrying out the provisions of this Agreement
and to pay their reasonable expenses and compensation from the Trust if not paid
by the Sponsor.
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<PAGE> 11
(ix) To invest all of any part of the assets of the Trust
in any collective investment trust or group trust which then provides for the
pooling of the assets of plans described in Section 401(a) and exempt from tax
under Section 501(a) of the Internal Revenue Code ("Code"), or any comparable
provisions of any future legislation that amends, supplements, or supersedes
those sections, provided that such collective investment trust or group trust is
exempt from tax under the Code or regulations or rulings issued by the Internal
Revue Service: the provisions of the document governing such collective
investment trusts or group trusts, as it may be amended from time to time, shall
govern any investment therein and are hereby made a part of this Trust
Agreement.
(x) To do all other acts although not specifically
mentioned herein, as the Trustee may deem necessary to carry out any of the
foregoing powers and the purposes of the Trust.
SECTION 5. RECORDKEEPING AND ADMINISTRATIVE SERVICES TO BE PERFORMED.
(a) General. The Trustee shall perform those recordkeeping and
administrative functions described in Schedule "A" attached hereto. These
recordkeeping and administrative functions shall be performed within the
framework of the Administrator's written directions regarding the Plan's
provisions, guidelines and interpretations.
(b) Accounts. The Trustee shall keep accurate accounts of all
investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Trust as of the last day of
each fiscal quarter of the Plan and, if not on the last day of a fiscal quarter,
the date on which the Trustee resigns or is removed as provided in Section 8 of
this Agreement or is terminated as provided in Section 10 (the "Reporting
Date"). Within thirty (30) days following each Reporting Date or within sixty
(60) days in the case of a Reporting Date caused by the resignation or removal
of the Trustee, or the termination of this Agreement, the Trustee shall file
with the Administrator a written account setting forth all investments,
receipts, disbursements, and other transactions effected by the Trustee between
the Reporting Date and the prior Reporting Date, and setting forth the value of
the Trust as of the Reporting Date. Except as otherwise required under ERISA,
upon the expiration of six (6) months from the date of filing such account with
the Administrator, the Trustee shall have no liability or further accountability
to anyone with respect to the propriety of its acts or transactions shown in
such account, except with respect to such acts or transactions as to which the
Sponsor shall within such six (6) month period file with the Trustee written
objections.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit,
during the Trustee's regular business hours
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<PAGE> 12
prior to the termination of this Agreement, by the Administrator or any person
designated by the Administrator. Upon the resignation or removal of the Trustee
or the termination of this Agreement, the Trustee shall provide to the
Administrator, at no expense to the Sponsor, in the format regularly provided to
the Administrator, a statement of each participant's accounts as of the
resignation, removal, or termination, and the Trustee shall provide to the
Administrator or the Plan's new recordkeeper such further records as are
reasonable, at the Sponsor's expense.
(d) Effect of Plan Amendment. A confirmation of the current qualified
status of the Plan is attached hereto as Schedule "F". The Trustee's provision
of the recordkeeping and administrative services set forth in this Section 5
shall be conditioned on the Sponsor delivering to the Trustee a copy of any
amendment to the Plan as soon as administratively feasible following the
amendment's adoption, with, if requested, an IRS determination letter or an
opinion of counsel substantially in the form of Schedule "F" covering such
amendment, and on the Administrator providing the Trustee on a timely basis with
all the information the Administrator deems necessary for the Trustee to perform
the recordkeeping and administrative services and such other information as the
Trustee may reasonably request.
(e) Returns, Reports and Information. The Administrator shall be
responsible for the preparation and filing of all returns, reports, and
information required of the Trust or Plan by law. The Trustee shall provide the
Administrator with such information as the Administrator may reasonably request
to make these filings. The Administrator shall also be responsible for making
any disclosures to Participants required by law, except such disclosure as may
be required under federal or state truth-in-lending laws with regard to
Participant loans, which shall be provided by the Trustee.
SECTION 6. COMPENSATION AND EXPENSES. Within thirty (30) days of receipt of the
Trustee's bill, which shall be computed and billed in accordance with Schedule
"B" attached hereto and made a part hereof, as amended from time to time, the
Sponsor shall send to the Trustee a payment in such amount or the Sponsor may
direct the Trustee to deduct such amount from participants' accounts. All
expenses of the Trustee relating directly to the acquisition and disposition of
investments constituting part of the Trust, and all taxes of any kind whatsoever
that may be levied or assessed under existing or future laws upon or in respect
of the Trust or the income thereof, shall be a charge against and paid from the
appropriate Plan participants' accounts.
SECTION 7. DIRECTIONS AND INDEMNIFICATION.
(a) Identity of Administrator and Named Fiduciary. The Trustee shall be
fully protected in relying on the fact that the Named Fiduciary and the
Administrator under the Plan are the individuals or persons named as such above
or such other individuals
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<PAGE> 13
or persons as the Sponsor may notify the Trustee in writing.
(b) Directions from Administrator. Whenever the Administrator provides a
direction to the Trustee, the Trustee shall not be liable for any loss, or by
reason of any breach, arising from the direction (i) if the direction is
contained in a writing (or is oral and immediately confirmed in a writing)
signed by any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee by the Administrator in the form attached
hereto as Schedule "D", and (ii) if the Trustee reasonably believes the
signature of the individual to be genuine, unless it is clear on the direction's
face that the actions to be taken under the direction would be prohibited by the
fiduciary duty rules of Section 404(a) of ERISA or would be contrary to the
terms of this Agreement. For purposes of this Section, such direction may also
be made via electronic data transfer (EDT) in accordance with procedures agreed
to by the Administrator and the Trustee; provided, however, that the Trustee
shall be fully protected in relying on such direction as if it were a direction
made in writing by the Administrator.
