<PAGE> 1
Registration No. 33- __________
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 26, 1996.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
TRANS WORLD AIRLINES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4512 43-1145889
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
ONE CITY CENTRE
515 N. SIXTH STREET
ST. LOUIS, MISSOURI 63101
(314) 589-3000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
RETIREMENT SAVINGS PLAN FOR NON-CONTRACT EMPLOYEES OF TWA
(Full title of the Plan)
RICHARD P. MAGURNO COPY TO:
SENIOR VICE PRESIDENT AND GENERAL COUNSEL HOWARD E. TURNER, ESQ.
TRANS WORLD AIRLINES, INC. SMITH, GAMBRELL & RUSSELL
ONE CITY CENTRE SUITE 3100, PROMENADE II
515 N. SIXTH STREET 1230 PEACHTREE STREET, NE
ST. LOUIS, MISSOURI 63101 ATLANTA, GEORGIA 30309-3592
(314) 589-3000 (404) 815-3500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF AMOUNT TO BE MAXIMUM MAXIMUM
SECURITIES TO REGISTERED (1) OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED PER UNIT (1) OFFERING PRICE REGISTRATION FEE
(1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,200,000 $10.094 $12,112,500(3) $4,176.73
par value $.01 shares(2)
per share
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described above.
(2) This Registration Statement also relates to such indeterminate number
of additional shares of Common Stock of the Registrant as may be issuable as a
result of stock splits, stock dividends or similar transactions.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to the provisions of Rule 457(c) & (h)(1) under the Securities Act.
Based on prices of the Common Stock on the American Stock Exchange Composite
Tape as of September 20, 1996.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Company hereby incorporates by reference in this Registration Statement
its Prospectus and the following documents:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1995, filed with the Securities and Exchange Commission (the "Commission")
pursuant to Section 13 of the Securities Exchange Act of 1934 (the "Exchange
Act");
(b) The Company's Amendment to its Annual Report on Form 10-K for the year
ended December 31, 1995, as filed on Form 10-K/A;
(c) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996.
(d) The Company's Amendment to its Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996, as filed on Form 10-Q/A;
(e) The Company's Amendments No. 1 and 2 to its Quarterly Report on Form
10-Q for the quarter ended June 30, 1996, as filed on Form 10-Q/A;
(f) The Company's Current Report on Form 8-K filed on March 20, 1996;
(g) The Company's Current Report on Form 8-K filed on March 21, 1996;
(h) The Company's Current Report on Form 8-K filed on September 20, 1996;
(i) The description of the Company's Common Stock contained in the Form
8-A Registration Statement filed with the Commission on August 1, 1995,
including any amendment or reports filed for the purpose of updating such
description;
(j) When filed, the Company's latest employee plan annual report, whether
filed on Form 11-K or Form 10-K; and
(k) All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereunder have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
respective dates of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be
2
<PAGE> 3
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall be deemed, except as so modified
and superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The class of securities offered (exclusive of plan interests) is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Delaware General Corporation Law (the "DGCL"), directors, officers,
employees and other individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than a derivative action) if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the bests interests of TWA and, with respect to any criminal
action or proceeding, had no reasonable cause to believe their conduct was
unlawful. A similar standard of care is applicable in the case of a derivative
action, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
an action, and the DGCL requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to TWA.
The eleventh article of TWA's Third Amended and Restated Certificate of
Incorporation ("Article Eleventh") provides that the Company shall indemnify
any person who was or is a party or is threatened to be made a party to, or
testifies in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature, by reason
of the fact that such person is or was a director, officer, employee or agent
of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding to the full extent permitted by law, and the Company may
adopt by-laws or enter into agreements with any such person for the purpose of
providing for such indemnification.
To the extent that a director or officer of the Company has been successful
on the merits or otherwise (including without limitation by nolo contendere) in
defense of any action, suit or proceeding referred to in the immediately
preceding paragraph, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
Expenses incurred by an officer, director, employee or agent in defending or
testifying in a civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be
determined that such director or officer is not entitled
3
<PAGE> 4
to be indemnified by the Company against such expenses as authorized by Article
Eleventh, and the Company may adopt by-laws or enter into agreements with such
persons for the purpose of providing for such advances.
The indemnification permitted by Article Eleventh shall not be deemed
exclusive of any other rights to which any person may be entitled under any
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in such person's official capacity and as to action in another
capacity while holding an office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executor and administrators of such person. Each
director of the Company has entered into an agreement that reflects the above
described indemnification provisions.
The Company shall have the power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
employee benefit plan trust or other enterprise, against any liability asserted
against such person and incurred by such person in any such capacity, or
arising out of such person's status as such, whether or not the Company would
have the power to indemnify such person against such liability under the
provisions of Article Eleventh or otherwise.
If the DGCL is amended to further expand the indemnification permitted to
directors, officers, employees or agents of the Company, then the Company shall
indemnify such persons to the fullest extent permitted by the DGCL, as so
amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
5 Opinion of Smith, Gambrell & Russell
23.1 Consent of Smith, Gambrell & Russell, included in Exhibit 5
23.2 Consent of KPMG Peat Marwick LLP
24 Powers of Attorney (see signature page)
99.1 Retirement Savings Plan for Non-Contract Employees of TWA,
including amendment and trust agreement
</TABLE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
4
<PAGE> 5
(2) 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
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Company'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 this Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus
is sent or given, the latest annual report to security holders that is
incorporated by reference in the Prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the
Prospectus, to deliver, or cause to be delivered to each person to
whom the Prospectus is sent or given, the latest quarterly report that
is specifically incorporated by reference in the Prospectus to provide
such interim financial information.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions of the Company's
By-Laws, or otherwise, the Company has been advised that in the
opinion of the 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
Company 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 Company 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 of whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 County of St. Louis, State of Missouri, on this 31 day of
July, 1996.
TRANS WORLD AIRLINES, INC.
/s/ Jeffrey H. Erickson
-------------------------------------
Jeffrey H. Erickson
President and Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints, Jeffrey H. Erickson, Richard P. Magurno,
Edward Soule and Kathleen A. Soled; and each 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 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 and about the
premises, 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 substitute or substitutes may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey H. Erickson President, Chief Executive July 31, 1996
- ------------------------------------ Officer and Director
Jeffrey H. Erickson (Principal Executive Officer)
/s/ Edward Soule Executive Vice President September 25, 1996
- ------------------------------------ and Chief Financial Officer
Edward Soule (Principal Financial Officer)
/s/ Jody A. Ruth Vice President and Controller September 24, 1996
- ------------------------------------ (Principal Accounting Officer)
Jody A. Ruth
</TABLE>
6
<PAGE> 7
Signature
<TABLE>
<S> <C> <C>
/s/ Thomas F. Meagher Director July 29, 1996
- ------------------------------------------------
Thomas F. Meagher
/s/ John W. Bachmann Director July 23, 1996
- ------------------------------------------------
John W. Bachmann
/s/ William F. Compton Director July 25, 1996
- ------------------------------------------------
William F. Compton
/s/ Eugene P. Conese Director July 24, 1996
- ------------------------------------------------
Eugene P. Conese
/s/ William M. Hoffman Director August 31, 1996
- ------------------------------------------------
William M. Hoffman
/s/ Gerald L. Gitner Director July 22, 1996
- ------------------------------------------------
Gerald L. Gitner
/s/ Thomas H. Jacobson Director July 31, 1996
- ------------------------------------------------
Thomas H. Jacobson
/s/ Jewel LaFontang-Mankarious Director July 31, 1996
- ------------------------------------------------
Jewel LaFontang-Mankarious
/s/ Myron Kaplan Director July 23, 1996
- ------------------------------------------------
Myron Kaplan
/s/ Willaim O'Driscoll Director August 31, 1996
- ------------------------------------------------
William O'Driscoll
/s/ G. Joseph Reddington Director July 31, 1996
- ------------------------------------------------
G. Joseph Reddington
</TABLE>
7
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ Lawrence K. Roos Director July 30, 1996
- ------------------------------------------------
Lawrence K. Roos
/s/ Willaim W. Winpisinger Director September 25, 1996
- ------------------------------------------------
William W. Winpisinger
</TABLE>
8
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of St. Louis, Missouri, on September 25, 1996.
RETIREMENT SAVINGS PLAN FOR NON-
CONTRACT EMPLOYEES OF TWA
By: /s/ Charles J. Thibaudeau
------------------------------------------
Charles J. Thibaudeau,
Senior Vice President-Employee Relations
9
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5 Opinion of Smith, Gambrell & Russell
23.1 Consent of Smith, Gambrell &
Russell, included in Exhibit 5
23.2 Consent of KPMG Peat Marwick LLP
24 Powers of Attorney (see signature page)
99.1 Retirement Savings Plan for Non-
Contract Employees of TWA,
including amendment and trust
agreement
</TABLE>
<PAGE> 1
EXHIBIT 5
SMITH, GAMBRELL & RUSSELL
Attorneys At Law
Suite 3100, Promenade II
1230 Peachtree Street, N. E.
Atlanta, Georgia 30309-3592
September 25, 1996
Board of Directors
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
St. Louis, Missouri 63101
Re: Trans World Airlines, Inc. Registration Statement on Form S-8 for the
Retirement Savings Plan for Non-Contract Employees of TWA, No.
33-____________
Ladies and Gentlemen:
In connection with the registration of 1,200,000 shares of the Common Stock,
par value $.01 (the "Securities") of Trans World Airlines, Inc. (the "Company")
issuable under the Company's Retirement Savings Plan for Non-Contract Employees
of TWA and participation interests with respect thereto, we have examined the
following:
1. A copy of Registration Statement No. 33-____________ to be filed with
the Securities and Exchange Commission on or about September 25, 1996,
and the Exhibits to be filed with and as a part of said Registration
Statement;
2. A copy of the Third Amended and Restated Certificate of Incorporation
of the Company and an amendment thereto as referred to in said
Registration Statement;
3. A copy of the Third Amended and Restated By-Laws of the Company as
referred to in said Registration Statement;
4. Copies of the minutes of meetings of the Board of Directors of the
Company or committees thereof, deemed by us to be relevant to this
opinion.
Further in connection with this matter, we have reviewed certain of the
Company's proceedings with respect to the authorization of the issuance of such
Securities and with respect to the filing of said Registration Statement.
Based on the foregoing, it is our opinion that:
<PAGE> 2
Board of Directors
September 25, 1996
Page 2
(i) the Company is a corporation in good standing, duly organized and
validly existing under the laws of the State of Delaware;
(ii) the necessary corporate proceedings and actions legally required for
the registration of the Securities have been held and taken;
(iii) the issuance and sale of the Securities has been duly and validly
authorized; and
(iv) the shares of Common Stock of the Company when issued will be fully
paid, non-assessable and free of preemptive rights.
We consent to the filing of this opinion as an Exhibit to the aforementioned
Registration Statement on Form S-8. In giving this consent, we do not thereby
admit we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
SMITH, GAMBRELL & RUSSELL
/s/ Howard E. Turner
---------------------
Howard E. Turner
<PAGE> 1
EXHIBIT 23.2
ACCOUNTANTS' CONSENT
The Board of Directors
Trans World Airlines, Inc.:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Trans World Airlines, Inc. of our report dated March 6, 1996
relating to the consolidated balance sheets of Trans World Airlines, Inc. and
subsidiaries as of December 31, 1995 and 1994 and the related statements of
consolidated operations and cash flows for the four months ended December 31,
1995, the eight months ended August 31, 1995, the year ended December 31, 1994,
the two months ended December 31, 1993 and the ten months ended October 31,
1993, and the related financial statement schedule, which report appears in the
December 31, 1995 annual report on Form 10-K of Trans World Airlines, Inc. Our
report refers to the application of fresh start reporting as of September 1,
1995 and November 1, 1993.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Kansas City, Missouri
September 24, 1996
<PAGE> 1
EXHIBIT 99.1
RETIREMENT SAVINGS PLAN FOR
NONCONTRACT EMPLOYEES OF
TRANS WORLD AIRLINES, INC.
(JANUARY 1, 1994, RESTATEMENT)
<PAGE> 2
ARTICLE ARTICLE 1
NAME, PURPOSE AND EFFECTIVE DATE
1.1 NAME: This Plan shall be known as the Retirement Savings Plan
for Noncontract Employees of Trans World Airlines, Inc.
1.2 PURPOSE: The purpose of the Plan is to encourage and
facilitate systematic savings for retirement. The Plan and
the Trust shall be administered for the exclusive benefit of
the Members and their Beneficiaries and shall not be used
for, or diverted to, any other purposes.
1.3 EFFECTIVE DATE: January 1, 1989, subject to receipt by TWA of
a ruling or determination, satisfactory to TWA, from the
Commissioner or District Director of Internal Revenue that
the Plan and the trust established pursuant to the provisions
of the Plan shall as a Plan and Trust (1) qualify for
exemption from taxation under Sections 401(a) and 501(a) of
the Internal Revenue Code of the United States (the Code) or
any other applicable section of the Federal tax laws at the
time in effect, and (2) entitle the Company to deductions for
contributions under Section 404 of the Code or any other.
applicable section of the Federal tax laws at the time in
effect.
ARTICLE ARTICLE 2
DEFINITIONS
For the purposes of this Plan, unless the context requires otherwise, the
following capitalized words and phrases, when used herein shall have the
meanings indicated. Wherever appropriate, singular words used in this Plan and
the Trust Agreement may mean the plural, and vice versa, and the masculine may
mean feminine, and vice versa.
2.1 ACCOUNT: With respect to any Member, any or all of the
following Accounts established and maintained on his behalf
under the Plan:
A. Before-Tax Account, to which shall be allocated
any Before-Tax Contributions made pursuant to
Section 4.l.
B. After-Tax Account, to which shall be allocated
any After-Tax Contributions made pursuant to
Section 4.1.
C. Matching Company Account, to which shall be
allocated any Matching Company Contributions made
pursuant to Section 4.2.
D. Employer Basic Account, to which shall be
allocated any Supplemental Agreement
Contributions or Other Company Contributions made
on behalf of all Members pursuant to Section 4.3
or Section 4.4.
E. Rollover Account, to which shall be allocated any
Rollover Contributions made pursuant to Section
4.5.
1
<PAGE> 3
F. Prior Plan Employer Account, to which shall be
allocated any amounts attributable to
contributions made by the Company to the Stock
Purchase Plan and subsequently transferred to
this Plan.
G. Prior Plan Employee Account, to which shall be
allocated any amounts attributable to
contributions made by Members to the Stock
Purchase Plan (on an after-tax basis) and
subsequently transferred to this Plan.
When appropriate in the context, the term "Account" shall also refer to the
aggregate of a Member's Accounts listed in this Section 2.1.
2.2 AFTER-TAX CONTRIBUTION: Such portion of a Member's
Compensation which the Member contributes to the Plan on an
after-tax basis.
2.3 ALTERNATE PAYEE: Any spouse, former spouse, child or other
dependent of a Member who is recognized by a Domestic
Relations Order or a Qualified Domestic Relations Order as
having a right to receive all, or a portion of, the benefits
payable under the Plan with respect to such Member.
2.4 BEFORE-TAX CONTRIBUTION: Such portion of a Member's
Compensation which is contributed by the Company to the Plan,
on a before-tax basis, on behalf of such Member.
2.5 BENEFICIARY: Any Person designated by a Member in accordance
with Article 8 of the Plan, to receive any sums payable
hereunder if such Person survives the Member.
2.6 BOARD OF DIRECTORS: The Board of Directors of the Company.
2.7 CODE: The Internal Revenue Code of 1986, as amended.
2.8 COMPANY: Trans World Airlines, Inc.
2.9 COMPENSATION: "Compensation" means all of each Member's
Compensation as defined in Section 3401 (a) of the Code for
purposes of income tax withholding at the source, but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or
location of the employment or the services performed (such as
the exceptions for agricultural labor in Section 3401 (a)(2)
of the Code).
Notwithstanding the above, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections
125, 402(a)(8), 402(h) or 403(b) of the Code.
2
<PAGE> 4
Compensation shall include only that Compensation which is actually paid to
the Member during the applicable period. Except as provided elsewhere in
this Plan, the applicable period shall be the Plan Year.
Compensation shall exclude the following:
- cost of living differentials for overseas;
- overtime or shift payment;
- commission;
- fee;
- retainer; or
- any other special remuneration or supplemental compensation.
Effective September 1, 1992, for those Employees who are Passenger Service
Employees, Compensation will include those items that are specifically excluded
in the paragraph above.
Effective for Plan Years beginning after December 31, 1988, but before January
1, 1994, the annual Compensation of each Member taken into account under the
Plan for any Plan Year shall not exceed $200,000, as adjusted by the Secretary
of the Treasury at the same time and in the same manner as under Section 415(d)
of the Code. Effective for Plan Years beginning after December 31, 1993, the
annual Compensation of each Member taken into account under the Plan for any
Plan Year shall not exceed $150,000, as adjusted by the Secretary of the
Treasury in accordance with Section 401(a)(17) of the Code. If Compensation is
determined on the basis of a period of less than 12 calendar months, then the
applicable dollar limitation in effect for the calendar year in which the
period begins shall be multiplied by the ratio obtained by dividing the number
of full months in the period by 12. In determining the Compensation of a
Member for purposes of any such dollar limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying such rules, the term
"family" shall include only the spouse of the Member and any lineal descendants
of the Member who have not attained age 19 before the close of the Plan Year.
If, as a result of the application of such rules, a dollar limitation is
exceeded, then the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as determined prior to the
application of the dollar limitation.
2.10 DEFERRED RETIREMENT DATE: The date a Member actually retires
from active employment with the Company if such date is
beyond his Normal Retirement Date.
2.11 DISABLED: A medically determinable physical or mental
impairment or impairments which are likely to be permanent
and of such severity that the Member is not only unable to do
his previous work but cannot, considering his age, education,
and work experience, engage in any other kind of substantial
gainful work which exists in the national economy, regardless
of whether such work exists in the immediate area in which he
lives, or whether a specific job vacancy exists for him, or
whether he would be hired if he applied for work. For
purposes of the preceding sentence, "work which exists in the
national economy" means work which exists in significant
numbers either in the region where such individual lives or
in several regions of the country; provided that if the
definition of disability
3
<PAGE> 5
should be changed for purposes of Federal Social Security, a
corresponding change will be deemed made in the definition
for purposes of this Plan. Anything contained herein to the
contrary notwithstanding, a Member shall be considered
Disabled if he and the Company, acting in a uniform and
nondiscriminatory manner and after a report by a physician or
physicians appointed by the Company, shall agree that he is
Disabled, even if his disability does not fall within the
definition in the first sentence of this Article.
2.12 DOMESTIC RELATIONS ORDER: Any judgment, decree, or order
(including approval of a property settlement agreement) which
(i) relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former
spouse, child, or other dependent of a Member, and (ii) is
made pursuant to a state domestic relations law (including a
city property law).
2.13 EARLY RETIREMENT DATE: The first day of the month coincident
with or next following the date on which a Member has
attained age fifty-five (55). A Member's Termination of
Employment from the Company subsequent to his Early
Retirement Date, but prior to his Normal Retirement Date,
shall be deemed an early retirement.
2.14 EARNINGS: Earnings resulting from the investment and any
reinvestment of Member and/or Company contributions to the
Plan and any increment thereof in any Account including
interest, dividends and other distributions on such
securities.
2.15 EFFECTIVE DATE: January 1, 1989.
2.16 ELECT/ELECTION: A properly completed written notice as
specified by the Plan and verified by the Plan Administrator,
on a form prescribed by the Plan Administrator, delivered to
and received by the office prescribed by the Plan
Administrator.
2.17 EMPLOYEE: Any employee who is receiving Compensation from the
Company in United States currency, which is not governed by a
collective bargaining agreement and whose regular
compensation is more than fifty percent (50%) paid by or
allocated to the Company in accordance with the
determinations made from time to time by the Board of
Directors. Employee shall also include leased employees
deemed to be employees within the meaning of Section 414(n)
or 414(o) of the Code.
2.18 EMPLOYER: The Company and any corporation, trade or business
which, together with the Company, are members of a controlled
group of corporations, or under common control, or are
members of an affiliated service group, within the meaning of
Code Section 414(b), 414(c), 414(m) or 414(o), respectively.
2.19 ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
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2.20 HIGHLY COMPENSATED EMPLOYEE: The term "Highly Compensated
Employee" includes highly compensated active Employees and
highly compensated former Employees. For purposes of this
definition, Employer includes any Affiliate.
