As filed with the Securities and Exchange Commission on July 25, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HOST MARRIOTT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 53-0085950
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10400 Fernwood Road
Washington, D.C. 20817
(Address of Principal Executive Offices) (Zip Code)
HOST MARRIOTT CORPORATION (HMC)
RETIREMENT AND SAVINGS PLAN
(Full title of the plan)
Christopher G. Townsend
Corporate Secretary
Host Marriott Corporation
10400 Fernwood Road
Washington, D.C. 20058
(301) 380-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of Securities Amount Proposed Proposed Amount of
to be registered to be maximum maximum registration fee
registered offering aggregate
price offering
per price(1)
share(1)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per 300,000 $ 13.50 $ 4,050,000.00 $ 1,396.55
share
- ---------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(h), these prices are estimated solely for the purpose
of calculating the registration fee and are based upon the average of the high
and low sales prices of the Registrant's Common Stock on the New York Stock
Exchange on July 19, 1996.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Host Marriott Corporation (HMC) Retirement and
Savings Plan (the "Plan") employee benefit plan described herein. There are also
registered hereunder such additional indeterminate number of shares as may be
issued as a result of the antidilution provisions of the Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing information specified by Part I of Form S-8 have
been or will be sent or given to participants in the Plan as specified in Rule
428(b)(1) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"). Such documents are not being filed with the Commission but constitute
(along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof), a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed with the Commission are incorporated herein
by reference:
(1) Form S-1 Registration Statement filed March 26, 1996;
(2) The Company's Annual Report on Form 10-K for the fiscal year ended December
29, 1995;
(3) The Company's Current Report on Form 8-K dated January 11, 1996 filed with
the Commission on January 17, 1996;
(4) The Company's Current Report on Form 8-K dated January 17, 1996 filed with
the Commission on January 17, 1996;
(5) The Company's Current Report on Form 8-K dated February 28, 1996 filed with
the Commission on March 1, 1996;
(6) The Company's Current Report on Form 8-K/A dated March 7, 1996 filed with
the Commission on March 7, 1996;
(7) The Company's Quarterly Report on Form 10-Q for the twelve weeks ended
March 22, 1996;
(8) The Joint Proxy Statement/Prospectus of the Company on Form 14A and Form
S-4 dated March 9, 1996;
(9) The Company's Current Report on Form 8-K dated May 31, 1996 filed with the
Commission on June 5, 1996; and
(10) The Company's Current Report on Form 8-K dated July 11, 1996 filed with the
Commission on July 15, 1996.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
as amended, prior to the filing of a post effective amendment that (1) indicates
that all securities offered pursuant to this registration statement have been
sold or (2) deregisters all Securities then remaining unsold shall be deemed to
be incorporated by reference in this Registration Statement and to be a part
hereof from the date of the filing of such documents.
Item 4. Description of Securities
Not applicable
Item 5. Interests of Named Experts and Counsel
The opinion of counsel constituting Exhibit 23.4 has been rendered by an
employee eligible for the Plan.
2
<PAGE>
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
for the indemnification of officers and directors under certain circumstances
against expenses (including attorneys, fees, judgments, fines and amounts paid
in settlement) actually and reasonably incurred in connection with the defense
or settlement of any threatened, pending or completed legal proceedings in which
he is involved by reason of the fact that he is or was a director or officer of
the Company if he acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and, in
respect to the criminal actions or proceedings, if he had no reasonable cause to
believe that his conduct was unlawful. The Certificate and By-laws of the
Company provide for indemnification of its officers and directors to the full
extent authorized by law.
The Company maintains officers' and directors' liability insurance which
insures against liabilities that the officers and directors of the Company may
incur in such capacities.
Item 7. Exemption from Registration Claimed
Not applicable
Item 8. Exhibits
Exhibit
Number Description
- ------- -----------
4.1 - Restated Certificate of Incorporation, incorporated by reference from the
Form 8-K (filed October 23, 1993)
4.2 - Amended Marriott Corporation By-Laws, incorporated by reference from the
Form 8-K (filed October 23, 1993)
4.3 - The Plan
5.1 - Opinion as to Legality of the Securities offered
5.2 - The registrant has submitted the Plan to the Internal Revenue Service for
a determination that the Plan is qualified under Internal Revenue Code
Section 401(a) in a timely manner and will make all changes required by
the Internal Revenue Service in order to qualify the Plan.
23.1 - Consent of Arthur Andersen LLP
23.2 - Consent of Ernst & Young LLP
23.3 - Consent of KPMG Peat Marwick LLP
23.4 - Consent of the Company's Law Department, see Exhibit 5.1
24 - The Power of Attorney by the Officers and Directors who signed this
Registration Statement is set forth on page 5 herein.
3
<PAGE>
Item 9. Undertakings
(a) 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:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(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.
(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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
4
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bethesda, State of Maryland, on this 25th day of
July, 1996.
HOST MARRIOTT CORPORATION
By /s/ Christopher G. Townsend
------------------------------
Christopher G. Townsend
Senior Vice President, Corporate Secretary
and Deputy General Counsel
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Plan's administrator has caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Bethesda,
State of Maryland, on this 25th day of July, 1996.
HOST MARRIOTT CORPORATION (HMC)
RETIREMENT AND SAVINGS PLAN
By /s/ Bruce F. Stemerman
---------------------------
Bruce F. Stemerman
Plan Administrator
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below under the heading "Signatures" constitutes and appoints Christopher G.
Townsend 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 or 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, each acting alone, 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 for all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
5
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on this 25th day of July, 1996.
Signature Title
--------- -----
/s/ Richard E. Marriott Richard E. Marriott
---------------------- Chairman of the Board
/s/ Terence C. Golden Terence C. Golden
---------------------- President and Chief Executive Officer
(Principal Executive Officer)
/s/ Robert E. Parsons, Jr. Robert E. Parsons, Jr.
-------------------------- Chief Financial Officer and
Executive Vice President
(Principal Financial Officer)
/s/ Donald D. Olinger Donald D. Olinger
--------------------- Vice President and Corporate Controller
(Principal Accounting Officer)
/s/ J.W. Marriott, Jr. J.W. Marriott, Jr.
--------------------- Director
/s/ Ann Dore McLaughlin Ann Dore McLaughlin
----------------------- Director
/s/ Harry L. Vincent, Jr. Harry L. Vincent, Jr.
------------------------- Director
/s/ R. Theodore Ammon R. Theodore Ammon
--------------------- Director
/s/ Robert M. Baylis Robert M. Baylis
-------------------- Director
6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
-----
4.1 - Restated Certificate of Incorporation, incorporated by reference from the
Form 8-K (filed October 23, 1993)
4.2 - Amended Marriott Corporation By-Laws, incorporated by reference from the
Form 8-K (filed October 23, 1993)
4.3 - The Plan
5.1 - Opinion as to Legality of the Securities offered
5.2 - The registrant has submitted the Plan to the Internal Revenue Service for
a determination that the Plan is qualified under Internal Revenue Code
Section 401(a) in a timely manner and will make all changes required by
the Internal Revenue Service in order to qualify the Plan.
23.1 - Consent of Arthur Andersen LLP
23.2 - Consent of Ernst & Young LLP
23.3 - Consent of KPMG Peat Marwick LLP
23.4 - Consent of the Company's Law Department, see Exhibit 5.1
24 - The Power of Attorney by the Officers and Directors who signed this
Registration Statement is set forth on page 5 herein.
7
EXHIBIT 4.3
HOST MARRIOTT CORPORATION (HMC)
RETIREMENT AND SAVINGS PLAN AND TRUST
Effective December 30, 1995
<PAGE>
TABLE OF CONTENTS
Page No.
-------
ARTICLE I DEFINITIONS................................................. 3
1.1 Account..................................................... 3
1.2 Actual Contribution Percentage.............................. 3
1.3 Actual Deferral Percentage.................................. 3
1.4 Additional After-tax Savings................................ 3
1.5 Additions................................................... 3
1.6 Administrative Expenses..................................... 3
1.7 Affiliated Company.......................................... 3
1.8 After-tax Savings........................................... 3
1.9 After-tax Savings Account................................... 3
1.10 Allocable Portion........................................... 3
1.11 Allocation Agreement........................................ 4
1.12 Alternate Payee............................................. 4
1.13 Annuity Starting Date....................................... 4
1.14 Authorized Leave of Absence................................. 4
1.15 Basic After-tax Savings..................................... 4
1.16 Beneficiary................................................. 4
1.17 Board of Directors.......................................... 4
1.18 Code........................................................ 4
1.19 Combined Basic Savings...................................... 4
1.20 Committee................................................... 4
1.21 Company..................................................... 5
1.22 Company Contribution Account................................ 5
1.23 Compensation................................................ 5
1.24 Consolidated Net Profit..................................... 6
1.25 Consolidated Net Worth...................................... 6
1.26 Distributee................................................. 6
1.27 Effective Date.............................................. 6
1.28 Eligible Rollover Distribution.............................. 6
1.29 Eligible Retirement Plan.................................... 6
1.30 Employee.................................................... 6
1.31 Entry Date.................................................. 7
1.32 ERISA....................................................... 7
1.33 Fiduciary................................................... 7
1.34 Fiscal Year................................................. 7
1.35 Flexible Compensation....................................... 7
1.36 FLSA........................................................ 8
1.37 Fund........................................................ 8
1.38 Hardship.................................................... 8
i
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1.39 Highly Compensated Employee................................ 8
1.40 Hire Date.................................................. 9
1.41 Host Marriott or Host Marriott Corporation................. 9
1.42 Investment Expenses........................................ 9
1.43 Maximum Permissible Amounts................................ 9
1.44 Month...................................................... 9
1.45 Month of Credit............................................ 9
1.46 Named Fiduciary............................................10
1.47 Participant................................................10
(a) Former Participant................................10
(b) Terminated Participant............................10
(c) Retired Participant...............................10
(d) Disabled Participant..............................10
(e) Deceased Participant..............................10
1.48 Participating Company......................................10
1.49 Permanent Disability.......................................10
1.50 Period of Severance........................................11
1.51 Plan.......................................................11
1.52 Plan Administrator.........................................11
1.53 Plan Year..................................................11
1.54 Predecessor Company........................................11
1.55 Prior Plan.................................................11
1.56 Pro Rata Share of Administrative Expenses..................11
1.57 Qualified Domestic Relations Order or QDRO.................11
1.58 Qualified Joint and Survivor Annuity or QJSA...............11
1.59 Qualifying Employer Real Property..........................11
1.60 Qualifying Employer Securities.............................11
1.61 Reemployment Date..........................................11
1.62 Required Beginning Date....................................12
1.63 Section 401(k) Contribution................................12
1.64 Section 401(k) Contribution Account........................12
1.65 Separation Date............................................12
1.66 Service....................................................12
1.67 Spousal Consent............................................13
1.68 Spouse or Surviving Spouse.................................13
1.69 Subaccount.................................................13
1.70 Subsidiary or Affiliated Company...........................13
1.71 Trustees...................................................13
1.72 Trust Fund.................................................13
1.73 Valuation Date.............................................14
ARTICLE II ELIGIBILITY AND PARTICIPATION..............................15
2.1 Eligibility and Participation..............................15
(a) Eligibility.......................................15
ii
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(b) Commencement of Participation......................15
(c) Continued Participation............................15
(d) Participation Voluntary............................15
2.2 Reemployment of Employee....................................15
(a) Eligibility Upon Reemployment......................15
2.3 Termination of Plan Participation...........................15
2.4 Readmission of Former Participant...........................15
2.5 Participation During Authorized Leave of Absence or During
Employment by Subsidiary Which Has Not Joined Plan......... 16
2.6 Treatment of Participants Who Cease Being Employees Pursuant
to Section 1.30............................................ 16
ARTICLE III COMPANY CONTRIBUTION....................................... 17
3.1 Amount of Contribution..................................... 17
3.2 Net Profits, Net Worth and Earnings and Profits. Determination
of Consolidated Net Profits and Consolidated Net Worth..... 17
3.3 Effect of Change in Consolidated Net Profit.................18
3.4 Time of Payment of Contributions............................18
3.5 Form of Payment of Contributions............................18
3.6 Return of Contributions to Company..........................18
ARTICLE IV PARTICIPANTS' AFTER-TAX SAVINGS.............................20
4.1 Participant After-tax Savings...............................20
4.2 Amount of After-tax Savings.................................20
4.3 Payroll Deduction...........................................20
4.4 Change in Rate of After-tax Savings.........................20
4.5 Payment to Trustees.........................................20
4.6 Advancement by Company......................................20
4.7 Investment of Participants' After-tax Savings...............21
4.8 In-Service Withdrawal of After-tax Savings..................21
ARTICLE V SECTION 401(k) CONTRIBUTIONS................................22
5.1 Designation of Flexible Compensation........................22
5.2 Section 401(k) Contributions................................22
5.3 Election Rules..............................................22
(a) Method of Election.................................22
(b) Effective Date of Election.........................22
(c) Revocation or Amendment............................22
5.4 Compensation Reduction......................................23
5.5 Limitations on Section 401(k) Contributions.................23
5.6 Actual Deferral Percentage Tests............................23
5.7 Recharacterization of Certain Section 401(k) Contributions..23
5.8 Coordination of After-tax Savings and Section 401(k)
Contributions.............................................. 23
5.9 Payment to Trustees........................................ 24
iii
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5.10 Advancement by Company..................................... 24
5.11 Distribution of Section 401(k) Contributions............... 24
(a) Restrictions on Distributions..................... 24
(b) In-Service Withdrawal of Section 401(k)
Contributions..................................... 25
5.12 Effect of Termination of Plan or Discontinuance of Section
401(k) Contributions....................................... 25
ARTICLE VI ALLOCATION OF CONTRIBUTIONS................................ 26
6.1 Maintenance of Separate Accounts........................... 26
6.2 Allocation to After-tax Savings Accounts................... 26
6.3 Allocation to Section 401(k) Contribution Account.......... 26
6.4 Allocation of Company Contribution......................... 26
6.5 (a) Limitation on After-tax Savings and Company
Contributions..................................... 27
(b) Multiple Use of the Alternative Limitation.........27
6.6 Correcting Excess Aggregate Contributions...................28
6.7 Special Provision for Allocating Company Contributions......28
6.8 Allocation of Net Income....................................29
6.9 Allocation of Forfeitures...................................29
6.10 Allocation of Unclaimed Benefits............................29
(a) Method of Allocation...............................29
(b) Reduction in Forfeitures...........................29
6.11 Allocation Limitations......................................30
(a) Maximum Additions..................................30
(b) Correction of Excess...............................30
(c) Further Limitations on Additions...................30
6.12 Transfers to Other Trusts...................................30
(a) Time and Manner....................................30
(b) Beginning Account Balances After Transfer..........30
6.13 Transfers From Other Qualified Plans........................31
(a) Manner of Transfer.................................31
(b) Governing Provisions...............................31
ARTICLE VII VESTING.....................................................32
7.1 Vesting of After-tax Savings Account........................32
7.2 Vesting of Section 401(k) Contribution Account..............32
7.3 Vesting of Company Contribution Account.....................32
(a) Vesting Schedule...................................32
(b) Service to be Credited Upon Resumption of
Employment.........................................32
(c) Definition of Service..............................32
(d) Automatic 100% Vesting.............................33
ARTICLE VIII TERMINATION AND DISTRIBUTION UPON
RETIREMENT, DEATH OR DISABILITY....................34
8.1 Retirement..................................................34
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8.2 Death.......................................................34
8.3 Disability..................................................34
8.4 Valuation of Account Balances...............................34
8.5 Available Payment Options...................................34
8.6 Qualified Joint and Survivor Annuity........................35
(a) Cash Payments in Lieu of a Qualified Joint and
Survivor Annuity.................................. 35
(b) Waiver of Qualified Joint and Survivor Annuity.....35
(c) Written Explanation................................36
(d) Result of Effective Waiver.........................36
(e) Spousal Consent....................................36
8.7 Distributions Upon Married Participant's Death..............37
8.8 General Distribution Requirements...........................37
(a) Distributions to Participants......................37
(b) Distributions to Beneficiary.......................37
(c) Commencement of Distribution.......................38
8.9 Form of Payment.............................................38
8.10 Mandatory Cash-Out of Small Accounts........................38
8.11 Account Balance.............................................39
8.12 Special Rule for Rollovers Out of the Plan..................39
ARTICLE IX TERMINATION AND DISTRIBUTION UPON
TERMINATION OF EMPLOYMENT OTHER THAN
FOR RETIREMENT, DEATH OR DISABILITY.........................40
9.1 Terminated Participant......................................40
9.2 Distribution of After-tax Savings and Section 401(k)
Contributions...............................................40
9.3 Distribution of Vested Company Contribution Account.........40
(a) Governing Rule.....................................40
(b) Special Adjustments................................40
9.4 Mandatory Cash-Out of Small Accounts........................41
9.5 Unvested Company Contributions..............................41
(a) Forfeiture.........................................41
(b) Restoration of Forfeiture..........................41
(1) General Rule..............................41
(2) Special Rule for Amounts Transferred
Pursuant to Section 6.12................. 42
(c) Distribution Prior to Reemployment.................42
9.6 Account Balance.............................................42
9.7 Special Rule for Rollovers Out of the Plan..................42
ARTICLE X DISTRIBUTION DURING CONTINUED EMPLOYMENT....................43
10.1 Withdrawal of After-tax Savings.............................43
(a) Withdrawal of Additional After-tax Savings.........43
(b) Withdrawal of Basic After-tax Savings..............43
(c) Valuation of After-tax Savings Account.............43
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(d) Form of Payment...................................43
(e) Taxation of Withdrawal............................43
10.2 Withdrawal of Section 401(k) Contribution..................43
10.3 Withdrawal of Vested Company Contribution Account..........43
10.4 Readmission of Former Participant to Plan..................44
10.5 Distributions Upon Attainment of Age 59-1/2................44
10.6 Account Balance............................................44
10.7 Hardship Withdrawals.......................................44
(a) Terms of Hardship Withdrawals.....................44
(b) Restrictions......................................44
(c) Spousal Consent...................................45
(d) Committee Guidelines and Determination............45
10.8 Special Rule for Rollovers Out of the Plan.................45
ARTICLE XI LOANS TO PARTICIPANTS......................................46
11.1 General Provisions.........................................46
11.2 Maximum Loan Amount........................................46
11.3 Minimum Loan Amount........................................46
11.4 Repayment Period...........................................46
11.5 Terms and Conditions.......................................47
11.6 Nondiscrimination..........................................48
11.7 Decision of the Plan Administrator.........................48
11.8 Offset of Account Balance..................................48
11.9 Default....................................................48
ARTICLE XBENEFICIARIES.......................................................50
12.1 Designation of Beneficiary.................................50
12.2 Manner of Designation......................................50
12.3 Absence of Valid Designation of Beneficiary................50
12.4 Beneficiary Bound by Plan Provisions.......................50
ARTICLE XIII QUALIFIED DOMESTIC RELATIONS ORDERS........................51
13.1 Governing Provisions.......................................51
ARTICLE XIV TRUST FUND........................................52
14.1 Receipt of Contributions, After-tax Savings and Transfers..52
14.2 Investment of Trust Fund...................................52
(a) Investment Vehicles...............................52
(b) Investment Policy.................................53
14.3 Investment Authority.......................................53
(a) General Authority.................................53
(b) Undertaking to Stock Exchanges....................53
14.4 Individually Directed Accounts.............................54
14.5 Payments From Trust Fund...................................54
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ARTICLE XV PARTICIPANT'S DIRECTED INVESTMENTS..........................55
15.1 Election by Participants....................................55
15.2 Election Rules..............................................55