(c) Directions from Named Fiduciary. Whenever the Named Fiduciary or
Sponsor provides a direction to the Trustee, the Trustee shall not be liable for
any loss, or by reason of any breach, arising from the direction (i) if the
direction is contained in a writing (or is oral and immediately confirmed in a
writing) signed by any individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the Named Fiduciary in the form
attached hereto as Schedule "E" and (ii) if the Trustee reasonably believes the
signature of the individual to be genuine, unless it is clear on the direction's
face that the actions to be taken under the direction would be prohibited by the
fiduciary duty rules of Section 404(a) of ERISA or would be contrary to the
terms of this Agreement. Such direction may also be made via electronic EDT in
accordance with procedures agreed to by the Named Fiduciary and the Trustee;
provided, however, that the Trustee shall be fully protected in relying on such
direction as if it were a direction made in writing by the Named Fiduciary.
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from any act or
omission of another fiduciary under the Plan except as provided in section
405(a) of ERISA.
(e) Indemnification. The Sponsor shall indemnify the Trustee against,
and hold the Trustee harmless from, any and all loss, damage, penalty,
liability, cost, and expense, including without limitation, reasonable
attorneys' fees and disbursements, that may be incurred by, imposed upon, or
10
<PAGE> 14
asserted against the Trustee by reason of any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss, etc.,
arising from the Trustee's negligence or bad faith.
(f) Survival. The provisions of this Section 7 shall survive the
termination of this Agreement.
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) Resignation. The Trustee may resign at any time upon thirty (30)
days' notice in writing to the Sponsor, unless a shorter period of notice is
agreed upon by the Sponsor.
(b) Removal. The Sponsor may remove the Trustee at any time upon sixty
(60) days' notice in writing to the Trustee, unless a shorter period of notice
is agreed upon by the Trustee.
SECTION 9. SUCCESSOR TRUSTEE.
(a) Appointment. If the office of Trustee becomes vacant for any reason,
the Sponsor may in writing appoint a successor trustee under this Agreement. The
successor trustee shall have all of the rights, powers, privileges, obligations,
duties, liabilities, and immunities granted to the Trustee under this Agreement.
The successor trustee and predecessor trustee shall not be liable for the acts
or omissions of the other with respect to the Trust.
(b) Acceptance. When the successor trustee accepts its appointment under
this Agreement, the predecessor trustee shall execute all instruments and do all
acts that reasonably may be necessary or reasonably may be requested in writing
by the Sponsor or the successor trustee to vest title to all Trust assets in the
successor trustee or to deliver all Trust assets to the successor trustee.
(c) Corporate Action. Any successor of the Trustee or successor trustee,
through sale or transfer of the business or trust department of the Trustee or
successor trustee, or through reorganization, consolidation, or merger, or any
similar transaction, shall, upon consummation of the transaction, become the
successor trustee under this Agreement.
SECTION 10. TERMINATION. This Agreement may be terminated at any time by the
Sponsor upon sixty (60) days' notice in writing to the Trustee. On the date of
the termination of this Agreement, the Trustee shall forthwith transfer and
deliver to such individual or entity as the Sponsor shall designate, all cash
and assets then constituting the Trust. If, by the termination date, the Sponsor
has not notified the Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Trustee
11
<PAGE> 15
may bring an appropriate action or proceeding for leave to deposit the assets
and cash in a court of competent jurisdiction. The Trustee shall be reimbursed
by the Sponsor for all costs and expenses of the action or proceeding including,
without limitation, reasonable attorneys' fees and disbursements.
SECTION 11. RESIGNATION, REMOVAL, AND TERMINATION NOTICES. All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed to the party to which the notice is being given by certified or
registered mail, return receipt requested, to the Sponsor c/o Bruce Bigwood,
California Microwave, 1143 Borregas Avenue, Sunnyvale, California 94065, and to
the Trustee c/o John M. Kimpel, Fidelity Investments, 82 Devonshire Street,
Boston, Massachusetts 02109, or to such other addresses as the parties have
notified each other of in the foregoing manner.
SECTION 12. DURATION. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
SECTION 13. AMENDMENT OR MODIFICATION. This Agreement may be amended or modified
at any time and from time to time only by an instrument executed by both the
Sponsor and the Trustee. Notwithstanding the foregoing, to reflect increased
operating costs the Trustee may once each calendar year amend Schedule "B"
without the Sponsor's consent upon seventy-five (75) days written notice to the
Sponsor.
SECTION 14. GENERAL.
(a) Performance by Trustee, its Agents or Affiliates. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates, including
Fidelity Investments Institutional Operations Company, Inc. or its successor,
and that certain of such services may be provided pursuant to one or more other
contractual agreements or relationships.
(b) Entire Agreement. This Agreement together with the schedules
attached hereto, which are hereby incorporated herein contains all of the terms
agreed upon between the parties with respect to the subject matter hereof.
(c) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
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(d) Successors and Assigns. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(e) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(f) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
SECTION 15. GOVERNING LAW.
(a) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under Section 514 of ERISA.
(b) Trust Agreement Controls. The Trustee is not a party to the Plan,
and in the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
CALIFORNIA MICROWAVE, INC.
Attest: /s/ George L. Spillane By: /s/ Bruce A. Bigwood
-------------------------- -------------------------------------
Secretary
Name: Bruce A. Bigwood
-----------------------------------
Title: Director, Benefits & Compensation
----------------------------------
Date: 12/30/97
-----------------------------------
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<PAGE> 17
FIDELITY MANAGEMENT TRUST
COMPANY
Attest: /s/ Douglas Kent By: /s/ Cheryl L. Gladstone
----------------------- ---------------------------------
Secretary
Name: Cheryl L. Gladstone
-------------------------------
Title: Vice President
------------------------------
Date: 1/6/98
-------------------------------
14
<PAGE> 18
SCHEDULE "A"
ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of participant account and election
percentages.
* Maintenance of the following Plan investment options:
- Managed Income Fund/Blended with Existing GICs
- Fidelity Puritan Fund
- Fidelity Magellan Fund
- Strong Opportunity Fund
* Maintenance of the following money classifications:
- Salary Deferral
- Basic Match
- Profit Sharing
- Rollover
The Trustee will provide the recordkeeping and administrative services
set forth on this Schedule "A" and as detailed in the Plan
Administrative Manual and no others.
A) Provide Participant Telephone Services
1. Fidelity registered representatives are available from 8:30 a.m. -
8:00 p.m. ET to provide toll free telephone service for participant
inquiries and transactions. Additionally, participants have 24 hour
account balance and transaction inquiry access utilizing our automated
voice response system and the internet.