A highly compensated active Employee includes any Employee who performed
service for the Employer during the determination year and who, during
the look-back year: (1) received Compensation from the Employer in excess
of $75,000 (as adjusted pursuant to section 415(d) of the Code); (2)
received Compensation from the Employer in excess of $50,000 (as adjusted
pursuant to section 415(d) of the Code) and was a member of the top-paid
group for such year; or (3) was an officer of the Employer and received
Compensation during such year that is greater than 50 percent of the
dollar limitation in effect under section 415(b)(1)(A) of the Code. The
term Highly Compensated Employee also includes: (1) Employees who are
both described in the preceding sentence if the term "determination year"
is substituted for the term "look-back year" and the Employee is one of
the 100 Employees who received the most Compensation from the Employer
during the determination year; and (2) Employees who are
more-than-5-percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation requirement of (3) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performs no service for the Employer during the determination year,
and was a highly compensated active Employee for either the separation
year or any determination year ending on or after the Employee's 55th
birthday.
If any Employee is, during a determination year or look-back year, a
family member of either a more-than-5-percent owner who is an active or
former Employee or a Highly Compensated Employee who is one of the 10
most Highly Compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the family member and the
more-than-5 percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and more-than-5-percent
owner or top-ten Highly Compensated Employee shall be treated as a single
Employee receiving Compensation and Plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the
family member and more than-5-percent owner or top-ten Highly Compensated
Employee. For purposes of this Section, family member includes the
spouse, lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of Employees in the top-paid
group, the top 100 Employees,
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<PAGE> 7
the number of Employees treated as officers and the Compensation that is
considered, will be made in accordance with Section 414(q) of the Code
and the Regulations thereunder.
2.21 HOUR OF SERVICE: Each hour:
A. for which an Employee is directly or indirectly
entitled to payment by the Company including
actual paid working time or paid vacation,
holiday, sick leave or any other paid time;
B. for which back pay irrespective of mitigation of
damages is either awarded an Employee or agreed
to by the Company;
C. as to which an Employee is absent during service
with the Armed Forces of the United States (i) in
the operation of a compulsory military service
law or (ii) during a period of declared national
emergency or (iii) pursuant to leave of absence
granted by the Company, provided the Employee
returns to the Service of the Company within 90
days (or such longer period as may be provided by
law for protection of reemployment rights) after
his discharge or release from active duty in the
Armed Forces of the United States or within the
period for which leave of absence was granted, as
the case may be.
A non-hourly Employee shall be credited with 45 Hours of
Service for each calendar week as to which he would be
credited with at least one Hour of Service as provided in
(A), (B) or (C) above. Calculation of Hours of Service for
periods while an Employee does not perform duties shall be
made in accordance with the provisions of ERISA regulations
Sections 2530.200(b)-2 (b) and (c) or any successor
regulations applicable thereto.
2.22 IRS: The United States Internal Revenue Service.
2.23 LEAVE OF ABSENCE: Any leave of absence authorized and
approved by the Company.
2.24 MATCHING COMPANY CONTRIBUTION: A contribution made by the
Company in an amount equal to twenty-five percent (25%) of a
Member's After-Tax Contribution to the Plan, not to exceed
2.5% of the Member's Compensation.
2.25 MEMBER: Any eligible Employee who shall have elected to
participate in the Plan and a Person who has an account under
the Plan.
2.26 NORMAL RETIREMENT DATE: The first day of the calendar month
coincident with or next following a Member's sixty-fifth
(65th) birthday.
2.27 ONE YEAR BREAK IN SERVICE: Any calendar year during which an
Employee does not complete more than 500 Hours of Service
with the Company. As used in
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<PAGE> 8
this definition, the term "Company' includes any subsidiary
or affiliate as defined under Section 414 of the Internal
Revenue Code.
Solely for purposes of determining whether a One-Year Break In Service
for participation and vesting purposes has occurred in a computation
period, an individual who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or
in any case in which such hours cannot be determined, 8 Hours of Service
per day of such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence: (1) by reason
of the pregnancy of the individual; (2) by reason of a birth of a child
of the individual; (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual; or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in the
computation period in which the absence begins if the crediting is
necessary to prevent a One-Year Break in Service in that period, or (2)
in all other cases, in the following computation period.
2.28 OTHER COMPANY CONTRIBUTION: A contribution made by the
Company at the discretion of the Board of Directors.
2.29 PERSON: Any individual, partnership, corporation, trust, or
other entity.
2.30 PLAN: The Retirement Savings Plan for Noncontract Employees
of Trans World Airlines, Inc., as amended and restated, and
any amendments thereto. For purposes of Section 401 (a) (27)
(B) of the Code, the Plan is a profit sharing plan.
2.31 PLAN ADMINISTRATOR: The Company.
2.32 PLAN YEAR: The twelve (12) month period ending on December 31.
2.33 QUALIFIED DOMESTIC RELATIONS ORDER: A Domestic Relations
Order which creates or recognizes the existence of an
Alternate Payee's right to or assigns to an Alternate Payee
the right to, receive all, or a portion of, the benefits
payable with respect to a Member under the Plan, and which
meets the requirements of the Code.
2.34 QUALIFIED JOINT AND SURVIVOR ANNUITY: An annuity payable
monthly from the first of the month next following or
coincident with a Member's Early, Normal or Deferred
Retirement Date to the first day of the month in which his
death occurs, and payable thereafter in monthly installments
of fifty percent (50%) of the monthly amount payable to the
Member during his lifetime, to the surviving spouse, if any,
for the remainder of his or her lifetime (where the surviving
spouse is the person to whom the Member was married at the
time of which the Member's benefits commenced). If the
Member's spouse should die after the Member's monthly annuity
payments have commenced under this type of annuity, the
Member will continue to receive the same amount of monthly
payments for his lifetime.
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<PAGE> 9
2.35 RETIREMENT PLAN: The Retirement Plan for Noncontract
Personnel of Trans World Airlines, Inc.
2.36 ROLLOVER CONTRIBUTION: A contribution or direct transfer of a
Member's interest in another plan that is qualified under
Section 401 of the Code.
2.37 STOCK PURCHASE PLAN: The Trans World Airlines, Inc. Employee
Stock Purchase Plan, which terminated on September 26, 1988.
2.38 SUPPLEMENTAL AGREEMENT CONTRIBUTION: A contribution made by
the Company pursuant to Section 1 5 ("Supplemental
Agreement") of the January 5, 1993, Settlement Agreement
among the Company and other parties.
2.39 TERMINATION OF EMPLOYMENT: A Member's separation from service
with the Company prior to his Early Retirement Date. In
addition, at any age, a Member who has been furloughed by the
Company or has been on a Leave of Absence other than military
leave, for at least one year will, for purposes of this Plan
only, be treated as having incurred a Termination of
Employment, although he may retain recall or reemployment
rights and/or other rights.
2.40 TRUST: The legal entity resulting from this Plan and the
Trust Agreement executed incident hereto which provides for
the Trust to receive, hold and invest the contributions made
by the Member and/or Company, and to make disbursements to,
or for the benefit of, Members and their Beneficiaries.
2.41 TRUST AGREEMENT: The agreement between the Company and the
Trustee executed pursuant to Article 21 of the Plan.
2.42 TRUST FUND: The total of Before-Tax Contributions and/or
After-Tax Contributions and Company Contributions to the
Trust made by the Members of this Plan and/or the Company,
increased by income, gains, appreciation, and recoveries
received, and decreased by losses, depreciation and benefits
paid. The Trust Fund includes all assets acquired by
investment and reinvestment which are held in the Trust Fund.
2.43 TRUSTEE: The Person(s) appointed pursuant to Article 21 of
the Plan and any duly appointed additional and successor
Trustee(s) acting thereunder.
2.44 TWA: Trans World Airlines, Inc.
2.45 VALUATION DATE: The last business day of each calendar month,
or such more frequent time as may be determined by the
Company.
2.46 YEAR OF SERVICE: A twelve consecutive month period during
which an Employee completes 1,000 or more Hours of Service
with the Company.
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<PAGE> 10
ARTICLE ARTICLE 3
ELIGIBILITY AND MEMBERSHIP
3.1 ELIGIBILITY:
A. Any Employee who is a member of the Thrift Plan
for Noncontract Employees of Trans World
Airlines, Inc. immediately prior to the Effective
Date in Section 1.3 shall automatically become a
Member of this Plan and be eligible for After-Tax
Contributions and Company Contributions l, only,
on such Effective Date.
B. Any Employee who is a member of the Retirement
Savings Plan for Noncontract Employees of Trans
World Airlines, Inc. immediately prior to the
Effective Date in Section 1.3 shall automatically
become a Member of this Plan and be eligible for
Before-Tax Contributions, only, on such Effective
Date.
C. Any Employee who, coincident with or subsequent
to the Effective Date of this Plan:
1. has completed One Year of Service;
2. who is an active member of the
Retirement Plan; and,
3. is not currently eligible to be a
member or a participant in any other
defined contribution plan, sponsored
by the Company, which permits
after-tax contributions;
shall be eligible to become a Member of this Plan.
D. Any Employee who, coincident with or subsequent
to the Effective Date of this Plan:
1. has completed One Year of Service;
2. who is an active member of the
Retirement Plan; and,
3. is currently eligible to be a member
or a participant in any other defined
contribution plan sponsored by the
Company which permits before-tax
contributions;
shall be eligible to become a Member of this Plan for
After-Tax Contributions, only.
E. Any Employee who, effective April 1, 1992:
1. has completed One Year of Service; and
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<PAGE> 11
2. is a Passenger Service Employee
shall be eligible to become a Member of this Plan. This
subsection 3.1 (E) shall be effective only through December
31, 1992.
F. Any Employee who, on or after May 1, 1993, is not
currently eligible to be a member or a
participant in any other defined contribution
plan, sponsored by the Company, which permits
after-tax contributions shall be eligible to
become a Member of this Plan.
G. Any Employee who, on or after May 1, 1993, is not
currently eligible to be a member or a
participant in any other defined contribution
plan, sponsored by the Company, which permits
before-tax contributions shall be eligible to
become a Member of this Plan for Before-Tax
Contributions, only.
3.2 MEMBERSHIP: Membership in the Plan shall be entirely
voluntary. An eligible Employee may elect membership in the
Plan on or after the Effective Date of the Plan on any "Entry
Date." The Entry Date for purposes of this Plan is the first
day of the month coincident with or immediately following the
date the Employee has met the eligibility requirements of
Section 3.1 above.
ARTICLE ARTICLE 4
CONTRIBUTIONS
4.1 EMPLOYEE CONTRIBUTIONS: Each eligible Employee who is a
Member of the Plan may elect, in accordance with procedures
established by the Plan Administrator, to make Before-Tax
Contributions or After-Tax Contributions, as the case may be,
for each pay period, within the limits set forth below. All
such Employee Contributions shall be made only on a
prospective basis. Each such election shall specify the
percentage of Compensation that the Member elects to
contribute as a Before-Tax Contribution or an After-Tax
Contribution under the Plan for each payroll period
applicable to him, and shall authorize the deduction of such
amounts from his Compensation.
The amounts contributed must be:
A. A minimum of one percent (1%) of Compensation;
B. In increments of one-tenth of one percent (.1%)
Of Compensation; and
C. Not to exceed the lesser of twenty percent (20%)
of Compensation or the limits set forth in
Article 7 of the Plan.
Subject to the foregoing provisions of this Section 4.1, a Member may
elect to increase, decrease, suspend or restart his Before-Tax
Contributions or After-Tax Contributions at
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<PAGE> 12
any time, such election to take effect on the first day of the payroll
period next following the Plan Administrator's receipt of the election
(or as soon as administratively practicable thereafter).
If a Member ceases to meet the eligibility requirements of Section 3.1,
he shall become ineligible to make contributions to the Plan, and his
deductions will be terminated forthwith by the Plan Administrator.
If a Member withdraws any amount from his or her After-Tax Account
(pursuant to any Section of Article 9), the Plan Administrator shall
automatically suspend the Member's after-tax contribution election, if
any, for a period of six months.
4.2 MATCHING COMPANY CONTRIBUTIONS: For each calendar month, the Company
shall contribute an amount equal to twenty-five percent (25%) of
each Member's After-Tax Contribution under the Plan, not to exceed
two and one- half percent (2 1/2%) of the Member's Compensation, as
to the payroll periods paid in such calendar month.
Effective January 1, 1993, all Matching Company Contributions shall be
suspended for all Members who are Passenger Service Employees. All such
Employees' remaining Account balances shall continue to be invested
according to the rules contained in Article 6 herein.
4.3 SUPPLEMENTAL AGREEMENT-CONTRIBUTIONS: With respect to any Plan Year,
and pursuant to Section 15 ("Supplemental Agreement") of the January
5, 1993, Settlement Agreement among the Company and other parties,
the Board of Directors may specify an amount of money to be
contributed to the Plan for that Plan Year. Any such Supplemental
Agreement Contribution shall be allocated among the Employer Basic
Accounts of all Members in accordance with Section 5.5.
4.4 OTHER COMPANY CONTRIBUTIONS: With respect to any Plan Year, the
Company's Board of Directors may specify an amount of money to be
contributed to the Plan for that Plan Year. Any such Other Company
Contribution shall be allocated among the Employer Basic Accounts of
all Members in accordance with Section 5.6.
4.5 ROLLOVER CONTRIBUTIONS: Each Member may elect to make a Rollover
Contribution to the Plan, provided such contribution qualifies as an
"eligible rollover distribution" under Section 402(c)(4) of the
Code, which determination shall be made by the Plan Administrator.
The Plan Administrator may request of the Member any documents or
evidence it deems necessary to assist it in making such
determination. Any Rollover Contribution shall be paid to the Plan
Administrator in cash, delivered by the Plan Administrator to the
Trustee as soon as practicable thereafter, allocated to the Member's
Rollover Account in accordance with Section 5.7, and invested by the
Trustee in accordance with the Member's election under Article VI.
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4.6 INDIVIDUAL AND COLLECTIVE LIMITATIONS ON CONTRIBUTIONS: The
contributions described in the preceding Sections may not exceed the
limitations set forth in Article 7 of the Plan. The Plan
Administrator shall, without the consent of the Members, reduce such
contributions of Members to insure that the limits in Article 7 of
the Plan are not exceeded.
4.7 TIME FOR PAYMENT: Before-Tax Contributions, After-Tax Contributions
and Matching Company Contributions shall be transmitted to the Trust
by the Company by wire transfer, as soon as practicable after the
end of the accounting month during which such amounts would have
been payable to the Member in the absence of a contribution
election, but in no event later than ninety (90) days following such
date. Supplemental Agreement Contributions and Other Company
Contributions for any Plan Year shall be transmitted to the Trust by
the Company within the time prescribed by law for filing the
Company's federal income tax return with respect to its taxable year
ending with or within that Plan Year.
ARTICLE ARTICLE 5
ALLOCATIONS TO MEMBERS' ACCOUNTS
5.1 SEPARATE ACCOUNTS: The Plan Administrator shall establish and
maintain separate accounts in the name of each Member, pursuant to
the following Sections of this Article 5.
5.2 BEFORE-TAX CONTRIBUTIONS: The Plan Administrator shall allocate
Before tax Contributions to Members' Before- Tax Accounts in
accordance with the applicable contribution elections and concurrent
with the Company's deposit of such contributions in the Trust
pursuant to Section 4.1.
5.3 AFTER-TAX CONTRIBUTIONS: The Plan Administrator shall allocate
After-Tax Contributions to Members' After-Tax Contribution Accounts
in accordance with the applicable contribution elections and
concurrent with the Company's deposit of such contributions in the
Trust pursuant to Section 4.1.
5.4 MATCHING COMPANY CONTRIBUTIONS: The Plan Administrator shall
allocate Matching Company Contributions to Members' Company Accounts
in accordance with the contribution formula set forth in Section 4.2
and concurrent with the Company's deposit of such contributions in
the Trust pursuant to Section 4.2.
5.5 SUPPLEMENTAL AGREEMENT CONTRIBUTIONS: The Plan Administrator shall
allocate any Supplemental Agreement Contributions to the Employer
Basic Accounts of all Members, concurrent with the Company's deposit
of such contributions in the Trust pursuant to Section 4.3. Such
contributions shall be allocated to each Member's Account in the
proportion that such Member's Plan Year Compensation bears to the
total Plan Year Compensation of all Members.
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<PAGE> 14
5.6 OTHER COMPANY CONTRIBUTIONS: The Plan Administrator shall allocate
any Other Company Contributions to the Employer Basic Accounts of
all Members, concurrent with the Company's deposit of such
contributions in the Trust pursuant to Section 4.4. Such
contributions shall be allocated to each Member's Account in the
proportion that such Member's Plan Year Compensation bears to the
total Plan Year Compensation of all Members.
5.7 ROLLOVER CONTRIBUTIONS: The Plan Administrator shall allocate any
Rollover Contributions to the Rollover Accounts of Members electing
to make such contributions, concurrent with the deposit of such
contributions in the Trust pursuant to Section 4.5.
5.8 CONTRIBUTIONS TO STOCK PURCHASE PLAN: The Plan Administrator shall
allocate amounts transferred to this Plan from the Stock Purchase
Plan to the following Accounts, as appropriate under subsections (F)
or (G) of Section 2.1.
A. Prior Plan Employer Account; and/or
B. Prior Plan Employee Account.
5.9 NOTICE OF ALLOCATION: The Plan Administrator shall notify the
Trustee in writing of its allocations made pursuant to the
preceding Sections.
ARTICLE ARTICLE 6
6.1 MEMBER DIRECTED INVESTMENT. All contributions to the Trust shall be
invested by the Trustee as directed by the Members in accordance
with Section 6.2 and 6.3 of the Plan.
6.2 INVESTMENT CHOICES. The Company shall from time to time establish
various investment options available for selection by Members
participating in the Plan. Such investment options may consist of
individual securities, insurance contributions, mutual funds or
collective investment funds, money market funds or any other
investment vehicle deemed appropriate by the Company. Each Member
may select any combination of investment options, in 1% increments,
with respect to the funds in his account. A similar selection shall
be made with respect to all future contributions to his Account.
Each Member shall be solely responsible for the selection of his
investment options provided for hereunder. The fact that an investment
option is made available to a Member for investment under the Plan shall
not constitute, or be construed as constituting, a recommendation for
investment in that investment options.
The Company is empowered with the authority and discretion to review or
change any of the investment options. The Trustee and the Company shall
not be liable or responsible for any loss resulting to a Member's Account
because of any sale or investment directed by the Member under this
Section 6.2 or because of the failure to take any action regarding
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<PAGE> 15
an investment acquired pursuant to such elective investment. The Trustee
and the Company shall be indemnified by the member from and against any
personal liability to which the Trustee and the Company may be subjected
due to carrying out an elective investment directed by the Member or
failing to act in the absence of instructions from the Member.
6.3 CHANGING INVESTMENT CHOICES. At any time, and without limitation, a
Member shall be permitted to change his election of any investment
options(s) and/or the percentage of funds in his Account to be
invested in each investment option. Any such change in an
investment election shall apply either to the Member's current
Account balance, to future contributions to his Account, or to both
-- as designated by the Member -- and shall be effective as of the
Valuation Date on which the Plan Administrator is notified of the
election (or as soon as administratively practicable thereafter).
6.4 INVESTMENT INCOME AND LOSS: The amount of net Income, loss,
appreciation or depreciation from each investment option shall be
credited or charged against, as the case may be, each Account of
each Member selecting such choice on a pro rata basis on each
Valuation Date in a Plan Year.
6.5 INVESTMENT DISCRETION: The Company reserves the exclusive right to
select and manage the investments held in each investment
alternative available under the Plan. The Company may, at its
option, delegate the management of such investments to an
independent investment advisor who shall then become a fiduciary of
the Plan and governed by its provisions. In the event there is a
delay in initiating or changing such investments, the Plan
Administrator may elect to invest Member investment choices in a
money market investment vehicle until the fund investments are
activated.
6.6 INVESTMENT EXPENSE: Expenses of managing investments in each fund,
including investment management fees, commissions, and other
transactions costs, shall be charged against the assets of the
applicable fund.
ARTICLE ARTICLE 7
LIMITATION
7.1 ANNUAL CODE SECTION 401 (K) LIMITS: Notwithstanding any other
provision of the Plan, each Member's Before-Tax Contributions for a
Plan Year shall not exceed the lesser of: (i) the limitation then in
effect under Section 402(g) of the Code; or (ii) if the Member is
highly compensated, as defined by the Code, the actual deferral
percentage ("ADP") permitted under Section 401 (k) of the Code.
7.2 ALLOCATION LIMITATIONS: The following provides rules for the maximum
allocation a Member may receive in a given year, which will
generally be the lesser of $30,000 (as indexed) or 25 percent of his
compensation (as defined in this Section).