(a) Election to be in Writing..........................55
(b) Effective Date of Election.........................55
(c) Revocation of Election.............................55
(d) Change in Election.................................55
(e) Default Election...................................56
15.3 Transfer Date...............................................56
15.4 Confirmation................................................56
15.5 Subdivision of Accounts.....................................56
(a) Establishment of Subaccounts.......................56
(b) Allocation of After-tax Savings, Section 401(k)
Contributions, Company Contributions and Forfeitures
Among Subaccounts................................. 56
15.6 Investment Funds............................................56
(a) Committee's Responsibility for Funds...............56
(b) Investment Policy of Funds.........................57
(c) Funds..............................................57
(1) Stable Value Fund.........................57
(2) Bond Fund.................................57
(3) Balanced Fund.............................57
(4) Stock Fund................................57
(5) Host Marriott Stock Fund..................57
(6) International Stock Fund..................57
(7) Aggressive Growth Fund....................57
15.7 Voting Rights...............................................57
15.8 Allocation of Income of Funds...............................58
15.9 Investment Authority of Former Employees....................58
15.10 Investment for the Benefit of Incompetents..................58
15.11 Rules of Committee..........................................58
15.12 Participant-Insider Provisions..............................58
ARTICLE XVI PLAN FIDUCIARIES...................................59
16.1 Plan Fiduciaries............................................59
(a) Named Fiduciary....................................59
(b) Profit Sharing Committee...........................59
(c) Trustees...........................................59
16.2 Fiduciary Duty..............................................60
16.3 Agents and Advisors.........................................60
(a) Employment of Agents...............................60
(b) Delegation to Agents and Plan Administrator........60
(c) Appointment of Investment Manager..................60
16.4 Administrative Action.......................................61
(a) Action by Majority.................................61
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(b) Right to Vote......................................61
(c) Authority to Execute Documents.....................61
16.5 Liabilities and Indemnifications............................61
(a) Liability of Fiduciaries...........................61
(b) Indemnity by Company...............................61
16.6 Plan Expenses and Taxes.....................................62
(a) Plan Expenses......................................62
(b) Taxes..............................................62
16.7 Records and Financial Reporting.............................62
(a) Book of Account....................................62
(b) Financial Reporting Under ERISA....................62
16.8 Compliance with ERISA and Code..............................62
16.9 Prohibited Transactions.....................................62
16.10 Foreign Assets................................................63
16.11 Exclusive Benefit of Trust Fund...............................63
16.12 Board of Directors Resolution.................................63
ARTICLE XVII PLAN ADMINISTRATION................................64
17.1 Administration of the Plan..................................64
(a) Authority to Administer............................64
(b) Delegation of Authority to Plan Administrator......64
(c) Finality of Decision...............................64
17.2 Claims......................................................64
(a) Claims for Benefits................................64
(b) Notice of Claim Denied.............................64
(c) Request for Review of Denial.......................65
(d) Decision on Review of Denial.......................65
ARTICLE XVIII PARTICIPATING COMPANY WITHDRAWAL FROM PLAN;
TERMINATION OR MERGER OF THE PLAN..................66
18.1 Voluntary Withdrawal from Plan..............................66
(a) Withdrawal By Participating Company................66
(b) Segregation of Trust Assets Upon Withdrawal........66
(c) Exclusive Benefit of Participants..................66
(d) Applicability of Withdrawal Provisions.............66
18.2 Amendment of Plan...........................................66
18.3 Voluntary Termination of Plan...............................67
(a) Right to Terminate Plan............................67
(b) Merger or Consolidation of Plan and Trust..........67
(c) Termination of Plan and Trust Fund.................68
18.4 Discontinuance of Contributions.............................68
18.5 Rights to Benefits Upon Termination of Plan or Complete
Discontinuance of Contributions............................ 68
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ARTICLE XIX ELECTION TO PARTICIPATE BY SUBSIDIARIES...........69
19.1 Consent Required for Subsidiaries to Join Plan.............69
ARTICLE XX MISCELLANEOUS PROVISIONS...................................70
20.1 Status of Employment.......................................70
20.2 Liability of Company.......................................70
20.3 Information................................................70
(a) Supplied by Named Fiduciary, the Committee or
Trustees................................. 70
(b) Supplied by Company...............................70
20.4 Provisions of Plan to Control..............................70
20.5 Payment for Benefit of Incompetent.........................70
20.6 Account to be Charged Upon Payment.........................71
20.7 Tax Qualification of Plan..................................71
20.8 Deductibility of Company Contributions.....................71
20.9 Valuation of Trust Fund....................................71
20.10 Restriction on Alienation or Assignment......................71
20.11 Unclaimed Benefits...........................................71
20.12 Recovery of Plan Benefits Payment Made by Mistake............72
20.13 Bonding......................................................72
20.14 Titles and Captions..........................................72
20.15 Execution of Counterparts....................................72
20.16 Governing Law................................................72
20.17 Separability.................................................72
20.18 Supplements and Appendices...................................72
ARTICLE XI TOP HEAVY PROVISIONS.......................................73
21.1 Determination of Top Heavy Status..........................73
21.2 Definitions................................................73
21.3 Requirements if Plan a Top Heavy Plan......................74
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HOST MARRIOTT CORPORATION (HMC)
RETIREMENT AND SAVINGS PLAN AND TRUST
PREAMBLE
WHEREAS, Marriott Corporation established the Marriott Corporation
Employees' Profit Sharing, Retirement and Savings Plan and Trust (the "Marriott
Corporation Plan") to enable the employees of Marriott Corporation and its
subsidiaries to share in the profits and the cash flow from Marriott Corporation
business operations, and to encourage retirement savings by the employees; and
WHEREAS, Marriott International, Inc. was a wholly owned subsidiary of
Marriott Corporation until the date of the distribution of a special dividend
(the "Marriott International Distribution") of all of the stock of Marriott
International, Inc. to the shareholders of Marriott Corporation following
approval of the Marriott International Distribution by the shareholders at the
1993 annual meeting of shareholders of Marriott Corporation; and
WHEREAS, upon the consummation of the Marriott International Distribution,
employees of Marriott Corporation became employees of Marriott International,
Inc. or Host Marriott Corporation (as Marriott Corporation was renamed as of the
Marriott International Distribution); and
WHEREAS, the Marriott Corporation Board of Directors at its meeting on July
23, 1993 approved (a) the adoption of a new Host Marriott Corporation Employees'
Profit Sharing, Retirement and Savings Plan and Trust (the "Host Marriott Plan")
by Host Marriott Corporation ("Host Marriott"), and (b) the continuation of the
Marriott Corporation Plan by Marriott International, Inc. (hereinafter the
"Marriott International Plan"); and
WHEREAS, Host Marriott established the Host Marriott Plan to be effective
as of the date of the Marriott International Distribution to provide benefits to
its employees and those of its subsidiaries after the Marriott International
Distribution; and
WHEREAS, the Marriott International Plan transferred to the Host Marriott
Plan, and the Host Marriott Plan accepted, the assets and liabilities
representing the account balances (both vested and unvested) of any participant
in the Marriott International Plan who was employed by Host Marriott on the date
of the Marriott International Distribution; and
WHEREAS, Host Marriott Services Corporation ("Host Marriott Services") is a
wholly- owned subsidiary of Host Marriott until the date of distribution of a
special dividend (the "Host Marriott Services Distribution") of all of the stock
of Host Marriott Services to the shareholders of Host Marriott; and
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WHEREAS, upon consummation of the Host Marriott Services Distribution,
employees of Host Marriott will remain employees of Host Marriott or become
employees of Host Marriott Services; and
WHEREAS, the Host Marriott Board of Directors (the "Board of Directors") at
its meeting on December 6, 1995 (a) adopted the new Host Marriott Corporation
(HMC) Retirement and Savings Plan and Trust (the "Host Marriott Retirement
Plan") for Host Marriott and (b) acting as the sole shareholder of Host Marriott
Services, approved the continuation of the Host Marriott Plan by Host Marriott
Services and amended and restated that plan to rename it the Host Marriott
Services Corporation Employees' Profit Sharing, Retirement and Savings Plan (the
"Host Marriott Services Plan"); and
WHEREAS, the Board of Directors, at its meeting on December 6, 1995,
authorized the transfer from the Host Marriott Services Plan to the Host
Marriott Retirement Plan, and the acceptance by the Host Marriott Retirement
Plan, of the assets and liabilities representing the account balances (both
vested and unvested) of any individual who (i) is an employee of Host Marriott
(or any subsidiary) on December 29, 1995; or (ii) on or before December 28,
1995, had terminated employment with any business or operation of Host Marriott
(or its subsidiaries) which is, pursuant to the Allocation Agreement, to be
conducted by Host Marriott (or a subsidiary) following the Host Marriott
Services Distribution, or (iii) is a beneficiary of any individual described in
(i) or (ii);
NOW THEREFORE, the Host Marriott Corporation Retirement and Savings Plan
and Trust, is adopted, effective December 30, 1995, for the benefit of employees
of Host Marriott Corporation employed after the Host Marriott Services
Distribution, the terms of which shall be as follows:
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ARTICLE I
DEFINITIONS
When used in this instrument, the following words and phrases have the
indicated meanings except where the contrary is expressly stated:
1.1 "Account" shall have the meaning set forth in Section 6.1.
1.2 "Actual Contribution Percentage" means, for a given Plan Year, the
average of the ratios, calculated separately for each Participant in a group, of
(a) the sum of After-tax Savings credited to the Participant's After-tax Savings
Account and Company contributions and forfeitures allocable to the Participant's
Company Contribution Account for the Plan Year to (b) the Participant's
Compensation for such Plan Year.
1.3 "Actual Deferral Percentage" means, for a given Plan Year, the average
of the ratios, calculated separately for each Participant in a group, of (a) the
Section 401(k) Contributions made on behalf of such Participant by the Company
for the Plan Year to (b) the Participant's Compensation for such Plan Year.
1.4 "Additional After-tax Savings" means After-tax Savings in excess of six
percent (6%) of a Participant's Compensation in a Fiscal Year.
1.5 "Additions" means, with respect to each Participant for any Fiscal
Year, the total of (a) the Company contributions and forfeitures allocated for
the Fiscal Year to the Participant's Company Contribution Account, plus
(b)Section 401(k) Contributions allocated for the Fiscal Year to the
Participant's Section 401(k) Contributions Account, plus (c) the After-tax
Savings allocated for the Fiscal Year to the Participants After-tax Savings
Account.
1.6 "Administrative Expenses" means the administrative expenses described
in Section 16.6(a).
1.7 "Affiliated Company" means a "Subsidiary", as defined in Section 1.70.
1.8 "After-tax Savings" means the after-tax savings deposited into the
Trust Fund by a Participant in accordance with Article IV.
1.9 "After-tax Savings Account" shall have the meaning set forth in Section
6.1(a).
1.10 "Allocable Portion" means, for purposes of Section 11.2, the lesser
of: (a) fifty percent (50%) of the Participant's vested Account balance; or (b)
$50,000, reduced by the excess of (1) the highest outstanding balance of any
previous loan from the Plan and any other plans of the Company or a Subsidiary
during the one-year period ending on the day before the date on
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which the current loan is made over (2) the outstanding balance of any
previous loan from the Plan and any other plans of the Company or a Subsidiary
on the date on which the current loan is made.
1.11 "Allocation Agreement" means the Employee Benefits & Other Employment
Matters Allocation Agreement entered into by and between Host Marriott
Corporation and Host Marriott Services Corporation on December 29, 1995.
1.12 "Alternate Payee" means any Spouse, former Spouse, child or other
dependent of a Participant who is entitled under a Qualified Domestic Relations
Order to receive all, or part of, the benefits payable to that Participant under
the Plan.
1.13 "Annuity Starting Date" means the first day of the first period for
which an amount is received as an annuity by reason of retirement or disability.
1.14 "Authorized Leave of Absence" means any absence authorized by the
Company under the Company's standard personnel practices provided that the
Employee or Participant returns within the period of authorized absence. An
absence due to service in the Armed Forces of the United States shall be
considered an Authorized Leave of Absence provided that the absence is caused by
war or other emergency, or provided that the Employee or Participant is required
to serve under the laws of conscription in time of peace, and further provided
that the Employee or Participant returns to employment with the Company within
the period provided by law. Except for service in the Armed Forces of the United
States in accordance with the preceding sentence, an Authorized Leave of Absence
may not extend beyond two (2) years.
1.15 "Basic After-tax Savings" means After-tax Savings up to six percent
(6%) of a Participant's Compensation in a Fiscal Year.
1.16 "Beneficiary" means the person or persons designated as a beneficiary
pursuant to Article XII.
1.17 "Board of Directors" means Host Marriott Corporation's Board of
Directors or the Executive Committee of such Board of Directors.
1.18 "Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute, including the regulations issued thereunder.
1.19 "Combined Basic Savings" means the sum of a Participant's After-tax
Savings and Section 401(k) Contributions for the Fiscal Year, provided that such
sum shall include only an amount up to six percent (6%) of Compensation for the
Fiscal Year.
1.20 "Committee" means the Profit Sharing Committee appointed by the Board
of Directors pursuant to Section 16.1(b).
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1.21 "Company" means Host Marriott Corporation and any Subsidiary that
elects to join the Plan with the consent of the Board of Directors.
1.22 "Company Contribution Account" shall have the meaning set forth in
Section 6.1(c).
1.23 "Compensation" means:
(a) Except as hereinafter specified, (1) earned income, wages, salary,
overtime, cash bonus, commissions, annual leave, sick leave and holiday pay,
paid by the Company to an Employee, and (2) gratuities reported by the Employee
to the Company and the Internal Revenue Service, all without regard for any
election under Article V or any elections made by the Participant under any plan
maintained by the Company pursuant to Section 125 of the Code, but excluding any
and all other forms of compensation. Notwithstanding the foregoing, Compensation
taken into account for each Employee for a Plan Year shall not exceed One
Hundred Fifty Thousand Dollars ($150,000) or such other amount as the United
States Secretary of Treasury may designate under Section 401(a)(17) of the Code;
provided, however, in the application of this limit to any Employee, the rules
of Section 414(q)(6) of the Code shall apply, except that, for purposes of such
rules, the term "family" shall include only the Spouse of such Employee and any
lineal descendant of such Employee who has not attained age nineteen (19) before
the end the Plan Year.
(b) For purposes of the limitation on contributions and benefits under
Section 415 of the Code as set forth in Section 6.11, a Participant's wages,
salaries, and fees for professional services, and other amounts received for
personal services actually rendered in the course of employment with the Company
to the extent that the amounts are includable in gross income (including, but
not limited to, commissions, gratuities reported by the Employee to the Company
and the Internal Revenue Service, bonuses, fringe benefits, reimbursements or
other expenses allowable under a nonaccountable plan (as described in Section
1.62-2(c) of the Treasury Regulations) annual leave, sick leave and holiday
pay), and excluding the following:
(1) Company contributions to a plan of deferred compensation which are
not included in the Employee's gross income for the taxable year in which
contributed or Company 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;
(2) 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;
(3) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
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(4) Other amounts which received special tax benefits.
1.24 "Consolidated Net Profit" shall have the meaning set forth in
Section 3.2(a).
1.25 "Consolidated Net Worth" shall have the meaning set forth in
Section 3.2(a).
1.26 "Distributee" means a Participant, Former Participant, Retired
Participant, Disabled Participant, the Surviving Spouse of a Deceased
Participant, and an Alternate Payee.
1.27 "Effective Date" means December 30, 1995, the day after the date on
which Host Marriott Corporation distributed a special dividend to its
shareholders of all of the stock of Host Marriott Services Corporation.
1.28 "Eligible Rollover Distribution" means any distribution of all or a
portion of the Distributee's Account balance, except that an Eligible Rollover
Distribution does not include (a) 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 (10) years or more, (b) any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code, and (c) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to Company securities).
1.29 "Eligible Retirement Plan" means 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 Spouse, an "Eligible
Retirement Plan" means an individual retirement account or individual retirement
annuity only.
1.30 "Employee" means any person employed by a Participating Company other
than: (a) a person who is covered by a collective bargaining agreement, if there
is evidence to show that retirement benefits were the subject of good faith
bargaining between a Participating Company and the employee representatives with
whom such agreement was entered; (b) a nonresident alien who receives no earned
income (within the meaning of Section 911(d)(2) of the Code) from a
Participating Company which constitutes income from sources within the United
States (within the meaning of Section 861(a)(3) of the Code); (c) a participant
in a profit sharing plan, pension plan or other retirement plan (other than this
Plan) maintained by Host Marriott Services Corporation or a Subsidiary, whether
or not the plan or the trust of such plan is intended to qualify under Section
401 of the Code; and (d) a leased employee (within the meaning of Section 414(n)
of the Code) if such leased employee is eligible to participate in another
pension, profit sharing or other tax-qualified retirement plan and if leased
employees do not constitute more than 20% of the aggregate workforce of all
Participating Companies.
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Employees are classified as follows:
Class A consists of all Employees not included in Class B whose base
compensation is stated in terms of hourly rates of pay including those who
receive gratuities collected and distributed by the employer.
Class B consists of all management and professional Employees whose base
compensation at the time the determination is to be made is stated in terms of a
weekly or annual salary, or whose base compensation is stated in terms of hourly
rates but who receive management benefits, regardless of whether such Employees
are exempt from the overtime pay requirements of the FLSA.
Unless specifically referring to a particular class, any and all provisions
of this Plan shall apply to all Employees regardless of classification.
1.31 "Entry Date" means the first day of the four week accounting period of
the Company immediately following receipt by the Plan Administrator of an
application for admission to the Plan in writing, or in such other form
authorized by the Plan Administrator. The Board of Directors may, with respect
to persons who become Employees by virtue of having been employed by any
business entity the stock or substantially all of the assets of which are
acquired by Host Marriott Corporation or any Subsidiary or the management of
which is assumed by the Company, establish by written resolution as a special
Entry Date, solely for such Employees, the date of such acquisition or
assumption of management.
1.32 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.33 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of the
Plan's assets; (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan, or
has any authority or responsibility to do so; or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan. The
term "Fiduciary" includes the Named Fiduciary, the Trustees and any person to
whom fiduciary responsibilities have been delegated pursuant to Section 16.3.
1.34 "Fiscal Year" means each year beginning on the first day of each
fiscal year of Host Marriott Corporation and ending on the last day of each
fiscal year of Host Marriott Corporation. The fiscal year is currently an annual
period which varies from 52 to 53 weeks and always ends on the Friday closest to
December 31. The Fiscal Year shall be the "limitation year" of the Plan for
purposes of the limitation on contributions and benefits under Section 415 of
the Code, or any successor provision thereto.
1.35 "Flexible Compensation" shall have the meaning set forth in
Section 5.l.
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1.36 "FLSA" means the Fair Labor Standards Act, as amended from time to
time.
1.37 "Fund" means any of the separate funds in which Participants' Accounts
may be placed and which are allocated and invested in accordance with Article
XV.
1.38 "Hardship" means the existence of an immediate and heavy financial
need of the Participant. A need exists if it is necessary for the following:
(a) expenses for medical care previously incurred by the Participant,
his spouse or any of his dependents or necessary for these persons to
obtain medical care within the limits of Section 213(d) of the Code;
(b) purchase (excluding mortgage payments) of a principal residence
for the Participant;
(c) payment of tuition, related education fees and room and board for
the next 12 months of post-secondary education for the Participant, his
spouse, children or dependents;
(d) payment to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence; and
(e) any other event determined by the Commissioner of Internal
Revenue.
1.39 "Highly Compensated Employee" means any Employee or former Employee
who during the current or preceding Fiscal Year:
(a) was at any time a 5% owner (within the meaning of section
416(I)(1)(B)(I) of the Code) of the Company or any Subsidiary;
(b) received Compensation from the Company or a Subsidiary in excess
of $75,000 (or such other amount as is in effect under section
414(q)(1)(B)) for the Fiscal Year;
(c) was an officer of the Company or a Subsidiary and received
Compensation from the Company or a Subsidiary greater than 50 percent of
the dollar amount in effect under section 415(b)(1)(A) of the Code for such
Fiscal Year; or
(d) received Compensation from the Company or a Subsidiary in excess
of $50,000 (or such other amount as is in effect under section
414(q)(1)(C)) for the Fiscal Year, and was among the top paid 20 percent of
employees (as determined under section 414(q)(4) of the Code).