2. For security purposes, all calls are recorded. In addition, several
levels of security are available including the verification of a
Personal Identification Number (PIN) and/or any other indicative data
resident on the system.
3. Through our telephone services, Fidelity provides the following
services:
- Provide Plan investment option information.
- Maintain Plan specific provisions.
- Process exchanges (transfers) between investment options on a
daily basis.
- Maintain and process changes to participants' contribution
allocations for all money sources.
- Allow participants to change their deferral and provide updates
via EDT for customer to apply to its payrolls accordingly.
- Consult with participants in various loan scenarios and generate
all documentation.
- Process all participant loan and withdrawal requests via
Fidelity's toll-free telephone service according to Plan
provisions on a daily basis.
15
<PAGE> 19
- In-service withdrawals via telephone due to certain circumstances
previously approved by the Sponsor.
- Hardship withdrawals via telephone as directed and approved by
the Sponsor.
- Enroll new participants via telephone; provide confirmation of
enrollment within five (5) days of the request.
B) PLAN ACCOUNTING
1. Process payroll contributions according to payroll frequency via
electronic data transfer (EDT), consolidated magnetic tape or diskette.
The data format will be provided by Fidelity.
2. Provide Plan and participant level accounting for up to nine (9)
money classifications for the Plan.
3. Audit and reconcile the Plan and participant accounts daily.
4. Provide daily Plan and participant level accounting for the Plan
investment options.
5. Reconcile and process participant withdrawal requests as approved and
directed by the Sponsor. All requests are paid based on the current
market values of participants' accounts, not advanced or estimated
values. A distribution report will accompany each check.
6. Track individual participant loans; process loan withdrawals;
re-invest loan repayments; and prepare and deliver comprehensive reports
to the Sponsor to assist in the administration of participant loans.
7. Maintain and process changes to participants' prospective and
existing investment mix elections via Fidelity's toll-free telephone
service.
C) PARTICIPANT REPORTING
1. Mail confirmation to participants of all transactions initiated via
Fidelity Telephone Services within three (3) calendar days of the
transaction.
2. Prepare and mail via first class to each Plan participant a quarterly
detailed participant statement reflecting all activity for the period.
Statements will be mailed no later than twenty (20) calendar days after
each quarter end.
3. Mail required 402(f) notification for distribution from the Plan.
This notice advises participants of the tax consequences of their Plan
distributions.
D) PLAN REPORTING
1. Prepare, reconcile and deliver a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the market value as of the last business day of the month. The report
will be delivered not later than twenty (20) days after the end of each
month in the absence of unusual circumstances.
16
<PAGE> 20
2. Prepare, reconcile and deliver a Quarterly Administrative Report
presenting both on a participant and a total Plan basis all money
classes, investment positions and a summary of all activity of the
participant and Plan as of the last business day of the quarter. The
report will be delivered not later than twenty (20) days after the end
of each quarter in the absence of unusual circumstances.
E) GOVERNMENT REPORTING
1. Process year-end tax reports for participants - 1099R, as well as
financial reporting to assist in the preparation of Form 5500.
F) COMMUNICATION SERVICES
1. Employee communications describing available investment options,
including multimedia informational materials and group presentations.
G) OTHER
1. Performance of non-discrimination limitation testing upon request. In
order to obtain this service, the client shall be required to provide
the information identified in the Fidelity Discrimination Testing
Package Guidelines.
2. Monitor and process required minimum distribution amounts (MRD) as
follows: the Trustee will notify the MRD participant and, upon
notification from the MRD participant, will use the MRD participant's
information to process their distributions. If the MRD participant does
not respond to the Trustee's notification, the Sponsor directs the
Trustee to automatically begin the required distributions for the
participant.
CALIFORNIA MICROWAVE, INC. FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ Bruce A. Bigwood, 12/30/97 By: /s/ Cheryl L. Gladstone, 1/6/98
------------------------------- --------------------------------
Date Vice President Date
17
<PAGE> 21
SCHEDULE "B"
FEE SCHEDULE
Annual Participant Fee: $8.00 per participant*, subject to a
$15,000 per year minimum, billed and
payable quarterly.
Enrollments by Phone: $5.00 per non-active employee residing
on Fidelity's participant recordkeeping
system.
Loan Fee: Establishment fee of $35.00 per loan
account; annual fee of $15.00 per loan
account.
Minimum Required Distribution: $25.00 per participant per MRD
withdrawal.
In-Service Withdrawals by Phone: $20.00 per withdrawal.
Plan Sponsor Workstation (PSW): $2,500 per year for the first PSW. Each
additional PSW $1,500 per year. $5.00
per hour per PSW for online usage (no
charge if accessed via another internet
service provider.)
Return of Excess Contribution Fee: $25.00 per participant, one-time charge
per calculation and check generation.
Non-Fidelity Mutual Funds: .35% trust administration fee on all
Non-Fidelity Mutual Fund assets (to
be paid by the Non-Fidelity Mutual Fund
vendor.)
* Other Fees: separate charges for optional non-discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous
manual transactions or from errors not caused by Fidelity, or for
reports not contemplated in this Agreement. The Administrator may
withdraw reasonable administrative fees from the Trust by written
direction to the Trustee.
* This fee will be imposed pro rata for each calendar quarter, or any part
thereof, that it remains necessary to keep a participant's account(s) as
part of the Plan's records, e.g., vested, deferred, forfeiture,
top-heavy and terminated participants who must remain on file through
calendar year-end for 1099-R reporting purposes.
GIC Fees
*Existing GIC Recordkeeping Fee .05% on all existing GIC assets
Note: These fees have been negotiated and accepted based on the following Plan
characteristics: current plan assets of $48.2 million, current participation of
1,750 participants, current GIC assets of $11 million, total Fidelity managed
Mutual Fund assets of $24.3 and projected net cash flows of $3.5
18
<PAGE> 22
million per year. Fees will be subject to revision if these Plan characteristics
change significantly by either falling below or exceeding current or projected
levels.