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A. This subsection applies if the Member does not
participate in, and has never participated in another
qualified plan maintained by the Employer, or a welfare
benefit fund, as defined in Section 419(e) of the Code
maintained by the Employer, or an individual medical
account, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, which provides an Annual
Addition as defined in subsection (D)(1).
1. The amount of Annual Additions which may be
credited to the Member's Account for any
Limitation Year will not exceed the lesser
of the Maximum Permissible Amount, as
defined in subsection (D)(10), or, any other
limitation contained in this Plan. If the
contributions that would otherwise be
contributed or allocated to the Member's
Account would cause the Annual Additions for
the Limitation Year to exceed the Maximum
Permissible Amount, the amount contributed
or allocated will be reduced, (Member
Before-Tax Contributions will first be so
reduced), so that the Annual Additions for
the Limitation Year will equal the Maximum
Permissible Amount.
2. As soon as is administratively feasible
after the end of the Limitation Year, the
Maximum Permissible Amount for the
Limitation Year will be determined on the
basis of the Member's actual Section 415
Compensation for the Limitation Year.
3. If there is an excess Annual Addition due to
a calculation error, Employee contributions,
the allocation of Forfeitures (if any), or
other facts and circumstances as determined
by the Plan Administrator, the excess will
be corrected as follows:
a. Any after-tax employee
contributions, to the extent they
would reduce the Excess Amount,
will be returned to the Member;
b. Any elective deferrals (within
the meaning of Code Section
402(g)(3)) credited for the
Limitation Year will be returned
to the Member, to the extent they
would reduce the Excess Amount;
c. If, after the application of
paragraphs (a) and (b), an Excess
Amount still exists, and the
Member is covered by the Plan at
the end of the Limitation Year,
the Excess Amount in the Member's
Account will be used to reduce
contributions, beginning with
Member Before-Tax Contributions,
if any, (including any allocation
of Forfeitures for such Member)
in the next Limitation Year, and
each succeeding Limitation Year,
if necessary;
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<PAGE> 17
d. If, after the application of paragraphs (a) and
(b), an Excess Amount still exists, and the
Member is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future
contributions, beginning with Member Before-Tax
Contributions, if any, for all remaining Members
in the next Limitation Year, and each succeeding
Limitation Year, if necessary;
e. If a suspense account is in existence at any time
during a Limitation Year pursuant to this
Article, it will participate in the allocation of
the Trust's investment gains and losses. If a
suspense account is in existence at any time
during a particular Limitation Year, all amounts
in the suspense account must be allocated and
reallocated to Members' Accounts before any
Employer or any after-tax employee contribution
may be made to the Plan for that Limitation Year.
Excess Amounts may not be distributed to Members
or former Members.
B. This subsection applies if, in addition to this Plan,
the Member is covered under another qualified defined
contribution plan maintained by the Employer, a welfare
benefit fund, as defined in Section 419(e) of the Code
maintained by the Employer, or an individual medical
account, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, which provides an Annual
Addition as defined in subsection (D)(1), during any
Limitation Year.
1. The Annual Additions which may be credited
to a Member's Account under this Plan for
any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the
Annual Additions credited to a Member's
account under the other Plans and welfare
benefit funds for the same Limitation Year.
If the Annual Additions with respect to the
Member under other defined contribution
plans and welfare benefit funds maintained
by the Employer are less than the Maximum
Permissible Amount and the Employer
contribution that would otherwise be
contributed or allocated to the Member's
Account under this Plan would cause the
Annual Additions for the Limitation Year to
exceed this limitation, the amount
contributed or allocated will be reduced so
that the Annual Additions under all such
Plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If
the Annual Additions with respect to the
Member under such other defined contribution
plans and welfare benefit funds in the
aggregate are equal to or greater than the
Maximum Permissible Amount, no
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<PAGE> 18
amount will be contributed or allocated to
the Member's Account under this Plan for the
Limitation Year.
2. As soon as is administratively feasible
after the end of the Limitation Year, the
Maximum Permissible Amount for the
Limitation Year will be determined on the
basis of the Member's actual Section 415
Compensation for the Limitation Year.
3. If, pursuant to subsection (B)(2) or as a
result of a calculation error, Employee
contributions, the allocation of Forfeitures
or other facts and circumstances as
determined by the Plan Administrator, a
Member's Annual Additions under this Plan
and such other Plans would result in an
Excess Amount for a Limitation Year, the
Excess Amount will be deemed to consist of
the Annual Additions last allocated, except
that Annual Additions attributable to a
welfare benefit fund or individual medical
account will be deemed to have been
allocated first regardless of the actual
allocation date.
4. If an Excess Amount was allocated to a
Member on an allocation date of this Plan
which coincides with an allocation date of
another Plan, the Excess Amount attributed
to this Plan will be the product of,
a. the total Excess Amount allocated
as of such date, times
b. the ratio of (i) the Annual
Additions allocated to the Member
for the Limitation Year as of
such date under this Plan to (ii)
the total Annual Additions
allocated to the Member for the
Limitation Year as of such date
under this and all other
qualified defined contribution
plans.
5. Any Excess Amount attributed to this Plan
will be disposed in the manner described in
subsection (A)(3).
C. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Member in
this Plan, the sum of the Member's Defined Benefit
Fraction and Defined Contribution Fraction will not
exceed 1.0 in any Limitation Year. If the sum of the
fractions exceeds 1.0, the annual benefit provided under
the defined benefit plan will be reduced until the sum
of the fractions equals 1.0.
D. Definitions:
1. Annual Additions: The sum of the following
amounts credited to a Participant's Account
for the limitation year:
a. Employer contributions,
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<PAGE> 19
b. Employee [After-Tax]
Contributions,
c. Forfeitures, and
d. Amounts allocated after March 31,
1984, to an individual medical
account, as defined in Section
415(l)(2) of the Code, which is
part of a pension or annuity plan
maintained by the Employer, are
treated as annual additions to a
Defined Contribution Plan. Also
amounts derived from
contributions paid or accrued
after December 31, 1985, in
taxable years ending after such
date, which are attributable to
post-retirement medical benefits,
allocated to the separate account
of a Key Employee, as defined in
Section 419(d)(3) of the Code,
under a welfare benefit fund, as
defined in Section 419(e) of the
Code, maintained by the Employer
are treated as annual additions
to a Defined Contribution Plan.
For this purpose, any excess amount applied
under subsection (A)(3) or (B)(5) in the
limitation year to reduce Employer
contributions will be considered annual
additions for such limitation year.
2. Section 415 Compensation: For purposes of
this Article, Section 415 Compensation shall
mean a Member's earned income, wages,
salaries, and fees for professional services
and other amounts received for personal
services actually rendered in the course of
employment with the Employer maintaining the
Plan (including, but not limited to,
commissions paid salesmen, compensation for
services on the basis of a percentage of
profits, commissions on insurance premiums,
tips, bonuses, fringe benefits,
reimbursements, and expense allowances), and
excluding the following:
a. Employer contributions to a Plan
of deferred compensation which
are not includible in the
Employee's gross income for the
taxable year in which
contributed, or Employer
contributions under a simplified
employee pension Plan to the
extent such contributions are
deductible by the Employee, or
any distributions from a Plan of
deferred compensation;
b. Amounts realized from the
exercise of a nonqualified stock
option, or when restricted stock
(or property) held by the
Employee either becomes freely
transferable or is no longer
subject to a substantial risk of
forfeiture;
18
<PAGE> 20
c. Amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
stock option; and
d. Other amounts which received
special tax benefits, or
contributions made by the
Employer (whether or not under a
salary reduction agreement)
toward the purchase of an annuity
described in Section 403(b) of
the Code (whether or not the
amounts are actually excludable
from the gross income of the
Employee).
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this Article, Section 415
Compensation for a Limitation Year is the compensation actually paid
or includible in gross income during such Limitation Year. Section
415 Compensation does not include accrued compensation unless it is
uniform and consistent and paid within two weeks.
Notwithstanding the preceding sentence, Section 415 Compensation for
a Member in a defined contribution plan who is permanently and
totally disabled (as defined in Section 22(e)(3) of the Code) is the
compensation such Member would have received for the Limitation Year
if the Member had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled; such
imputed compensation for the disabled Member may be taken into
account only if the Member is not a Highly Compensated Employee (as
defined in Section 414(q) of the Code) and contributions made on
behalf of such Member are nonforfeitable when made.
3. Defined Benefit Fraction: A fraction, the numerator of
which is the sum of the Member's Projected Annual
Benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the
dollar limitation determined for the Limitation Year
under Sections 415(b) and (d) of the Code or 140 percent
of the highest average Section 415 Compensation,
including any adjustments under Section 415(b) of the
Code.
Notwithstanding the above, if the Member was a Member as of the
first day of the first Limitation Year beginning after December 31,
1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such Plans which the Member had accrued as of
the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only if the
defined benefit plans individually and in the aggregate
19
<PAGE> 21
satisfied the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
4. Defined Contribution Dollar Limitation: $30,000 or if
greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as
indexed as in effect for the Limitation Year.
5. Defined Contribution Fraction: A fraction, the numerator
of which is the sum of the Annual Additions to the
Member's Account under all the defined contribution
plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years
(including the Annual Additions attributable to the
Member's nondeductible Employee contributions to all
defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions
attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(l)(2) of the Code,
maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years of service
with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The
maximum aggregate amount in any Limitation Year is the
lesser of 1 25 percent of the dollar limitation
determined under Sections 415(b) and (d) of the Code in
effect under Section 415(c)(1)(A) of the Code or 35
percent of the Member's Section 415 Compensation for
such year.
If the Employee was a Member as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0, times (2) the
denominator of this fraction, will be permanently subtracted from
the numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the Plan made after May
5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all Employee contributions
as Annual Additions.
20
<PAGE> 22
6. Employer: For purposes of this Article, Employer means
the Company, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code
as modified by Section 415(h)), all commonly controlled
trades or businesses (as defined in Section 414(c) as
modified by Section 415(h)) or affiliated service groups
(as defined in Section 414(m)) of which the adopting
Employer is part, and any other entity required to be
aggregated with the Employer pursuant to Regulations
under Section 414(o) of the Code.
7. Excess Amount: The excess of the Member's Annual
Additions for the Limitation Year over the Maximum
Permissible Amount.
8. Highest Average Compensation: The average Section 415
Compensation for the three consecutive Years of Service
with the Employer that produces the highest average. A
Year of Service with the Employer is the 12-consecutive
month period defined in Article 2 of the Plan.
9. Limitation Year: The Limitation Year will be the Plan
Year. All qualified Plans maintained by the Employer
must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date
within the Limitation Year in which the amendment is
made.
10. Maximum Permissible Amount: The maximum Annual Addition
that may be contributed or allocated to a Member's
Account under the Plan for any Limitation Year shall not
exceed the lesser of:
a. the Defined Contribution Dollar Limitation
(i.e., $30,000, or if greater, 25 percent of
the Section 415(b)(1)(A) amount), or
b. 25 percent of the Member's Section 415
Compensation for the Limitation Year.
The Section 415 Compensation limitation referred to in (b) shall not
apply to any contribution for medical benefits (within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under Sections 415(l)(1) or
419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive month
period, the Maximum Permissible Amount will not exceed the Defined
Contribution Dollar Limitation multiplied by the following fraction:
21
<PAGE> 23
Number of months in the short Limitation Year
12
11. Projected Annual Benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other
than a straight life annuity or qualified joint and
survivor annuity) to which the Member would be entitled
under the terms of the Plan assuming:
a. The Member will continue employment until
Normal Retirement Age under the Plan (or
current age, if later), and
b. The Member's Section 415 Compensation for
the current Limitation Year and all other
relevant factors used to determine benefits
under the Plan will remain constant for all
future Limitation Years.
7.3 ANNUAL SECTION 408 AGGREGATE LIMITS: Notwithstanding any
other provisions of the Plan, nothing in this Plan shall
permit all Employees eligible for this Plan to exceed the
limits of Section 408 of the Code or otherwise cause the
Company to lose its tax deduction for any of its qualified
defined benefit and/or defined contribution plans.
7.4 ADJUSTMENTS FOR EXCEEDING CODE LIMITS: If the Members of this
Plan individually or jointly exceed the limits in Sections
7.1, 7.2 or 7.3, the Plan Administrator shall be permitted to
reduce the Before-Tax Contribution and/or After-Tax
Contribution of such Member or Members and/or return such
excess contributions to the Member or Members subject to all
applicable statutory tax withholdings. Such reduction or
return of such contributions shall be made by first reducing
or returning the excess contributions of the
highly-compensated Members of this Plan to the extent
necessary to satisfy the limits.
7.5 ACTUAL DEFERRAL PERCENTAGE TEST: This Section describes the
nondiscrimination rules referred to as the Actual Deferral
Percentage (ADP) test for Employee Salary Deferrals.
A. The ADP for Members who are Highly Compensated
Employees for each Plan Year and the ADP for
Members who are Non-Highly Compensated Employees
for the same Plan Year must satisfy one of the
following tests:
1. The ADP for Members who are Highly
Compensated Employees for the Plan
Year shall not exceed the ADP for
Members who are Non-Highly
Compensated Employees for the same
Plan Year multiplied by 1.25 or:
2. The ADP for Members who are Highly
Compensated Employees for the Plan
Year shall not exceed the ADP for
Members who are
22
<PAGE> 24
Non-Highly Compensated Employees for
the same Plan Year multiplied by 2.0,
provided that the ADP for Members who
are Highly Compensated Employees does
not exceed the ADP for Members who
are Non-Highly Compensated Employees
by more than two (2) percentage
points. Actual Deferral Percentage
means, for a specified group of
Members for a Plan Year, the average
of the ratios (calculated separately
for each Member in such group) of (1)
the amount of Employer contributions
actually paid over to the Trust on
behalf of such Member for the Plan
Year to (2) the Member's Compensation
for such Plan Year (whether or not
the Employee was a Member for the
entire Plan Year). Employer
contributions on behalf of any Member
shall include: (1) any Employee
Salary Deferrals made pursuant to the
Member's deferral election, including
excess Employee Salary Deferrals of
Highly Compensated Employees, but
excluding Employee Salary Deferrals
that are taken into account in the
Contribution Percentage test
(provided the ADP test is satisfied
both with and without exclusion of
these Employee Salary Deferrals); and
(2) at the election of the Employer,
qualified non-elective contributions
and qualified matching contributions
made either to the Plan or another
Plan of the Employer qualified under
Section 401(a). For purposes of
computing Actual Deferral
Percentages, any Employee who would
be a Member but for the failure to
make Employee Salary Deferrals shall
be treated as a Member on whose
behalf no Employee Salary Deferrals
are made. Compensation may be
limited to that received for the
period the Employee is a Member.
B. The ADP for any Member who is a Highly
Compensated Employee for the Plan Year shall be
determined by aggregating his Employee Salary
Deferrals in all Plans maintained by the
Employer. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all
cash or deferred arrangements ending with or
within the same calendar year shall be treated as
a single arrangement.
C. In the event that this Plan satisfies the
requirements of Sections 401(k), 401 (a)(4), or
410(b) of the Code only if aggregated with one or
more other Plans, or if one or more other Plans
satisfy the requirements of such Sections of the
Code only if aggregated with this Plan, then this
Article shall be applied by determining the ADP
of Employees as if all such Plans were a single
Plan. For Plan Years beginning after December
31, 1989, Plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they
have the same Plan Year.
D. For purposes of determining the ADP of a Member
who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the
Employee Salary Deferrals (and qualified
non-elective contributions or
23
<PAGE> 25
qualified matching contributions, or both, if
treated as Employee Salary Deferrals for purposes
of the ADP test) and Compensation of such Member
shall include the Employee Salary Deferrals (and,
if applicable, qualified non-elective
contributions and qualified matching
contributions, or both) and Compensation for the
Plan Year of family members (as defined in
Section 414(q)(6) of the Code). Family members,
with respect to such Highly Compensated
Employees, shall be disregarded as separate
Employees in determining the ADP both for Members
who are Non-Highly Compensated Employees and for
Members who are Highly Compensated Employees.
E. For purposes of determining the ADP test,
Employee Salary Deferrals, qualified non-
elective contributions and qualified matching
contributions must be made before the last day of
the twelve-month period immediately following the
Plan Year to which contributions relate.
F. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the
amount of qualified non-elective contributions or
qualified matching contributions, or both, used
in such test.
G. The determination and treatment of the ADP
amounts of a Member shall satisfy such other
requirements as may be prescribed by the IRS.
7.6 DISTRIBUTION OF EXCESS CONTRIBUTIONS: This Section describes
the rules for distributing discriminatory Employee Salary
Deferrals referred to as "Excess Contributions." Excess
Contributions are, with respect to any Plan Year, the excess
of:
A. The aggregate amount of Employer contributions
actually taken into account in computing the ADP
of Highly Compensated Employees for such Plan
Year, over
B. The maximum amount of such contributions
permitted by the ADP test (determined by reducing
contributions made on behalf of Highly
Compensated Employees in order of the ADPs,
beginning with the highest of such percentages).
1. Notwithstanding any other provision
of this Plan, Excess Contributions,
plus any income and minus any loss
allocable thereto, shall be
distributed no later than the last
day of each Plan Year to Members to
whose Accounts such Excess
Contributions were allocated for the
preceding Plan Year. Such
distributions shall be made to Highly
Compensated Employees on the basis of
the respective portions of the Excess
Contributions attributable to each of
such Employees. Excess Contributions
shall be allocated to Members who are
subject to the family member
aggregation rules of Section
414(q)(6) of the Code in the manner
prescribed by the
24
<PAGE> 26
Regulations. Excess Contributions
(including the amounts
recharacterized) shall be treated as
Annual Additions under the Plan.
2. Excess Contributions shall be
adjusted for any income or loss up to
the date of distribution. The income
or loss allocable to Excess
Contributions is the sum of: (1)
income or loss allocable to the
Member's 401(k) Contributions (and,
if applicable, the qualified
nonelective contribution account or
the Qualified Matching Contributions
Account, or both) for the Plan Year
multiplied by a fraction, the
numerator of which is such Member's
Excess Contributions for the year and
the denominator is the Member's
Account balance attributable to
Employee Salary Deferrals (and
qualified non-elective contributions
or qualified matching contributions,
or both, if any of such contributions
are included in the ADP test) without
regard to any income or loss
occurring during such Plan Year; and
(2) ten percent of the amount
determined under (A) multiplied by
the number of whole calendar months
between the end of the Plan Year and
the date of distribution, counting
the month of distribution if
distribution occurs after the 15th of
such month.
3. Excess Contributions shall be
distributed from the Member's 401(k)
Contributions Account and Qualified
Matching Contributions Account (if
applicable) in proportion to the
Member's Employee Salary Deferrals
and qualified matching contributions
(to the extent used in the ADP test)
for the Plan Year.
7.7 ACTUAL CONTRIBUTION PERCENTAGE TEST: This Section
describes the nondiscrimination rules for Matching
Contributions, if any, and after-tax employee
contributions (the Actual Contribution Percentage (ACP)
test). It also describes the nondiscrimination rules
which apply when Members make Employee Salary Deferrals
in addition to Matching Contributions or After-Tax
Employee Contributions.
The ACP for Members who are Highly Compensated Employees for each
Plan Year and the ACP for Members who are Non-Highly Compensated
Employees for the same Plan Year must satisfy one of the following
tests:
A. The ACP for Members who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for Members who are
Non-Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
B. The ACP for Members who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for Members who are
Non-Highly Compensated Employees for the
same Plan Year multiplied by two, and the
ACP for Highly Compensated Employees does
not exceed the ACP for
25
<PAGE> 27
Members who are Non-Highly Compensated
Employees by more than two percentage points.
If one or more Highly Compensated Employees make both Employee
Salary Deferrals and have Matching Contributions or after-tax
employee contributions in Plans maintained by the Employer, and the
sum of the ADP and ACP of those Highly Compensated Employees subject
to either or both tests exceeds the Aggregate Limit, then the ACP of
those Highly Compensated Employees will be reduced (beginning with
such Highly Compensated Employee whose ACP is the highest) so that
the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amount is reduced
shall be treated as an Excess Aggregate Contribution. The ADP and
ACP of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use
does not occur if either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of the
Non-Highly Compensated Employees.