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Notwithstanding the foregoing, not more than 50 Employees (or, if lesser,
the greater of 3 Employees or 10 percent of Employees) shall be considered
Highly Compensated Employees by reason of subparagraph (c) above. Unless an
Employee is one of the 100 highest paid Employees during the Fiscal Year, an
Employee shall not be treated as a Highly Compensated Employee by reason of
subparagraph (b), (c) or (d) for such Fiscal Year if such Employee did not
satisfy the standards of such subparagraphs in the prior Fiscal Year. If any
Employee is a member of the family (i.e., spouse, lineal ascendant or descendant
or a spouse of such lineal ascendant or descendant) of a 5% owner (within the
meaning of Section 416(I)(1)(B)(I) of the Code) or of one of the 10 most Highly
Compensated Employees during the Fiscal Year, then for purposes of this Section
only: (i) such Employee shall not be considered a separate Employee;
and(ii)any Compensation paid to such Employee shall be treated as if it were
paid to (or on behalf of) the 5% owner or Highly Compensated Employee. The term
Highly Compensated Employee includes any former Employee (a) whose terminated
employment with the Company and all Subsidiaries (or was deemed to have
terminated employment) before the current Fiscal Year, (b) who performs no
services for the Company or any Subsidiary during the current Fiscal Year, and
who was a Highly Compensated Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
Whether any individual is treated as a Highly Compensated Employee shall be
determined in accordance with the provisions of section 414(q) of the Code and
any regulations thereunder, including any election by the Plan Administrator
thereunder regarding the period for the determination of Highly Compensated
Employees.
1.40 "Hire Date" means, for any Employee, the date on which he first
becomes entitled to credit for an hour for which he is directly or indirectly
paid or entitled to be paid by the Company or a Subsidiary for the performance
of employment duties.
1.41 "Host Marriott" or "Host Marriott Corporation" means Host Marriott
Corporation, a Delaware Corporation, or any corporate successor thereto by
merger, consolidation or the acquisition of substantially all of the assets and
business thereof.
1.42 "Investment Expenses" means all expenses which under generally
accepted accounting principles would be classified as investment expenses,
including, without limitation, investment manager's or advisor's fees and
expenses, custodial fees, fees of broker-dealers for effecting investment
transactions or rendering investment advice, expenses relating to the making of
investments and expenses relating to the recovery of any investment in a
bankrupt or insolvent entity.
1.43 "Maximum Permissible Amounts" means the lesser of:
(a) $30,000 (or, if greater, twenty-five percent (25%) of the dollar
limitation set forth in Section 415(b)(1)(A) of the Code in effect for the
Fiscal Year), or such higher amount
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to which such amount may be adjusted or, pursuant to Section 415(f) of the
Code, to implement special rules applicable to combining more than one defined
contribution plan as a single plan; or
(b) Twenty-five percent (25%) of the Participant's Compensation.
Compensation for any Fiscal Year is the Compensation actually paid or includable
in gross income during such year.
1.44 "Month" means any calendar month.
1.45 "Month of Credit" means any month during the entire period of which an
Employee is employed by the Company. For purposes of the foregoing, a Month of
Credit shall be deemed to commence on the day of hire and end on the close of
business on the day preceding the next month's anniversary thereof. Months of
Credit are cumulative and need not be successive.
Notwithstanding anything to the contrary elsewhere in the Plan, for
purposes of computing a Month of Credit, employment with a Predecessor Company
is deemed to be employment with the Company.
1.46 "Named Fiduciary" means the Committee in its role as named fiduciary
of the Plan as set forth in Section 16.1(a).
1.47 "Participant" means an Employee of the Company who has been admitted
to participation in this Plan in accordance with Article II. To the extent
provided in Section 6.12, the term "Participant" (or any appropriate
sub-definition thereof) shall also include any person who was a participant in
the Prior Plan and whose account balance under such plan was transferred to this
Plan. As appropriate to the context a "Participant" may include one or more of
the following sub-definitions.
(a) "Former Participant" means any present Employee of the Company
who, after having been a Participant, ceases to participate in the Plan.
(b) "Terminated Participant" means any prior Employee of the Company
or of Marriott Corporation who, after having been a Participant, terminated
his employment other than by retirement, death or disability, and has any
vested balance in the Plan.
(c) "Retired Participant" means any retired Participant who has any
vested balance in the Plan.
(d) "Disabled Participant" means any Participant with a Permanent
Disability who has any vested balance in the Plan.
(e) "Deceased Participant" means any deceased person who leaves any
vested balance in the Plan.
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1.48 "Participating Company" means Host Marriott Corporation or any
Subsidiary that has elected to join the Plan with the consent of the Host
Marriott Corporation's Board of Directors. All of the Participating Companies
constitute the "Company", as defined in Section 1.20.
1.49 "Permanent Disability" means that the Participant, as a result of a
disability, will be prevented on a permanent basis from engaging in any
occupation for which he is reasonably qualified by education, training or
experience as certified by a competent medical authority designated by the Named
Fiduciary to make such determination. The foregoing shall include disability
attributable to the permanent loss or loss of use of a member or function of the
body, or to the permanent disfigurement of the Participant.
The determination of the existence of a Permanent Disability shall be made
by the Plan Administrator and shall be final and binding upon the Participant
and all other parties.
1.50 "Period of Severance" means the period of time commencing on the
Separation Date and ending on the Participant's Reemployment Date.
1.51 "Plan" means the Host Marriott Corporation Retirement and Savings Plan
and Trust, effective as of December 30, 1995, and all subsequent amendments
thereto.
1.52 "Plan Administrator" means the person to whom the duties of Plan
Administrator are delegated pursuant to Section 16.3(b).
1.53 "Plan Year" shall have the same meaning as "Fiscal Year" in Section
1.33.
1.54 "Predecessor Company" means Marriott Corporation.
1.55 "Prior Plan" means the Host Marriott Corporation Employees' Profit
Sharing, Retirement and Savings Plan and Trust, as in effect prior to December
30, 1995.
1.56 "Pro Rata Share of Administrative Expenses" means the amount
determined by multiplying the Administrative Expenses of the Plan by a fraction,
the numerator of which is the total value of each Fund and the denominator of
which is the total aggregate value of all such Funds.
1.57 "Qualified Domestic Relations Order" or "QDRO" shall have the same
meaning as "qualified domestic relations order" under Section 414(p) of the Code
and the Treasury Regulations thereunder.
1.58 "Qualified Joint and Survivor Annuity" or "QJSA" means an annuity for
the life of the Participant with a survivor annuity for the life of the
Participant's Surviving Spouse in an amount not less than fifty percent (50%)
and not more than one hundred percent (100%) of the
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amount being paid to the Participant during his lifetime, and which is the
actuarial equivalent to a single-life annuity for the Participant.
1.59 "Qualifying Employer Real Property" means parcels of real property
(and related personal property) which are leased to the Company or an Affiliated
Company (a) if a substantial number of the parcels are dispersed geographically;
and (b) if each parcel and the improvements thereon are suitable (or adaptable
without excessive cost) for more than one use.
1.60 "Qualifying Employer Securities" means (a) any stocks or other equity
securities issued by the Company or an Affiliated Company; or (b) any bonds,
debentures, notes or certificates or other evidences of indebtedness of the
Company or an Affiliated Company which are described in Section 503(e) of the
Code and Section 407(e) of ERISA.
1.61 "Reemployment Date" means, for any Employee, the first date following
the Employee's Separation Date on which he first becomes entitled to credit for
an hour for which he is directly or indirectly paid or entitled to be paid by
the Company or a Subsidiary for the performance of employment duties.
1.62 "Required Beginning Date" means April 1 of the calendar year following
the calendar year in which the Participant attains age 70-1/2; provided,
however, that in the case of a Participant who attained age 70-1/2 before
January 1, 1988, Required Beginning Date means the April 1 following the later
of the calendar year in which he (a) attained age 70-1/2; or (b) the sixtieth
(60th) day following the close of the Plan Year in which the Participant
terminates employment with the Company, provided such date is not later than
April 1 of the calendar year following the calendar year during which such
termination occurs, unless he was a five percent (5%) owner (as defined in
Section 416 of the Code) of the Company with respect to the Plan Year ending in
the calendar year in which the he attains age 70-1/2, in which case, clause (b)
shall not apply.
1.63 "Section 401(k) Contribution" shall have the meaning set forth in
Section 5.2.
1.64 "Section 401(k) Contribution Account" shall have the meaning set forth
in Section 6.1(b).
1.65 "Separation Date" means the earlier of:
(a) Any date on which an Employee's employment with the Company
terminates by reason of voluntary termination, discharge, retirement or
death; or
(b) The first anniversary of the first date of a period in which the
Employee remains absent from active employment with the Company for some
reason other than voluntary termination, discharge, retirement, death,
approved leave of absence, or military service.
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Provided, however, that, solely for the purpose of determining whether
a Period of Severance has occurred, if an Employee is absent from service
beyond the first anniversary of the first date of absence by reason of a
"maternity or paternity leave", then the Separation Date of such Employee
shall be the second anniversary of the first date of such absence. For
purposes of this Section 1.65, "maternity or paternity leave" means
termination of employment or absence from work due to: (i) the pregnancy of
the Participant, (ii) the birth of a child of the Participant, (iii)the
placement of a child in connection with the adoption of the child by a
Participant, or (iv) the caring for a Participant's child during the period
immediately following the child's birth or placement for adoption. The Plan
Administrator shall determine, under rules of uniform application and based
on information provided to the Plan Administrator by the Participant,
whether or not the Participant's termination of employment or absence from
work is due to "maternity or paternity leave".
1.66 "Service" means an Employee's or a Participant's period of employment
with the Company, a Predecessor Company and any other employer that is required
to be aggregated with the Company under section 414 of the Code, as determined
in accordance with Article II or Article VII. Employment of an Employee or a
Participant by any of the following employers shall be treated as Service:
(a) A Subsidiary, both prior to and after becoming a Subsidiary, if
such Subsidiary has elected to join the Plan.
(b) A Subsidiary, after becoming a Subsidiary, if such Subsidiary has
not elected to join the Plan.
In addition, the Board of Directors shall have the authority by
adopting written resolutions to recognize employment of an Employee or a
Participant by any of the following employers as Service:
(a) A Subsidiary, prior to becoming a Subsidiary, if such Subsidiary
has not elected to join the Plan.
(b) Any business entity substantially all of the assets of which are
acquired by Host Marriott Corporation or any Subsidiary or whose management
is assumed by the Company; provided that such recognition shall apply
uniformly to all employees of any such employer.
1.67 "Spousal Consent" means a Spouse's written consent which acknowledges
the effect of the Participant's election and is witnessed by a Plan
representative or notary public. Spousal Consent may be in the form of a
specific consent, general consent or limited general consent, as provided in
Section 8.6(e).
1.68 "Spouse" or "Surviving Spouse" means the spouse or surviving spouse of
the Participant, provided that a former spouse will be treated as the spouse or
surviving spouse and a
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current spouse will not be treated as the spouse or surviving spouse to the
extent provided in a Qualified Domestic Relations Order.
1.69 "Subaccount" means the portion of a Participant's Account placed in
each Fund pursuant to Article XV.
1.70 "Subsidiary" or "Affiliated Company" means (a) a member of a
controlled group of corporations of which Host Marriott Corporation is a member;
or (b) an unincorporated trade or business which is under common control by or
with Host Marriott Corporation, as determined in accordance with Section 414(c)
of the Code. For purposes hereof, a "controlled group of corporations" shall
mean a controlled group of corporations as defined in Section 1563(a) of the
Code, determined without regard to Sections 1563(a)(4) and 1563(e)(3)(C) of the
Code, except that, with respect to the limitation on Annual Additions set forth
in Section 6.11, instead of eighty percent (80%), the applicable percentage
shall be fifty percent (50%) wherever such percentage appears in Section
1563(a)(1) of the Code.
1.71 "Trustees" means the persons appointed as Trustees pursuant to Section
16.1(c).
1.72 "Trust Fund" means, and consists of (a) the contributions made from
time to time by the Company as provided in Article III, (b) the After-tax
Savings of Participants as provided in Article IV, (c) Section 401(k)
Contributions made by the Company on behalf of Participants as provided in
Article V, (d) the income derived from such contributions and After-tax Savings
that have not been distributed in accordance with the terms of the Plan, and (e)
any transfers from other trusts pursuant to Sections 6.12 and 6.13, less (f) any
losses on such contributions and After-tax Savings and (g) any distributions
made in accordance with the terms of the Plan. The Trust Fund shall further be
defined as the aggregate of the Funds described in Section 15.6(c) (or any other
Funds created by the Committee).
1.73 "Valuation Date" means the date as of which the Trustees shall value
the interest of a Participant in the assets of the Trust Fund, such valuation
being made in accordance with the provisions of Section 20.9.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility and Participation.
(a) Eligibility. Any Employee shall be eligible to participate in the
Plan immediately on the Employee's Hire Date.
(b) Commencement of Participation. Any Employee may commence
participation in the Plan on any Entry Date after the Employee's Hire Date
and shall be admitted to the Plan on any such Entry Date if the Plan
Administrator receives the Employee's written application for admission to
the Plan.
(c) Continued Participation. Notwithstanding subsection (a), any
person who was a Participant or Former Participant in the Prior Plan on the
day before the Effective Date shall automatically become a Participant
under this Plan on the Effective Date, provided that such person is an
Employee on the Effective Date.
(d) Participation Voluntary. Participation in the Plan shall be
entirely voluntary.
2.2 Reemployment of Employee.
(a) Eligibility Upon Reemployment. An Employee who terminates
employment with the Company and subsequently resumes employment with the
Company shall become eligible to participate in the Plan immediately upon
again becoming an Employee and may be admitted to the Plan on any Entry
Date thereafter upon written application in accordance with Section 2.1(b).
2.3 Termination of Plan Participation. A Participant may cease to
participate in the Plan during the Participant's continued employment at any
time by giving written notice thereof to the Plan Administrator. Such notice
shall be effective to terminate participation upon its receipt by the Plan
Administrator and such Employee shall thereupon become a Former Participant.
2.4 Readmission of Former Participant. Any Former Participant may be
readmitted to the Plan as a Participant on any Entry Date upon written
application in accordance with Section 2.1(b); provided, however, that if any
Former Participant withdraws any portion of his Basic After-tax Savings pursuant
to Section 10.1 or receives a distribution of his entire Account pursuant to
Section 10.5 before completing sixty (60) months of participation in the Plan,
he shall not be eligible for readmission to the Plan until six (6) months have
elapsed from the date on which he became a Former Participant.
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2.5 Participation During Authorized Leave of Absence or During Employment
by Subsidiary Which Has Not Joined Plan. Participation in the Plan may continue
during periods of Authorized Leave of Absence, and periods during which a
Participant is employed by a Subsidiary which has not elected to join the Plan.
However, the Participant may neither deposit savings in the Trust Fund nor share
in the allocation of the Company contribution during such periods. A Participant
on Authorized Leave of Absence who does not return to active employment with the
Company by the expiration of such Authorized Leave of Absence shall be treated
for the purposes of the Plan as having terminated employment pursuant to Section
9.1.
2.6 Treatment of Participants Who Cease Being Employees Pursuant to Section
1.30. Notwithstanding the provisions of Section 2.5, any Participant who ceases
to be an Employee by reason of Section 1.30(c), (d) or (e), or by becoming
employed by a Subsidiary which has not elected to join the Plan (if such person
also becomes covered by an agreement described in Section 1.30(c) or becomes a
participant in a plan (other than this Plan) described in Section 1.30(e)),
shall be treated thereupon as a Former Participant in accordance with the
provisions of this Plan.
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ARTICLE III
COMPANY CONTRIBUTION
3.1 Amount of Contribution. For each Fiscal Year or portion thereof, each
Participating Company shall make the following contributions to the Trust Fund:
(a) Section 401(k) Contributions, as provided by Article V;
(b) a matching contribution on behalf of each Participant in the
amount of fifty percent (50%) of the Participant's Combined Basic Savings
for the Plan Year; and
(c) any additional contribution as determined in the absolute and sole
discretion of the Host Marriott Board of Directors. In determining this
discretionary amount, the Board of Directors shall take into account the
following factors, among others:
(1) The Company accruals to the Host Marriott Corporation (HMC)
Executive Deferred Compensation Plan which are accrued during that
year, excluding any such accruals attributable to interest or earnings
on previously accrued amounts;
(2) The amount, if any, contributed by the Company to any other
tax- qualified profit sharing plan or pension plan maintained by the
Company;
(3) The amount of Host Marriott's consolidated Net Worth at the
beginning of the Fiscal Year; and
(4) The cost of death benefits paid during that year by the
Company to Beneficiaries of Retired or Disabled Participants holding
death certificates issued at retirement to Participants in the
Marriott Corporation Employee's Profit Sharing, Retirement and Savings
Plan and Trust prior to August 1, 1964, if any.
Notwithstanding anything to the contrary in this subsection (c), in no
event shall the amount contributed by any Participating Company include an
amount, if any, equal to the amount of any "excess aggregate contributions"
(as defined in Section 401(m)(6)(B) of the Code) for such year that would
otherwise be allocable to Participants who are Highly Compensated
Employees, if such amounts were contributed to the Plan; and
Contributions under this Section 3.1 shall be computed in accordance
with the provisions of Section 3.2; provided, however, that in no event
shall the amount of the contribution exceed the maximum amount deductible
by a Participating Company for the Fiscal Year with respect to which the
contribution is made under Section 404(a) of the Code or the corresponding
provision of any subsequent tax law.
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<PAGE>
3.2 Net Profits, Net Worth and Earnings and Profits. Determination of
Consolidated Net Profits and Consolidated Net Worth. For purposes of this
Article III, Consolidated Net Profits and the Consolidated Net Worth of Host
Marriott shall be determined and certified by the Company's auditors in
accordance with the established methods of accounting regularly employed by the
Company; provided, however, that Consolidated Net Profits shall be determined
before deducting contributions made pursuant to this Plan, accruals for employee
cash and deferred stock bonuses, death benefits paid during that year by the
Company to the Beneficiaries of Retired or Disabled Participants holding death
benefit certificates issued at retirement to Participants in the Marriott
Corporation Plan prior to August 1, 1964, if any, and Federal and state income
and franchise taxes and shall exclude such special items as the Board of
Directors may from time to time determine, including major nonrecurring gains
and losses, earnings of any foreign Subsidiary, or any domestic Subsidiary
designated by the Board of Directors.
3.3 Effect of Change in Consolidated Net Profit. The amount of each
contribution shall not be changed by reason of any changes in Consolidated Net
Profit due to the action of any government department or agency occurring after
the Company's final computation thereof and the submission of its Federal income
tax return for the Fiscal Year involved.
3.4 Time of Payment of Contributions. A Participating Company may pay its
contributions at such time or times and in such amount or amounts as it may deem
appropriate during the Fiscal Year for which each such contribution becomes due
and for such period thereafter during which payment thereof may be permitted as
a deduction for the previous Fiscal Year under the Code.
3.5 Form of Payment of Contributions. All payments of contributions shall
be made directly to the Trustees. Payments may be in cash, Qualifying Employer
Securities (including treasury stock or previously unissued stock of Host
Marriott), Qualifying Employer Real Property or in such other property of any
kind as the Named Fiduciary may authorize the Trustees to accept, to the extent
permitted by law. The value of any property other than cash which may be paid to
the Trustees shall be its fair market value as of the date of such payment, as
determined by the Named Fiduciary, based on the report of an independent
appraiser.
3.6 Return of Contributions to Company. Notwithstanding any other
provisions of this Plan, any contributions made by a Participating Company
pursuant to Article 3.1 shall, to the extent permitted by Section 403(c) of
ERISA, be returned to a Participating Company if:
(a) The contributions are made as the result of a mistake of fact;
(b) A tax deduction claimed for the contributions pursuant to Section
404 of the Code is denied to the Company by the Internal Revenue Service;
or
(c) The IRS determines that the Plan is not tax-qualified under
Section 401 of the Code.