CALIFORNIA MICROWAVE INC. FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ Bruce A. Bigwood, 12/30/97 By: /s/ Cheryl L. Gladstone, 1/6/98
------------------------------- --------------------------------
Date Vice President Date
19
<PAGE> 23
SCHEDULE "C"
INVESTMENT OPTIONS
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee that participants' individual accounts may be invested in the following
investment options:
-Managed Income Fund/Blended with Existing GICs
-Fidelity Puritan Fund
-Fidelity Magellan Fund
-Strong Opportunity Fund
The investment option referred to in Section 4(c) shall be Fidelity
Retirement Money Market Portfolio.
CALIFORNIA MICROWAVE, INC.
By: /s/ Bruce A. Bigwood, 12/30/97
-------------------------------
Date
20
<PAGE> 24
SCHEDULE "D"
[ADMINISTRATOR'S LETTERHEAD]
[DATE]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street- MM3H
Boston, Massachusetts 02109
[NAME OF PLAN]
*** NOTE: This schedule should contain names and signatures for ALL
individuals who will be providing directions to Fidelity representatives
in connection with the Plan.
Fidelity representatives will be unable to accept directions from any
individual whose name does not appear on this schedule.***
Dear Ms. Redden:
This letter is sent to you in accordance with Section 7(b) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions upon which Fidelity Management Trust Company shall be fully protected
in relying. Only one such individual need provide any direction. The signature
of each designated individual is set forth below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[ADMINISTRATOR]
By
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
21
<PAGE> 25
SCHEDULE "E"
[NAMED FIDUCIARY'S LETTERHEAD]
[DATE]
Ms. Carolyn Redden
Fidelity Investments Institutional Operations Company, Inc.
82 Devonshire Street - MM3H
Boston, Massachusetts 02109
[NAME OF PLAN]
Dear Ms. Redden:
This letter is sent to you in accordance with Section 7(c) of the Trust
Agreement, dated as of [date], between [name of Plan Sponsor] and Fidelity
Management Trust Company. [I or We] hereby designate [name of individual], [name
of individual], and [name of individual], as the individuals who may provide
directions upon which Fidelity Management Trust Company shall be fully protected
in relying. Only one such individual need provide any direction. The signature
of each designated individual is set forth below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[NAMED FIDUCIARY]
By
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
22
<PAGE> 26
SCHEDULE "F"
[LAW FIRM LETTERHEAD]
**NOTE: MAY SUBSTITUTE THE PLAN'S IRS DETERMINATION LETTER IF THE LETTER IS NO
MORE THAN TWO YEARS OLD.
Carolyn Redden
Fidelity Institutional Retirement
Services Company
82 Devonshire Street - MM3H
Boston, MA 02109
[NAME OF PLAN]
Dear Ms. Redden
In accordance with your request, this letter sets forth our opinion with
respect to the qualified status under section 401(a) of the Internal Revenue
Code of 1986 (including amendments made by the Employee Retirement Income
Security Act of 1974) (the "Code"), of the [name of plan], as amended to the
date of this letter (the "Plan").
The material facts regarding the Plan as we understand them are as
follows. The most recent favorable determination letter as to the Plan's
qualified status under section 401(a) of the Code was issued by the [location of
Key District] District Director of the Internal Revenue Service and was dated
[date] (copy enclosed). The version of the Plan submitted by [name of company]
(the "Company") for the District Director's review in connection with this
determination letter did not contain amendments made effective as of [date].
These amendments, among other matters, [brief description of amendments].
[Subsequent amendments were made on [date] to amend the provisions dealing with
[brief description of amendments].]
The Company has informed us that it intends to submit the Plan to the
[location of Key District] District Director of the Internal Revenue Service and
to request from him a favorable determination letter as to the Plan's qualified
status under section 401(a) of the Code. The Company may have to make some
modifications to the Plan at the request of the Internal Revenue Service in
order to obtain this favorable determination letter, but we do not expect any of
these modifications to be material. The Company has informed us that it will
make these modifications.
Based on the foregoing statements of the Company and our review of the
provisions of the Plan, it is our opinion that the Internal Revenue Service will
issue a favorable determination letter as to the qualified status of the Plan,
as modified at the request of the Internal Revenue Service, under section 401(a)
of the Code, subject to the customary condition that continued qualification of
the Plan, as modified, will depend on its effect in operation.
[Furthermore, in that the assets are in part invested in common stock
issued by the Company or an affiliate, it is our opinion that the Plan is an
"eligible individual account plan" (as defined under Section 407(d)(3) of ERISA)
and that the shares of common stock of the Company held and to be purchased
under the Plan are "qualifying employer securities" (as
23
<PAGE> 27
defined under Section 407(d)(5) of ERISA). Finally, it is our opinion that
interests in the Plan are not required to be registered under the Securities Act
of 1933, as amended, or, if such registration is required, that such interests
are effectively registered under said Act.]
Sincerely,
[name of law firm]
By [signature]
---------------------------------
[name of partner]
24
<PAGE> 28
SCHEDULE "G"
EXISTING GICS
In accordance with Section 4(b), the Named Fiduciary hereby directs the Trustee
to continue to hold the following Existing GICs until such time as the Named
Fiduciary directs otherwise:
CONTRACT ISSUER: ITT HARTFORD GA-42001
EFFECTIVE DATE: 7/1/93
MATURITY DATE: 12/31/98
CONTRACT ISSUER: CONTINENTAL ASSURANCE COMPANY GP-12985
EFFECTIVE DATE: 7/5/94
MATURITY DATE: 6/30/99
CONTRACT ISSUER: NEW YORK LIFE INSURANCE COMPANY GA-30298
EFFECTIVE DATE: 7/1/95
MATURITY DATE: 6/30/2000
CONTRACT ISSUER: METROPOLITAN LIFE INSURANCE CO. GA-20267
EFFECTIVE DATE: 7/1/96
MATURITY DATE: 6/30/2001
CALIFORNIA MICROWAVE, INC.
By: /s/ Bruce A. Bigwood, 12/30/97
-------------------------------
Date
25
<PAGE> 29
SCHEDULE "H"
TELEPHONE EXCHANGE GUIDELINES
The following telephone exchange procedures are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (ET) to 8:00 p.m. (ET) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
FIRSCO reserves the right to change these telephone exchange guidelines at its
discretion.