For purposes of this Section, the Contribution Percentage for any
Member who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his or her Account
under two or more Plans described in Section 401(a) of the Code, or
arrangements described in Section 401(k) of the Code that are
maintained by the Employer, shall be determined as if the total of
such Contribution Percentage Amounts was made under each Plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
In the event that this Plan satisfies the requirements of Sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one
or more other Plans, or if one or more other Plans satisfy the
requirements of such Sections of the Code only if aggregated with
this Plan, then this Section shall be applied by determining the
Contribution Percentage of Employees as if all such Plans were a
single Plan. For Plan Years beginning after December 31, 1989,
Plans may be aggregated in order to satisfy Section 401(m) of the
Code only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of a Member
who is a five-percent owner or one of the ten most highly paid
Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Member shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of family
members as defined in Section 414(q)(6) of the Code. Family
members, with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Contribution
Percentage both for Members who are Non-Highly Compensated Employees
and for Members who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the Plan
Year in which contributions were made to the Trust. Matching
Contributions and qualified non-elective contributions will be
considered
26
<PAGE> 28
made for a Plan Year if made no later than the end of the
twelve-month period beginning on the day after the close of the Plan
Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of qualified
non-elective contributions or qualified matching contributions, or
both, used in such test.
The determination and treatment of the Contribution Percentage of
any Member shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
Definitions:
"Average Contribution Percentage" means, for a specified group of
Members for a Plan Year, the average of the ratios (calculated
separately for each Member in such group) of the Member's
Contribution Percentage Amounts to the Member's Compensation for the
Plan Year (whether or not the Employee was a Member for the entire
Plan Year).
"Aggregate Limit" -- In general, for purposes of this Section, the
Aggregate Limit is the greater of:
A. The sum of:
1. 1.25 times the greater of the Relevant
Actual Deferral Percentage or the Relevant
Actual Contribution Percentage, and
2. Two percentage points plus the lesser of the
Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage. In
no event, however, shall this amount exceed
twice the lesser of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage; or
B. The sum of:
1. 1.25 times the lesser of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage, and
2. Two percentage points plus the greater of
the Relevant Actual Deferral Percentage or
the Relevant Actual Contribution Percentage.
In no event, however, shall this amount
exceed twice the greater of the Relevant
Actual Deferral Percentage or the Relevant
Actual Contribution Percentage.
"Relevant Actual Deferral Percentage" means the Actual Deferral
Percentage of the group of Non-Highly Compensated Employees eligible
under the arrangement subject to Section 401(k) for the Plan Year,
and the term "Relevant Actual Contribution Percentage" means the
Actual Contribution Percentage of the group of Non-Highly
Compensated Employees
27
<PAGE> 29
eligible under the Plan subject to Section 401(m) for the Plan Year
beginning with or within the Plan Year of the arrangement subject to
Section 401(k).
"Contribution Percentage" means the ratio (expressed as a
percentage) of the Member's Contribution Percentage Amounts to the
Member's Compensation for the Plan Year (whether or not the Employee
was a Member for the entire Plan Year).
"Contribution Percentage Amounts" means the sum of the Employee
Contributions, Matching Contributions, and qualified matching
contributions (to the extent not taken into account for purposes of
the ADP test) made under the Plan on behalf of the Member for the
Plan Year. Such Contribution Percentage Amounts shall include
Forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Member's Account which shall be taken
into account in the year in which such forfeiture is allocated. The
Employer may include qualified non-elective contributions in the
Contribution Percentage Amounts. The Employer also may elect to use
Employee Salary Deferrals in the Contribution Percentage Amounts so
long as the ADP test is met before the Employee Salary Deferrals are
used in the ACP test and continues to be met following the exclusion
of those Employee Salary Deferrals that are used to meet the ACP
test.
"Eligible Member" means any Employee who is eligible to make an
after-tax employee contribution, or an Employee Before-Tax (if the
Employer takes such contributions into account in the calculation of
the Contribution Percentage), or to receive a Matching Contribution
(including Forfeitures) or a Qualified Matching Contribution.
"After-tax employee contribution" means any contribution made to the
Plan by or on behalf of a Member that is included in the Member's
gross income in the year in which made and that is maintained under
a separate Account to which earnings and losses are allocated.
"Matching Contribution" means an Employer contribution made to this
or any other defined contribution plan on behalf of a Member on
account of an Employee Contribution made by such Member, or on
account of a Member's Employee Before-Tax Contribution, under a Plan
maintained by the Employer.
7.8 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS: This
describes the rules for distributing discriminatory
Matching Contributions or after-tax employee
contributions (Excess Aggregate Contributions).
"Excess Aggregate Contributions" means, with respect to
any Plan Year, the excess of:
A. The aggregate Contribution Percentage
Amounts taken into account in computing the
numerator of the Contribution Percentage
actually made on behalf of Highly
Compensated Employees for such Plan Year,
over
B. The maximum Contribution Percentage Amounts
permitted by the ACP test (determined by
reducing contributions made on behalf of
Highly
28
<PAGE> 30
Compensated Employees in order of their
Contribution Percentages beginning with the
highest of such percentages).
1. Notwithstanding any other
provision of this Plan, Excess
Aggregate Contributions, plus any
income and minus any loss thereto
shall be forfeited if
forfeitable, or if not
forfeitable, distributed no later
than the last day of each Plan
Year to Members to whose Accounts
such Excess Aggregate
Contributions were allocated for
the preceding Plan Year. Excess
Aggregate Contributions shall be
allocated to Members who are
subject to the family member
aggregation rules of Section
414(q)(6) of the Code in the
manner prescribed by the
Regulations. Excess Aggregate
Contributions shall be treated as
Annual Additions under the Plan.
2. Excess Aggregate Contributions
shall be adjusted for any income
or loss up to the date of
distribution. The income or loss
allocable to Excess Aggregate
Contributions is the sum of: (1)
Income or loss allocable to the
Member's After-Tax Contribution
Account, matching contribution
account (if any, and if all
amounts therein are not used in
the ADP test) and, if applicable,
qualified non-elective
contribution account and Employee
401(k) Contributions Account for
the Plan Year multiplied by a
fraction, the numerator of which
is such Member's Excess Aggregate
Contributions for the year and
the denominator is the Member's
Account balance(s) attributable
to Contribution Percentage
Amounts without regard to any
income or loss occurring during
such Plan Year; and (2) ten
percent of the amount determined
under (A) multiplied by the
number of whole calendar months
between the end of the Plan Year
and the date of distribution,
counting the month of
distribution if distribution
occurs after the 15th of such
month.
3. Forfeitures of Excess Aggregate
Contributions: Forfeitures of
Excess Aggregate Contributions
may either be reallocated to the
Accounts of Non-Highly
Compensated Employees or applied
to reduce Employer contributions.
4. Accounting for Excess Aggregate
Contributions: Excess Aggregate
Contributions shall be forfeited,
if forfeitable or distributed on
a pro rata basis from the
Member's After-Tax Contribution
Account, Matching Contribution
Account, and qualified matching
contribution account (and, if
applicable, the Member's
qualified non-elective
contribution account or Employee
Deferral Account, or both).
7.9 RECHARACTERIZATION: The Company may recharacterize Before-Tax
Contributions as After-Tax Contributions. These amounts,
when recharacterized, will be treated for purposes of the
nondiscrimination test of Section 7.8 as After-Tax
Contributions. However, such amounts will remain in a
Member's Before-Tax
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Account. Any recharacterization under this Section must be
performed within two and one-half (2 1/2) months following the end
of the Plan Year.
7.10 DISTRIBUTION OF EXCESS EMPLOYEE SALARY DEFERRALS: This
Section describes the rules for distributing contributions
made to the Plan in excess of the dollar limit (originally
$7,000) set forth In Section 402(g) of the Code.
Excess Employee Salary Deferrals are those elective deferrals that are
includible in a Member's gross income because they exceed the dollar
limitation under Code Section 402(g). Excess Employee Salary Deferrals shall
be treated as Annual Additions under the Plan.
A Member may assign to this Plan any excess Employee Salary Deferrals made
during a taxable year of the Member by notifying the Plan Administrator on or
before March 1 following the calendar year when the Excess Employee Salary
Deferrals are made of the amount of the Excess Employee Salary Deferrals to
be assigned to the Plan.
Notwithstanding any other provision of the Plan, excess Employee Salary
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Member to whose Account excess
Employee Salary Deferrals were assigned for the preceding year and who claims
excess Employee Salary Deferrals for such taxable year. With respect to any
taxable year, a Member's Employee Salary Deferrals are the sum of all
Employer contributions made on behalf of such Member pursuant to an election
to defer under any qualified CODA as described in Section 401(k) of the Code,
any simplified employee pension cash or deferred arrangement as described in
Section 402(h)(1)(B), any eligible deferred compensation Plan under Section
457, any Plan as described under Section 501(c)(18), and any Employer
contributions made on the behalf of a Member for the purchase of an annuity
contract under Section 403(b) pursuant to a salary reduction agreement.
Excess Employee Salary Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to excess Employee
Salary Deferrals is the sum of: (1) income or loss allocable to the Member's
Employee Deferral Account for the taxable year multiplied by a fraction, the
numerator of which is such Member's excess Employee Salary Deferrals for the
year and the denominator is the Member's Account balance attributable to
Employee Salary Deferrals without regard to any income or loss occurring
during such taxable year; and (2) ten percent of the amount determined under
(A) multiplied by the number of whole calendar months between the end of the
Member"s taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
ARTICLE ARTICLE 8
BENEFICIARIES
8.1 DESIGNATION: Each Member may designate through Election one
or more Beneficiaries. Upon the death of a Member, his
Beneficiary shall be entitled to payment of benefits due the
Member in an amount and in the manner provided for
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in this Plan. A Member may designate different Beneficiaries at any
time by delivering a new written designation to the Plan
Administrator. Any such designation shall become effective only
upon its receipt by the Plan Administrator. The last effective
designation received by the Plan Administrator shall supersede all
prior designations. A designation of a Beneficiary shall be
effective only if the designated Beneficiary survives the Member.
In the case of a married Member, the Beneficiary provided in this
Section shall be the married Member's spouse, provided, however,
that a married Member may designate a Beneficiary other than the
spouse if:
A. the spouse has waived his or her right to be the
Member's Beneficiary, such waiver to be in writing and
notarized, or
B. the spouse cannot be located.
8.2 FAILURE TO DESIGNATE: If a Member fails to designate a
Beneficiary, or if no designated Beneficiary survives the
Member, the Member shall be deemed to have designated as the
Beneficiary, in order of priority: (a) surviving spouse, (b)
surviving children, in equal shares, (c) surviving parents,
in equal shares, (d) surviving brothers and sisters in equal
shares, or (e) the Member's estate.
8.3 BENEFICIARIES BOUND BY PLAN: Whenever the rights of a Member
are stated or limited in the Plan and the Trust Agreement,
his Beneficiaries shall be bound thereby.
ARTICLE ARTICLE 9
IN-SERVICE WITHDRAWALS
9.1 HARDSHIP WITHDRAWALS: Subject to the limitations provided in
the remainder of this Article IX, an in-service withdrawal
shall be permitted upon a showing to the Plan Administrator
of a Member's financial hardship. A hardship withdrawal
shall be authorized only upon a showing of an immediate and
heavy financial need, and then only to the extent necessary
to satisfy that need.
A. A hardship withdrawal shall be available only from a Member's
Before-Tax Account, and then only to the extent of:
1. The Member's Before-Tax Contributions; and
2. Income attributable to the Member's Before-Tax
Contributions, to the extent such income was credited to
the Member's Before-Tax Account as of December 31, 1988.
B. The following are the only financial needs considered
immediate and heavy:
1. Medical expenses described in Code section 213(d)
previously incurred by the Member, spouse, or any of his
dependents (as
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defined in Code section 152); or expenses necessary for
those persons to obtain such medical care;
2. Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Member;
3. Payment of tuition for the next twelve months of
post-secondary education for the Member, his spouse,
children, or dependents;
4. Payments necessary to prevent the eviction of the Member
from his principal residence or foreclosure on the
mortgage of the Member's principal residence; or
5. Payment of funeral expenses for the Member's spouse or
for any lineal ascendant or descendant of the Member or
the Member's spouse.
C. A withdrawal will be considered as necessary to satisfy an
immediate and heavy financial need of the Member only if:
1. The Member has obtained all distributions, other than
hardship withdrawals, and all nontaxable loans under all
deferred compensation plans maintained by the Company;
2. All deferred compensation plans maintained by the
Company provide that the Member's contributions (both
pre-tax and after-tax) will be suspended for twelve
months after the receipt of the hardship withdrawal;
3. The withdrawal is not in excess of the amount of the
immediate and heavy financial need; and
4. All deferred compensation plans maintained by the
Company provide that the Member may not make Salary
Deferrals for the Member's taxable year immediately
following the taxable year of the hardship withdrawal in
excess of the applicable limit under Section 402(g) of
the Code for such taxable year, less the amount of such
Member's Salary Deferrals for the taxable year of the
hardship withdrawal.
D. For purposes of determining the amount of the immediate and
heavy need, the amount may include additional amounts
necessary to pay any federal, state or local income taxes
reasonably anticipated to result from the withdrawal.
9.2 WITHDRAWAL UPON ATTAINMENT OF AGE 59 1/2: Subject to the
limitations provided in the remainder of this Article IX, any active
Member who has attained
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<PAGE> 34
age fifty-nine and one-half (59 1/2) may Elect to withdraw an amount
up to his or her Account balance in the following Accounts of the
Member, to be withdrawn in the following order:
A. Prior Plan Employee Account;
B. After-Tax Account;
C. Prior Plan Employer Account;
D. Rollover Account;
E. Matching Company Account; and
F. Before-Tax Account.
9.3 WITHDRAWAL UPON COMPLETING FIVE YEARS OF PARTICIPATION: Subject
to the limitations provided in the remainder of this Article IX, any
active Member who has completed at least five (5) years of
participation in the Plan may Elect to withdraw an amount up to his
or her Account balance in his or her Matching Company Account.
9.4 WITHDRAWALS AVAILABLE AT ANY TIME: Subject to the limitations
provided in the remainder of this Article IX, any active Member may
Elect at any time to withdraw an amount up to his or her Account
balance in the following Accounts of the Member, to be withdrawn in
the following order:
A. Prior Plan Employee Account;
B. After-Tax Account;
C. Prior Plan Employer Account; and
D. Rollover Account.
9.5 PERMITTED FREQUENCY OF IN-SERVICE WITHDRAWALS: Only one
inservice withdrawal is permitted per calendar quarter.
9.6 MINIMUM AMOUNT: The minimum amount of an in-service withdrawal
is the lesser of $500 or the Member's "maximum withdrawable amount."
A Member's "maximum withdrawable amount" shall equal the Member's
total available Account balance in the Accounts from which the
Member may take a withdrawal, in accordance with Sections 9.1, 9.2,
9.3 and 9.4 of the Plan. The minimum in-service withdrawal amount
will be calculated and applied to the Member on a Plan-wide basis,
rather than on a per-Account basis.
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<PAGE> 35
9.7 FORM OF DISTRIBUTION: The form of payment for an in-service
withdrawal is a single lump sum.
9.8 EMPLOYEES NO LONGER IN ELIGIBLE CLASS: In the event a Member
remains an employee of the Employer, but is no longer within
the class of eligible Employees, such individual shall remain
a Member for purposes of any in-service withdrawal under this
Article IX, even though no further contributions are being
made to the Plan on his or her behalf.
9.9 INVESTMENT OPTION SOURCES: Within each Account type used for
funding a withdrawal, amounts shall be withdrawn in direct
proportion to the market value of the Member's interest in
each investment option at the time the withdrawal is made.
9.10 SUSPENSE ACCOUNTS AND DOMESTIC RELATIONS ORDERS: No
withdrawal may be made from that portion of any Account which
is in a suspense account pursuant to Section 7.2 of the Plan
or from that portion of an Account which is segregated while
a determination is being made with respect to a Domestic
Relations Order pursuant to Section 16.4 of the Plan.
ARTICLE 10
LOANS
10.1 AMOUNTS: Each Member who is on active pay status, on a
medical leave of absence, on furlough, or a party in interest
(as such term is defined in ERISA) may borrow from the Plan
an amount not to exceed the lesser of:
A. $50,000, reduced by the greater (if any) of:
1. The highest outstanding balance of loans to the
Member from the Plan during the one-year period
ending on the day before the date on which the
loan is to be made; or
2. The outstanding balance of any loan to the Member
from the Plan on the date on which such loan is
to be made or; or
B. One-half (1/2) of the Member's Account balance in all
of his or her Accounts (determined as of the last day
of the preceding calendar month).
No loan may be for an amount less than $1000, and no member may have more
than one loan outstanding at any time. The amount the Member may borrow
shall be reduced by the amount of any loan from any other tax-qualified plan
maintained by the Company.
10.2 LOAN TERMS: An application for a loan shall be made in
accordance with procedures established by the Plan
Administrator. The terms and conditions of such loan shall
be as follows:
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<PAGE> 36
A. An annual rate of interest equal to the base rate on
corporate loans at large United States money center
commercial banks as reported in the Wall Street Journal
(prime rate) in effect on the first business day of the
calendar month in which such loan is requested.
B. A fixed maturity date of no longer than five (5) years.
C. Adequate security, which will be up to fifty percent (50%) of
the value of the borrower's interest in his or her Accounts,
although the Plan Administrator may require additional
security as it deems appropriate.
D. Repayment:
1. Active Employees: a level schedule of payroll
deductions, to be made each payroll period for repayment
of loan principal and interest. Repayment will commence
on the first available pay period after receipt of the
loan check.
2. Inactive Employees: repayment will be monthly, on an
amortized loan repayment schedule.
Repayments will be invested according to the Member's current
investment election for new contributions at the time of repayment.
If there is not a current investment election at the time of
repayment, the last investment election will be used for investment
of repayments.
E. The Member may repay the loan in full at any time without
penalty.
F. Upon termination of employment, the Member may either:
1. Repay the loan from the Member's current Account balance
before distribution; or
2. Have the outstanding balance of the loan reamortized, in
accordance with procedures established by the Plan
Administrator, with subsequent repayments to be made on
a monthly basis.
G. Loans shall be made available to all Members and
Beneficiaries on a reasonably equivalent basis.
H. Loans shall not be made available to Highly Compensated
Employees (as defined in section 414(q) of the Code) in an
amount greater than the amount made available to other
Employees.
I. Loans granted or renewed on or after the last day of the
first Plan Year beginning after December 31, 1988, shall be
made pursuant to a written
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<PAGE> 37
Member loan program, incorporated herein by reference, which
will include the following:
1. The basis on which loans will be approved or denied;
2. Procedures for applying for the loans;
3. The person or positions authorized to administer the
Member loan program;
4. Limitations, if any, on the types and amounts of loans
offered;
5. Procedures under the program for determining the rates
of interest;
6. The types of collateral which may secure a Member loan;
and
7. The events constituting default and the steps that will
be taken to preserve Plan assets.
10.3 SOURCE OF LOAN FUNDING: A loan to a Member shall be made
solely from the assets of his or her own Accounts. The
available assets shall be determined first by Account type
and then by investment option within each type of Account.
A. The hierarchy for loan funding by type of Account shall
be as follows:
1. Employer Basic Account;
2. Before-Tax Account;
3. Matching Company Account;
4. Rollover Account;
5. Prior Plan Employer Account;
6. After-Tax Account; and
7. Prior Plan Employee Account.
B. Within each Account used for funding a loan, amounts
shall be drawn in direct proportion to the market value
of the Member's interest in each investment option as of
the date on which the loan is made.
10.4 EMPLOYEES NO LONGER IN ELIGIBLE CLASS: In the event a Member
remains an employee of the Employer, but is no longer within
the class of eligible Employees, such individual shall remain
a Member for purposes of any Plan loan
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<PAGE> 38
under this Article X, even though no further contributions
are being made to the Plan on his or her behalf.
10.5 LOAN APPLICATION PROCEDURE:
A. A loan application, if required by the Plan
Administrator, may be obtained either by contacting the
Plan Administrator or by following any other procedures
specified by the Plan Administrator. The completed
application should be returned to the location specified
by the Plan Administrator. The loan terms will be
described on the loan application.
B. Alternatively, the Plan Administrator may determine that
a promissory note will serve as the loan application.
C. There will be an initial fee for obtaining a loan. An
additional fee will be assessed on each March 31, June
30, September 30, and December 31 on which the loan
remains outstanding. All fees will be established from
time to time by the Plan Administrator, and will be
charged to the loan applicant's account.
D. In the case of any married Member who is subject to the
rules set forth in Section 12.3 (because the Member has
previously elected to receive a distribution in any form
of life annuity), no loan shall be made, renegotiated,
extended, renewed, or otherwise revised without the
prior written consent of the Member's spouse to the use
of the Member's Account balance as security for the
loan. Any such consent shall be obtained in accordance
with Section 12.3.