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Notwithstanding the foregoing, however, no contributions may be
returned to a Participating Company under the above provisions later than
one (1) year from the date a mistaken contribution is made, a tax deduction
for a contribution is denied, or the IRS determines that the Plan is not
tax-qualified, as the case may be. Further, except as otherwise provided in
this paragraph, the assets of the Plan shall not inure to the benefit of
the Company, and shall be held for the exclusive purposes of providing
benefits to Participants and Beneficiaries and defraying reasonable
expenses of administering the Plan.
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ARTICLE IV
PARTICIPANTS' AFTER-TAX SAVINGS
4.1 Participant After-tax Savings. Subject to the provisions of Section
4.2, each Participant may deposit After-tax Savings into the Trust Fund.
4.2 Amount of After-tax Savings. Subject to the limitation provisions of
Section 6.5, a Participant shall deposit in the Trust Fund, specified in
multiples of one percent (1%), an amount which is at least one percent (1%), but
not more than fifteen percent (15%), of his Compensation earned during the
Fiscal Year as a Participant provided, however, that the amount of a
Participant's After-tax Savings may not result in a cumulative amount for all
such After-tax Savings (plus all of the Participant's contributions to any other
plan, if any, maintained by the Company or an Affiliated Company which is
qualified under Section 401(a) of the Code) which exceeds fifteen percent (15%)
of such Participant's Compensation for all Fiscal Years in which the Participant
has been a Participant in the Plan. In lieu of depositing a percentage of
Compensation, a Participant may deposit into the Trust Fund a fixed dollar
amount which is at least three dollars ($3.00) per week; provided, however, that
such Participant may not deposit, in any given pay period, more than fifteen
percent (15%) of his Compensation for that pay period.
4.3 Payroll Deduction. Each Participant's After-tax Savings shall be
withheld by the Company from Compensation paid such Participant for each payroll
period.
4.4 Change in Rate of After-tax Savings. A Participant may change the rate
of his After-tax Savings to any other rate authorized by Section 4.2 at any time
by giving written notice to the Plan Administrator. Such notice shall be
effective as specified by the Committee. In addition, a Participant may
discontinue his After-tax Savings at any time by giving written notice to the
Plan Administrator. Such notice of discontinuation shall be effective as
specified in Section 2.3, unless the Participant has made an election pursuant
to Section 5.2.
4.5 Payment to Trustees. The Participants' After-tax Savings withheld shall
be paid to the Trustees by the Company on the earliest date on which such
After-tax Savings can reasonably be segregated from the Company's general
assets. A statement showing the amount representing the After-tax Savings of
each Participant shall accompany each such payment.
4.6 Advancement by Company. Notwithstanding the provisions of Section 4.5,
the Company may, at any time, estimate the aggregate After-tax Savings to be
made by Participants for any portion of the remainder of any Fiscal Year, and
advance a sum equal to such aggregate estimated future After-tax Savings to the
Trustees. In such event the Company shall retain all After-tax Savings
thereafter withheld by it until the advance has been recovered.
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<PAGE>
4.7 Investment of Participants' After-tax Savings. Subject to the
Participant's right to direct investments under Article XIV, the Participant's
After-tax Savings shall be commingled with other assets in the Trust Fund for
investment purposes.
4.8 In-Service Withdrawal of After-tax Savings. A Participant may withdraw
After-tax Savings from his After-tax Savings Account as provided in Sections
10.1 and 10.5.
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ARTICLE V
SECTION 401(k) CONTRIBUTIONS
5.1 Designation of Flexible Compensation. The books and records of the
Company shall designate fifteen percent (15%) of each Participant's Compensation
as "Flexible Compensation." Flexible Compensation shall for all purposes, tax or
otherwise, be treated as part of a Participant's Compensation and the
designation of such amount shall be relevant only for purposes of this Article
V.
5.2 Section 401(k) Contributions. Subject to the terms and conditions of
this Article V, any Participant may, at any time and from time to time, elect to
have contributed to the Trust Fund out of his Flexible Compensation, specified
in multiples of one percent (1%), an amount which shall be designated a Section
401(k) Contribution and shall constitute a contribution to the Trust Fund by the
Company on behalf of the Participant under the provisions of Section 401(k) of
the Code. In lieu of contributing a percentage of Compensation, a Participant
may contribute to the Trust Fund out of his Flexible Compensation a fixed dollar
amount which is at least three dollars ($3.00) per week; provided, however, that
such Participant may not contribute, in any given pay period, more than fifteen
percent (15%) of his Compensation for that pay period.
5.3 Election Rules.
(a) Method of Election. The Committee shall determine the method by
which an election may be made pursuant to this Article V. Any such election
method must be consistent with the provisions of Section 401(k)(2) of the
Code and (assuming such consistency) may include either an affirmative
election procedure whereby Participants shall only be treated as having
made an election upon written direction of the Participants or a negative
election procedure whereby Participants shall be deemed to have made an
election until and unless a Participant files a written direction negating
the election. Regardless of the method of election determined by the
Committee, Participants shall be given prompt and adequate notice thereof
and thus be afforded an appropriate opportunity to exercise their rights
under this Article V.
(b) Effective Date of Election. An election shall become effective
(unless previously revoked) upon the first day of the payroll period of the
Company immediately following receipt by the Plan Administrator of the
election.
(c) Revocation or Amendment. An election may be made to change a
Participant's rate of Section 401(k) Contributions to any other rate
authorized under Section 5.2 at any time. Such election shall be made in
the manner, and shall be effective, as specified by the Committee. In
addition, an election may be made to discontinue future Section 401(k)
Contributions at any time. Such election to discontinue future
contributions shall be effective as specified in Section 2.3, unless the
Participant is depositing After-tax Savings into the Trust Fund pursuant to
Section 4.2. Finally, the Plan Administrator shall have the right and
obligation
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to reduce a Participant's rate of Section 401(k) Contribution to any
rate as necessary, from time to time, in order to assure compliance by this
Plan with the standards of Section 401(k)(3) of the Code.
5.4 Compensation Reduction. For each payroll period, a Participant's
Compensation shall be reduced by the portion of a Participant's Flexible
Compensation which such Participant has elected to have contributed by the
Company to the Trust Fund as a Section 401(k) Contribution (or such lesser
amount determined by the Plan Administrator pursuant to Section 5.3(c)). A
Participant's Flexible Compensation for the payroll period in excess of such
amount shall be paid to the Participant as cash compensation for the period.
5.5 Limitations on Section 401(k) Contributions. Notwithstanding any
provision of this Plan to the contrary, the maximum amount of Section 401(k)
Contributions for any Fiscal Year shall not exceed the least of:
(a) Fifteen percent (15%) of each Participant's Compensation;
(b) the amount in effect for such Fiscal Year under Section 402(g)(5)
of the Code); or
(c) Such lesser amount which may be allowed in order to assure
compliance by the Plan with one of the Actual Deferral Percentage Tests set
forth in Section 5.6.
5.6 Actual Deferral Percentage Tests. The Actual Deferral Percentage Test
shall be satisfied for a Plan Year if one of the following two tests is met for
such Plan Year:
(a) The Actual Deferral Percentage for the eligible Highly Compensated
Employees is not more than the Actual Deferral Percentage of all other
eligible Employees multiplied by 1.25; or
(b) The Actual Deferral Percentage for the Highly Compensated
Employees is not more than the Actual Deferral Percentage of all other
eligible Employees multiplied by 2.0, and the excess of the Actual Deferral
Percentage for the Highly Compensated Employees over all other eligible
Employees is not more than two percentage points.
5.7 Recharacterization of Certain Section 401(k) Contributions. To the
extent that contributions made on behalf of a Participant pursuant to an
election under Section 5.2 by a Participant who is a Highly Compensated Employee
would otherwise cause the Plan to fail to comply with the Actual Deferral
Percentage Test set forth in Section 5.6, such contributions shall constitute
After-tax Savings by the Participant rather than Section 401(k) Contributions.
5.8 Coordination of After-tax Savings and Section 401(k) Contributions. A
Section 401(k) Contribution is made in lieu of all or a portion of such
Participant's After-tax Savings deposits into the Trust Fund under Section 4.2
of the Plan. Thus, the maximum After-tax
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Savings deposit which may be made by a Participant under Section 4.2 during
any Fiscal Year is equal to (a) the amount which may be made under Section 4.2
without regard to this Section 5.8, less (b)the Section 401(k) Contribution
made on behalf of the Participant under Section 5.2.
5.9 Payment to Trustees. Section 401(k) Contributions shall be paid to the
Trustees by the Company on the earliest date on which such Section 401(k)
Contributions can reasonably be segregated from the Company's general assets. A
statement showing the amount representing the Section 401(k) Contributions of
each Participant shall accompany each such payment.
5.10 Advancement by Company. Notwithstanding the provisions of Section 5.9,
the Company may, at any time, estimate the aggregate Section 401(k)
Contributions to be made on behalf of Participant for any portion of the
remainder of any Fiscal Year, and advance a sum equal to such aggregate
estimated amount to the Trustees. In such event, the Company shall contribute no
Section 401(k) Contributions until the advance has been recovered.
5.11 Distribution of Section 401(k) Contributions.
(a) Restrictions on Distributions. A Participant's Section 401(k)
Contributions (and earnings attributable thereto) shall not be
distributable other than upon:
(1) The Participant's termination of employment with the Company
and all Subsidiaries, death or disability;
(2) The Participant's attainment of age 59-1/2, or termination of
participation in the Plan after attaining age 59-1/2;
(3) The Participant's Hardship;
(4) The termination of the Plan by the Company without
establishment or maintenance of another defined contribution plan
(other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code);
(5) The sale or other disposition by the Company (or a
Participating Company employing the Participant) of substantially all
of the assets (within the meaning of Section 409(d)(2) of the Code)
used in a trade or business of the Company (or such Participating
Company) with respect to a Participant who continues employment with
the corporation acquiring such assets; or
(6) The sale or other disposition by the Company (or a
Participating Company) employing the Participant of its interest in a
Participating Company (within the meaning of Section 409(d)(3) of the
Code or any successor provision) with respect to a Participant who
continues employment with the sold Participating Company.
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Notwithstanding the foregoing, any distribution made pursuant to
subsections (a)(4), (a)(5) and (a)(6) of this Section must meet the
requirements of Section 410(k)(10) of the Code.
(b) In-Service Withdrawal of Section 401(k) Contributions. Any
Participant or Former Participant who meets the requirements of subsection
(a)(2) of this Section may withdraw his Section 401(k) Contributions during
the Participant's continued employment, as provided in Section 10.5.
5.12 Effect of Termination of Plan or Discontinuance of Section 401(k)
Contributions. In the event (a) the Plan is terminated or partially terminated
with respect to a Participating Company or particular group or class of
Participants, or (b) the Company or any Participating Company discontinues the
making of Section 401(k) Contributions, the election made by any affected
Participant under the provisions of this Article V shall be immediately null and
void and of no further effect, and no additional amounts of such Participant's
Flexible Compensation shall be contributed to the Trust Fund by the Company or
the Participating Company.
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ARTICLE VI
ALLOCATION OF CONTRIBUTIONS
AND NET INCOME AMONG PARTICIPANTS
6.1 Maintenance of Separate Accounts. The Plan Administrator shall maintain
the following accounts in the name of each person participating in the Plan:
(a) After-tax Savings Account (consisting of Participants' After-tax
Savings pursuant to Article IV and any earnings or losses thereon);
(b) Section 401(k) Contribution Account (consisting of Section 401(k)
Contributions pursuant to Article V and any earnings or losses thereon);
and
(c) Company Contribution Account (consisting of Company contributions
under Section 3.1(b) and (c), forfeitures and any earnings or losses
thereon).
All of such separate accounts and the separate Fund Subaccounts, as
established pursuant to Section 15.5(a), shall in the aggregate constitute
the Participant's Account.
6.2 Allocation to After-tax Savings Accounts. The After-tax Savings
deposited by a Participant pursuant to Section 4.2 shall be credited, as made,
to the Participant's After-tax Savings Account.
6.3 Allocation to Section 401(k) Contribution Account. Section 401(k)
Contributions made by the Company on behalf of a Participant pursuant to Section
V shall be credited, as made, to the Participant's Section 401(k) Contribution
Account.
6.4 Allocation of Company Contribution. Subject to Section 6.7, Company
contributions shall be allocated as follows:
(a) Company contributions pursuant to Section 3.1(b) shall be credited
as made to the Participant's Company Contribution Account; and
(b) Company contributions pursuant to Sections 3.1(c) and 3.2 shall be
allocated and applied in the following order:
(1) To the restoration of forfeitures of Terminated Participants
readmitted to the Plan in accordance with Section 9.5(b), to the
extent that current forfeitures are insufficient to provide for such
restoration as provided in Section 6.9; and
(2) To Participants working in or affiliated with the unit of
Marriott Family Restaurants, Inc. being sold pursuant to Section 9.3;
and
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(3) To the Company Contribution Accounts of all Participants who
are Employees of the Company on the last day of the Fiscal Year and
all Participants who become Retired, Disabled or Deceased Participants
during the Fiscal Year, based on the ratio that each such
Participant's Combined Basic Savings for such Fiscal Year bears to the
total Combined Basic Savings of all such Participants for such Fiscal
Year. The Company Contributions allocated to each Participant's
Account shall be further allocated among such Participant's Fund
Subaccounts in accordance with the provisions of Article XV.
6.5 (a) Limitation on After-tax Savings and Company Contributions.
Notwithstanding any provisions of the Plan to the contrary, the Participant's
After-tax Savings and Company contributions (including forfeitures) for a Plan
Year must satisfy the Actual Contribution Percentage Tests for such Plan Year.
The Actual Contribution Percentage Test shall be satisfied for a Plan Year if
one of the following two tests is met for such Plan Year:
(1) The Actual Contribution Percentage for the eligible Highly
Compensated Employees is not more than the Actual Contribution Percentage
of all other eligible Employees multiplied by 1.25; or
(2) The Actual Contribution Percentage for the Highly Compensated
Employees is not more than the Actual Contribution Percentage of all other
eligible Employees multiplied by 2.0, and the excess of the Actual
Contribution Percentage for the Highly Compensated Employees over all other
eligible Employees is not more than two percentage points.
(b) Multiple Use of the Alternative Limitation. Notwithstanding the
above, if both Section 5.6(a) and subsection (a)(1) of this Section are not
satisfied for a Plan Year and one Highly Compensated Employee of the
Company is eligible to have Section 401(k) Contributions made on his
behalf, and to make deposits of After-tax Savings to his After-tax Savings
Account or have Company contributions allocated to his Company Contribution
Account during such Plan Year, then the sum of the Actual Deferral
Percentage and the Actual Contribution Percentage for eligible Highly
Compensated Employees shall not exceed the greater of:
(1) The sum of:
(a) 1.25 multiplied by the greater of:
(i) The Actual Deferral Percentage for eligible Employees
who are not Highly Compensated Employees, or
(ii) The Actual Contribution Percentage for eligible
Employees who are not Highly Compensated Employees; and
(b) Two (2) plus the lesser of:
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(i) Subsection (b)(l)(i)(A) of this Section, or
(ii) Subsection (b)(1)(i)(B) of this Section, which shall in
no event exceed twice the lesser of subsection (b)(1)(i)(A) of
this Section or subsection (b)(1)(i)(B); or
(2) The sum of:
(a) 1.25 multiplied by the lesser of:
(i) Subsection (b)(1)(i)(A) of this Section, or
(ii) Subsection (b)(1)(i)(B); and
(b) Two (2) plus the greater of:
(i) Subsection (b)(1)(i)(A), or
(ii) Subsection (b)(1)(i)(B), which shall in no event exceed
twice the greater of subsection (B)(1)(i)(A) or subsection
(b)(1)(i)(B) above.
In the event that the limitation of this subsection (b) is exceeded, the
Actual Contribution Percentage shall be reduced in accordance with the manner
described in Section 6.6
6.6 Correcting Excess Aggregate Contributions. In the event that the
limitation imposed by Section 6.5 is not satisfied for any Plan Year,
Participant After-tax Savings (including recharacterized Section 401(k)
Contributions) credited to a Participant's Account shall, to the extent such
credited amounts constitute "excess aggregate contributions" (within the meaning
of Section 401(m)(6)(B) of the Code, and after taking into account the last
subsection of Section 3.1(c) and Section 6.7), be distributed to such
Participant on or before the date which is two and one-half (2-1/2) months after
the end of the Plan Year to which such credited amounts relate. Distribution of
credited amounts shall include any income attributable thereto, and shall be
determined in accordance with regulations promulgated by the United States
Secretary of the Treasury under Section 401(m) of the Code.
6.7 Special Provision for Allocating Company Contributions. Notwithstanding
any other provision of this Plan, Company contributions pursuant to Sections
3.1(b) and 3.1(c) shall be allocated and applied to the accounts of Participants
who are not Highly Compensated Employees as if the reduction of contributions
provided in the last subsection of Section 3.l(c) had not taken place. Company
contributions shall be allocated and applied to the accounts of Highly
Compensated Employees after taking into account the reduction of contributions
provided in the last subsection of Section 3.1(c) so that no amounts
constituting "excess aggregate contributions" (within the meaning of Section
401(m)(6)(B) of the Code) are allocated to the Company Contribution Account of
any Participant under this Article VI.
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6.8 Allocation of Net Income. The net income of each Fund (after deducting
related Investment Expenses and the Pro Rata Share of Administrative Expenses),
together with the realized and unrealized investment profits or losses, as
certified by the Trustees pursuant to Section 20.9, shall be allocated
proportionately to the Subaccounts of each Participant to the extent invested in
each such Fund, as of the close of each Month. The allocation described in this
Section 6.8 shall be based on the balances of the Subaccounts identified in the
preceding sentence as of the end of the prior Month, plus one-half of all
After-tax Savings and Section 401(k) Contributions which have been deposited
since the close of such prior Month into each Subaccount, plus any transfers
into each Subaccount from a Subaccount invested in any other Fund which have
occurred since the close of such prior Month, less any transfers from such
Subaccount into a Subaccount invested in any other Fund which have occurred
since the close of such prior Month, and less one-half of all distributions
which have been made to Participants from the After-tax Savings Account, Section
401(k) Contribution Account and Company Contribution Account since the close of
such prior Month.
If, at the time the allocation described in this Section 6.8 is made, the
balance in a given Participant's Account is zero, then no allocation of net
income shall be made under this Section to such account.
6.9 Allocation of Forfeitures. Forfeitures, as described in Section 9.5(a),
shall be applied in the following order: (a)first to restore forfeitures of
Terminated Participants readmitted to the Plan in accordance with Section
9.5(b), (b)second to pay Plan expenses, and (c)third, to be reallocated as of
the end of each Fiscal Year among the Company Contribution Accounts of
Participants and Former Participants, subject to Section 6.5. Reallocation of
forfeitures among Participants shall be proportionate based upon the ratio of
each Participant's Combined Basic Savings for the current Fiscal Year to the
aggregate total Combined Basic Savings of all Participants for the current
Fiscal Year. Any forfeiture reallocated to the Company Contribution Account of a
Participant shall be further allocated among such Participant's Fund Subaccounts
in accordance with the provisions of Article XV.
6.10 Allocation of Unclaimed Benefits.
(a) Method of Allocation. Unclaimed benefits, as described in Section
20.11, shall be reallocated in the same manner as forfeitures as provided
in Section 6.9.
(b) Reduction in Forfeitures. If the Plan Administrator pays any
unclaimed benefits which had previously been reallocated hereunder, the
amount of such benefits shall reduce the amount of forfeitures otherwise
reallocated pursuant to Section 6.9. In the event that forfeitures for the
Fiscal Year in question are not sufficient to pay any unclaimed benefits,
the Company contribution for such Fiscal Year shall first be applied for
such payment.
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6.11 Allocation Limitations.
(a) Maximum Additions. Notwithstanding anything to the contrary
contained in the Plan, the sum of: (1) the total Additions made to the
Account of a Participant under this Plan for any Fiscal Year; and (2) the
"annual additions" (as defined in Section 415 of the Code) made to the
account of a Participant under any other qualified defined contribution
plan maintained by the Company or any Affiliated Company, shall not exceed
the Maximum Permissible Amount.