EXCHANGES BETWEEN INVESTMENT OPTIONS
Participants may call on any business day to exchange between investment
options. If the request is received before 4:00 p.m. (ET), it will receive that
day's trade date. Calls received after 4:00 p.m. (ET) will be processed on a
next business day basis.
CALIFORNIA MICROWAVE, INC.
By: /s/ Bruce A. Bigwood, 12/30/97
-------------------------------
Date
26
<PAGE> 30
SCHEDULE "I"
OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS
PRICING
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual Fund
Vendor (Fund Vendor) will input the following information ("Price Information")
into the Fidelity Participant Recordkeeping System ("FPRS") via the remote
access price screen that Fidelity Investments Institutional Operations Company,
Inc. ("FIIOC"), an affiliate of the Trustee, has provided to the Fund Vendor:
(1) the net asset value for each Fund at the Close of Trading, (2) the change in
each Fund's net asset value from the Close of Trading on the prior Business Day,
and (3) in the case of an income fund or funds, the daily accrual for interest
rate factor ("mil rate"). FIIOC must receive Price Information each Business Day
(a "Business Day" is any day the New York Stock Exchange is open). If on any
Business Day the Fund Vendor does not provide such Price Information to FIIOC,
FIIOC shall pend all associated transaction activity in the Fidelity Participant
Recordkeeping System ("FPRS") until the relevant Price Information is made
available by Fund Vendor.
TRADE ACTIVITY AND WIRE TRANSFERS
By 7:00 a.m. ET each Business Day following Trade Date ("Trade Date plus One"),
FIIOC will provide, via facsimile, to the Fund Vendor a consolidated report of
net purchase or net redemption activity that occurred in each of the Funds up to
4:00 p.m. ET on the prior Business Day. The report will reflect the dollar
amount of assets and shares to be invested or withdrawn for each Fund. FIIOC
will transmit this report to the Fund Vendor each Business Day, regardless of
processing activity. In the event that data contained in the 7:00 a.m. ET
facsimile transmission represents estimated trade activity, FIIOC shall provide
a final facsimile to the Fund Vendor by no later than 9:00 a.m. ET. Any
resulting adjustments shall be processed by the Fund Vendor at the net asset
value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC transaction confirms for
all daily activity in each of the Funds. The Fund Vendor shall also send via
regular mail to FIIOC, by no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC agrees to notify
the Fund Vendor of any balance discrepancies within twenty (20) Business Days of
receipt of the monthly statement.
27
<PAGE> 31
For purposes of wire transfers, FIIOC shall transmit a daily wire for aggregate
purchase activity and the Fund Vendor shall transmit a daily wire for aggregate
redemption activity, in each case including all activity across all Funds
occurring on the same day.
PROSPECTUS DELIVERY
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Plan participants, and shall
retain the services of a third-party vendor to handle such mailings. The Fund
Vendor shall be responsible for all materials and production costs, and hereby
agrees to provide the Required Materials to the third-party vendor selected by
FIIOC. The Fund Vendor shall bear the costs of mailing annual Fund reports to
Plan participants. FIIOC shall bear the costs of mailing prospectuses to Plan
participants.
PROXIES
Participants shall have the right to direct the Trustee as to the manner in
which the Trustee is to vote the shares of the Non-Fidelity Mutual Funds
credited to the participant's accounts (both vested and unvested). The Trustee
shall vote the shares as directed by the participant. The Trustee shall not vote
shares for which it has received no directions from the participant. During the
participant recordkeeping reconciliation period, the Sponsor shall have the
right to direct the Trustee as to the manner in which the Trustee is to vote the
shares of the Non-Fidelity Mutual Funds in the Trust. With respect to all rights
other than the right to vote, the Trustee shall follow the directions of the
participant and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no further duty to solicit directions from
participants or the Sponsor.
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a third-party
vendor to handle proxy solicitation mailings and vote tabulation. Expenses
associated with such services shall be billed directly to the Fund Vendor by the
third-party vendor.
PARTICIPANT COMMUNICATIONS
The Fund Vendor shall provide internally-prepared fund descriptive information
approved by the Funds' legal counsel for use by FIIOC in its written participant
communication materials. FIIOC
28
<PAGE> 32
shall utilize historical performance data obtained from third-party vendors
(currently Morningstar, Inc., FACTSET Research Systems and Lipper Analytical
Services) in telephone conversations with plan participants and in quarterly
participant statements. The Sponsor hereby consents to FIIOC's use of such
materials and acknowledges that FIIOC is not responsible for the accuracy of
such third-party information. FIIOC shall seek the approval of the Fund Vendor
prior to retaining any other third-party vendor to render such data or materials
under this Agreement.
COMPENSATION
FIIOC shall be entitled to fees as set forth in a separate agency agreement with
the Fund Vendor.
INDEMNIFICATION
The Fund Vendor shall be responsible for compensating participants and/or FIIOC
in the event that losses occur as a result of (1) the Fund Vendor's failure to
provide FIIOC with Price Information or (2) providing FIIOC with incorrect Price
Information.
29
<PAGE> 33
SCHEDULE "J"
OPERATING PROCEDURES
FOR THE MANAGED INCOME FUND
I. DESCRIPTION OF INVESTMENT OPTION
The Managed Income Fund will be comprised of units in the Fidelity
Institutional Cash Portfolio: Money Market Portfolio ("STIF"), units in
the Fidelity Group Trust for Employee Benefits Plan Managed Income
Portfolio ("MIP") and the existing Investment Contracts listed on
Schedule "G" purchased prior to the effective date of the Trust
Agreement between the Trustee and the Sponsor.
II. INVESTMENT OPTION TRANSACTIONS
All transactions for the Managed Income Fund will be coordinated by the
Trustee based on the procedures outlined in this document.
III. VALUATION
The Trustee will value the Managed Income Fund on a daily basis and
produce a blended mil rate to reflect the net income earned by the
Managed Income Fund.
IV. MONEY MOVEMENT
All money transfers to and from the Managed Income Fund will be made
through the STIF portion of the Managed Income Fund. Plan level
transactions representing cumulative participant level transactions will
update nightly to the STIF portion to ensure "same day" settlement of
all transactions.