10.6 LOAN DEFAULT-FORECLOSURE: Actively employed Members will make
repayment via non-revocable continuing payroll deductions
from each paycheck. If pay should become insufficient to
cover the repayment or if the borrower is not actively
receiving a paycheck to cover the repayment, monthly
repayment checks must be submitted for scheduled payments.
In the event that timely repayment is not received within 30
days of a due date, the Member will be notified of potential
loan default and possible foreclosure upon the Account
balance. If the loan is not made current within 30 days of
notice, the Plan Administrator may declare the loan to be in
default. Upon default, the loan shall be Immediately due and
payable and a deemed distribution to the Member of the
outstanding balance of the loan shall occur, to the extent
provided under applicable Code provisions. Additionally, the
amount of the loan in default will be subtracted from the
Member's Account balance for the purpose of determining the
Account balance available to the Member in the event the
Member requests an in-service withdrawal under Article IX of
the Plan. Notwithstanding the foregoing, the default shall
not be satisfied out of the Member's interest in the Plan
prior to his or her entitlement to a distribution under the
terms of the Plan.
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ARTICLE 11
TIMING OF DISTRIBUTIONS
11.1 RETIREMENT, DISABILITY OR TERMINATION OF EMPLOYMENT: Upon a
Member's Early Retirement, Normal Retirement, Deferred
Retirement (collectively, a "Member's Retirement'),
Disability or Termination of Employment, a Member shall be
entitled to a benefit, to be equal to the Member's vested
Account balance and to be distributed as provided in Article
XII. The distribution of the Member's benefit shall commence
as soon as administratively practicable following the Plan
Administrator's receipt of notice of the Member's Retirement,
Disability or Termination of Employment. Notwithstanding the
foregoing, if the Member's total vested Account balance
exceeds (or, at the time of any prior distribution has ever
exceeded) $3500, the distribution shall be made in accordance
with Section 11.3.
11.2 DEATH: Upon the death of a Member, the Member's Beneficiary
shall be entitled to a benefit, to be equal to the Member's
vested Account Balance and to be distributed as provided in
Article XIII. The distribution to the Beneficiary shall
commence as soon as administratively practicable following
the Plan Administrator's receipt of notice of the Member's
death.
11.3 ACCOUNT-BALANCE-OVER $3500: In the case of a Member who has
not attained the age of 65 years and whose vested Account
balance exceeds $3500 (or at the time of any prior
distribution has ever exceeded $3500), distribution of
benefits under Article XII shall not commence within 30 days
after the date the Plan Administrator issues to the Member
the notice required by Treasury Regulation Section
1.411(a)-11(c) (the "Tax Notice"). The Tax Notice shall be
distributed no less than 30 days and no more than 90 days
before any distribution would be made.
The Tax Notice shall explain the tax rules that apply to Plan
distributions and shall notify the Member of his or her right to (1) have
benefit payments deferred to a later date, (2) have benefits paid to the
Member, (3) have benefits paid in a direct rollover described in Article
XIV, or (4) have benefits split between payment to the Member and payment
in a direct rollover.
A. The Member shall elect in writing, on a form to be
provided by the Plan Administrator, whether and/or how
benefits are to be distributed. No distribution shall
be made unless the Member consents to such distribution.
Such consent may not be given before the Member receives
the Tax Notice nor more than 90 days before the
distribution would be made. If the Member refuses to
consent to such distribution, his or her Accounts shall
be retained in the Trust Fund. In that case,
distribution shall commence as soon as administratively
practicable after the first to occur of the Member's:
1. Election to receive benefits;
2. Required Beginning Date, as defined in subsection
11.5(D)(6); or
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3. Death, provided the Plan Administrator receives
notice of the Member's death.
B. Notwithstanding subsection 11.3(A), a distribution to
any Member who is not subject to the annuity
distribution rules described in Section 12.3 may
commence less than 30 days after the Tax Notice is given
to the Member if:
1. The Plan Administrator clearly informs the Member
that the Member has a right to a period of at
least 30 days after receiving the Tax Notice to
consider the decision of whether or not to elect
a distribution (and, if applicable, a particular
distribution option), and
2. The Member, after receiving the Tax Notice,
affirmatively elects a distribution.
11.4 MEMBER'S RIGHT TO ELECT DISTRIBUTION: Except with the
Member's consent, distribution of a Member's Account Balance
shall commence no later than the 60th day after the close of
the Plan Year in which the latest of the following occurs:
A. The date on which the Member attains Normal Retirement
Age;
B. The tenth (10th) anniversary of the year in which the
Member commenced participation in the Plan; or
C. The date the Member terminates his service with the
Company;
provided, however, that any Member who declines a distribution upon his
or her termination of service with the Company shall be deemed to have
consented to a deferral of any distribution until his or her Required
Beginning Date, as defined in subsection 11.5(D)(6), subject to the
Member's right to revoke such consent at any time by Electing to receive
a distribution.
11.5 REQUIRED DISTRIBUTIONS: The requirements of this Section
shall apply to any distribution of a Member's interest and
will take precedence over any inconsistent provisions of this
Plan.
A. Unless otherwise specified, the provisions of this
Article apply to calendar years beginning after December
31, 1984. All distributions shall be determined and
made in accordance with the proposed Regulations under
section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations as prescribed
by the IRS.
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The entire interest of a Member must be distributed or must begin to be
distributed no later than the Member's Required Beginning Date (defined
below) which is generally the April lst following his attainment of age
70 1/2.
B. Distributions, if not made in a single sum, may only be made over a
period equal to or less than the following (or a combination
thereof):
1. The life of the Member,
2. The life of the Member and a Designated Beneficiary,
3. A period certain not extending beyond the Life Expectancy of
the Member, or
4. A period certain not extending beyond the joint life and last
survivor expectancy of the Member and a Designated
Beneficiary.
C. If the Member's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
1. Distribution During the Member's Life: If a Member's benefit
is to be distributed over (a) a period not extending beyond
the Life Expectancy of the Member or the joint life and last
survivor expectancy of the Member and the Member's Designated
Beneficiary or (b) a period not extending beyond the Life
Expectancy of the Designated Beneficiary, then the amount
required to be distributed for each calendar year, beginning
with the distribution for the first Distribution Calendar
Year, must at least equal the quotient obtained by dividing
the Member's benefit by the Applicable Life Expectancy.
For calendar years beginning before January 1, 1989, if the Member's
spouse is not the Designated Beneficiary, the method of distribution
selected must assure that at least 50 percent of the present value
of the amount available for distribution is paid within the Life
Expectancy of the Member.
For calendar years beginning after December 31, 1988, the amount to
be distributed each year, beginning with distributions for the first
Distribution Calendar Year shall not be less than the quotient
obtained by dividing the Member's benefit by the lesser of (a) the
Applicable Life Expectancy or (b) if the Member's spouse is not the
Designated Beneficiary, the applicable divisor determined from the
table set forth is Q&A-4 of Section 1.401(a)(9)-2 of the proposed
regulations as proscribed by the IRS. Distributions after the death
of the Member shall be made using the Applicable Life Expectancy
above as the relevant advisor without regard to proposed Regulations
Section 1.401(a)(9)-2.
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The minimum distribution required for the Member's first
Distribution Calendar Year must be made on or before the Member's
Required Beginning Date. The minimum distribution for other
calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Employee's Required
Beginning Date occurs, must be made on or before December 31 of that
Distribution Calendar Year.
If the Member's benefit is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder shall
be made in accordance with the requirements of Section 401(a)(9) of
the Code and the proposed regulations thereunder.
2. Distributions After the Member's Death: If the Member dies
after distribution of his or her interest has begun and he
had attained age 70 1/2, the remaining portion of such
interest, if any, will continue to be distributed at least as
rapidly as under the method of distribution being used prior
to the Member's death.
If the Member dies before distribution of his or her interest begins
or if he is not yet 70 1/2, distribution of the Member's entire
interest shall be completed by the later of December 31 of the
calendar year containing the fifth anniversary of the Member's death
or if any portion of the Member's interest is payable to a
Designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the Life Expectancy of the
Designated Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
Member died, but if the Designated Beneficiary is the Member's
surviving spouse, the date distributions are required to begin shall
not be earlier than the later of (a) December 31 of the calendar
year in which the Member died or (b) December 31 of the calendar
year in which the Member would have attained age 70 1/2 ("spousal
exception rule").
If the Member has not made an election pursuant to this Section by
the time of his or her death, the Member's Designated Beneficiary
must elect the method of distribution no later than the earlier of
(a) December 31 of the calendar year in which distributions would be
required to begin under this Section, or (b) December 31 of the
calendar year which contains the fifth anniversary of the date of
death of the Member. If the Member has no Designated Beneficiary,
or if the Designated Beneficiary does not elect a method of
distribution, distribution of the Member's entire interest must be
completed by December 31 of the calendar year containing the fifth
anniversary of the Member's death.
For purposes of the above paragraphs, if the surviving spouse dies
after the Member, but before payments to such spouse begin, the
provisions above, except for the spousal exception rule, shall be
applied as if the surviving spouse were the Member.
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<PAGE> 43
Any amount paid to a child of the Member will be treated as if it
has been paid to the surviving spouse if the amount becomes payable
to the surviving spouse when the child reaches the age of majority.
Distribution of Member's interest is considered to begin on the
Member's Required Beginning Date (or, if applicable, the date
distribution is required to begin to the surviving spouse pursuant
to the above). If distribution in the form of an annuity
irrevocably commences to the Member before the Required Beginning
Date, the date distribution is considered to begin is the date
distribution actually commences.
D. Definitions:
1. Applicable Life Expectancy. The Life Expectancy (or joint
life and last survivor expectancy) calculated using the
attained age of the Member (or Designated Beneficiary) as of
the Member's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one (1) for each calendar
year which has elapsed since the date the Life Expectancy was
first calculated. If Life Expectancy is being recalculated,
the Applicable Life Expectancy shall be the Life Expectancy
as so recalculated. The applicable calendar year shall be
the first Distribution Calendar Year and if Life Expectancy
is being recalculated, such succeeding calendar year.
2. Designated Beneficiary. An individual affirmatively elected
by the Member or the Member's surviving spouse. If no
Beneficiary is elected, the Designated Beneficiary shall be
the spouse of the Beneficiary under the Plan in accordance
with Section 401(a)(9) of the Code and the proposed
Regulations thereunder.
3. Distribution Calendar Year. A calendar year for which a
minimum distribution is required. For distributions
beginning before the Member's death, the first Distribution
Calendar Year is the calendar year immediately preceding the
calendar year which contains the Member's Required Beginning
Date. For distributions beginning after the Member's death,
the first Distribution calendar year is the calendar year in
which distributions are required to begin pursuant to the
above.
4. Life Expectancy. Life Expectancy and joint life and last
survivor expectancy are computed by use of the expected
return multiples in Tables V and VI of Section 1.72-9 of the
Regulations.
Unless the Member or the surviving spouse elect otherwise by the
time distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Member or surviving
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spouse and shall apply to all subsequent years. The Life Expectancy
of a non-spouse Beneficiary may not be recalculated.
5. Member's Benefits.
a. The Account balance as of the last Valuation Date in the
calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year) increased by the
amount of any contributions or Forfeitures allocated to
the Account balance as of dates in the valuation
calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after
the Valuation Date.
b. Exception for second Distribution Calendar Year. For
purposes of paragraph (a) above, if any portion of the
minimum Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution
made in the second Distribution Calendar Year shall be
treated as if it had been made in the immediately
preceding Distribution Calendar Year.
6. Required Beginning Date.
a. General Rule. The Required Beginning Date of a Member
is the first day of April of the calendar year following
the calendar year in which the Member attains age 70 1/2
subject to the transition rules below.
b. Transitional rules. The Required Beginning Date of a
Member who attains 70 1/2 before January 1, 1988, shall
be determined in accordance with (1) or (2) below:
1. Non 5-percent owners: The Required Beginning
Date of a Member who is not a 5-percent owner is
the first day of April of the calendar year
following the calendar year in which the later of
retirement or attainment of age 70 1/2 occurs.
2. 5-percent owners. The Required Beginning Date of
a Member who is 5-percent owner during any year
beginning after December 31, 1979, is the first
day of April following the later of:
A. The calendar year in which the Member
attains age 70 1/2, or
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B. The earlier of the calendar year with or
within which ends the Plan Year in which the
Member becomes a 5-percent owner, or the
calendar year in which the Member retires.
c. The Required Beginning Date of a Member who is not a 5
percent owner who attains age 70 1/2 during 1988 and who
has not retired as of January 1, 1989, is April 1, 1990.
d. 5-percent owner. A Member is treated as a 5-percent
owner for purposes of this Section if such Member is a 5
percent owner as defined in Section 416(i) of the Code
(determined in accordance with Section 416 but without
regard to whether the Plan is Top-Heavy) at any time
during the Plan Year ending with or within the calendar
year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
e. Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed even
if the Member ceased to be a 5-percent owner in a
subsequent year.
E. Transitional Rules for TEFRA Elections: Notwithstanding the other
requirements of this Section and subject to the joint and survivor
annuity requirements, distribution on behalf of any Employee,
including a 5 percent owner, may be made in accordance with all of
the following requirements (regardless of when such distribution
commences):
1. The distribution by the Trust is one which would not have
disqualified such Trust under Section 401(a)(9) of the Code
as in effect prior to amendment by the Deficit Reduction Act
of 1984.
2. The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the
Trust is being distributed or, if the Employee is deceased,
by a Beneficiary of such Employee.
3. Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1, 1984.
4. The Employee had accrued a benefit under the Plan as of
December 31, 1983.
5. The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made,
and in the case of
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any distribution upon the Employee's death, the Beneficiaries
of the Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required
information described above with respect to the distributions to be made
upon the death of the Employee.
For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the Beneficiary to
whom such distribution is being made, will be presumed to have designated
the method of distribution under which the distribution is being made if
the method of distribution was specified in writing and the distribution
satisfied the requirements of (a) and (e) above.
If a designation is revoked, any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and the proposed
Regulations thereunder. If a designation is revoked subsequent to the
date distributions are required to begin, the Trust must distribute by
the end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Section 401(a)(9) of
the Code and the proposed regulations as prescribed by the IRS
thereunder, but for the Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distributions must meet the
minimum distributions incidental benefit requirements in Section
1.401(a)(9)-2 of the proposed regulations as prescribed by the IRS. Any
changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under the designation will
not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring life). In
the case in which an amount is transferred or rolled over from the Plan
or another Plan, the rules in Q&A J-2 and Q&A J-3 of the proposed
regulations shall apply.
ARTICLE 12
RETIREMENT, DISABILITY, AND TERMINATION
OF EMPLOYMENT BENEFITS
12.1 STANDARD FORMS OF DISTRIBUTION: Unless the Member Elects
otherwise, as provided in Section 12.2, the Trustee shall
distribute Retirement, Disability or Termination of
Employment Benefits in the form of a single lump sum.
12.2 OPTIONAL FORMS OF DISTRIBUTION: A Member may Elect an
optional form of benefit distribution, as provided in this
Section. The optional forms of benefit distribution are as
follows:
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A. Partial lump sum. A Member may Elect to have a portion
of the Member's Account balance paid in a lump sum, with
the remainder to be paid later. Any such partial
lump-sum distribution will be subject to the limitations
applicable to in-service withdrawals, as set forth in
Sections 9.4 (frequency) and 9.5 (minimum amount).
B. Installment payments for a five-year period.
C. Installment payments for a ten-year period.
D. Single-life annuity with no term-certain guarantee.
E. Single-life annuity with five-year term-certain
guarantee.
F. Single-life annuity with ten-year term-certain
guarantee.
G. 50 percent joint and survivor annuity with ten-year
term-certain guarantee.
12.3 ANNUITY ELECTIONS AND WAIVERS: Any Member who Elects as an
optional form of distribution any form of life annuity (under
either (D), (E), (F) or (G) of Section 12.2) shall be subject
to the rules set forth in this Section 12.3.
A. Each such Member who is not married shall receive a
Single Life Annuity, purchased with the Member's Account
balance. For purposes of this Plan, a Single Life
Annuity shall mean a benefit payable monthly from a
Member's benefit commencement date to the first day of
the month in which the Member dies, or for ten years,
whichever is later. If the Member dies before the end
of the ten-year period, continued payments will be made
to his or her Beneficiary for the remainder of the
ten-year period.
B. Each such Member who is married shall receive a
Qualified Joint and Survivor Annuity, purchased with the
Member's Account balance. For purposes of this Plan, a
Qualified Joint and Survivor Annuity shall mean a
benefit payable monthly from a Member's benefit
commencement date to the first day of the month in which
the Member dies, or for ten years, whichever is later,
and payable thereafter in monthly installments of 50% of
the monthly amount payable to the Member during his or
her lifetime, to the Member's surviving spouse, if any,
for the remainder of his or her lifetime (where the
surviving spouse is the person to whom the Member was
married on the Member's benefit commencement date). No
benefits shall be payable under a Qualified Joint and
Survivor Annuity to a surviving spouse who was not the
Member's spouse as of the Member's benefit commencement
date.
C. Any such Member may Elect to have his or her benefit
paid in any manner described in Section 12.2, rather
than in the form of a Single Life Annuity or Qualified
Joint and Survivor Annuity, if he or she establishes to
the
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satisfaction of the Plan Administrator that he or she
has no spouse or that the spouse cannot be located, or
if the spouse consents in writing to the Election and
acknowledges its effect. Any spousal consent and
acknowledgment shall be in a form authorized by the Plan
Administrator and shall be witnessed by a notary public
or a representative of the Plan Administrator. Any such
consent and acknowledgment shall bind only the spouse
who executes it, and shall not be effective unless the
Election designates a specific alternative Beneficiary,
including any class of Beneficiaries or contingent
Beneficiaries, which may not be changed without spousal
consent. Additionally, any such spousal consent will
not be effective unless the Election designates a
specific form of benefit payment which may not be
changed without spousal consent. A Member may revoke
such Election by completing a revocation form furnished
by the Plan Administrator and filing it with the Plan
Administrator during the election period. The number of
such revocations shall not be limited. After an
Election is revoked, another Election under this Section
may be made during the election period; the conditions
relating to spousal consent with respect to the initial
Election shall apply as well to any subsequent Election.
Any Election or revocation under this Section shall be
effective on receipt thereof during the election period
by the Plan Administrator. The "election period" shall
be the 90-day period ending on the Member's benefit
commencement date. The "benefit commencement date" is
the first day of the first period with respect to which
an amount is payable as a benefit under the Plan.
D. During the period beginning 90 days before a Member's
benefit commencement date and ending 30 days before the
Member's benefit commencement date, the Plan
Administrator shall furnish each Member to whom this
Section 12.3 applies with a written explanation of:
1. The terms and conditions of the Single Life
Annuity or Qualified Joint and Survivor Annuity;
2. The Member's right to make, and the effect of, an
Election under subsection 12.3(C) to waive the
Single Life Annuity or Qualified Joint and
Survivor Annuity form of benefit;
3. The rights of the Member's spouse under
subsection 12.3(C);
4. The right to make, and the effect of, a
revocation of an Election under subsection
12.3(C); and
5. The relative values of the various optional forms
of benefit under the Plan.
ARTICLE 13
DEATH BENEFITS
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13.1 SPOUSAL BENEFICIARIES: Upon a Member's death, a spousal
Beneficiary may elect to receive any Death Benefit payable
hereunder in any of the distribution options available to
Members set forth in Section 12.2, with the exception of the
50 percent joint and survivor annuity with ten-year term
certain guarantee.
13.2 NON-SPOUSAL BENEFICIARIES: Upon a Member's death, a
non-spousal Beneficiary will receive any Death Benefit
payable hereunder in a single lump sum.
13.3 PROOFS: The Plan Administrator may require such proof of
death and such evidence of the right of any Beneficiary to
receive payment of the benefits of the deceased Member as it
may deem advisable. The Plan Administrator's determination
of death and of the right of any Beneficiary to receive
payment shall be conclusive.
ARTICLE 14
DIRECT ROLLOVERS
14.1 DIRECT ROLLOVERS: This Article applies to distributions made
on or after January 1, 1993. Notwithstanding any provision
of the Plan to the contrary that would otherwise limit a
"distributee's" election under this Article, a distributes
may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an "eligible
rollover distribution" paid directly to an "eligible
retirement plan" specified by the distributes in a "direct
rollover."
14.2 DEFINITIONS: For purposes of this Article, the following
terms shall have the meaning ascribed to them below:
A. An "eligible rollover distribution" is 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
and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution
to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
B. An "eligible retirement plan" is an individual
retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
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retirement plan is an individual retirement account or
individual retirement annuity.