(b) Correction of Excess. If the Maximum Permissible Amount is
exceeded in any Fiscal Year for any Participant, any Additional After-tax
Savings under Article IV made by the Participant to the Plan for the Fiscal
Year and otherwise allocable to the Participant's After-tax Savings Account
which cause the excess shall be distributed to the Participant. If, after
returning such Additional After-tax Savings to the Participant an excess
still exists, such excess shall be corrected in accordance with the
provisions of Treasury Regulation Section 1.415-6(b)(6) or such other rules
or procedures as the Internal Revenue Service shall allow.
(c) Further Limitations on Additions. Notwithstanding the foregoing
provisions of this Section 6.11, the otherwise permissible annual additions
for any Participant under this Plan shall be further reduced to the extent
necessary, as determined by the Committee to prevent disqualification of
the Plan under Section 415 of the Code, which imposes additional
limitations on the benefits payable to Participants who also may be
participating in another tax- qualified pension, profit sharing, savings or
stock bonus plan of the Company or any Affiliated Company. The Committee
shall advise affected Participants of any additional limitation of their
annual Additions required by the preceding sentence.
6.12 Transfers to Other Trusts.
(a) Time and Manner. After the Effective Date, the trustees of the
Prior Plan shall transfer directly to the Trustees, and the Trustees shall
accept, the assets and liabilities representing the full account balance
(both vested and unvested), determined as of the day immediately preceding
the date of transfer, of any individual who (i)is an employee of Host
Marriott Corporation (or any subsidiary) on December 29, 1995; or (ii) as
of December 28, 1995, was formerly employed by any business or operation of
Host Marriott Corporation (or its subsidiaries) which is, pursuant to the
Allocation Agreement, to be conducted by Host Marriott Corporation (or a
subsidiary) after December 29, 1995, or (iii)is a beneficiary of any
individual described in (i) or (ii).
(b) Beginning Account Balances After Transfer. The amounts transferred
from the Prior Plan pursuant to subsection (a) of this Section shall be
held as follows:
(1) All amounts (and any gains or losses thereon) that were
deposited in the Prior Plan as employee contributions shall be held in
the Participant's After-tax Savings Account.
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(2) All amounts (and any gains or losses thereon) that were
deposited in the Prior Plan as Participant-elected company
contributions shall be held in the Participant's Section 401(k)
Contribution Account.
(3) All amounts (and any gains or losses thereon) that were
deposited in the Prior Plan as Company contributions and forfeitures
shall be held in the Participant's Company Contribution Account.
The Participant's Accounts shall continue to be invested based on
the most recent investment election filed by the Participant under the
Prior Plan, until such time as the Participant files a new election in
the manner specified in Sections 15.1 and 15.2.
6.13 Transfers From Other Qualified Plans.
(a) Manner of Rollover or Direct Transfer. An Employee (including an
Employee who is not a Participant) may rollover or transfer to this Plan
amounts received from a retirement plan which are eligible to be rolled
over or transferred to this Plan pursuant to the provisions of Section 402
of the Code, including a direct transfer of an eligible rollover
distribution pursuant to the provisions of Section 401(a)(31) of the Code,
or from an individual retirement account that meets the requirements of
Section 408(d)(3)(A) of the Code. Such rollover of transfer must comply
with the requirement of Section 402 of the Code.
(b) Governing Provisions. The assets so rolled over or transferred
shall be solely in cash. The Committee shall develop such procedures, and
may require such information from the Employee desiring to make such a
rollover or transfer, as it deems necessary to determine that the proposed
rollover or transfer will meet the requirements of this Section and will
not jeopardize the tax qualified status of the Plan. All amounts rolled
over or transferred pursuant to this Section shall be deposited in the
Trust Fund and shall be credited to a rollover account. The rollover
account shall be one hundred percent (100%) vested in the Participant,
shall share in income allocations in accordance with Section 6.8 (but shall
not share in Company contributions or forfeiture allocations) and shall be
invested in accordance with the provisions of Article XV. Distributions of
amounts so transferred shall be subject to the same restrictions as those
stated in Section 5.11.
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ARTICLE VII
VESTING
7.1 Vesting of After-tax Savings Account. The interest of each Participant
in his After-tax Savings Account (including amounts transferred pursuant to
Section 6.12) shall vest to the extent of one hundred percent (100%) as soon as
such After-tax Savings are withheld from his Compensation pursuant to Article IV
and as soon as the earnings on such After-tax Savings are credited pursuant to
Article VI.
7.2 Vesting of Section 401(k) Contribution Account. The interest of each
Participant in his Section 401(k) Contribution Account (including amounts
transferred pursuant to Section 6.12) shall vest to the extent of one hundred
percent (100%) as soon as such Section 401(k) Contributions are made on his
behalf by the Company pursuant to Article V and as soon as the earnings thereon
are credited pursuant to Article VI.
7.3 Vesting of Company Contribution Account.
(a) Vesting Schedule. The interest of each Participant in his Company
Contribution Account (including amounts transferred pursuant to Section
6.12) shall vest as follows:
Period of Service Vested Percentage
Less than 2 years 0%
At least 2 years but less than 3 years 25%
At least 3 years but less than 4 years 50%
At least 4 years but less than 5 years 75%
5 years of more 100%
(b) Service to be Credited Upon Resumption of Employment. If an
Employee terminates employment and is reemployed by the Company, upon the
Employee's reemployment, all Service with the Company (including Service
before and after such reemployment) shall be counted for purposes of
determining his vested interest in his Company Contribution Account, if
any.
(c) Definition of "Service". For purposes of determining a
Participant's vested interest in his Company Contribution Account,
"Service" means the period of time commencing on the Participants Hire
Date and ending on the Participants Separation Date and, if applicable,
the period of time commencing on the Participants Reemployment Date and
ending on the Participants subsequent Separation Date. In addition, such
Service shall include the period following a Separation Date described in
Section 1.65(a) if a Participant's or Former Participant's Reemployment
Date occurs within the 12-consecutive month period following such
Separation Date; provided, however, that if a Participant or Former
Participant is otherwise absent from
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<PAGE>
employment, the period following such Separation Date shall be counted
as Service only if the Participant's or Former Participant's Reemployment
Date occurs within the 12-consecutive month period following the
commencement of such other absence from employment. "Service" shall also
include any periods of absence from active employment followed by a
Separation Date, and periods of approved leaves of absence granted in
accordance with a nondiscriminatory leave policy; provided, however, that
if the Participant or Former Participant does not resume status as an
employee of the Company at the time agreed upon by the Company and the
Participant, the Participant shall be deemed to be discharged at such time.
(d) Automatic 100% Vesting. Notwithstanding subsection (a) of this
Section, the Participant's interest in his Company Contribution Account
(including amounts transferred pursuant to Section 6.12) shall vest to the
extent of one hundred percent (100%) upon the earlier of the following:
(1) Death;
(2) Permanent Disability; or
(3) Attainment of age fifty-five (55) for Class B Participants and age
forty-five (45) for Class A Participants.
Such vesting in the event of Permanent Disability is intended to
provide "accident or health insurance" as described in Section 105(a) of
the Code, in providing benefits for the permanent loss or loss of use of a
member or function of the body, or the permanent disfigurement of
Participants, to the extent that Permanent Disability results.
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ARTICLE VIII
TERMINATION AND DISTRIBUTION UPON
RETIREMENT, DEATH OR DISABILITY
8.1 Retirement. Upon retirement, a Participant shall be eligible to receive
the balance in his Account. Retirement for purposes of this Plan may be elected
by any Participant upon attaining the earliest of the following age:
Class A Participants - Age forty-five (45)
Class B Participants - Age fifty-five (55)
Any age after two hundred forty (240) Months of Credit with the
Company
8.2 Death. The death of any Participant or Former Participant shall be
reported promptly to the Plan Administrator by the Company. The death of a
Terminated Participant or a Retired Participant shall be reported to the Plan
Administrator by dependents or beneficiaries who are directly concerned. Upon
the Participant's death, the Participant's Beneficiary shall be entitled to
payment of the balance of the Participant's Account in the manner provided by
the Plan.
8.3 Disability. The termination of a Participant's employment with the
Company by reason of Permanent Disability shall be promptly certified to the
Plan Administrator by the Company. Upon such termination of employment, the
Participant shall be eligible to receive the balance in his Account.
8.4 Valuation of Account Balances. The Account balance of a Retired,
Deceased or Disabled Participant shall be valued as of the Valuation Date
coinciding with or immediately preceding the date distribution is made to such
Participant or Beneficiary, as applicable (and shall include such Participant's
pro rata share of the Company contribution under Section 3.1(c), as determined
under Section 6.4(b), if any, for the year in which such Participant terminated
employment). There will be no pro rata credit of forfeitures for a partial
Fiscal Year.
8.5 Available Payment Options. A Retired, Deceased or Disabled
Participant's Account balance shall be distributed by the Trustees under such of
the following payment options as the Participant (or, if a Deceased Participant
shall have failed to select a payment option, as his Beneficiary) shall
determine:
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(a) Lump sum payment;
(b) Purchase of term annuity (such annuity shall be a Qualified Joint
and Survivor Annuity for a married Participant, unless waived pursuant to
Section 8.6(b));
(c) Deferred payments in installments in any amount from time to time
or over a period of time specified by the Participant, including
installment payments in substantially equal amounts;
(d) Variable payment accounts with regulated investment companies.
8.6 Qualified Joint and Survivor Annuity.
(a) Cash Payments in Lieu of a Qualified Joint and Survivor Annuity. A
married Participant who has selected a Qualified Joint and Survivor Annuity
(hereinafter "QJSA"), pursuant to Section 8.5(b), may elect instead that
the present value of such annuity be distributed in cash if:
(1) The value of the QJSA does not (and did not at the time of
any prior distribution or withdrawal) exceed Three Thousand Five
Hundred Dollars ($3,500); provided such distribution shall not be made
after the Annuity Starting Date unless the Participant and his Spouse
(or the Surviving Spouse, if the Participant has died) consent in
writing to such distribution; or
(2) The present value of the QJSA exceeds (or, at the time of any
prior distribution or withdrawal, exceeded) Three Thousand Five
Hundred Dollars ($3,500), and the Participant and his Spouse (or the
Surviving Spouse, if the Participant has died) consent in writing to
the distribution.
(b) Waiver of Qualified Joint and Survivor Annuity. A married
Participant who has selected a QJSA, pursuant to Section 8.5(b), may elect
to waive the QJSA payment option. Such waiver must be made within the
ninety (90) day period ending on the Participant's Annuity Starting Date
with respect to such benefit. A Participant may subsequently revoke the
election to waive the QJSA and elect again to waive the QJSA at any time
and any number of times prior such Annuity Starting Date. All such
elections and revocations shall be in writing. Any election to waive the
QJSA must:
(1) Specify the alternate payment option elected;
(2) Be accompanied by the designation of a specific nonspouse
Beneficiary (including any class of beneficiaries or any contingent
beneficiaries) who will receive the benefit upon the Participant's
death, if applicable; and
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(3) Be accompanied by Spousal Consent, to the extent required
under Section 1.67.
Notwithstanding the above, no consent under this subsection (b) shall
be valid unless, within thirty (30) days and no more than ninety (90) days
before the Annuity Starting Date, the Plan Administrator has provided the
Participant with the written explanation described in subsection (c) of
this Section.
(c) Written Explanation. The written explanation shall contain the
following:
(1) The terms and conditions of the QJSA;
(2) The Participant's right to make, and the effect of, an
election to waive the QJSA payment option;
(3) The rights of the Participant's Spouse; and
(4) The right to make, and the effect of, a revocation of a
previous election to waive the QJSA.
(d) Result of Effective Waiver. In the event of an effective waiver of
the QJSA payment option, in accordance with the terms of subsection (b) of
this Section, the amount payable to the married Retired or Disabled
Participant (or to the Beneficiary of a Deceased Participant) shall be
distributed by the Trustees or their delegate under such of the alternate
payment options set forth in Section 8.5 as the Participant or his legal
representative may select.
(e) Spousal Consent. A Spousal Consent shall be in one of the
following forms:
(1) A "specific consent" shall specify the non-spouse
Beneficiary, if any, and the alternate payment option elected.
(2) A "general consent" shall allow the Participant, without
further Spousal Consent, to change the Beneficiary designation and to
elect any alternate payment option, if such general consent indicates
that the Spouse has the right to limit his consent to a specific
Beneficiary and alternate payment option and that such Spouse
voluntarily elects to relinquish such right.
(3) A "limited general consent" shall allow the Participant,
without further Spousal Consent, to change the Beneficiary designation
to any person or persons (natural or otherwise) among those set forth
in writing and to elect one or among a list of payment options set
forth in writing, or any combination of the above.
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<PAGE>
Once made, a general consent shall be irrevocable. A specific or
limited consent shall be irrevocable unless the Participant changes
his Beneficiary designation or revokes his election to waive the
Qualified Joint and Survivor Annuity; upon such event, a specific
consent and a limited general consent (if the Participant's subsequent
Beneficiary designation or election of a payment option is not among
those options expressly set forth in the limited general consent)
shall be deemed to be revoked.
Notwithstanding the foregoing, Spousal Consent is not required if
the Participant establishes to the satisfaction of the Plan
Administrator that such written consent may not be obtained because
there is no Spouse or that the Spouse cannot be located. In addition,
no Spousal Consent is necessary if the Participant has been legally
separated or abandoned within the meaning of local law and the
Participant provides the Plan Administrator with a court order to that
effect, so long as such court order does not conflict with a Qualified
Domestic Relations Order. If the Spouse is legally incompetent to
consent, the Spouse's legal guardian may consent on his behalf, even
if the legal guardian is a Participant.
8.7 Distributions Upon Married Participant's Death. If a Participant is
married on the date of his death, the full amount of the Participant's Account
balance shall be payable on the death of the Participant to the Participant's
Surviving Spouse, unless the Participant's Surviving Spouse has given Spousal
Consent to the designation of a specific non-spouse Beneficiary (including any
class of beneficiaries or any contingent beneficiaries) who will receive the
Account balance upon the Participant's death.
8.8 General Distribution Requirements. Notwithstanding any provision to the
contrary, all Plan distributions to Participants and Beneficiaries shall comply
with the requirements of Section 401(a)(9) of the Code and the regulations
thereunder, including the incidental death benefit distribution rules of Section
1.401(a)(9)-2 of the Treasury Regulations.
(a) Distributions to Participants. The Participant's Account balance
shall be distributed or begin to be distributed no later than the
Participant's Required Beginning Date and may only be distributed over:
(1) A period of years not to exceed the life-expectancy of the
Participant, or the joint life expectancy of the Participant and the
Participant's designated Beneficiary; or
(2) The life of the Participant, or the lives of the Participant
and the Participant's designated Beneficiary.
Life expectancy shall be recalculated annually.
(b) Distributions to Beneficiary. Notwithstanding any other provision
of this Article VIII, any distribution to a Participant's Beneficiary must
comply with the following requirements:
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(1) If the Participant dies after distribution of his Account
balance has begun, then the remaining portion of such Account balance
shall be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(2) If the Participant dies before receiving any portion of his
Account balance, then distribution of the Participant's entire Account
balance shall be completed by December 31 of the calendar year
containing the fifth (5th) anniversary of the Participant's death
unless:
(i) The Beneficiary elects to receive payments over his life
(or over a period not extending beyond his life expectancy), in
which case the first installment must be made by December 31 of
the calendar year immediately following the calendar year in
which the Participant died; or
(ii) In the case of a Beneficiary who is a Surviving Spouse,
the Surviving Spouse elects to receive installment payments as
set forth in subsection (b)(2)(i) of this Section, in which case
the first installment may be deferred until the later of:
December 31 of the calendar year immediately following the
calendar year in which the Participant died, or December 31 of
the calendar year in which the Participant would have attained
age 70-1/2.
Such an election shall be made by the earlier of: the date
the distribution is required to be made under subsection (b)(2)
of this Section, or December 31 of the calendar year which
contains the fifth (5th) anniversary of the Participant's death.
If the Participant has no Beneficiary, or if the Beneficiary does
not elect a method of distribution, distribution of the entire
Account balance shall be completed by December 31 of the calendar
year containing the fifth (5th) anniversary of the Participant's
death.
If the Surviving Spouse dies after the Participant, but
before payments to such Surviving Spouse begin, then the
provisions of subsection (b)(2) of this Section, with the
exception of subsection (b)(2)(ii) of this Section, shall be
applied as if the Spouse were the Participant.
(c) Commencement of Distribution. Distribution of a Participant's
Account balance shall be made or commence no later than 60 days after the
close of the Plan Year in which occurs the latest of:
(1) The date on which the Participant attains age 62;
(2) The tenth anniversary of the year in which the Participant
commenced participation in the Plan; or
(3) The date on which the Participant terminates employment with
the Company.
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Notwithstanding the preceding sentence, no payment will be made
under the Plan until the Participant files a written claim for such
payment, unless otherwise required by the Plan.
8.9 Form of Payment. Distribution may be in cash or employer securities,
except that any distribution of employer securities shall be limited to the
amount of such securities credited to the Participant's account under the Host
Marriott Stock Fund.
8.10 Mandatory Cash-Out of Small Accounts. Notwithstanding any other
provision of this Article VIII, if the total value of the Participant's Account
does not (and did not, at the time of any other distribution or withdrawal)
exceed Three Thousand Five Hundred Dollars ($3,500), the Plan Administrator
shall direct the Trustee to distribute as soon as practicable the full amount
thereof to the Participant, his legal representative or Beneficiary to the
extent permitted by Section 411(a)(11) of the Code and Section 203(e) of ERISA,
and subject to Section 5.11.
8.11 Account Balance. For purposes of this Article VIII, Account balance
shall include any rollover account balance.
8.12 Special Rule for Rollovers Out of the Plan. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit the election of
a Distributee under this Article VIII, a Distributee 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 Distributee in a direct rollover. Any portion of an Eligible
Rollover Distribution that is not paid directly to an Eligible Retirement Plan
shall be subject to applicable income tax withholding. For purposes of this
Section 8.13, a "direct rollover" is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
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ARTICLE IX
TERMINATION AND DISTRIBUTION UPON
TERMINATION OF EMPLOYMENT OTHER THAN
FOR RETIREMENT, DEATH OR DISABILITY
9.1 Terminated Participant. Upon a Participant's or Former Participant's
termination of employment with the Company for any reason other than retirement,
death or Permanent Disability, the Company shall promptly notify the Plan
Administrator in writing of such fact and such Participant shall become (a) a
Terminated Participant if such Participant has not attained retirement age (as
provided in Section 8.1), or (b) a Retired Participant if such Participant has
attained retirement age (as provided in Section 8.1). In the event a Terminated
Participant has attained retirement age, the provisions of Article VIII shall
thereafter apply to such Participant.
9.2 Distribution of After-tax Savings and Section 401(k) Contributions. The
balance of a Terminated Participant's After-tax Savings Account and Section
401(k) Contribution Account (as determined in accordance with Articles IV and V)
shall be valued as of the Valuation Date coinciding with or immediately
preceding the date distribution is made to the Participant, and shall be subject
to distribution in the same manner as provided in Sections 8.5, 8.7 and 8.9 (and
in the same forms as provided in Section 8.10) without discrimination in favor
of or against any class.
9.3 Distribution of Vested Company Contribution Account.
(a) Governing Rule. The vested interest of the Terminated Participant
in the Terminated Participant's Company Contribution Account (as determined
in accordance with Article VII) shall be valued as of the Valuation Date
coinciding with or immediately preceding the date distribution is made to
the Participant, and shall be subject to distribution in the same manner as
provided in Section 8.5 and 8.9 (and in the same forms as provided in
Section 8.10) without discrimination in favor of or against any class. A
Terminated Participant may elect to defer distribution of his vested
interest until the earliest of the date such Terminated Participant attains
age 62, dies, or suffers a Permanent Disability; provided, however, that
the Terminated Participant may elect to commence distribution in any of the
forms of payment available under Section 8.5 as of any earlier date after
the date on which he becomes a Terminated Participant. There will be no pro
rata credit of the Company Contribution or forfeitures for the partial
Fiscal Year in valuing a Terminated Participant's Company Contribution
Account.