V. CASH MANAGEMENT
The Sponsor will maintain 3% of the Managed Income Fund in STIF. The
Trustee will monitor the cashflows and the balance of the STIF portion.
If the STIF balance exceeds 3%, the Trustee will transfer the excess to
the MIP. If the STIF balance falls below 3%, the Trustee will request
money from the Investment Contract carriers and/or the MIP on a Prorata
basis to replenish the balance to 3%.
VI. INVESTMENT CONTRACT MATURITIES
The proceeds from a maturing Investment Contract will be transferred to
the STIF portion for subsequent reinvestment in the MIP. The Trustee
will provide wiring instructions to the Investment Contract carrier.
VII. RECONCILIATION
The Fidelity Participant Recordkeeping System (FPRS) will be reconciled
to the Managed Income Portfolio Accounting System (GUIDE) on a daily and
monthly basis. The Investment Contract portion will be reconciled to the
carrier balances on a monthly basis.
30
<PAGE> 34
VIII. FEE COLLECTION FOR ACCOUNTING SERVICES
The Trustee will accrue its fee for Accounting services on a daily
basis, and will deduct the fee monthly from the earnings of the Managed
Income Fund.
IX. CHANGES TO THE SCHEDULE
This Schedule may be amended or modified at any time and from time to
time only by an instrument executed by both the Trustee and the Sponsor.
X. DISCONTINUANCE OF ACCOUNTING SERVICES
The Trustee will discontinue accounting services for the Managed Income
Fund once all the Investment Contracts have matured.
California Microwave Fidelity Management Trust Company
By: /s/ Bruce A. Bigwood By: /s/ Cheryl L. Gladstone
------------------------------- --------------------------------
Date Vice President Date
31
<PAGE> 35
FIRST AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
CALIFORNIA MICROWAVE, INC.
THIS FIRST AMENDMENT, dated as of the first day of April, 1998, by and
between Fidelity Management Trust Company (the "Trustee") and California
Microwave, Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated January 1, 1998, with regard to the California Microwave
Tax-Deferred Savings and Deferred Profit Sharing Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 13 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the Trust Agreement by:
(1) Amending the "investment options" section of Schedules "A"
and "C" to add the following:
- Fidelity Low-Priced Stock Fund
- Spartan U.S. Equity Index Fund
- Fidelity Diversified International Fund
- Fidelity U.S. Bond Index Fund
- Franklin Small Cap Growth Fund I
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this First
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
CALIFORNIA MICROWAVE, INC. FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ Bruce A. Bigwood By: /s/ Vice President
------------------------------- --------------------------------
Date Vice President Date
<PAGE> 36
SECOND AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
CALIFORNIA MICROWAVE, INC.
THIS SECOND AMENDMENT, dated as of the fourth day of January, 1999, by
and between Fidelity Management Trust Company (the "Trustee") and California
Microwave, Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated January 1, 1998, with regard to the California Microwave
Tax-Deferred Savings and Deferred Profit Sharing Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 13 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the Trust Agreement by:
(1) Amending Section 4(b), Available Investment Options, by adding
the following new subsection (v), as follows:
(v) equity securities issued by the Sponsor or an affiliate
which are publicly-traded and which are "qualifying employer
securities" within the meaning of section 407(d)(5) of ERISA
("Sponsor Stock"),
(2) Amending Section 4, Investment of Trust, by adding the following
new subsection:
(i) Sponsor Stock. Trust investments in Sponsor Stock shall be
made via the California Microwave Stock Fund (the "Stock Fund").
Investments in the Stock Fund shall consist primarily of shares
of Sponsor Stock. In order to satisfy daily participant exchange
or withdrawal requests for transfers and payments, the Stock Fund
shall also include cash or short-term liquid investments in
accordance with this paragraph. Such holdings will include
Fidelity Institutional Cash Portfolios: Money Market Portfolio:
Class I or such other Mutual Fund or commingled money market pool
as agreed to by the Sponsor and Trustee. The Named Fiduciary
shall, after consultation with the Trustee, establish and
communicate to the Trustee in writing a target percentage and
drift allowance for such short-term liquid investments. The
Trustee shall be responsible for ensuring that the actual cash
held in the Stock Fund falls within the agreed upon range over
time. Each participant's proportional interest in the Stock Fund
shall be measured in units of participation, rather than shares
of Sponsor Stock. Such units shall represent a proportionate
interest in all of the assets of the Stock Fund, which includes
shares of Sponsor Stock, short-term investments and at times,
receivables for dividends and/or Sponsor Stock sold and payables
for Sponsor Stock purchased. The Trustee shall determine a daily
net asset value ("NAV") for each unit outstanding of the Stock
Fund. Valuation of the Stock Fund shall be based upon the 4:00
p.m. New York Stock Exchange ("NYSE") closing price of the stock,
or if unavailable, the latest available price as reported by the
principal national securities
33
<PAGE> 37
exchange on which the Sponsor Stock is traded. The NAV shall be
adjusted by dividends paid on the shares of Sponsor Stock held
by the Stock Fund, gains or losses realized on sales of Sponsor
Stock, appreciation or depreciation in the market price of those
shares owned, and interest on the short-term investments held by
the Stock Fund, expenses that, pursuant to Sponsor direction,
the Trustee accrues from the Stock Fund, and commissions on
purchases and sales of Sponsor Stock. Investments in Sponsor
Stock shall be subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the Trust
may be invested in Sponsor Stock to the extent necessary to
comply with investment directions in accordance with this
Agreement.
(ii) Fiduciary Duty of Named Fiduciary. The Named
Fiduciary shall continually monitor the suitability under the
fiduciary duty rules of section 404(a)(1) of ERISA (as modified
by section 404(a)(2) of ERISA) of acquiring and holding Sponsor
Stock. The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the directions of the
Named Fiduciary with respect to the acquisition and holding of
Sponsor Stock, unless it is clear on their face that the actions
to be taken under those directions would be prohibited by the
foregoing fiduciary duty rules or would be contrary to the terms
of this Agreement.