C. A "distributee" includes 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.
D. A "direct rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE 15
VESTING
15.1 MEMBER CONTRIBUTIONS: The Value of Member Before-Tax
Contributions and After-Tax Contributions to the Plan, and
any Earnings thereon, are always one hundred percent (100%)
vested.
15.2 COMPANY CONTRIBUTIONS:
A. Any Member having no Hours of Service after December 31,
1993, became vested in any Matching Company
Contributions made on his behalf, and in any Earnings
thereon, only upon completing five (5) Years of Service.
Any such Member who incurred a Termination of Employment
before completing five (5) Years of Service forfeited
all such Contributions.
B. All Members having one or more Hour of Service after
December 31, 1993, are always one hundred percent (100%)
vested in any Matching Company Contributions made on
their behalf, and in any Earnings thereon.
C. All Members are always one hundred percent (100%) vested
in any Supplemental Agreement Contributions or Other
Company Contributions made on their behalf, and in any
earnings thereon.
15.3 VESTING UPON BREAK IN SERVICE:
A. Notwithstanding the vesting schedule specified above, a
Member's right to his or her Accounts will be
nonforfeitable upon the attainment of Normal Retirement
Age, death, or Disability.
B. For purposes of computing a Member's nonforfeitable
right to the Account balance derived from Company
contributions, Years of Service and breaks in service
will be measured by the Plan Year.
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C. All of an Employee's Years of Service with the Employer
are counted to determine the nonforfeitable percentage
of the Member's Account balance.
D. Years of Service before break in service:
1. In the case of a Member who has incurred a One
Year Break in Service, Years of Service before
such break will not be taken into account until
the Member has completed a Year of Service after
such break in service.
2. In the case of a Member who had five (5) or more
consecutive One-Year Breaks in Service, all
service after such breaks in service will be
disregarded for the purposes of vesting the
Company derived Account balance that accrued
before such breaks in service. Such Member's
pre-break service will count in vesting the
post-break Company-derived Account balance only
if either:
a. Such Member had any nonforfeitable interest
in the Account balance attributable to
Company contributions at the time of
separation from service, or
b. Upon returning to service, the number of
consecutive One-Year Breaks in Service is
less than the number of Years of Service.
Separate accounts will be maintained for the Member's
pre-break and post-break Company-derived Account
balance. Both Accounts will share in the earnings and
losses of the fund.
E. If any previous Member shall be reemployed by the
Company before a One-Year Break in Service occurs, he
shall continue to participate in the Plan in the same
manner as if such termination had not occurred.
If any previous Member shall be reemployed by the Company
after he has incurred a One-Year Break in Service, and such
previous Member had received a distribution of his entire
vested interest (including where the Member had no vested
amount in his account) prior to reemployment, his forfeited
Account shall be restored only if he repays the full amount
distributed to him before the earlier of five (5) years after
the first date on which the Member is subsequently reemployed
by the Company or the close of the first period of five (5)
consecutive One-Year Breaks in Service commencing after the
distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may
not end earlier than five (5) years after the date of the
distribution. In the event the former Member repays the full
amount distributed to him, the undistributed portion of the
Member's Account must be restored in full, unadjusted by
gains or losses occurring after the Valuation Date preceding
the distribution.
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F. If the Plan's vesting schedule is changed or amended, or the
Plan is amended in any way that directly or indirectly
affects the computation of the Member's nonforfeitable
percentage, each Member with at least three (3) Years of
Service with the Company may elect, within a reasonable
period after the adoption of the amendment or change, to have
the nonforfeitable percentage computed under the Plan without
regard to such amendment or change. For Members who do not
have at least one (1) Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence
shall be applied by substituting "5 Years of Service" for "3
Years of Service" where such language appears.
Furthermore, if the vesting schedule of the Plan is amended, in the
case of an Employee who is a Member as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
Employee's right to his Company-derived accrued benefit will not be
less than his percentage computed under the Plan without regard to
such amendment.
ARTICLE 16
INALIENABILITY OF BENEFITS
16.1 INALIENABILITY: A Member's interest in the Plan, or that of his
Beneficiary, may not be assigned or alienated by voluntary or
involuntary assignment. Any attempt by a Member or Beneficiary to
assign or alienate his interest under the Plan, or any attempt to
subject his interest to attachment, execution, garnishment or other
legal or equitable process, shall be void. This does not preclude
the Trustee from complying with any Qualified Domestic Relations
Order.
ARTICLE 17
QUALIFIED DOMESTIC RELATIONS ORDERS
17.1 QUALIFIED DOMESTIC RELATIONS ORDERS: The Plan Administrator shall
comply with all Qualified Domestic Relations Orders received and
shall pay benefits in accordance with the applicable requirements of
such Qualified Domestic Relations Orders.
17.2 NOTICE AND DETERMINATION: The Plan Administrator shall promptly
notify the Member and each Alternate Payee of the receipt of a
Domestic Relations Order and of the Plan's procedures (as described
in Section 17.3) for determining whether a Domestic Relations Order
is a Qualified Domestic Relations Order. The Plan Administrator
shall, within a reasonable period of time after receipt of a
Domestic Relations Order, determine whether the Domestic Relations
Order is a Qualified Domestic Relations Order and notify the Member
and each Alternate Payee of their determination. The notices
provided for in this Section shall be mailed by certified mail,
return receipt requested, to the addresses specified in the Domestic
Relations Order, or, if the Domestic Relations Order fails to
specify an address, to the last address of the Member or Alternate
Payee known to the Administrator.
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17.3 PROCEDURES FOR DETERMINATION: Upon the receipt of a Domestic
Relations Order, the Plan Administrator shall, review such Domestic
Relations Order, or cause such Domestic Relations Order to be
reviewed, to determine whether it is a Qualified Domestic Relations
Order. If the Domestic Relations Order satisfies each and every
requirement set forth in Section 2.33, then the Plan Administrator
shall make a determination that the Domestic Relations Order is a
Qualified Domestic Relations Order, and the Plan Administrator shall
provide notice of such determination in accordance with the
requirements set forth in Section 2.33. If the Domestic Relations
Order does not meet each and every requirement set forth in Section
2.33, the Plan Administrator shall notify the Member and any
Alternate Payee of the reasons such Domestic Relations Order would
not be a Qualified Domestic Relations Order. The Alternate Payee
shall have eighteen (18) months from the date the Plan Administrator
first received the Domestic Relations order to obtain a modified
Domestic Relations Order which satisfies all of the requirements of
Section 2.33. There shall be no limit to the number of modified
Domestic Relations Orders which say be submitted to the Plan
Administrator within that eighteen (18) month period. Absent a
court order which specifies otherwise, the Alternate Payee shall be
responsible for all costs and expenses incurred by the Plan
Administrator and/or the Company in determining whether a Domestic
Relations Order is a Qualified Domestic Relations Order. If the
Alternate Payee fails to present a modified Domestic Relations Order
which satisfies the requirements stipulated in Section 2.33 during
the eighteen (18) month period, then the Plan Administrator shall
make a determination that the Domestic Relations order is not a
Qualified Domestic Relations Order. If the Domestic Relations Order
is not a Qualified Domestic Relations order, the Plan Administrator
shall provide notice of such determination, and the reasons for such
determination, in accordance with the requirements for notice
provided in this Section. If the modified order is a Qualified
Domestic Relations Order, then the Plan Administrator shall make a
determination that the domestic Relations Order Is a Qualified
Domestic Relations Order, and the Plan Administrator shall provide
notice of such determination in accordance with the requirements of
notice provided in Section 17.4. Each Alternate Payee shall be
permitted to designate a representative for receipt of copies of
notices which are sent to the Alternate Payee with respect to a
Domestic Relations Order received by the Plan Administrator and
pertaining to the Alternate Payee.
17.4 PROCEDURES FOR PERIOD DURING WHICH DETERMINATION IS BEING MADE:
A. During any period in which the issue of whether a Domestic
Relations Order is a Qualified Domestic Relations Order is
being determined (by the Plan Administrator, a court of
competent jurisdiction, or otherwise), the Plan Administrator
shall direct the Trustee to segregate in a separate account
in the Plan the amounts which would have been payable to the
Alternate Payee during such period if the Domestic Relations
Order had been determined to be a Qualified Domestic
Relations Order.
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B. If within eighteen (18) months the Domestic Relations Order
(or modification thereof) is determined to be a Qualified
Domestic Relations Order, the Plan Administrator shall notify
the Trustee to pay the segregated amounts (plus any interest
thereon) to the Alternate Payee entitled thereto.
C. If within eighteen (18) months:
1. it is determined that the Domestic Relations Order is
not a Qualified Domestic Relations Order; or
2. the issue as to whether such Domestic Relations Order is
a Qualified Domestic Relations Order is not resolved,
then the Plan Administrator shall notify the Trustee to pay the
segregated amounts (plus any interest thereon) to the Member's
Account or the Person who would have been entitled to such amounts
if there had been no Domestic Relations Order.
D. Any determination that a Domestic Relations Order is a
Qualified Domestic Relations Order which is made after the
close of the eighteen (18) month period shall be applied
prospectively only.
17.5 TREATMENT OF FORMER SPOUSE AS SURVIVING SPOUSE: To the extent
provided in any Qualified Domestic Relations Order, the former
spouse of a Member shall be treated as a surviving spouse of such
Member.
ARTICLE 18
ADMINISTRATION OF THE PLAN
18.1 PLAN ADMINISTRATION: The Plan shall be administered by the Company.
The Company shall have authority to control and manage the operation
and administration of the Plan including, without limitation, the
power to interpret and construe any provision of the Plan finally
and conclusively on all Persons having any interest thereunder, to
adopt rules and regulations not inconsistent with the Plan for
carrying out the Plan or for providing for matters not specifically
covered thereby, and to alter, amend or revoke any rules or
regulations so adopted. The Company may, in a writing acknowledged
by the designee, designate pursuant to Section 405(c)(1)(B) of ERISA
other Persons to carry out any or all of its responsibilities in the
operation and administration of the Plan. Any Person or persons may
serve in more than one fiduciary capacity with respect to the Plan
(including service both as Trustee and Administrator).
Each Member and Beneficiary shall have the right to appeal any decision
of the Company governing his rights under the Plan by submitting a
written request to the Company indicating the reasons that he feels that
the decision is in error and if a hearing in person is desired,
requesting such hearing. Such written request for review must be
submitted to the Company within sixty (60) days after he has received
detailed notification in writing
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<PAGE> 55
of the Company's initial decision, the reasons for such decision and the
appeals procedure. The Company shall review the appeal and within sixty
(60) days after receipt of the request for review (unless special
circumstances exist which require a longer period, but in no event later
than one hundred twenty (120) days from receipt of the request for
review) will give the affected individual written notice of its decision
on the appeal, which decision shall be final, binding and conclusive.
Any interpretation of the provisions of the Plan by the Company shall be
final and conclusive and shall bind and may be relied upon by the
Company's Members and Employees, the Trustee and all other Persons.
Except as may otherwise be required by ERISA: no director, officer or
Employee of the Company shall be liable for any action or failure to act
under or in connection with the Plan, except for his own bad faith; each
director, officer or Employee of the Company, as such, shall be
indemnified and held harmless by the Company, against and from any and
all loss, cost, liability or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any
claim, action, suit or proceeding to which he may be a party or in which
he may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him in
settlement thereof (with the Company's written approval) or paid by him
in satisfaction of a judgment in any such action, suit or proceeding,
except a judgment in favor of the Company based upon a finding of his bad
faith (subject, however, to the condition that, upon the assertion or
institution of any such claim, action, suit or proceeding against him, he
shall in writing give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it
on his own behalf); and the foregoing right of indemnification shall not
be exclusive of any other right to which such Person may be entitled as a
matter of law or otherwise, or any power that the Company may have to
indemnify him or hold him harmless.
All expenses of administration of the Plan shall be charged against the
Members' Accounts, unless the Company, in its sole discretion, elects to
pay those expenses directly. Other taxes, if any, on any security or
cash held by the Trustee or income therefrom which are payable by the
Trustee shall be charged against the Members' Accounts, as the Trustee
and the Company shall determine.
Each Employee at the time of electing to participate in the Plan shall be
given a copy of the summary plan description as in effect at the time.
The records of the Trustee and the Company shall be conclusive in respect
of all matters involved in the administration of the Plan.
The Plan shall be governed by and construed in accordance with the laws
of the State of Missouri.
ARTICLE 19
TRUST FUND
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19.1 TRUST AGREEMENT: The Company shall enter into one or more Trust
Agreements with one or more Trustees to implement the provisions of
this Plan. The Trust Agreements shall be deemed a part of this Plan
and any and all rights or benefits which may accrue to any Person
under this Plan shall be subject to the terms and provisions of said
Trust Agreements. Likewise, all provisions of this Plan shall be
deemed part of the Trust Agreements. In case of any inconsistency
between the provisions of the Plan and the Trust Agreements, the
provisions of this Plan shall control.
19.2 TRUSTEE: The Trustee shall be a Person or Persons, including the
Company, designated by the Company. The duties, obligations and
responsibilities of the Trustee shall be as set forth in the Trust
Agreements.
ARTICLE 20
TERMINATION. SUSPENSION AND AMENDMENT
20.1 TWA, by action of its Board of Directors, may terminate or amend the
Plan or suspend the operation of any provision of the Plan, as
follows:
A. TWA may at any time or from time to time amend, suspend or
terminate in whole or in part, and if terminated may
reinstate, any or all of the provisions of the Plan, except
that no amendment, suspension or termination may be made
which will in the judgment of its Board of Directors
retroactively adversely affect the rights of Members in
respect of the Plan. TWA may at any time or from time to
time terminate or amend the Plan or suspend for any period
the operation of any provision thereof in respect of any
Members located in one or more States or countries, if in the
judgment of TWA compliance with the laws of such State or
country would involve disproportionate expense and
inconvenience to the Company. Any such amendment that
affects the rights or duties of the Trustee may be made only
with the consent of the Trustee. Any such termination,
amendment or suspension of the Plan may affect Members in the
Plan at the time thereof, as well as future Members, but may
not adversely affect the rights of a Member as to
distribution or withdrawal of the assets in the Account of
the Member as of the effective date of such termination,
amendment or suspension. Any termination or amendment of the
Plan or suspension of any provision thereof shall be
effective as of such date as TWA may determine, but not
earlier than the date on which TWA shall give notice of such
termination, amendment or suspension to the Trustee and to
the Members who are affected thereby.
B. The provisions of the foregoing subprograms A
notwithstanding, TWA, by action of its Board of Directors, at
any time or from time to time may amend any of the provisions
of the Plan in any respect retroactively, if and to the
extent necessary or appropriate in the judgment of the Board
of Directors of TWA to qualify or maintain the Plan and the
trust fund established thereunder as a plan and trust meeting
the requirements of
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Sections 401(a) and 501(a) of the Code, or any other
applicable provisions of the Federal tax laws or other
Federal or state legislation, as now in effect or hereafter
amended or adopted, and the regulations thereunder at the
time in effect.
C. Anything herein to the contrary notwithstanding, no such
termination or amendment of the Plan, or suspension of any
provision thereof may diminish the securities and cash in the
Account of a Member as of the effective date of such
termination, amendment or suspension.
D. In no event shall any merger or consolidation of any other
retirement, profit sharing, or other employee benefit plan
with this Plan to any other plan take place, which results in
a benefit to a Member or Beneficiary (if the Plan then
terminated), that is lower than the benefit he would receive
immediately before the merger, consolidation or transfer (if
the Plan then terminated).
E. Upon full or partial termination of the Plan, all amounts
credited to the affected Members' Accounts shall become 100%
vested and shall not thereafter be subject to forfeiture.
All unallocated amounts shall be allocated to the accounts of
Members in accordance with the provisions of the Plan
contained herein.
ARTICLE 21
MISCELLANEOUS
21.1 PLAN NOT AN EMPLOYMENT CONTRACT: Nothing herein contained shall be
deemed (a) to give to any Employee the right to be retained in the
employ of the Company, (b) to affect the right of the Company to
discipline or discharge any Employee at any time, (c) to give the
Company the right to require any Employee to remain in its employ,
or (d) to affect the Employee's right to terminate his employment at
any time.
21.2 RULE AGAINST PERPETUITIES: If the laws of the State of Missouri (or
those of any other jurisdiction whose laws apply to this Plan)
restrict the duration of the Plan or Trust, this Plan shall not last
longer than the period permitted by such law.
21.3 INDEPENDENT PROVISIONS: If any provision of this Plan shall be held
invalid or illegal for any reason, the remaining provisions shall be
construed and enforced as if the invalid or illegal provisions had
never been included.
21.4 TITLES: Titles to Articles are for convenience of reference only and
shall not affect the construction of this Plan.
21.5 STATEMENTS: Each Member shall, as determined by the Plan
Administrator receive a periodic statement showing the value of his
Account in the Plan.
56
<PAGE> 58
Notwithstanding the above, a statement of Account will be provided
to each Member as soon as practicable after the end of each Plan
Year.
ARTICLE 22
TOP-HEAVY PROVISIONS
22.1 APPLICABILITY: If the Plan is or becomes Top-Heavy in any Plan Year
beginning after December 31, 1983, the provisions of this Article
will supersede any conflicting provisions in the Plan.
22.2 DEFINITIONS:
A. Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
"Determination Period" was (1) an officer of the Employer if
such individual's Annual Compensation exceeds 50 percent of
the dollar limitation under Section 415(b)(1)(A) of the Code,
(2) an owner (or considered an owner under Section 318 of the
Code) of one of the ten largest interests in the Employer if
such individual's Annual Compensation exceeds 100 percent of
the dollar limitation under Section 415(c)(1)(A) of the Code,
(3) a more-than-5-percent owner of the Employer, or (4) a
more-than-l-percent owner of the Employer who has an Annual
Compensation of more than $150,000. Annual Compensation
means compensation as defined in Section 415(c)(3) of the
Code, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable
from the Employee's gross income under Section 125, Section
402(a)(8), Section 402(h) or Section 403(b) of the Code. The
"Determination Period" is the Plan Year containing the
Determination Date and the four (4) preceding Plan Years.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the Regulations
thereunder.
B. Top-Heavy Plan: For any Plan Year beginning after December
31, 1983, this Plan is Top-Heavy if any of the following
conditions exists:
1. If the Top-Heavy Ratio for this Plan exceeds 60 percent
and this Plan is not part of any Required Aggregation
Group or Permissive Aggregation Group of Plans.
2. If this Plan is a part of a Required Aggregation Group
of Plans, but not part of a Permissive Aggregation Group
of Plans and the Top Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.
3. If this Plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of Plans and
the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
57
<PAGE> 59
C. Super-Top-Heavy Plan: A Plan is Super-Top-Heavy if such a
Plan would be Top-Heavy if "90 percent" were substituted for
"60 percent" each place it appears in (B) above.
D. Top-Heavy Ratio:
1. If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension Plan) and the Employer has not maintained any
defined benefit plan which during the 5 year period
ending on the Determination Date(s) has or has had
accrued benefits, the Top- Heavy Ratio for this Plan
alone or for the required or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator of
which is the sum of the Account balances of all Key
Employees as of Determination Date(s) (including any
part of any Account balance distributed in the 5-year
period ending on the Determination Date(s)), and the
denominator of which is the sum of all Account balances
(including any part of any Account balance distributed
in the 5-year period ending on the Determination
Date(s)), both computed in accordance with Section 416
of the Code and the Regulations thereunder. Both the
numerator and denominator of the Top Heavy Ratio are
increased to reflect any contribution not actually made
as of the Determination Date, but which is required to
be taken into account on that date under Section 416 of
the Code and the Regulations thereunder.
2. If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension Plan) and the Employer maintains or has
maintained one or more defined benefit plans which
during the 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any required or Permissive
Aggregation Group as appropriate, is a fraction, the
numerator of which is the sum of account balances under
the aggregated defined contribution plan or Plans for
all Key Employees, determined in accordance with (1)
above, and the Present Value of accrued benefits under
the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances
under the aggregated defined contribution plan or Plans
for all Members, determined in accordance with (1)
above, and the Present Value of accrued benefits under
the defined benefit plan or Plans for all Members as of
the Determination Date(s), are determined in accordance
with Section 416 of the Code and the Regulations
thereunder. The accrued benefits under a defined
benefit plan in both the numerator and denominator of
the Top- Heavy Ratio are increased for any distribution
of an accrued benefit made in the five-year period
ending on the Determination Date.