(b) Special Adjustments. In addition to the foregoing, if a
Participant ceases to be an Employee as a result of the sale of a unit (the
"Participant's Unit") of Marriott Family Restaurants Inc. in which a
Participant is employed, then the Account balance of such Participant
("Marriott Family Restaurants Terminated Participant") shall be adjusted as
of the end of the week (the "Marriott Family Restaurants Unit Final Week")
immediately preceding or coinciding with the closing date of the sale of
the Participant's Unit to reflect the Marriott Family
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Restaurants Terminated Participant's advance pro rata share of the
Company Contributions for a Fiscal Year by using the following methodology.
A Marriott Family Restaurants Terminated Participant's advance pro rata
share of the Company Contribution shall mean the Marriott Family
Restaurants Terminated Participant's pro rata share (as determined in the
manner provided in Section 6.4) as of an amount equal to the product of (1)
the most Current Fiscal Year Company Contribution Forecast (as defined
below), and (2) a fraction, the numerator of which is the number of full
weeks during the Fiscal Year up to and including he Marriott Family
Restaurants Unit Final Week and the denominator of which shall be the
number of weeks in said Fiscal Year; provided, however, there will be no
pro rata credit of forfeitures for a partial Fiscal Year allocated to
Marriott Family Restaurants Terminated Participants. For purposes of the
foregoing, adjustments shall be made only to the accounts of those
Participants (1)who are Employees working in or affiliated with Marriott
Family Restaurants, Inc. on the day before the closing date ("Closing
Date") of the sale of the Participant's Unit and (2) who cease to be
Employees as of the Closing Date.
The Current Fiscal Year Company Contribution Forecast shall mean the
most current report prepared as of the Marriott Family Restaurants Unit
Final Week by the reports section of the corporate accounting department of
Host Marriott Corporation, using the same methodology as that used in
preparing the regular quarterly forecast reports to the Plan Administrator.
9.4 Mandatory Cash-Out of Small Accounts. Notwithstanding any other
provision in this Article IX, if the total value of the Terminated Participant's
Account does not (and did not, at the time of any prior distribution or
withdrawal) exceed Three Thousand Five Hundred Dollars ($3,500), the Plan
Administrator shall direct the Trustee to distribute as soon as practicable the
full amount thereof to the Terminated Participant or his legal representative or
Beneficiary to the extent permitted by Section 411(a)(11) of the Code and
Section 203(e) of ERISA, and subject to Section 5.11.
9.5 Unvested Company Contributions.
(a) Forfeiture. Any portion of a Terminated Participant's Company
Contribution Account, which has not vested at the time the Participant's
employment is terminated will be forfeited. Such forfeiture shall be valued
as of the Valuation Date immediately preceding the date such Participant
terminates employment.
(b) Restoration of Forfeiture.
(1) General Rule. Subject to the requirements of subsection (c)
of this Section, a Terminated Participant (described in subsection (a)
of this Section) who resumes status as an Employee of the Company
before incurring five (5) consecutive Periods of Severance and who is
readmitted to the Plan in accordance with Section 2.2 shall have his
forfeited amounts restored and added to his new Company Contribution
Account (where it will vest in accordance with Article VII).
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(2) Special Rule for Amounts Transferred Pursuant to Section
6.12. Subject to the requirements of subsection (c) of this Section, a
person who forfeited a portion of his company contribution account
under the Prior Plan and whose vested account balance (minus such
forfeitures) is held by the Host Marriott Services Corporation
Employees' Profit Sharing, Retirement and Savings Plan and Trust
shall, upon becoming an Employee of the Company before incurring the
Breaks in Service described in subsection (b)(1) of this Section and
upon being admitted to the Plan in accordance with Section 2.2, have
his forfeited amounts restored to his new Company Contribution Account
(where they will vest in accordance with Article VII) to the extent
that such forfeited amounts have not been restored under the Marriott
International, Inc. Employees' Profit Sharing, Retirement and Savings
Plan and Trust.
(c) Distribution Prior to Reemployment. A Terminated Participant
described in subsection (b) of this Section who previously received a
distribution will have his forfeitures restored only if he repays, at any
time prior to the end of five (5) consecutive Periods of Severance
commencing on the date such distribution is made:
(1) The entire amount of distribution, if any, previously
received from the Terminated Participant's After-tax Savings Account
under Section 9.2;
(2) The entire amount of distribution, if any, previously
received from the Terminated Participant's Section 401(k) Contribution
Account under Section 9.2; and
(3) The entire amount of distribution, if any, previously
received from the Terminated Participant's Vested Company Contribution
Account under Section 9.3.
Any repayment made by a Participant pursuant to this subsection (c) shall
be made by means of a single lump sum cash payment.
9.6 Account Balance. For purposes of this Article IX, Account balance shall
include any rollover account balance.
9.7 Special Rule for Rollovers Out of the Plan. The special rule provided
in Section 8.13 shall apply to distributions under this Article IX.
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ARTICLE X
DISTRIBUTION DURING CONTINUED EMPLOYMENT
10.1 Withdrawal of After-tax Savings.
(a) Withdrawal of Additional After-tax Savings. A Participant or
Former Participant may withdraw his Additional After-tax Savings at any
time and continue to participate in the Plan after such withdrawal.
(b) Withdrawal of Basic After-tax Savings. A Participant or Former
Participant may withdraw his Basic After-tax Savings at any time. However,
upon withdrawing such Basic After-tax Savings, the Participant shall cease
to participate in the Plan and shall in all respects become a Former
Participant, except as otherwise provided in Section 10.5 and subject to
the provisions of Section 2.4.
(c) Valuation of After-tax Savings Account. The After-tax Savings
Account of the Participant or Former Participant shall be valued as of the
Valuation Date coinciding with or immediately preceding the date
distribution is made to the Participant or Former Participant.
(d) Form of Payment. Withdrawals of After-tax Savings under this
Section 10.1 (including the withdrawal of any earnings thereon) shall be
distributed in whole or in part as a single lump sum payment and may be in
cash or employer securities, except that any withdrawal of employer
securities shall be limited to the amount of such securities credited to
the Participant's or Former Participant's account under the Host Marriott
Stock Fund.
(e) Taxation of Withdrawal. Any withdrawal of After-tax Savings shall
be nontaxable to the Participant or Former Participant to the extent it
does not exceed the amount of After-tax Savings that were transferred from
the Prior Plan and were made before January 1, 1987. To the extent the
withdrawal of After-tax Savings is in excess of that amount, a portion of
the withdrawal shall be treated as taxable earnings, determined in
accordance with Section 72(e)(8) of the Code. The nontaxable percentage of
such withdrawals shall be a fraction (a) the numerator of which equals the
amount of After-tax Savings held in the Participant's Account, and (b) the
denominator of which equals the balance in the Participant's After-tax
Savings Account.
10.2 Withdrawal of Section 401(k) Contribution. Distribution of a
Participant's or Former Participant's Section 401(k) Contribution Account (and
the earnings thereon) is subject to Section 5.11 and the limitations of Section
401(k) of the Code.
10.3 Withdrawal of Vested Company Contribution Account. A Participant or
Former Participant may not withdraw his vested Company contributions (or any
earnings thereon) during his continued employment, except as provided in Section
10.5.
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10.4 Readmission of Former Participant to Plan. A Former Participant who
terminates participation in the Plan during continued employment shall be
entitled to readmission thereto as provided in Section 2.4.
10.5 Distributions Upon Attainment of Age 59-1/2. Upon attainment of age
59-1/2, a Participant or Former Participant may elect to withdraw the entire
balance of his After-tax Savings Account, Section 401(k) Contribution Account
and vested Company Contribution Account and continue participation in the Plan,
provided that he has been a Participant for at least sixty (60) months. In the
event the Participant has not completed sixty (60) months of participation in
the Plan, he may elect to withdraw the entire balance of his After-tax Savings
Account, Section 401(k) Contribution Account and vested Company Contribution
Account; however, such Participant must thereupon terminate participation in the
Plan and shall in all other respects be treated as a Former Participant.
Application for withdrawal under this Section 10.5 by Participants or Former
Participants shall be made in writing and shall be made in accordance with the
distribution and the spousal consent requirements set forth in Article VIII.
10.6 Account Balance. For purposes of this Article X, Account balance shall
include any rollover account balance.
10.7 Hardship Withdrawals.
(a) Terms of Hardship Withdrawals. Any Participant who sustains a
Hardship may submit a request to the Plan Administrator for a distribution
from the Plan as may be necessary to meet such Hardship. The Plan
Administrator shall have the power in its sole discretion to approve or
disapprove (in whole or in part) any such request, based on the standards
set forth in this Section 10.7. Any distribution to a Participant pursuant
to this Section 10.7 shall not exceed the amount required to meet the
Hardship, and distribution shall be made only if participant represents in
writing that such amount is not reasonably available from other resources
of the Participant as described in Treas. Reg. Section
1.401(k)-1(d)(2)(ii)(B). Such distributions shall be limited to the sum of
(1) amounts in the Participant's Section 401(k) Contribution Account
attributable to amounts transferred from the Prior Plan that had accrued on
or before December 31, 1988 (along with earnings attributable thereto),
plus (2) amounts in the Participant's Section 401(k) Contribution Account
accrued under the Prior Plan and this Plan after December 31, 1988
(exclusive of any earnings).
(b) Restrictions. Participants receiving Hardship distribution under
this Section 10.7 shall be subject to the following restrictions:
(1) The Participant's limit under Section 402(g) of the Code on
Section 401(k) Contributions for the Fiscal Year immediately following
the Fiscal Year in which a distribution is made to the Participant
shall be reduced by the amount of Section 401(k) Contributions for the
Fiscal Year in which such distribution was made; and
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(2) The Participant shall be prohibited for twelve (12) months
from the date of a distribution under this Section 10.7 from electing
any Section 401(k) Contributions under Article V or making
contributions of Basic or Additional After-tax Savings under Article
IV of this Plan. The Participant shall likewise be prohibited for the
same twelve (12) month period from making employee contributions under
any deferred compensation plan of the Company, in accordance with
written guidelines set forth by the Committee.
(c) Spousal Consent. If the Participant is married at he requests a
Hardship withdrawal, disbursement of the amount to be withdrawn may not be
made unless such Participant's Spouse consents in writing to the
withdrawal. Such consent shall be obtained no earlier than the beginning of
the 90 day period that ends on the date on which the withdrawal is to be
made. The consent must be in writing, must acknowledge the effect of the
withdrawal, and must be witnessed by a plan representative or notary
public. Notwithstanding the foregoing, if the Participant establishes to
the satisfaction of the Plan Administrator that such written consent may
not be obtained because there is no Spouse or that the Spouse cannot be
located, then no spousal consent is required. In addition, no spousal
consent is necessary if the Participant has been legally separated or
abandoned within the meaning of local law and the Participant provides the
Plan Administrator with a court order to that effect, so long as such court
order does not conflict with a Qualified Domestic Relations Order. If the
Spouse is legally incompetent to consent, the Spouse's legal guardian may
consent on his behalf, even if the legal guardian is a Participant; and
(d) Committee Guidelines and Determination. The Committee shall set
forth written guidelines for the Administrator to make its determination
under this Section 10.7 in accordance with the above standards (and the
definition of Hardship) in a uniform and nondiscriminatory manner. The
Committee shall make its determination under this Section 10.7 in
accordance with the above standards (and the definition of Hardship) and in
a uniform and nondiscriminatory manner.
10.8 Special Rule for Rollovers Out of the Plan. Unless otherwise provided
by a provision of the Code, the rule provided in Section 8.13 shall apply to
distributions under this Article X.
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ARTICLE XI
LOANS TO PARTICIPANTS
11.1 General Provisions. The Committee shall direct the Trustees to make a
loan to Participants who are "parties in interest" (as defined in Section 3(14)
of ERISA) and who have been Participants for at least twelve (12) months (and to
beneficiaries of such Participants as designated in written rules set forth by
the Committee) as provided in this Section 11.1. Such loan shall be in an amount
that does not exceed the amount set forth in Section 11.2. Loans shall be made
on written application to the Plan Administrator and on such terms and
conditions as set forth in this Article XI, and in accordance with the rules and
procedures established by the Committee in a written resolution. All such rules
and procedures shall be uniform and nondiscriminatory and shall relate to such
matters as:
(a) Procedures for applying for loans;
(b) The basis on which loans will be approved or denied;
(c) Limitations on the types of loans offered;
(d) The procedure for determining a reasonable rate of interest;
(e) The types of collateral which may secure a loan;
(f) The events constituting default;
(g) Minimum loan amounts;
(h) Frequency of loans; and
(i) Any other appropriate matters consistent with this Article XI.
11.2 Maximum Loan Amount. A loan to a Participant (when added to the
outstanding balance of all other loans made to the Participant under this Plan)
shall not be in an amount that exceeds the Allocable Portion of the total
balance in the Participant's After-tax Savings Account and Section 401(k)
Contribution Account (valued as of the Valuation Date coinciding with or
immediately preceding the date of such loan). The Allocable Portion shall be
adjusted accordingly in the event the maximum permissible loan amount under
Section 72(p) of the Code (or any successor provision) is decreased.
11.3 Minimum Loan Amount. The minimum loan amount for each loan shall be
One Thousand Dollars ($1,000).
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11.4 Repayment Period. The term of a loan made under this Article XI shall
be fixed by the Committee, but in no event shall such term exceed (a) one
hundred twenty (120) months in the case of a loan for the purchase of a
principal residence, or (b) sixty (60) months in the case of a loan for any
other purpose.
11.5 Terms and Conditions. Loans made to Participants shall be made in
accordance with the following terms and conditions:
(a) The loans shall be secured by the Participant's interest in the
Plan, plus by the Participant's promissory note for the amount of the loan
(including interest) payable to the order of the Trustees. The Plan
Administrator may also require such other collateral which in a normal
commercial setting would be considered adequate for the full protection of
the Trust Fund.
(b) The interest rate for the loan shall be the Federal prime rate as
of the last day of the quarter immediately preceding or ending on the date
the loan is made.
(c) Payment of principal and interest shall be made through
appropriate payroll deductions from the Compensation otherwise payable to
the Participant while the Participant is an Employee. Such payroll
deductions shall continue until the full outstanding balance of any loans
is repaid, regardless of whether the borrower remains a Participant in the
Plan. Payment of principal and interest by an individual who is no longer
an Employee shall be made through such other means (not less frequently
than quarterly) as the Committee deems appropriate.
(d) The loan shall be made to the Participant from his Account and
shall be treated as an investment of assets of such Account. All interest
and all losses attributable to loans shall be charged to the borrowing
Participant's Account, and all loan payments shall be credited to the
Participant's Account.
(e) If the Participant is married at the time for disbursement of the
loan proceeds, disbursement may not be made unless such Participant's
Spouse consents in writing to the use of the Account balance as security
for the loan. Such consent shall be obtained no earlier than the beginning
of the 90 day period that ends on the date on which the loan is to be so
secured. The consent must be in writing, must acknowledge the effect of the
loan, and must be witnessed by a plan representative or notary public. Such
consent shall thereafter be binding with respect to the consenting Spouse
or any subsequent Spouse with respect to that loan. A new consent shall be
required if the Account balance is used for renegotiation, extension,
renewal, or other revision of the loan. Notwithstanding the foregoing, if
the Participant establishes to the satisfaction of the Plan Administrator
that such written consent may not be obtained because there is no Spouse or
that the Spouse cannot be located, then no spousal consent is required. In
addition, no spousal consent is necessary if the Participant has been
legally separated or abandoned within the meaning of local law and the
Participant provides the Plan Administrator with a court order to that
effect, so long as such court order does not conflict with a Qualified
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Domestic Relations Order. If the Spouse is legally incompetent to
consent, the Spouse's legal guardian may consent on his behalf, even if the
legal guardian is a Participant.
(f) The loan shall not be used as a means of distributing benefits
before they otherwise become due.
(g) Any loan made under the Plan shall be subject to such other terms
and conditions as the Committee shall determine are necessary or
appropriate, including the condition that the Participant pay (through
payroll withholding) the reasonable expenses determined by the Committee
incurred by the Plan to make and service the loan.
11.6 Nondiscrimination. In making loans under this Article XI, the
Committee shall not discriminate in favor of or against any Participant or group
of Participant. Accordingly, loans shall be available to all Participants on a
reasonably equivalent basis and shall not be made to Highly-Compensated
Employees of the Company in an amount greater than the amount made available to
other Participants.
11.7 Decision of the Plan Administrator. The Plan Administrator's decision
to grant or deny a loan under this Article XI shall be final.
11.8 Offset of Account Balance. Notwithstanding anything to the contrary
contained elsewhere in the Plan, in determining the amount of any distribution
made in accordance with Article VIII or Article IX, the amount of any security
interest held by the Plan by reason of any loan made against the Participant's
Account under this Article XI, including accrued interest, shall be collected by
the Plan Administrator from any amounts standing to the credit of the
Participant in the Plan in satisfaction of the loan before making any payments
to the Participant or to the Participant's Beneficiary.
11.9 Default. In the event a Participant defaults on the repayment of a
loan (under uniform and nondiscriminatory written standards adopted by the
Committee as to what constitutes default), the Trustees may treat the loan as a
distribution and pay the principal and interest owing under the loan from the
Participant's After-tax Savings Account in the following order of priority:
(a) Current year After-tax Savings;
(b) Prior years' After-tax Savings;
(c) Earnings on prior years' After-tax Savings; and
(d) Earnings on current year After-tax Savings.
In the event the Participant's After-tax Savings Account is
insufficient to repay the full amount of principal and interest owing, the
Plan Administrator, in its sole discretion, may treat
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the unpaid balance as a distribution from the vested portion of the
Participant's Company Contribution Account.
In the event the Participant's After-tax Savings Account and the
vested portion of the Participant's Company Contribution Account are
insufficient to repay the full amount of principal and interest owing, a
determination shall be made whether the Participant qualifies for a
Hardship withdrawal under the provisions of Section 10.7, and, if so, a
distribution shall be made in accordance therewith. If the Participant
fails to qualify for a Hardship distribution, the Plan Administrator shall
take such other collection action as it deems fit, in accordance with
written standards adopted by the Committee; provided, however, that the
Plan Administrator shall defer making any distribution from the
Participant's Section 401(k) Contribution Account to repay any unpaid loan
balance until such time as the Participant has become a Terminated
Participant or has attained age 59, or until an event described in Section
401(k)(10) of the Code has occurred.
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ARTICLE XII
BENEFICIARIES
12.1 Designation of Beneficiary. Each Participant or Alternate Payee may
designate, on the forms provided by the Plan Administrator, one or more
Beneficiaries and contingent Beneficiaries to receive the Plan benefits in the
event of the Participant's or Alternate Payee's death. Notwithstanding the
preceding sentence, if the Participant is married at the time of his death and
has not elected a Qualified Joint and Survivor Annuity, his Account balance
shall be payable in full to his Surviving Spouse, unless he has designated a
different beneficiary with the consent of his Spouse, if any, in accordance with
Section 8.6(b).
12.2 Manner of Designation. Such designation may be delivered, on forms
provided by the Plan Administrator, at the time such Participant commences
participation in the Plan, or thereafter. A beneficiary designation completed by
an Alternate Payee may be delivered at the time the Administrator notifies the
Alternate Payee that he is entitled to Plan benefits under a Qualified Domestic
Relations Order, or thereafter. A Participant or Alternate Payee 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 Participant or Alternate Payee. All designations must be signed by either
the Participant or Alternate Payee, as appropriate.
12.3 Absence of Valid Designation of Beneficiary. Except as provided in
section 8.8, if a Participant or Alternate Payee fails to designate a
Beneficiary, if no designated Beneficiary survives the Participant or Alternate
Payee, or if such designation is for any reason illegal or ineffective,
distribution of benefits otherwise payable under this Plan shall be made to the
Participant's or Alternate Payee's estate.