(iii) Purchase and sales of Sponsor Stock shall be made
on the open market as necessary to maintain the target cash
percentage and drift allowance for the Stock Fund, provided
that:
(1) If the Trustee is unable to purchase or sell
the total number of shares required to be purchased or sold on
such day as a result of market conditions; or
(2) If the Trustee is prohibited by the
Securities and Exchange Commission, the New York Stock Exchange,
or any other regulatory body from purchasing or selling any or
all of the shares required to be purchased or sold on such day,
then the Trustee shall purchase or sell such shares as soon as
possible thereafter. The Trustee may follow directions from the
Administrator or Named Fiduciary to deviate from the above
purchase and sale procedures provided that such direction is
made in writing by the Administrator or Named Fiduciary.
(iv) Execution of Purchases and Sales.
(A) Purchases and sales of units in the Stock Fund
(other than for exchanges) shall be made on the date on which
the Trustee receives from the Administrator in good order all
information, documentation, and wire transfers of funds (if
applicable), necessary to accurately effect such transactions.
Exchanges of units in the Stock Fund shall be made in accordance
with the Telephone Exchange Guidelines attached hereto as
Schedule "H". The Trustee may follow directions from the
Administrator or Named Fiduciary to deviate from the above
purchase and sale procedures provided that such direction is
made in writing by the Administrator or Named Fiduciary.
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(B) Purchases and Sales from or to Sponsor. If directed
by the Sponsor in writing prior to the trading date, the Trustee
may purchase or sell Sponsor Stock from or to the Sponsor if the
purchase or sale is for adequate consideration (within the
meaning of section 3(18) of ERISA) and no commission is charged.
If Sponsor contributions (employer) or contributions made by the
Sponsor on behalf of the participants (employee) under the Plan
are to be invested in Sponsor Stock, the Sponsor may transfer
Sponsor Stock in lieu of cash to the Trust. In either case, the
number of shares to be transferred will be determined by
dividing the total amount of Sponsor Stock to be purchased or
sold by the 4:00 p.m. NYSE closing price of the Sponsor Stock on
the trading date.
(C) Use of an Affiliated Broker. The Sponsor hereby
directs the Trustee to use Fidelity Capital Markets, Inc.
("Capital Markets") to provide brokerage services in connection
with any purchase or sale of Sponsor Stock in accordance with
directions from Plan participants. Capital Markets shall execute
such directions directly or through its affiliate, National
Financial Services Company ("NFSC"). The provision of brokerage
services shall be subject to the following:
(1) As consideration for such brokerage
services, the Sponsor agrees that Capital Markets shall be
entitled to remuneration under this direction provision in the
amount of three and one-half cents ($.035) commission on each
share of Sponsor Stock. Any change in such remuneration may be
made only by a signed agreement between Sponsor and Trustee.
(2) The Trustee will provide the Sponsor with a
description of Capital Markets' brokerage placement practices
and a form by which the Sponsor may terminate this direction to
use a broker affiliated with the Trustee. The Trustee will
provide the Sponsor with this termination form annually, as well
as quarterly and annual reports which summarize all securities
transaction-related charges incurred by the Plan.
(3) Any successor organization of Capital
Markets, through reorganization, consolidation, merger or
similar transactions, shall, upon consummation of such
transaction, become the successor broker in accordance with the
terms of this direction provision.
(4) The Trustee and Capital Markets shall
continue to rely on this direction provision until notified to
the contrary. The Sponsor reserves the right to terminate this
direction upon written notice to Capital Markets (or its
successor) and the Trustee, in accordance with Section 11 of
this Agreement.
(v) Securities Law Reports. The Named Fiduciary shall be
responsible for filing all reports required under Federal or
state securities laws with respect to the Trust's ownership of
Sponsor Stock, including, without limitation, any reports
required under section 13 or 16 of the Securities Exchange Act of
1934, and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Sponsor Stock pending
the filing of any report. The Trustee shall provide to the Named
Fiduciary such information on the Trust's ownership of Sponsor
Stock as the Named
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Fiduciary may reasonably request in order to comply with Federal
or state securities laws.
(vi) Voting and Tender Offers. Notwithstanding any other
provision of this Agreement the provisions of this Section shall
govern the voting and tendering of Sponsor Stock. The Sponsor,
after consultation with the Trustee, shall provide and pay for
all printing, mailing, tabulation and other costs associated
with the voting and tendering of Sponsor Stock.
(A) Voting.
(1) When the issuer of Sponsor Stock
prepares for any annual or special meeting, the Sponsor shall
timely notify the Trustee in advance of the intended record date
and shall cause a copy of all proxy solicitation materials to be
sent to the Trustee. If requested by the Trustee, the Sponsor
shall certify to the Trustee that the aforementioned materials
represents the same information that is distributed to
shareholders of Sponsor Stock. Based on these materials the
Trustee shall prepare a voting instruction form and shall
provide a copy of all proxy solicitation materials to be sent to
each Plan participant with an interest in Sponsor Stock held in
the Trust, together with the foregoing voting instruction form
to be returned to the Trustee or its designee. The form shall
show the proportional interest in the number of full and
fractional shares of Sponsor Stock credited to the participant's
accounts held in the Stock Fund.
(2) Each participant with an interest in
the Stock Fund shall have the right to direct the Trustee as to
the manner in which the Trustee is to vote (including not to
vote) that number of shares of Sponsor Stock reflecting such
participant's proportional interest in the Stock Fund (both
vested and unvested). Directions from a participant to the
Trustee concerning the voting of Sponsor Stock shall be
communicated in writing, or by mailgram or similar means as is
agreed upon by the Trustee and the Sponsor. These directions
shall be held in confidence by the Trustee and shall not be
divulged to the Sponsor, or any officer or employee thereof, or
any other person except to the extent that the consequences of
such directions are reflected in reports regularly communicated
to any such persons in the ordinary course of the performance of
the Trustee's services hereunder. Upon its receipt of the
directions, the Trustee shall vote the shares of Sponsor Stock
reflecting the participant's proportional interest in the Stock
Fund as directed by the participant. Except as otherwise
required by law, the Trustee shall not vote shares of Sponsor
Stock reflecting a participant's proportional interest in the
Stock Fund for which it has received no direction from the
participant.