58
<PAGE> 60
3. For purposes of (1) and (2) above, the value of account
balances and the Present Value of accrued benefits will
be determined as of the most recent Valuation Date that
falls within or ends with the 12-month period ending on
the Determination Date, except as provided in Section
416 of the Code and the Regulations thereunder for the
first and second Plan Years of a defined benefit plan.
The account balances and accrued benefits of a Member
(a) who is not a Key Employee but who was a Key Employee
in a prior Year, or (b) who has not been credited with
at least one Hour of Service with any Employer
maintaining the Plan at any time during the 5-year
period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, roll overs and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
Regulations thereunder. Employee contributions
previously deductible under Section 219 of the Code will
not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating Plans, the value of
account balances and accrued benefits will be calculated
with reference to the Determination Dates that fall
within the same calendar year.
The accrued benefit of a Member other than a Key Employee
shall be determined under either (a) the method, if any, that
uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
E. Permissive Aggregation Group: The Required Aggregation Group
of Plans plus any other Plan or Plans of the Employer which,
when considered as a group with the Required Aggregation
Group, would continue to satisfy the requirements of Sections
401(a)(4) and 410 of the Code.
F. Required Aggregation Group: (1) Each qualified Plan of the
Employer in which at least one Key Employee participates or
participated at any time during the Determination Period
(regardless of whether the Plan has terminated), and (2) any
other qualified Plan of the Employer which enables a Plan
described in (1) to meet the requirements of Sections
401(a)(4) or 410 of the Code.
G. Determination Date: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the last day of that year.
59
<PAGE> 61
H. Valuation Date: The date as defined in Article 2 of the Plan
as of which Account balances or accrued benefits are valued
for purposes of calculating the Top-Heavy Ratio.
I. Present Value: Present Value shall be determined using the
interest and mortality rates specified in the applicable
Plans. Notwithstanding the foregoing, all determinations
shall be made in accordance with Section 416 of the Code and
the Regulations thereunder.
22.3 MINIMUM ALLOCATION:
A. Except as otherwise provided in (C) and (D) below, Employer
contributions and Forfeitures, not including Employee Salary
Deferrals, allocated on behalf of any Member who is not a Key
Employee shall not be less than the lesser of three percent
(four percent if the Plan is super Top-Heavy) of such
Member's Compensation or, in the case where the Employer has
no defined benefit plan which designates this Plan to satisfy
Section 401 of the Code, the largest percentage of Employer
contributions and Forfeitures, as a percentage of the Key
Employee's Compensation, allocated on behalf of any Key
Employee for that year. The minimum allocation is determined
without regard to any Social Security contribution. This
minimum allocation shall be made even though, under the Plan
provisions, the Member would not otherwise be entitled to
receive an allocation, or would have received a lesser
allocation for the year because of (1) the Member's failure
to complete 1,000 hours of service (or any equivalent
provided in the Plan), or (2) the Member's failure to make
mandatory Employee contributions to the Plan or (3)
Compensation less than a stated amount.
B. For purposes of computing the minimum allocation,
Compensation means Compensation as defined in Article 2 of
the Plan.
C. The provision in (A) above shall not apply to any Member who
was not employed by the Employer on the last day of the Plan
Year.
D. The provision in (A) above shall not apply to any Member to
the extent the Member is covered under any other Plan or
Plans of the Employer and the minimum allocation or benefit
requirement applicable to Top-Heavy Plans will be met in the
other Plan or Plans.
22.4 NONFORFEITABILITY OF MINIMUM ALLOCATION: The minimum allocation
required (to the extent required to be nonforfeitable under Section
416(b) of the Code) may not be forfeited under Section 411(a)(3)(B)
or 411(a)(3)(D) of the Code.
22.5 ALLOCATION LIMITATIONS: In determining the Defined Contribution
Fraction under Section 415(e)(3)(B) of the Code and pursuant to
Section 7.2 of the Plan, "100 percent" shall be substituted for "125
percent" unless the minimum
60
<PAGE> 62
allocation percentage under Section 416(c)(2)(A) of the Code and
subsection 22.3(A) of the Plan is increased from 03 percent' to "4
percent" and the Plan would not be a Top-Heavy Plan if "90 percent"
were substituted for "60 percent" each Place it appears in
subsection 22.2(B) of the Plan.
22.6 MINIMUM VESTING SCHEDULES: The nonforfeitable interest of each
Employee in his or her Account balance attributable to Employer
contributions shall be determined on the basis of the following:
<TABLE>
<CAPTION>
Years of Service: The Nonforfeitable Percentage is:
----------------- ---------------------------------
<S> <C>
Less than 3 0%
3 or more 100%
</TABLE>
If the vesting schedule under the Plan shifts in or out of the above schedule
for any Plan Year because of the Plan's Top-Heavy status, such shift is an
amendment to the vesting schedule and the election in Section 16.3(F) of the
Plan applies.
* * * * *
IN WITNESS WHEREOF, Trans World Airlines, Inc. has caused this January 1,
1994, Restatement of the Plan to be executed on this 28th day of December
_______, 1994.
TRANS WORLD AIRLINES, INC.
----------------------------------------
(Signature)
----------------------------------------
(Print Name)
ATTEST:
- -----------------------
(Signature)
- -----------------------
(Print Name)
61
<PAGE> 63
AMENDMENT
OF
RETIREMENT SAVINGS PLAN FOR
NONCONTRACT EMPLOYEES OF
TRANS WORLD AIRLINES, INC.
(as restated effective January 1, 1994)
WHEREAS, Trans World Airlines, Inc. (the "Company") desires to amend the
Retirement Savings Plan for Noncontract Employees of Trans World Airlines, Inc.
(the "Plan"), pursuant to authority held by the Company under Section 20.1 of
the Plan,
NOW THEREFORE, the Plan is hereby amended in the following particulars,
effective as of August 1, 1996, unless otherwise specifically provided herein:
1. The first paragraph of Section 6.2 is amended to read, in its entirety,
as follows:
The Company shall from time to time establish various investment options
available for selection by Members participating in the Plan. Such
investment options may consist of individual securities (including
Company securities), insurance contributions, mutual funds or collective
investment funds, money market funds or any other investment vehicle
deemed appropriate by the Company. Each Member may select any combination
of investment options, in 1% increments, with respect to the funds in his
account. A similar selection shall be made with respect to the funds in
his account. A similar selection shall be made with respect to all future
contributions to his Account. The Company, as Plan Administrator, may, in
its sole discretion, limit investment in Company securities to a
specified percentage of each Member's total account. Company securities
will be purchased or sold on the American Stock Exchange or other
securities exchanges or (without commission) will be purchased from or
sold to the Company.
2. Section 6.6 is amended to read, in its entirety, as follows:
Expenses of managing investments in each fund, including investment
management fees, commissions, and other transaction costs, shall be
charged against the assets of the applicable fund, except that expenses
associated with the purchase or sale of Company securities shall be
charged against the Account of the Member directing such transaction.
3. A new Section 21.6 is added to read as follows:
Members who have invested in Company securities will be entitled to
direct the Plan's Trustee with respect to the voting of full and
fractional shares of Company securities credited to their accounts. The
Trustee will solicit such votes. Full and fractional shares of Company
securities for which no direction is received by the Trustee in a timely
fashion will be voted in proportion to the votes of the shares for
<PAGE> 64
which direction was received unless the Trustee in its sole discretion
elects to vote such undirected shares in another way in order to meet its
duties under ERISA.
4. A new Section 21.7 is added to read as follows:
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. The following documents
are hereby incorporated by reference in the Company's registration
statement on Form S-8 for the Plan (the "Registration Statement"), as
filed or to be filed with the Securities and Exchange Commission on or
about August 30, 1996:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, filed with the Securities and Exchange Commission (the
"Commission") pursuant to Section 13 of the Securities Exchange Act of
1934 (the "Exchange Act").
(b) The Company's Quarterly Report on Form 10-Q for the Quarter
Ended June 30, 1996.
(c) The description of the Company's Common Stock contained in
the Form 8-A Registration Statement filed with the Commission on August
1, 1995.
(d) All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
such Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered thereunder have
been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference into such Registration
Statement and to be a part thereof from the respective dates of filing of
such documents.
Any statements contained in a document incorporated or deemed to be
incorporated by reference therein shall be deemed to be modified or
superseded for purposes of such Registration Statement to the extent that
a statement contained therein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference therein
modifies or supersedes such statement. Any such statement so modified or
superseded shall be deemed, except as so modified or superseded, to
constitute a part of such Registration Statement.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed this
24th day of September, 1996, effective as of the date set forth herein.
TRANS WORLD AIRLINES, INC.
By:
----------------------------------------
2
<PAGE> 65
RESTATEMENT
OF
MASTER TRUST AGREEMENT
FOR:
TRANS WORLD AIRLINES, INC.
<PAGE> 66
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C>
FIRST: Acceptance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECOND: Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
THIRD: Investment Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FOURTH: Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FIFTH: Administrative Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SIXTH: Guaranteed Income Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SEVENTH: Fiduciary Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EIGHTH: Prohibition of Diversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
NINTH: Hold Harmless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
TENTH: Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ELEVENTH: Authorized Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
TWELFTH: Compensation and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
THIRTEENTH: Resignation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FOURTEENTH: Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
FIFTEENTH: Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SIXTEENTH: Plan-to-Plan Transfers; Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SEVENTEENTH: Adopting Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EIGHTEENTH: Alienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
NINETEENTH: Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
TWENTIETH: Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
TWENTY-FIRST: Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
TWENTY-SECOND: Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
(i)
<PAGE> 67
RESTATEMENT
OF
MASTER TRUST AGREEMENT
WHEREAS, the Company and certain of its affiliated and subsidiary
corporations enumerated in Appendix A hereto (which affiliated and subsidiary
corporations shall hereinafter be referred to as the "Corporation"), have
established certain pension and retirement plans for the exclusive benefit of
their respective eligible employees and the beneficiaries thereof (which plans
shall hereinafter be referred to as the "Separate Plans"), each of which
Separate Plan is enumerated in Appendix B hereto and constitutes a qualified
pension plan within the meaning of Section 401(a) of the Internal Revenue Code,
as amended; and
WHEREAS, the Company as the "named fiduciary" as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), has
general responsibility for administration of the Separate Plans; and
WHEREAS, the Separate Plans call for the establishment of a trust to
which contributions are to be made by the Company to be held by the Trustee and
to be managed, invested and reinvested for the exclusive benefit of
participants of the Separate Plans and their beneficiaries; and
WHEREAS, the Separate Plans and trust are intended to qualify as
separate plans and trust which meet the applicable requirements of Section
401(a) and 501(a) of the Internal Revenue Code of 1986, as amended hereinafter
referred to as the "Code"; and
WHEREAS, the Company entered into a Trust Agreement, hereinafter
referred to as the "Trust," with Boston Safe Deposit and Trust Company, a
corporation organized and existing under the laws of the State of
Massachusetts, having its principal place of business at Boston, Massachusetts;
and
<PAGE> 68
WHEREAS, the Company retained the right in the Trust to terminate the
same and appoint a Successor Trustee; and
WHEREAS, the Company hereby appoints United States Trust Company of
New York, as Successor Trustee, a corporation organized and existing under the
laws of the State of New York, having its principal place of business at 114
West 47th Street, New York, New York 10036-1532; hereinafter referred to as the
"Trustee";
NOW THEREFORE, the Company, with the consent of the Trustee, enters
into this Master Trust Agreement effective February 1, 1994.
FIRST: Acceptance of Property. The Trustee shall accept such cash
and other property as is tendered to it as contributions hereunder, and as is
acceptable to it, hereunder referred to as the "Trust Fund," but shall not be
under any duty to require the Company or any other adopting employer to
contribute to the Trust Fund or to determine whether the amount of any
contribution has been correctly computed under the terms of the Separate Plans.
In no event shall the Trustee be considered a party to any of the Separate
Plans. The Trustee shall have only such duties with respect to the Separate
Plans as are set forth in this Agreement.
SECOND: Separate Accounts. The Trustee shall invest, reinvest and
administer the Trust Fund as a single fund. Notwithstanding the foregoing, the
Trustee shall, on the basis of information furnished to it from time-to-time by
the Company, maintain separate accounts within the Trust Fund showing the
beneficial interest of each Plan in the Trust Fund. The Trust Fund shall be
valued at cost and market values as often as may be requested by the Company,
such dates to be hereinafter referred to as the "Valuation Dates." All charges
and credits shall be accounted for on the day they occur in the Valuation
Period. The beneficial interest in the Trust Fund of each Plan shall be
adjusted to reflect the effect of income, realized and unrealized gains and
losses, expenses, and all other transactions during each such period. Such
valuations and such
2
<PAGE> 69
adjustments shall be made so as to preserve for each Plan and beneficial
interest in the Trust Fund properly allocable to each Plan.
THIRD: Investment Powers. The Trustee shall invest and reinvest the
principal and income of the Trust Fund, without distinction between principal
and income, in such savings accounts, securities or other property, real or
personal, within or without the United States, as it in its sole discretion
shall deem proper including, without limitations, interests and part interests
in any bond and mortgage or note and mortgage and interests and part interests
in certificates of deposit, commercial paper and other short term or demand
obligations, secured or unsecured, whether issued by governmental or
quasi-governmental agencies or corporations or by any firm or corporation,
capital, common and preferred, voting and non-voting stock (regardless of
dividend or earnings record), warrants, options (including options written by
the Company), puts, calls, straddles, spreads, voting trust certificates,
equipment trust and receivers' certificates, fractional oil and gas and mineral
interests, timber rights, and all other forms of private and governmental
securities (both foreign and domestic) including an employer security, as such
term is defined in Section 407(d) of ERISA, or in any fund created and
administered by it as the trustee thereof for the collective investment of the
assets of employee benefit trusts, as long as such collective investment fund
is a qualified trust under the applicable provisions of the Code (and while any
portion of the Trust Fund is so invested, such collective investment fund shall
constitute part of the Separate Plans, and the instrument creating such fund
shall constitute part of this Agreement). The sole discretion to keep such
portion of the Trust Fund in cash and cash balances or hold all or any portion
of the Trust Fund in savings accounts, certificates of deposit, and other types
of time or demand deposits with any financial institution or quasi-financial
institution, either domestic or foreign (including any such institution
operated or maintained by the Trustee in its corporate capacity) as the Trustee
may from time-to-time determine to be in the best interests of
3
<PAGE> 70
the Trust Fund. Notwithstanding the foregoing, unless otherwise authorized by
ERISA or by regulations promulgated by the Secretary of the Department of
Labor, the Trustee shall maintain the indicia of ownership for all securities
or other investments within the jurisdiction of the District Courts of the
United States.
To the maximum extent permitted by law, the Trustee shall not be
liable for the acquisition, retention or disposition of any assets of the Trust
Fund or for any loss to or diminution of such assets unless due to the
Trustee's own willful misconduct or failure to act in good faith.
The Company may appoint an "investment manager," as defined in Section
3(38) of ERISA. Any investment manager so appointed shall be (i) an investment
adviser registered as such under the Investment Advisers Act of 1940, (ii) a
bank, or (iii) an insurance company qualified to perform investment management
services under the laws of more than one state of the United States. The
Company shall notify the Trustee of any such appointment by delivering to the
Trustee an executed copy of the instrument under which the investment manager
is appointed and evidencing the investment manager's acceptance of such
appointment, an acknowledgment by the investment manager that it is a fiduciary
of the Plan, and a certificate evidencing the investment manager's current
registration under the Investment Advisers Act of 1940 or other appropriate
qualification. The Company shall specify to the Trustee the portion of the
Trust Fund which shall be subject to such investment management. The Trustee
shall invest and reinvest the portion of the Trust Fund subject to such
investment management only to the extent and in the manner directed by the
investment manager in writing. During the term of such appointment, the
Trustee shall have no liability for the acts or omissions of such investment
manager, and except as provided in the preceding sentence, shall be under no
obligation to invest or otherwise manage the portion of the Trust Fund subject
to such investment management. The Trustee may maintain separate accounts
within the Trust Fund for the assets of the Trust Fund subject to such
investment
4
<PAGE> 71
management. The Company may terminate its appointment of an investment manager
at any time and shall notify the Trustee in writing of such termination. To
the maximum extent permitted by ERISA the Trustee shall be protected in
assuming that the appointment of an investment manager remains in effect until
it is otherwise notified in writing by the Company.
In the event that the investment manager appointed hereunder is a bank
or a trust company, or an affiliate of a bank or a trust company, the Trustee
shall, upon the direction of the Company, transfer funds to such bank, trust
company, or affiliate for investment through the medium of any fund created and
administered by such bank, trust company, or affiliate, acting as trustee
therefor, for the collective investment of the assets of employee benefit
trusts, provided that such fund is qualified under the applicable provisions of
the Code and while any portion of the assets are so invested, such fund shall
constitute part of the applicable plan or plans, and the instrument creating
such fund shall constitute part of this Trust. In order to implement the
provisions of this paragraph, the Trustee is authorized to enter into any
required auxiliary trust, agency or other type of agreement with an investment
manager, or its affiliate, as described in the preceding sentence.
In the event the Company or its designee has directed the Trustee to
transfer funds to a mutual fund as an alternative investment vehicle, the
Trustee or its agent shall invest that portion of the Trust Fund in said mutual
fund. During the term of such direction, the Trustee or its agent shall have
no liability for the acts or omissions of such Trust Fund, and except as
provided in the preceding sentence, shall be under no obligation to invest or
otherwise manage the portion of the Trust Fund subject to investment in such
fund.
FOURTH: Payments. Subject to the provisions of Article FIFTEENTH
hereof, the Trustee shall from time-to-time transfer cash or other property
from the Trust Fund to such persons, including an insurance company or
companies or a paying agent designated by the Company or its designee, at such
addresses, in such amounts, for such purposes and in such
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manner as the Company or its designee may direct, provided that such transfer
is administratively feasible, and the Trustee shall incur no liability for any
such payment made at the direction of the Company or its designee. The Company
or its designee shall be solely responsible to ensure that any payment made at
its direction conforms with the provisions of the Separate Plans, the
provisions of this agreement, and ERISA, and the Trustee shall have no duty to
determine the rights or benefits of any person in the Trust Fund or under the
Separate Plans or to inquire into the right or power of the Company or its
designee to direct any such payment.