12.4 Beneficiary Bound by Plan Provisions. Whenever the rights of a
Participant or Alternate Payee are stated or limited in the Plan, the
Participant's or Alternate Payee's Beneficiaries shall be bound thereby.
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ARTICLE XIII
QUALIFIED DOMESTIC RELATIONS ORDERS
13.1 Governing Provisions. Notwithstanding any other provisions of this
Plan, a Participant's Account may be assigned in whole or in part pursuant to
the provisions of a Qualified Domestic Relations Order (hereinafter "QDRO"). In
such case, the following rules shall apply:
(a) A separate Account shall be established for any Alternate Payee
who has been awarded Plan assets, unless a QDRO obligates the Plan to
distribute, as soon as administratively practicable, all or part of a
Participant's Account to the Alternate Payee. In such cases, a pro rata
portion of the amount payable to the Alternate Payee shall be withdrawn
from each Fund in which the Participant, pursuant to Section 15.1, has
invested. This pro rata withdrawal from each Fund shall be calculated
according to the percentage of the Participant's total Account which the
Participant has placed in each Fund. Thus, for example, if a Participant
with an Account of $200,000 has invested fifty percent (50%) in the
Balanced Fund and fifty percent (50%) in the Bond Fund, and a QDRO awards
$100,000 to an Alternate Payee, fifty percent (50%) of the Alternate
Payee's award shall be deducted from the Bond Fund and fifty percent (50%)
from the Balanced Fund.
(b) All such payments pursuant to a QDRO shall be subject to
reasonable rules and regulations promulgated by the Committee respecting
the time of payment pursuant to such order and the valuation of the
Participant's Account from which payment is made, provided that all such
payments are made in accordance with such order and Section 414(p) of the
Code.
(c) The balance of a Participant's Account subject to any QDRO shall
be reduced by the amount of any payment made pursuant to such order.
An Alternate Payee for whom a separate Account is established pursuant
to this Article XIII shall be entitled to file an election with regard to
investment of that Account in the manner specified by Article XV and
subject to the terms of the QDRO. All such elections shall be subject to
the same terms and conditions as Article XV imposes upon Participant
elections, and all such elections shall be carried out by the Administrator
in accordance with Article XV.
Upon the death of an Alternate Payee, the Alternate Payee's
Beneficiaries shall be entitled to payment of benefits in an amount and in
the manner provided by the Plan.
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ARTICLE XIV
TRUST FUND
14.1 Receipt of Contributions, After-tax Savings and Transfers. The
Trustees shall receive the Company contributions, Participants' After-tax
Savings, Section 401(k) Contributions, forfeitures, and transfers from other
trusts pursuant to Sections 6.12 and 6.13, which, together with the income
therefrom, shall constitute the Trust Fund which shall be held, managed, and
administered in trust pursuant to the terms of the Plan for the exclusive
benefit of Participants and their Beneficiaries.
14.2 Investment of Trust Fund.
(a) Investment Vehicles. The Trustees shall invest and reinvest the
principal and income of the Trust Fund and keep the Trust Fund invested in
accordance with the investment policy determined pursuant to subsection (b)
of this Section, without distinction between principal and income, in such
securities (including Qualifying Employer Securities to an unlimited amount
acquired or sold in accordance with Section 408(e) of ERISA), in a contract
or contracts issued by an insurance company for the purpose of providing
for the benefits under the Plan or investing the assets of the Plan, or in
such property, real or personal, wherever situated (including Qualifying
Employer Real Property to an unlimited amount acquired or sold in
accordance with Section 408(3) of ERISA), as the Trustees shall deem
advisable and as consistent with the provisions of Sections 16.2, 16.9 and
16.10 and the provisions of any investment policies established by the
Named Fiduciary, including, but not limited to, common or preferred stock
(including stock upon which call options traded on the Chicago Board Option
Exchange or other organized exchange will be written and subsequently
traded); purchase and sale of puts and calls traded on the Chicago Board
Option Exchange or other organized exchange; personal, corporate and
governmental obligations; shares of investment company stock, trust and
participation certificates; leaseholds, mortgages and other interests in
realty; notes and other evidences of indebtedness of ownership, secured or
unsecured; interests in joint ventures, partnerships or limited
partnerships; and shares or interests in real estate investment trusts,
discretionary common trust funds and mutual funds. In making such
investments, the Trustees shall not be restricted to securities or other
property of the character now or hereafter authorized or required by
applicable law for trust investment. Without liability for interest, the
Trustees may keep a portion of the Trust Fund uninvested and may place any
uninvested funds in any bank or banks; provided, however, that the Trustees
may place funds in a bank or similar financial institution which is a
Fiduciary hereunder only if the funds bear a reasonable interest rate, and
only if such bank or financial institution is supervised by the United
States or a State. The Trustees may also engage in any transaction with (1)
a common or collective trust fund or pooled investment fund maintained by a
"party-in-interest," within the meaning of Section 3(14) of ERISA, which is
a bank or trust company supervised by a State or Federal Agency, or (2) a
pooled investment fund of an insurance company qualified to do business in
a State, if (i) the
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transaction is a sale or purchase of an interest in each fund and
(ii) the bank, trust company or insurance company receives not more than
reasonable compensation.
(b) Investment Policy. The Named Fiduciary, acting by and through the
Committee, shall establish an investment policy and method consistent with
the objectives of the Plan and the requirements of Title I of ERISA. Such
objectives shall include, those set forth in Article XV with respect to the
Funds. The Committee acting on behalf of the Named Fiduciary shall at least
annually review such investment policy and method. In establishing and
reviewing such investment policy and method, the Named Fiduciary shall
endeavor to determine the Plan's short-term and long-term objectives and
financial needs, taking into account the need for liquidity to pay benefits
and the need for investment growth. All actions of the Committee acting on
behalf of the Named Fiduciary taken pursuant to this subsection (b) and the
reasons therefor shall be recorded and shall be communicated to the
Trustees and to the Board of Directors.
14.3 Investment Authority.
(a) General Authority. In furtherance and not in limitation of their
investment authority, the Trustees shall have full power and authority,
subject to the provisions of any investment policies established by the
Committee on behalf of the Named Fiduciary, to deal with all or any part of
the Trust Fund, including, without limitation, the power and authority to
invest, reinvest and change investments; to acquire any property by
purchase, subscription, lease, or other means; to sell for cash or on
credit, convey, lease for long or short terms, or convert, redeem or
exchange, all or any part of the Trust Fund; to borrow and to pledge as
security for such borrowings all or any part of the Trust Fund; to make
loans with or without security; to improve, repair and develop real
property; to enforce, by suit or otherwise, or to waive their rights on
behalf of the Trust Fund, and to defend claims asserted against them or the
Trust Fund; to compromise, adjust and settle any and all claims against or
in favor of them or the Trust Fund; to renew, extend or foreclose any
mortgage or other security; to bid in property on foreclosure; to take
deeds in lieu of foreclosure with or without paying a consideration
therefor; to vote, or give proxies to vote, any stock or other security and
to waive notice of meetings; to oppose, participate in or consent to the
reorganization, merger, consolidation, or readjustment of finances of any
enterprise, to pay assessments and expenses in connection therewith, and to
deposit securities under deposit agreements; to hold investments
unregistered or to register them in their names, as Trustees, or in the
name of a nominee; to open, deposit and withdraw funds in, and maintain
bank accounts with savings banks, commercial banks, savings and loan
associations, building loan associations and other institutions and to
manage such accounts as they deem advisable; to lend securities to a
broker-dealer registered under the Securities Exchange Act of 1934 or to a
bank, in accordance with the requirements of ERISA; to make, execute,
acknowledge and deliver any and all instruments that they shall deem
necessary or appropriate to carry out the powers herein granted; and
generally to exercise any and all of the powers of an owner with respect to
all or any part of the Trust Fund. No person dealing with the Trustees
shall be bound to see to the application of any money or property paid or
delivered to the Trustees or to inquire into the validity or propriety of
any transaction by them or on their behalf.
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(b) Undertaking to Stock Exchanges. The Trustees are further
authorized and empowered to enter into such undertakings or agreements with
the New York Stock Exchange or any other national securities exchange on
which the common stock of the Company is listed, under which the Trustees
will agree, as and to the extent necessary to comply with the rules and
regulations of any such national securities exchange, to vote any shares of
the common stock of the Company owned by the Trust Fund in the same
proportion as the vote of other shareholders of the Company on any issue
acted upon at any meeting of shareholders at which a vote is taken either
in person or by proxy.
14.4 Individually Directed Accounts. Article XV of this Plan grants each
Participant the right to direct the investment and reinvestment of his (a)
Account balance, (b) share of future allocations of Company contributions, (c)
share of future forfeitures, and (d) future After-tax Savings and Section 401(k)
Contributions, be invested in any of the Funds maintained under the Plan,
provided the Participant elects to do so in accordance with Article XV. Such
directions (including default directions) shall be promptly transmitted to the
Trustees by the Committee and shall be completed in the time period prescribed
by Article XV. The Trustees shall have no duty or responsibility to evaluate any
investment decision made by the Participant pursuant to Article XV, including
the decision to retain an investment.
14.5 Payments From Trust Fund. The Named Fiduciary, acting by and through
the Committee, shall direct the Trustees to make payments out of the Trust Fund
to such persons, in such manner, in such amounts, and for such purposes as may
be required in the execution of the Plan, and upon any such payment being made
the amount thereof shall no longer constitute a part of the Trust Fund. The
Named Fiduciary, the Committee and the Trustees shall not be responsible in any
way for the application of such payments or for the adequacy of the Trust Fund
to meet and discharge liabilities under the Plan.
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ARTICLE XV
PARTICIPANT'S DIRECTED INVESTMENTS
15.1 Election by Participants. Subject to the terms and conditions of this
Article XV, each Participant shall have the right to direct that his (a) Account
balance, (b) share of future allocations of Company contributions, (c) share of
future forfeitures, and (d) future After-tax Savings and Section 401(k)
Contributions, be invested, in specified multiples of one percent (1%), in any
of the Funds maintained under the Plan, provided the Participant elects to do
so. The Plan Administrator shall carry out the election in accordance with the
provisions of this Article XV. For the purposes of making elections under this
Article XV, the term "Participant" shall include a Beneficiary, and an Alternate
Payee for whom a separate account has been established in accordance with
Article XIII.
15.2 Election Rules.
(a) Election to be in Writing. A Participant's election to direct
investments shall be in writing, on a form furnished by the Plan
Administrator, or shall be made under such other procedures as specified by
the Plan Administrator. The election shall state the percentage to be
transferred to or from a Fund.
(b) Effective Date of Election. An election shall become effective
upon the next subsequent Transfer Date (as described in Section 15.3)
occurring within a reasonable time (as determined under procedures
specified by the Plan Administrator) after the receipt of the Participant's
valid election by the Plan Administrator, unless such election is revoked
before such Transfer Date.
(c) Revocation of Election. A Participant may revoke an election, in
whole or in part, any time prior to the Transfer Date. Thereafter, a
revocation shall become effective as of the next ensuing Transfer Date
occurring within a reasonable time (as determined under procedures
specified by the Plan Administrator) after the Plan Administrator's receipt
of such revocation.
(d) Change in Election. Each Participant may elect to change the Funds
(and/or the percentage to be allocated thereto) in which his (1) Account
balance, (2) share of future allocations of Company contributions, (3)
share of future forfeitures, and (4) future After-tax Savings and Section
401(k) Contributions, are to be invested. Upon the receipt by the Plan
Administrator of a Participant's request for a change in writing or in some
other form authorized by the Plan Administrator, the election shall be
effective as provided in paragraph (b) of this Section.
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(e) Default Election. In the event that a Participant does not make an
initial election to direct investments, his (1) Account balance, (2) share
of future allocations of Company contributions (3) share of future
forfeitures, and (4)future After-tax Savings and Section 401(k)
Contributions, shall be invested in the Fund(s) determined in the sole
discretion of the Committee until an election is made pursuant to this
Article XV.
15.3 Transfer Date. The Committee on behalf of the Named Fiduciary shall
establish one or more Transfer Dates in each Fiscal Year; provided, however,
that such Transfer Dates shall occur no less frequently than quarter-annually.
15.4 Confirmation. The Plan Administrator shall provide written
confirmation to a Participant within a reasonable time after an election or
change of election is made by such Participant.
15.5 Subdivision of Accounts.
(a) Establishment of Subaccounts. The Account of a Participant who has
made an election pursuant to this Article XV shall be subdivided as of the
Transfer Date into a Subaccount corresponding to each of the Funds
maintained under the Plan into which the Participant has made an election
to have his Account invested. Such Participant's Fund Subaccounts shall
each have a balance as of the Transfer Date giving effect to the
percentages indicated by the Participant's election. If a Participant has
not made an election as to any Fund, such Participant's Account shall be
placed into the Fund(s) determined under Section 15.2(e) and the
Participant's Fund Subaccount(s) shall have an aggregate value equal to the
Participant's entire Account balance.
(b) Allocation of After-tax Savings, Section 401(k) Contributions,
Company Contributions and Forfeitures Among Subaccounts. The following
amounts shall be further allocated among such Participant's Fund
Subaccounts in the appropriate percentages in accordance with the
Participant's election: (1) that portion of any Company contribution which
is allocated pursuant to Section 6.4 to the Company Contribution Account of
a Participant who has made an election; (2)the Participant's After-tax
Savings; (3) the Participant's Section 401(k) Contributions; and (4)
forfeitures allocated under Section 6.9 to the Company Contribution Account
of a Participant.
15.6 Investment Funds.
(a) Committee's Responsibility for Funds. The Committee shall be
responsible for designating Funds in the Trust Fund into which Participants
may elect to invest their Accounts as provided in this Article XV. The Plan
Administrator shall provide sufficient information to Participants
concerning the Funds to permit them to make informed investment decisions,
or, if appropriate, provide Participants with directions as to how such
information may be obtained.
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(b) Investment Policy of Funds. The Committee shall determine the
investment policy of the Funds in accordance with Section 14.2(b); provided
however, that at all times three (3) or more Funds shall be maintained
which (1) shall not invest in Qualifying Employer Securities or Qualifying
Employer Real Property; (2) shall be designed to enable Participants, by
choosing among them, to minimize the risk of large losses in their
Accounts; (3) shall be designed to enable Participants, by combining them,
to achieve general risk and return characteristics in their Accounts as
desired by Participants; and (4) shall be designed to permit Participants
to generally minimize the risk to their Accounts at any level of expected
return.
(c) Funds. The Committee shall make available to the Participants the
following Funds:
(1) Stable Value Fund. The assets of the Stable Value Fund shall
be invested in a manner that emphasizes a high level of stability and
preservation of principal over capital appreciation or income.
(2) Spectrum Income Fund. The assets of the Spectrum Income Fund
are invested in a number of other T. Rowe Price mutual funds which
invest principally in fixed income securities. The fund seeks a high
level of current income consistent with moderate price fluctuation.
(3) Balanced Fund. The assets of the Balanced Fund shall be
invested in a manner that emphasizes long-term growth of capital as
well as providing income, with a moderate level of risk.
(4) Blue Chip Growth Fund. The assets of the Blue Chip Growth
Fund shall be invested in a manner that emphasizes long-term growth of
capital.
(5) Host Marriott Corporation Common Stock. Host Marriott
Corporation common stock which constitutes Qualifying Employer
Securities.
(6) International Stock Fund. The assets of the International
Stock Fund shall be invested in a manner that emphasizes long-term
capital growth, principally through investment in a portfolio of
diversified common stocks of established non-U.S. companies.
(7) New Horizons Fund. The assets of the Aggressive Growth Fund
shall be invested in a manner that emphasizes high growth by investing
in stocks of small, rapidly growing companies.
15.7 Voting Rights.
(a) All shares (including fractional shares) held in a Participant's
Host Marriott Stock Fund Subaccount shall be voted by the Trustee in
accordance with the written direction of the Participant. In the absence of
such written direction with respect to any such
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shares, those nonvoted shares shall be voted by the Trustee in the same
proportion as the shares for which Participant directions were received.
(b) The Committee shall notify the Participants in writing of each
occasion for the exercise of voting rights as soon as practicable, and
generally not less than thirty (30) days, before such rights are to be
exercised. Such notification shall include all the information that the
Corporation distributes to shareholders regarding the exercise of such
rights.
(c) Each Participant shall be entitled to direct the exercise of
rights other than voting rights (such as, for example, a conversion
privilege) with respect to all shares held in the Participant's Host
Marriott Stock Fund Subaccount in the same manner as prescribed in this
Section 15.6, to the extent required by the provisions of the Plan and
applicable laws.
15.8 Allocation of Income of Funds. The net income of each Fund shall be
allocated among the Fund Subaccounts as provided in Section 6.8.
15.9 Investment Authority of Former Employees. Any Participant who ceases
to be an Employee shall continue to have the authority to direct the investment
of his Account in accordance with the provisions of this Article.
15.10 Investment for the Benefit of Incompetents. If any person entitled to
direct investments hereunder is legally incompetent, his Account shall be placed
in a Fund(s) determined under Section 15.2(e) until such time as the person's
legal representative files an election in the manner specified in this Article
XV.
15.11 Rules of Committee. The Committee may establish such rules as it
deems necessary to carry out the provisions of this Article XV and to comply
with the requirements of ERISA.
15.12 Participant-Insider Provisions. Notwithstanding anything contained
herein to the contrary, all investments in the Host Marriott Stock Fund by
Participant-Insiders shall comply with the requirements of Section 16 of the
Securities Exchange Act of 1934, 15 U.S.C. 78p (1988) (and accompanying rules
issued by the Securities and Exchange Commission) (the "Exchange Act"). For
purposes of this Section 15.12, a Participant-Insider is any Participant who is,
pursuant to Section 16 of the Exchange Act, a company officer or director, or a
person who is directly or indirectly the beneficial owner of more than ten
percent (10%) of any class of equity securities of the Company registered
pursuant to Section 12 of the Exchange Act, and who is subject to the reporting
requirements of the Exchange Act (and accompanying rules issued by the
Securities and Exchange Commission).
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ARTICLE XVI
PLAN FIDUCIARIES
16.1 Plan Fiduciaries.
(a) Named Fiduciary. The Committee is hereby named as the fiduciary of
the Plan to have authority to control and manage the operation and
administration of the Plan. As such, the Committee may hereinafter be
referred to as the "Named Fiduciary". The Named Fiduciary shall have all of
the legal liabilities and obligations set forth in ERISA with respect to
employee benefit plan fiduciaries.
(b) Profit Sharing Committee. The function of the Committee shall be
to advise and assist the Plan Administrator in the day-to-day discharge of
its duties hereunder. The Committee shall consist of not more than ten (10)
persons appointed by the Board of Directors. The Plan Administrator shall
attend all meetings of the Committee and shall act as the secretary of the
Committee ex-officio to record minutes of all action taken at any such
meeting. Each member of the Committee shall sit at the pleasure of the
Board of Directors and may be removed at any time with or without cause.
(c) Trustees. The Named Fiduciary shall appoint one or more trustees
("Trustees") and upon acceptance of such appointment, the Trustees shall
have the authority and discretion to manage and control the assets of the
Plan as set forth in this Article XVI (except to the extent that authority
to manage, acquire or dispose of assets of the Plan is designated to one or
more investment managers pursuant to Section 16.3); provided, however, that
notwithstanding anything to the contrary in this Plan, the Trustees shall
be subject to proper directions of the Named Fiduciary, where such
directions are in accordance with the terms of this Plan and are not
contrary to ERISA. The Trustees shall manage and control the assets of the
Plan jointly except to the extent that an agreement executed by the
Trustees and approved by the Named Fiduciary provides for allocation of
specific responsibilities, obligations or duties among the Trustees. Any
Trustee may resign at any time upon thirty (30) days' advance written
notice mailed or otherwise delivered to each of the remaining Trustees and
to the Named Fiduciary. Any Trustee may be removed by the Named Fiduciary
upon ten (10) days' advance written notice mailed or delivered to such
Trustee. If, for any reason, there are no Trustees appointed, then the
Named Fiduciary may elect to jointly be Trustee until a successor Trustee
is appointed. A successor Trustee shall succeed to the right and title of
the predecessor Trustee in the assets of the Trust Fund, without the need
for execution of any documents of transfer or assignment, and each
successor Trustee shall have all the powers conferred by this Plan as if
originally name Trustee. Notwithstanding the foregoing, a retiring Trustee
shall deliver the property comprising the Trust Fund to the successor
Trustee, and shall provide such successor Trustee with any instruments of
transfer, conveyance, assignment and further assurance as the successor
Trustee may reasonably require.