(3) The Trustee shall vote that number
of shares of Sponsor Stock not credited to participants'
accounts in the same proportion on each issue as it votes those
shares credited to participants' accounts for which it received
voting directions from participants.
(B) Tender Offers.
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(1) Upon commencement of a tender offer
for any securities held in the Trust that are Sponsor Stock, the
Sponsor shall timely notify the Trustee in advance of the
intended tender date and shall cause a copy of all materials to
be sent to the Trustee. The Sponsor shall certify to the Trustee
that the aforementioned materials represent the same information
distributed to shareholders of Sponsor Stock. Based on these
materials and after consultation with the Sponsor the Trustee
shall prepare a tender instruction form and shall provide a copy
of all tender materials to be sent to each plan participant,
together with the foregoing tender instruction form, to be
returned to the Trustee or its designee. The tender instruction
form shall show the number of full and fractional shares of
Sponsor Stock that reflect the participants proportional
interest in the Stock Fund (both vested and unvested).
(2) Each participant shall have the
right to direct the Trustee to tender or not to tender some or
all of the shares of Sponsor Stock reflecting such participant's
proportional interest in the Stock Fund (both vested and
unvested). Directions from a participant to the Trustee
concerning the tender of Sponsor Stock shall be communicated in
writing, or by mailgram or such similar means as is agreed upon
by the Trustee and the Sponsor. These directions shall be held
in confidence by the Trustee and shall not be divulged to the
Sponsor, or any officer or employee thereof, or any other person
except to the extent that the consequences of such directions
are reflected in reports regularly communicated to any such
persons in the ordinary course of the performance of the
Trustee's services hereunder. The Trustee shall tender or not
tender shares of Sponsor Stock as directed by the participant.
Except as otherwise required by law, the Trustee shall not
tender shares of Sponsor Stock reflecting a participant's
proportional interest in the Stock Fund for which it has
received no direction from the participant.
(3) Except as otherwise required by law,
the Trustee shall tender that number of shares of Sponsor Stock
not credited to participants' accounts in the same proportion as
the total number of shares of Sponsor Stock credited to
participants' accounts for which it has received instructions
from Participants.
(4) A participant who has directed the
Trustee to tender some or all of the shares of Sponsor Stock
reflecting the participant's proportional interest in the Stock
Fund may, at any time prior to the tender offer withdrawal date,
direct the Trustee to withdraw some or all of the tendered
shares reflecting the participant's proportional interest, and
the Trustee shall withdraw the directed number of shares from
the tender offer prior to the tender offer withdrawal deadline.
Prior to the withdrawal deadline, if any shares of Sponsor Stock
not credited to participants' accounts have been tendered, the
Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 4(i)(vi)(B)(3) if the date
of the foregoing withdrawal were the date of determination, and
withdraw from the tender offer the number of shares of Sponsor
Stock not credited to participants' accounts necessary to reduce
the amount of tendered Sponsor Stock not credited to
participants' accounts to the amount so redetermined. A
participant shall not be limited as to the number of directions
to tender or withdraw that the participant may give to the
Trustee.
(5) A direction by a participant to the
Trustee to tender shares of Sponsor Stock reflecting the
participant's proportional interest in the Stock Fund
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<PAGE> 41
shall not be considered a written election under the Plan by the
participant to withdraw, or have distributed, any or all of his
withdrawable shares. The Trustee shall credit to each
proportional interest of the participant from which the tendered
shares were taken the proceeds received by the Trustee in
exchange for the shares of Sponsor Stock tendered from that
interest. Pending receipt of directions (through the
Administrator) from the participant or the Named Fiduciary, as
provided in the Plan, as to which of the remaining investment
options the proceeds should be invested in, the Trustee shall
invest the proceeds in the investment option described in
Schedule "C".
(vii) General. With respect to all rights other than the
right to vote, the right to tender, and the right to withdraw
shares previously tendered, in the case of Sponsor Stock
credited to a participant's proportional interest in the Stock
Fund, the Trustee shall follow the directions of the participant
and if no such directions are received, the directions of the
Named Fiduciary. The Trustee shall have no duty to solicit
directions from participants. With respect to all rights other
than the right to vote and the right to tender, in the case of
Sponsor Stock not credited to participants' accounts, the
Trustee shall follow the directions of the Named Fiduciary.
(viii) Conversion. All provisions in this Section 4(i)
shall also apply to any securities received as a result of a
conversion of Sponsor Stock.
(3) Amending the "investment options" section of Schedules "A" and
"C" to add the following:
- California Microwave Stock Fund
(4) Amending the "Trustee Fees" section of Schedule "B" to add the
following:
- To the extent that assets are invested in Sponsor stock,
.10% of such assets in the Trust payable pro rata
quarterly on the bases of such assets as of the calendar
quarter's last valuation date, but no less than $10,000
nor more than $35,000 per year.
(5) Amending Schedule "H" Telephone Exchange Procedures, by adding
the following section:
EXCHANGE RESTRICTIONS
Investments in the Stock Fund will consist primarily of shares
of Sponsor Stock. However, in order to satisfy daily participant
requests for exchanges, loans and withdrawals, the Stock Fund
will also hold cash or other short-term liquid investments in an
amount that has been agreed to in writing by the Sponsor and the
Trustee. The Trustee will be responsible for ensuring that the
percentage of these investments falls within the agreed upon
range over time. However, if there is insufficient liquidity in
the Sponsor Stock Fund to allow for such activity, the Trustee
will sell shares of Sponsor Stock in the open market. Exchange
and redemption transactions will be processed as soon as
proceeds from the sale of Sponsor Stock are received.
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IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Second
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
CALIFORNIA MICROWAVE, INC. FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ Harriot Puviance By: /s/ Vice President
------------------------------- --------------------------------
Date Vice President Date
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Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Tax-Deferred Savings and Deferred Profit Sharing
Plan of California Microwave, Inc. and to the incorporation by reference therein
of our report dated August 10, 1998, with respect to the consolidated financial
statements and schedule of California Microwave, Inc. incorporated by reference
in its Annual Report on Form 10-K for the year ended June 30, 1998, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
- ---------------------
Ernst & Young LLP
Palo Alto, California
December 29, 1998