FIFTH: Administrative Powers. The Trustee is authorized to exercise
from time-to-time in its sole discretion the following powers in respect of any
property, real or personal, of the Trust Fund, it being intended that these
powers be construed in the broadest possible manner:
(1) power to sell at public or private sale for cash or
upon credit or partly for cash and partly upon credit and upon such terms and
conditions as it shall deem proper. No purchaser shall be bound to see to or
be liable for the application of the proceeds of any such sale;
(2) power to exchange securities or property held by it
for other securities or property, or partly for such securities or property and
partly for cash, and to exercise conversion, subscription, option and similar
rights with respect to securities held by it, and to make payments in
connection therewith;
(3) power to write put options upon any kind of evidences
of ownership or indebtedness, or contracts for the future delivery of evidences
of ownership or indebtedness, and to enter into closing transactions for the
purpose of terminating the same; provided that each such option shall be of a
kind traded on a national securities exchange subject to regulation by the
Securities and Exchange Commission; and further provided that the Trustee has
set aside cash or cash equivalents in an amount equal to the exercise price of
such options or has established put or futures contract positions offsetting
such options;
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(4) power to write call options upon any kind of
evidences of ownership or indebtedness or contracts for the future delivery of
evidences of ownership or indebtedness, or to write such call options against
offsetting call options or futures contracts held in the Trust Fund, or cash,
cash equivalents, or other readily marketable assets equal in value, determined
on a daily basis, to the evidences of ownership or indebtedness subject
thereto, and to enter into closing transactions for the purpose of terminating
the same; provided that each such option shall be of a kind traded on a
national securities exchange subject to regulation by the Securities and
Exchange Commission;
(5) power to invest in contracts for the future delivery
of United States Treasury Bills, other financial instruments or securities of
any kind, or indexes based on any group of securities, provided that each such
future contract shall be of a kind traded on a national securities exchange
subject to regulation by the Securities and Exchange Commission;
(6) power to vote in person or by proxy at corporate or
other meetings and to participate in or consent to any voting trust,
reorganization, dissolution, merger or other action affecting securities in its
possession or the issuers thereof;
(7) power to own or to manage, administer, operate, lease
for any number of years, regardless of any restrictions on leases made by
fiduciaries except restrictions imposed by ERISA, develop, improve, repair,
alter, demolish, mortgage, pledge, grant options with respect to, or otherwise
deal with any real property or interest therein at any time held in the Trust
Fund, to hold any such real property in its own name, or in the name of its
nominee, with or without the addition of words indicating that such property is
held in a fiduciary capacity, and to cause to be formed a corporation,
partnership, trust or other entity to hold title to any such real property with
the aforesaid powers, all upon such terms and conditions as may be deemed
advisable; to renew or extend or participate in the renewal or extension of any
mortgage, and to agree to a reduction
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in the rate of interest on any mortgage or to any other modifications or
changes in the terms of any mortgage or of any guarantee pertaining thereto, in
any manner and to any extent that may be deemed advisable for the protection of
the Trust Fund or the preservation of any covenant or condition of any mortgage
or in the performance of any guarantee, or to enforce any default in such
manner and to such extent as may be deemed advisable; and to exercise and
enforce any and all rights of foreclosure, to bid on any property in
foreclosure, to take a deed in lieu of foreclosure with or without paying a
consideration therefor and in connection therewith to release the obligation on
the bond secured by such mortgage, and to exercise and enforce in any action,
suit or proceeding at law or in equity any rights or remedies in respect of any
such mortgage or guarantee;
(8) power to acquire, hold or dispose of property in
unregistered form, or in its name without designation of fiduciary capacity, or
in the name of its nominee or any custodian, and to the extent permitted by
ERISA, to combine certificates representing investments with certificates
representing investments of the same issue held by the Trustee in other
fiduciary capacities, and to deposit property in a depository or clearing
corporation or with the Federal Reserve Bank in its district;
(9) power to compromise and adjust all debts or claims
due to or made against it, to participate in any plan of reorganization,
consolidation, merger, combination, liquidation or other similar plan or any
action thereunder, or any contract, lease, mortgage, purchase, sale or other
action by any corporation or other entity;
(10) power to borrow money from any lender, in accordance
with ERISA, in any amount and upon any reasonable terms and conditions, for
purpose of this Agreement, and to pledge or mortgage any property held in the
Trust Fund to secure the repayment of any such loan;
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(11) power to deposit any such property with any
protective, reorganization or similar committee; to delegate discretionary
power to any such committee; and to pay part of the expenses and compensation
of any such committee; and any assessments levied with respect to any property
so deposited;
(12) power to exercise any conversion privilege or
subscription right available in connection with any such property; to oppose or
to consent to the reorganization, consolidation, merger or readjustment of the
finances of any corporation, company or association, or to the sale, mortgage,
pledge or lease of the property of any corporation, company or association any
of the securities of which may at any time be held in the Trust Fund and to do
any act with reference thereto, including the exercise of options, the making
of agreements or subscriptions and the payment of expenses, assessments or
subscriptions, which may be deemed necessary or advisable in connection
therewith and to hold and retain any securities or other property which it may
so acquire;
(13) power to make distributions in cash or in specific
property, real or personal, or an undivided interest therein, or partly in cash
and partly in such property;
(14) power to engage legal counsel, including counsel to
the Company or the Trustee in its individual capacity, and any other suitable
agents, and to consult with such counsel or agents with respect to the
construction of this Agreement, the administration of the Trust Fund, and the
duties of the Trustee hereunder;
(15) power to commence or defend suits or legal
proceedings and to represent the Trust in all suits or legal proceedings; to
settle, compromise or submit to arbitration any claims, debts or damages due or
owing to or from the Trust, provided that the Trustee shall notify the Company
of all such suits, legal proceedings and claims, and, except in the case of a
suit, legal proceeding or claim involving solely the Trustee's action or
omissions to act, shall obtain the
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written consent of the Company before settling, compromising or submitting to
binding arbitration any claim, suit or legal proceeding or any nature
whatsoever;
(16) power, upon the written direction or the Company, to
enter into any contract or policy with an insurance company or companies, for
the purpose of insurance coverage or otherwise, provided that, except as
provided in Article THIRD, the Trustee shall be the sole owner of all such
contracts or policies and all such contracts or policies shall be held as
assets of the Trust Fund;
(17) power to make, execute and deliver, as Trustee, any
and all deeds, leases, notes, bond guarantees, mortgages, conveyances,
contracts, waivers, releases or other instruments in writing necessary or
proper for the accomplishment of any of the foregoing powers;
(18) power to enter into an agency, trust, custodial,
administrative or other arrangement with any bank or other financial
institution for the deposit of safekeeping of the assets of the Trust Fund;
(19) power to transfer assets of the Trust Fund to a
successor trustee as provided in Article THIRTEENTH; and
(20) power to exercise, generally, any of the powers which
an individual owner might exercise in connection with property either real,
personal or mixed held by the Trust Fund, and to do all other acts that the
Trustee may deem necessary or proper to carry out any of the powers set forth
in this Article FIFTH or otherwise in the best interests of the Trust Fund.
(21) upon specific written instructions of the Company to
transfer funds to a mutual fund as an alternate investment vehicle.
Notwithstanding the foregoing, in the event that an investment manager
is appointed pursuant to Article THIRD hereof, such investment manager shall
exercise such of the powers enumerated in this Article FIFTH and otherwise
contained in this Agreement with respect to the
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portion of the Trust Fund subject to its control as may be specified in the
instrument under which the investment manager was appointed.
SIXTH: Guaranteed Income Contracts. The Trustee may, at the
direction of the Company, (i) enter into one or more contracts with legal
reserve life insurance companies, the rate of return from which is fixed by the
terms of such contracts, (ii) transfer to any such insurance companies a
portion of the Trust Fund in accordance with any such contracts, and (iii) hold
any such contracts as a part of the Trust Fund until directed otherwise by the
Company. The Company shall give such direction to the Trustee by delivering to
the Trustee a copy of the action of the Company, which shall specifically refer
to this Article SIXTH and direct the Trustee to so act. The Company may direct
the Trustee to (i) request any information from any such insurance companies
necessary or appropriate to make an investment decision, (ii) demand or accept
withdrawals or other distributions under any such contracts, (iii) exercise or
not to exercise any rights, powers, privileges and options under any such
contracts and (iv) assign, amend, modify or terminate any such contracts. The
Trustee shall take no action with respect to any such contracts except at the
direction of the Company, unless an investment manager is appointed, pursuant
to Article THIRD, upon which the Trustee will take direction from said manager.
The Trustee shall incur no liability for complying with or failing to comply
with any direction of the Company or said manager unless the Trustee's action
is prima facie contrary to ERISA or contrary to the Trustee's duties and
responsibilities under this agreement. Any insurance companies issuing any
contracts as hereinabove described may deal with the Trustee as the absolute
owner of any such contracts and need not inquire as to the authority of the
Trustee to act with regard to such contracts. Any such insurance company may
accept and rely upon any communication from the Trustee which is signed by an
officer of the Trustee. For purposes of this agreement, any such insurance
company shall be considered to be an investment manager with regard to the
assets of
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the Plan subject to its control. In no event shall the underlying assets of
such insurance company in which such contracts are invested be considered
assets of the plan or part of the Trust Fund.
SEVENTH: Fiduciary Standards. The Trustee (or any investment manager
appointed pursuant to Article THIRD hereof) shall (i) discharge its duties
hereunder 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; (ii) subject to the investment funds specified in the separate
plans, if any, to the extent required by ERISA diversify the investments of the
Trust so as to minimize the risk of large losses, unless under circumstances it
is clearly prudent not to do so; and (iii) discharge its duties in accordance
with the provisions of the Separate Plans and this agreement insofar as such
provisions are consistent with ERISA.
The Trustee (or any investment manager appointed pursuant to Article
THIRD hereof) shall not engage in any transaction which it knows or should know
violates Section 406 of ERISA. Notwithstanding the foregoing, the Trustee (or
any investment manager appointed pursuant to Article THIRD hereof) may, in
accordance with any appropriate exemption provided under ERISA or upon the
approval of the Secretary of the Department of Labor, enter into any action
otherwise prohibited under Section 406 of ERISA.
The Trustee shall not be responsible for the administration of the
Separate Plans, for determining the funding policy of the Separate Plans or the
adequacy of the Trust Fund to meet and discharge liabilities under the Separate
Plans.
The Trustee shall not be responsible for any failure of the Company to
discharge any of their respective responsibilities with respect to the Separate
Plans nor be required to enforce payment of any contributions to the Trust
Fund.
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EIGHTH: Prohibition of Diversion. (a) At no time prior to the
satisfaction of all liabilities with respect to participants in the Separate
Plans and their beneficiaries shall any part of the corpus or income of the
Trust Fund be used for, or diverted to, purposes other than for the exclusive
benefit of such participants and their beneficiaries. Except as provided in
paragraphs (b), (c) and (d) below, and Article FOURTEENTH, the assets of the
Trust Fund shall never inure to the benefit of the Company and shall be held
for the exclusive purpose of providing benefits to participants in the Separate
Plans and their beneficiaries and defraying the reasonable expenses of
administering the Separate Plans.
(b) In the case of a contribution that is made by the company by a
mistake of fact, paragraph (a) above shall not prohibit the return to the
Company of such contribution at the direction of the Company within one year
after the payment of the contribution.
(c) If a contribution by the Company is expressly conditioned on
qualification of one of the Separate Plans under Section 401 of the Code, and
if said Separate Plan does not so qualify, then paragraph (a) above shall not
prohibit the return to the Company of such contribution at the direction of the
Company within one year after the date of denial of qualification of the
Separate Plan, to the extent permitted by ERISA and the Code.
(d) If a contribution by the Company is expressly conditioned upon
the deductibility of the contribution under Section 404 of the Code, then to
the extent such deduction is disallowed, paragraph (a) above shall not prohibit
the return to the Company of such contribution at the direction of the Company,
to the extent disallowed, within one year after the date of such disallowance.
NINTH: Hold Harmless. To the maximum extent permitted by ERISA and
other applicable law, the Trustee shall not be liable for acting in accordance
with, or not acting in the
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absence of, any written direction of the Company, its designee or an investment
manager appointed pursuant to Article THIRD including, without limitation, any
claim or liability that may be asserted against the Trustee on account of
failure to receive securities purchased, or failure to deliver securities sold
pursuant to orders issued by an investment manager, and the Company shall
indemnify the Trustee against and agrees to hold the Trustee harmless from, all
such liabilities and claims (including attorney's fees and expenses in
defending against such liabilities and claims). The foregoing indemnifications
shall also apply to liabilities and claims against the Trustee arising from any
breach of fiduciary responsibility by a fiduciary other than the Trustee,
unless the Trustee (i) participates knowingly in or knowingly undertakes to
conceal such breach, (ii) has enabled such fiduciary to commit such breach by
its failure to exercise its fiduciary duties under ERISA or (iii) has actual
knowledge of such breach and fails to take reasonable remedial action to remedy
such breach.
TENTH: Accounts. The Trustee shall keep records of all transactions
relating to the Trust Fund, which shall be made available at all reasonable
times to persons designated by the Company or as may be required by law. The
Trustee shall render an accounting to the Company at least annually. The
Company may approve such account on behalf of itself by an instrument in
writing delivered to the Trustee. If the Company does not file with the
Trustee objections to any such account within sixty (60) days after its
receipt, the Company shall be deemed to have approved such account. In such
case, or upon the written approval of the Company of any such account, the
Trustee shall, to the extent permitted by law, be discharged from all liability
to the Company for its acts or failures to act described in such account.
Except to the extent otherwise provided in ERISA, no person, other than the
Company, may require an accounting or bring any action against the Trustee with
respect to the Trust Fund. The Trustee shall render to the Company at least
quarterly, a statement of the Trust Fund assets and their values and, whenever
a contribution
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is made to the Trust Fund other than in cash, a statement of the value of such
property on the date it is received by the Trustee.
Nothing contained in this agreement or in the Separate Plans shall
deprive the Trustee of the right to have a judicial settlement of its accounts.
In any proceeding for a judicial settlement of the Trustee's accounts, or for
instructions with regard to the Trust, the only necessary parties thereto in
addition to the Trustee shall be the Company. If the Trustee so elects, it may
join as a party or parties defendant any other person or persons.
ELEVENTH: Authorized Persons. The Company shall certify to the
Trustee the names of the persons authorized to act from time-to-time on behalf
of the Company in connection with this Agreement. All directions to the
Trustee by the Authorized Persons shall be in writing, and the Trustee shall be
entitled to rely without further inquiry upon all such written directions
received from the Authorized Persons.
TWELFTH: Compensation and Expenses. The Trustee shall be entitled to
receive such reasonable compensation for its services as may be agreed upon
from time-to-time by the Company and the Trustee. Unless paid by the Company,
such compensation, attorneys' fees incurred in the administration of the Trust
Fund, all taxes levied or assessed against the Trust Fund, and such other
expenses as are incurred in the administration of the Trust Fund shall be paid
from the Trust Fund.
THIRTEENTH: Resignation of Trustee. The Trustee may resign at any
time by giving one hundred twenty (120) days written notice to the Company.
The Company may remove the Trustee at any time by giving one hundred twenty
(120) days written notice to the Trustee. In the case of the resignation or
removal of the Trustee, the Company shall appoint a successor trustee who shall
have the same powers and duties as those conferred upon the Trustee. Upon the
resignation or removal of the Trustee and the appointment of a successor
trustee, the Trustee shall
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account for the administration of the Trust Fund up to the date of its
resignation or removal in the manner provided in Article TENTH hereof and, upon
the approval or deemed approval of such account, the Trustee shall transfer to
the successor trustee all of the assets then constituting the Trust Fund and
the Trustee shall to the maximum extent permitted by ERISA be forever released
and discharged from all liability and accountability with respect to the
propriety of its acts and transactions; provided, however, that the Trustee
may, in its sole discretion, transfer such assets prior to the completion of
such accounting if the Company agrees thereto in writing, such writing to
include such limitations on the Trustee's liability therefor as the Trustee may
deem appropriate. The term "Trustee" as used in this agreement shall be deemed
to apply to any successor trustee acting hereunder.
FOURTEENTH: Amendment. The Company may amend all or any part of this
agreement at any time provided, however, that any amendment shall not be
effective until the instrument of amendment has been agreed to and executed by
the Trustee. Any such amendment or modification of this agreement may be
retroactive if necessary or appropriate to qualify or maintain the Trust as a
part of a separate plan and trust exempt from Federal income taxation under
Sections 401 (a) and 501(a) of the Code, the provisions of ERISA, or any other
applicable provisions of Federal or state law, as now in effect or hereafter
amended or adopted, and any regulations issued thereunder, including, without
limitation, any regulations issued by the United States Treasury Department, or
the United States Department of Labor.
Notwithstanding anything contained in this Article FOURTEENTH to the
contrary, no amendment shall divert any part of the Trust Fund to, and no part
of the Trust Fund shall be used for, any purpose other than for the exclusive
purpose of providing benefits to participants and their beneficiaries;
provided, however, that nothing in this Article FOURTEENTH shall be deemed to
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limit or otherwise prevent the payment from the Trust Fund of expenses and
other charges as provided in Article TWELFTH.
FIFTEENTH: Termination. This agreement and the trust hereby created
may be terminated at any time by the Company by written notice, executed and
acknowledged so as to authorize it to be recorded in the State of New York and
delivered to the Trustee. Upon receipt of such notice of termination, the
Trustee shall, after payment of all expenses incurred in the administration of
the Trust Fund and such compensation as the Trustee may be entitled to, and
upon approval of the appropriate governmental or quasi-governmental authorities
(if such approval shall be required under applicable law or desired by the
Trustee), then distribute the Trust Fund in cash or in kind to such persons or
entities, including the Company, at such time and in such amounts as the
Company shall direct, which direction shall be in conformity with the
provisions of the Separate Plans and ERISA.
SIXTEENTH: Plan-to-Plan Transfers; Rollovers. The Trustee may
transfer all of the property representing a participant's vested interest in a
Separate Plan to the trustees of any trust qualified under Section 401(a) of
the Code. The Trustee may make such a transfer only at the direction of the
Company.
The Trustee may accept as part of the Trust Fund such property as is
acceptable to the Trustee which represents a participant's retirement benefits
transferred from a trust qualified under Section 401 (a) of the Code or
transferred from the participant or an individual retirement account as a
permissible rollover under Section 401(a)(5) or 408(d)(3) of the Code. The
Trustee may accept such a transfer only at the direction of the Company. The
amount of such benefits shall at all times be separately accounted for by the
Company. A participant shall at all times be fully vested in any property so
transferred as a rollover to the Trust Fund. Such property shall be
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distributed to the participant or his beneficiary at the direction of the
Company within the time required for distribution of his retirement benefits
under the applicable provisions of the Plan.
SEVENTEENTH: Adopting Employers. Upon the written consent of the
Company delivered to the Trustee, any other affiliated or subsidiary
corporation of the Company sponsoring a Plan which is qualified under Section
401(a) of the Internal Revenue Code as amended may become a party to this
Master Trust Agreement by delivering to the Trustee a certified copy of a
resolution of its board of directors to the same effect as discussed
immediately above. For purposes of this Master Trust Agreement, the qualified
plan sponsored by such affiliated or subsidiary corporation shall be deemed to
be a separate plan hereunder, and the affiliated or subsidiary corporation
shall be deemed to be a Corporation hereunder. Irrespective of the number of
Corporations which may from time-to-time be parties to this Master Trust
Agreement, the company shall have the sole authority to enforce this Master
Trust Agreement on its own behalf and on behalf of each and every such
Corporation, and the Trustee shall in no event be required to deal with any
such Corporation, except by dealing with the Company and agent of such
Corporation.
Any Corporation which has become a party to this Master Trust
Agreement may, with the written consent of the Company delivered to the
Trustee, cease to be a party to this Master Trust Agreement upon delivering to
the Trustee a certified copy of a resolution of its board of directors to the
effect that it elects to cease to be a party hereto. In such event, the
Trustee, shall until directed otherwise by the company, continue to hold, that
portion of the Trust Fund, pursuant to Article SECOND herein in accordance with
the provision of this Master Trust Agreement, and ERISA, which is attributable
to the Separate Plan sponsored by such corporation.
EIGHTEENTH: Alienation. No interest in the Trust Fund shall be
assignable or subject to anticipation, sale, transfer, mortgage, pledge,
charge, garnishment, attachment, bankruptcy or
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encumbrance or levy or any kind, and the Trustee shall not recognize any
attempt to assign, sell, transfer, mortgage, pledge, charge, garnish, attach or
otherwise encumber the same except to the extent that such attempt is made
pursuant to a court order determined by the plan administrator to be a
qualified domestic relations order, as defined in Section 414 of the Code and
Section 206 of ERISA.
NINETEENTH. Bond. The Trustee shall not be required to give any bond
or any other security for the faithful performance of its duties under this
agreement except as required by law.
TWENTIETH: Successors. This Agreement shall be binding upon the
respective successors and assigns of the Company and the Trustee. Any
corporation which shall, by merger, consolidation, purchase or otherwise,
succeed to substantially all the Trust business of the Trustee shall, upon such
succession, and without any appointment or other action by any person, be and
become successor Trustee hereunder.
TWENTY-FIRST: Communications. Communications to the Company shall
addressed to the Company, at 11500 Ambassador Drive, c/o Gary Dilly, Director
Pension Finance, Kansas City, MO, 64195; provided, however, that upon the
Company's written request such communications shall be sent to such other
address as the Company may specify.
Communications to the Trustee shall be addressed to:
United States Trust Company of New York
770 Broadway
New York, NY 10003-9598
Attention: Ms. Judith M. Trepanowski, Senior Vice President
provided; however, that upon the Trustee's written request, such communications
shall be sent to such other address as the Trustee may specify. No
communication shall be binding on the Trustee until it is received by the
Trustee.
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TWENTY-SECOND: Governing Law. This agreement shall be construed in
accordance with ERISA and, to the extent not preempted by ERISA, the laws of
the State of New York; provided that, the GIC assets could be governed by the
laws of the States of New York, California, Florida, New Jersey, Connecticut,
Texas and Oregon.
IN WITNESS WHEREOF the Company and the Trustee have executed this
instrument this first day of February, 1994.
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ATTEST:
By:
- --------------------------- -------------------------------------
Title: Title:
(Corporate Seal)
United States Trust Company of New York
ATTEST:
By:
- --------------------------- -------------------------------------
Title: Title:
(Corporate Seal)
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STATE OF NEW YORK
:SS.:
COUNTY OF NEW YORK
On the day of February 18, 1994, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and
say that he/she resides at _________________________; that he/she is
______________________________, the corporation described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by order of the Board of Directors of said corporation, and that he signed his
name hereto by like order.
--------------------------------------
Notary Public
(Notarial Seal)
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APPENDIX A
Trans World Airlines, Inc.
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APPENDIX B
Retirement Savings Plan for Flight Attendants of Trans World Airlines, Inc.
Retirement Savings Plan for Non-Contract Employees of Trans World Airlines,
Inc.
24