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16.2 Fiduciary Duty. Subject to Section 403(c) of ERISA, the Named
Fiduciary and each other Fiduciary shall discharge its duties with respect to
the Plan solely in the interest of the Participants and their Beneficiaries and:
(a) For the exclusive purpose of providing benefits to Participants
and their Beneficiaries and defraying reasonable expenses of administering
the Plan;
(b) 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;
(c) By diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly prudent
not to do so; and
(d) In accordance with the provisions of this Plan insofar as they are
consistent with the provisions of ERISA.
The diversification requirement of subsection (c) of this Section and
the prudence requirement (only to the extent that it requires
diversification) of subsection (b) of this Section shall not be violated by
acquisition or holding of Qualifying Employer Real Property or by
acquisition or holding of Qualifying Employer Securities.
16.3 Agents and Advisors.
(a) Employment of Agents. The Named Fiduciary, the Committee and the
Trustees shall have the power to employ suitable agents and advisors for
themselves including but not limited to auditors, accountants, investment
advisors and custodians and legal and other counsel, and to pay reasonable
compensation for their services. Such agents may be persons acting in a
similar capacity for the Company, or may be employees of the Company. The
opinion of any such agent shall be complete authority and protection for
any action taken or omitted by the Named Fiduciary, the Committee and the
Trustees acting in good faith and in accordance with such opinion.
(b) Delegation to Agents and Plan Administrator. The Named Fiduciary
acting by and through the Committee may employ agents and delegate to them
ministerial duties. The Named Fiduciary may also designate persons,
including a Plan Administrator and the Committee, to carry out both
ministerial and fiduciary responsibilities; provided, however, that the
Trustees' responsibility to manage or control the assets of the Plan may
not be so delegated except to an investment manager or managers pursuant to
subsection (c) of this Section.
(c) Appointment of Investment Manager. The Named Fiduciary shall have
the power to appoint an investment manager or managers with the power to
manage, acquire or dispose of any assets of the Plan so long as each such
investment manager (1)(i) is registered as an investment advisor under the
Investment Advisors Act of 1940; (ii) is a bank, as defined in
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that Act; or (iii) is an insurance company qualified to manage, acquire, or
dispose of assets of employee pension benefit plans under the laws of more
than one State; and (2) has acknowledged in writing to the Named Fiduciary
that he or she or it is a fiduciary with respect to the Plan. The Named
Fiduciary or the Committee shall not be liable for the acts or omissions of
such investment manager or managers, or be under an obligation to invest or
otherwise manage any asset of the Plan which is subject to the management
of such investment manager.
16.4 Administrative Action.
(a) Action by Majority. The action of a majority of the Board of
Directors, the Committee or Trustees at the time acting hereunder, and any
instrument executed by a majority of such Directors, Committee members or
Trustees, shall be considered the action or instrument of the Named
Fiduciary, the Committee or Trustees as the case may be. Action may be
taken by the Board of Directors, the Committee or Trustees at a meeting or
in writing without a meeting.
(b) Right to Vote. No Director, Committee member or Trustee shall have
the right to vote or decide upon any matter relating solely to himself or
solely to any of his rights or benefits under the Plan.
(c) Authority to Execute Documents. The Named Fiduciary, Committee or
Trustees may authorize in writing any one or more of their number to
execute any document or documents on their behalf, and anyone dealing with
the Named Fiduciary, Committee or Trustees may accept and rely upon any
document executed by such member or members as representing action by the
Named Fiduciary, Committee or Trustees, as the case may be.
16.5 Liabilities and Indemnifications.
(a) Liability of Fiduciaries. The Trustees and the Named Fiduciary and
their assistants and representatives including members of the Committee and
the Plan Administrator (other than any Investment Manager) shall be free
from all liability for their acts and conduct in the administration of the
Plan except for acts of willful misconduct; provided, however, that the
foregoing shall not relieve any of them from any responsibility or
liability for any responsibility, obligation or duty that they may have
pursuant to ERISA.
(b) Indemnity by Company. In the event, and to the extent not insured
against by any insurance company pursuant to provisions of any applicable
insurance policy, the Company shall indemnify and hold harmless the
Trustees, the Named Fiduciary and their assistants and representatives
including members of the Committee and the Plan Administrator from any and
all claims, demands, suits or proceedings in connection with the Plan that
may be brought by the Company's (or Affiliated Company's) employees,
Participants or their Beneficiaries or legal representatives, or by any
other person, corporation, entity, government or agency thereof; provided,
however, that such indemnification shall not apply to any such person for
such person's acts of willful misconduct in connection with the Plan.
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16.6 Plan Expenses and Taxes.
(a) Plan Expenses. The administrative expenses (and the Investment
Expenses) incurred by the Named Fiduciary, the Committee and Trustees in
the performance of their duties, including recordkeeping fees and fees for
legal services rendered to the Named Fiduciary and Trustees, such
compensation to the Named Fiduciary and Trustees as may be agreed upon in
writing from time to time between themselves and the Board of Directors,
and all other proper charges and disbursements of the Named Fiduciary, the
Committee and Trustees, shall be paid by the Trust Fund to the extent not
paid from forfeitures as provided in Section 6.9 or by the Company.
(b) Taxes. All taxes of any and all kinds whatsoever that may be
levied or assessed under existing or future laws upon or with respect to
the Trust Fund or the income thereof shall be paid from the Trust Fund,
subject to the making of appropriate charges.
16.7 Records and Financial Reporting.
(a) Book of Account. The Named Fiduciary acting by and through the
Committee and the Trustees shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder.
Within ninety (90) days following the close of each Fiscal Year and at the
request of the Company ninety (90) days after the removal or resignation of
any Trustee as provided in Section 16.1(c), the Trustees shall file with
the Company a written account setting forth all investments, receipts,
disbursements, allocations and other transactions effected by the Trustees
during such Fiscal Year or during the period from the close of the last
Fiscal Year to the date of such removal or resignation.
(b) Financial Reporting Under ERISA. The Named Fiduciary shall cause
the Plan to engage, on behalf of the Participants, an independent qualified
public accountant, who shall conduct such examinations and give such
opinions as are required in connection with the Plan's reporting and filing
requirements under ERISA. The Named Fiduciary shall make available or cause
to be made available to each Participant and each beneficiary who is
receiving benefits under this Plan, such information, financial and
otherwise, and in such manner and at such times as is required under ERISA.
16.8 Compliance with ERISA and Code. The Named Fiduciary shall cause the
Plan to comply with all filing requirements as provided in ERISA and in the Code
and all regulations promulgated thereunder. All authority granted to the Named
Fiduciary, the Committee and the Trustees hereunder is subject to their
compliance with Sections 16.2, 16.9 and 16.10 and with ERISA.
16.9 Prohibited Transactions. A Fiduciary shall not engage in any
prohibited transaction within the meaning of Sections 406 and 407 of ERISA, or
Section 4975(c) of the Code, unless such transaction is exempt under Section 408
or Section 414(c) of ERISA or
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Section 4975(d) of the Code, or acquire or hold any Company securities or real
property except to the extent permitted under Section 407 of ERISA.
16.10 Foreign Assets. No Fiduciary may maintain the indicia of ownership of
any assets of the Plan outside the jurisdiction of the district courts of the
United States, except as may be authorized by the Secretary of Labor by
regulation.
16.11 Exclusive Benefit of Trust Fund. The assets of the Trust Fund shall
never inure to the benefit of the Company and shall be held for the exclusive
purposes of providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan.
16.12 Board of Directors Resolution. Any action by the Company pursuant to
any of the provisions hereof shall be evidenced by a resolution of its Board of
Directors certified to the Committee or the Trustees over the signature of its
secretary or of any assistant secretary. The Committee and the Trustees shall be
fully protected in acting in accordance with such certified resolution.
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ARTICLE XVII
PLAN ADMINISTRATION
17.1 Administration of the Plan.
(a) Authority to Administer. On behalf of the Named Fiduciary, the
Committee shall administer the Plan in accordance with its terms and shall
have all powers and discretionary authority necessary to carry out the
provisions of the Plan, including but not limited to, the power to: (1)
interpret and construe the provisions of the Plan, including making factual
determinations; (2) prepare any rules and regulations which may become
necessary or desirable in the operation of the Plan, including but not
limited to specifying procedures to be followed by eligible Employees in
electing to participate in the Plan and in revoking such participation; (3)
determine eligibility for benefits and determine the amounts and manner of
payment thereof under the provisions of the Plan; (4)keep individual
accounts; (5) establish investment policies to be followed by the Trustees;
and (6) perform such other duties as may be required for the proper
administration of the Plan. The Committee shall have absolute discretion in
interpreting the provisions of the Plan and administering the Plan in
accordance with such provisions, including by way of illustration and not
of limitation, the making of determinations of eligibility to participate
and the calculation of benefits accruing or payable under this Plan.
(b) Delegation of Authority to Plan Administrator. In accordance with
Section 16.3(b), the duties described in subsection (a) of this Section
shall be exercised by the Plan Administrator acting on behalf of the
Committee, subject to review by the Committee under Section 17.2(c) of a
denial of a claim for benefits.
(c) Finality of Decision. Any decision of the Named Fiduciary or of
the Committee on its behalf, in matters within its jurisdiction shall be
final, binding and conclusive upon the Company and upon all persons who
have participated or have any interest or concern, whatsoever, in the Plan.
17.2 Claims.
(a) Claims for Benefits. Any claim for benefits under the Plan shall
be made in writing to the Plan Administrator. Except as to his own account,
no claimant shall have any legal right to inquire as to any payment under
the Plan having been made or as to determining the amount of such payment.
(b) Notice of Claim Denied. If a claim for benefits is denied, in
whole or in part, the Plan Administrator shall, within thirty (30) days
after receipt of the claim, notify the claimant of the denial of the claim.
The notice shall be written in language calculated to be understood by the
claimant and shall include the following information:
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(1) The specific reason or reasons for denial of the claim;
(2) Specific reference to the pertinent Plan provisions upon
which the denial is based;
(3) A description of any additional material or information
necessary for the claimant to perfect the claim, along with an
explanation of why such material or information is necessary; and
(4) An explanation of the Plan's claim review procedure with
respect to the denial of benefits.
(c) Request for Review of Denial. Within sixty (60) days after the
receipt by the claimant of a written notice of denial of the claim, or such
later time as shall be deemed reasonable taking into account the nature of
the benefit subject to the claim and any other attendant circumstances, the
claimant may file a written request with the Plan Administrator requesting
that the Committee conduct a full and fair review of the denial of the
claim for benefits. In connection with the claimant's appeal of the denial
of the claim for benefits, the claimant (or his authorized representative)
may review permanent documents and may submit issues and comments regarding
the claim in writing.
(d) Decision on Review of Denial. The Committee shall deliver to the
claimant a written decision on the claim within thirty (30) days after the
receipt of the aforesaid request for review, except that if there are
special circumstances (such as the need to hold a hearing, if necessary)
which require an extension of time for processing, the aforesaid thirty
(30) day period shall be extended to sixty (60) days. If an extension of
time is necessary, written notice shall be furnished to the claimant before
the extension period commences. If the claim is denied on review, in whole
or in part, the decision shall be written in a manner calculated to be
understood by the claimant and shall include the following information: (1)
the specific reason or reasons for denial; and (2) specific references to
the pertinent Plan provisions on which the decision is based.
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ARTICLE XVIII
PARTICIPATING COMPANY WITHDRAWAL FROM PLAN;
TERMINATION OR MERGER OF THE PLAN
18.1 Voluntary Withdrawal from Plan.
(a) Withdrawal By Participating Company. Any Participating Company may
at any time withdraw from the Plan upon giving the Named Fiduciary and the
Trustees at least thirty (30) days notice in writing of its intention to
withdraw. The withdrawal of such Participating Company shall be effective
on the last day of the Month in which the foregoing thirty (30) day period
ends.
(b) Segregation of Trust Assets Upon Withdrawal. Upon the withdrawal
of a Participating Company pursuant to subsection (a) of this Section, the
Plan Administrator shall segregate the share of the assets in the Trust
Fund, the value of which, determined on the day the withdrawal of such
Participating Company shall be effective, shall equal the total credited to
the accounts of Participants of the withdrawing Participating Company. The
determination of which assets are to be so segregated shall be made by the
Committee acting on behalf of the Named Fiduciary in its sole discretion.
(c) Exclusive Benefit of Participants. Neither the segregation and
transfer of the Trust assets upon the withdrawal of a Participating Company
nor the execution of a new agreement and declaration of trust by such
withdrawing Participating Company shall operate to permit any part of the
Trust Fund to be used for or diverted to purposes other than for the
exclusive benefit of the Participants.
(d) Applicability of Withdrawal Provisions. The withdrawal provisions
contained in this Section 18.1 shall be applicable only if the withdrawing
Participating Company continues to cover its Participants and eligible
employees in another profit-sharing plan or pension plan and trust
qualified under Sections 401 and 501 of the Code. Otherwise, the
termination provisions of Section 18.3 shall apply.
18.2 Amendment of Plan. The Board of Directors may amend the Plan with
respect to all Participating Companies or with respect to a particular
Participating Company at any time, and from time to time, pursuant to written
resolutions adopted by the Board of Directors (and all Employees and persons
claiming any interest hereunder shall be bound thereby); provided, however, that
no such amendment shall:
(a) Alter the rights, duties or responsibilities of the Named
Fiduciary or Trustees without their written consent;
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(b) Permit any portion of the Trust Fund to inure to the benefit of
the Company or permit any portion of the Trust Fund to be held or used
other than for the exclusive purpose of providing benefits to Participants
and their Beneficiaries and defraying reasonable costs of administering the
Plan; or
(c) Have the effect of decreasing the "accrued benefit" of any
Participant as proscribed in Section 411(d)(6) of the Code;
(d) Have the effect of reducing any then vested percentage of benefits
of any Participant as computed in accordance with the vesting schedule
under Article VII of the Plan.
If the vesting schedule under Article VII of the Plan shall be amended
and such an amendment would, at any time, decrease the percentage of vested
benefits which any Participant would have been entitled to receive had the
vesting schedule not been so amended, then each Participant who is an
Employee on the date such amendment is adopted, or the date such amendment
is effective, whichever is later, and who has three (3) or more Periods of
Service as of the end of the period within which such Participant may make
the election provided for herein, shall be permitted, beginning on the date
such amendment is adopted, to irrevocably elect to have the Participant's
vested interest computed without regard to such amendment. Written notice
of such amendment and the availability of such election must be given to
each such Participant, and each such Participant shall be granted a period
of sixty (60) days after the later of:
(1) The Participant's receipt of such notice; or
(2) The effective date of such amendment within which to make
such election.
Such election shall be exercised by the Participant by delivering
or sending written notice thereof to the Named Fiduciary prior to the
expiration of such sixty (60) day period.
18.3 Voluntary Termination of Plan.
(a) Right to Terminate Plan. Each Participating Company contemplates
that the Plan shall be permanent and that it shall be able to make
contributions to the Plan. Nevertheless, in recognition of the fact that
future conditions and circumstances cannot now be entirely foreseen, each
Participating Company reserves the right to terminate (as to such
Participating Company) either the Plan (exclusive of the Trust Fund) or
both the Plan and the Trust Fund, at any time, by resolution of the Board
of Directors.
(b) Merger or Consolidation of Plan and Trust. Neither the Plan nor
the Trust Fund may be merged or consolidated with, nor may its assets or
liabilities be transferred to, any other plan or trust, unless each
Participant would (if the Plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer which is equal to
or greater than the
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benefit the Participant would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had
then terminated).
(c) Termination of Plan and Trust Fund. If the board of directors of a
Participating Company determines to terminate (as to such Participating
Company) the Plan and Trust Fund completely, the Plan and Trust Fund shall
be terminated insofar as they are applicable to such Participating Company
as of the date specified in certified copies of resolutions of such board
of directors delivered to the Named Fiduciary, the Committee and the
Trustees. Upon such termination of the Plan and Trust Fund, after payment
of all expenses and proportional adjustment of accounts of Participants
employed by such Participating Company to reflect such expenses, Trust Fund
earnings or losses, and allocations of any previously unallocated funds to
the date of termination, such Participating Company's Participants shall be
entitled to receive the amount then credited to their respective accounts
in the Trust Fund. The Named Fiduciary, in its sole discretion, may make
payment of such amount in cash, in assets of the Trust Fund, or in the form
of immediate or deferred payment term annuity contracts for such
Participants.
18.4 Discontinuance of Contributions. Whenever a Participating Company
determines that it is impossible or inadvisable for it to make further
contributions as provided in the Plan, the board of directors of such
Participating Company may, without terminating the Trust Fund, adopt an
appropriate resolution permanently discontinuing all further contributions by
such Participating Company. A certified copy of such resolution shall be
delivered to the Named Fiduciary, the Committee and the Trustees. Thereafter,
the Named Fiduciary, the Committee and the Trustees shall continue to administer
all the provisions of the Plan which are necessary and remain in force, other
than the provisions relating to contributions by such Participating Company.
However, the Trust Fund shall remain in existence with respect to such
Participating Company and all of the provisions of the Plan relating to the
Trust Fund shall remain in force.
18.5 Rights to Benefits Upon Termination of Plan or Complete Discontinuance
of Contributions. Upon the termination or partial termination of the Plan or the
complete discontinuance of contributions by a Participating Company, the rights
of each of such Participating Company's Participants affected by such
termination or partial termination to the amount credited to such Participant's
Account at such time shall be nonforfeitable without reference to any formal
action on the part of such Participating Company, the Named Fiduciary, the
Committee or the Trustees.
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<PAGE>
ARTICLE XIX
ELECTION TO PARTICIPATE BY SUBSIDIARIES
19.1 Consent Required for Subsidiaries to Join Plan. The Plan
Administrator, upon receiving a written resolution of the board of directors of
a Subsidiary electing to become a Participating Company, may approve or
disapprove such election acting as the delegate of the Board of Directors. The
Board of Directors shall retain the final authority to override such action and
approve or disapprove the Subsidiary's request.
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<PAGE>
ARTICLE XX
MISCELLANEOUS PROVISIONS
20.1 Status of Employment. The adoption and maintenance of the Plan shall
not be deemed to constitute a contract of employment between the Company and any
Employee or Participant, or to be a consideration for, or an inducement or
condition of, any employment. Nothing contained herein shall be deemed to give
any Employee the right to be retained in the service of the Company or to
interfere with the right of the Company to discharge any Employee or Participant
at any time.
20.2 Liability of Company. Except as may be determined by the Board of
Directors, in its sole discretion from time to time, all benefits payable under
this Plan shall be paid or provided solely from the Trust Fund and the Company
(other than Host Marriott in its role as Named Fiduciary) assumes no liability
or responsibility therefor; its obligation which is expressly stated to be
non-contractual is limited solely to the making of contributions to the Trust
Fund as provided in this Plan.
20.3 Information.
(a) Supplied by Named Fiduciary, the Committee or Trustees. A
certification in writing to the Named Fiduciary, Plan Administrator, the
Committee or the Trustees, executed in accordance with the provisions of
this Plan, certifying to the existence, occurrence or happening of any
event, shall constitute evidence of such existence, occurrence or
happening; and the Named Fiduciary, Plan Administrator, the Committee, the
Trustees and the Company shall be fully protected in accepting and relying
upon such certification and shall incur no liability or responsibility for
so doing.
(b) Supplied by Company. At the request of the Named Fiduciary, the
Committee or the Trustees, the Company shall furnish in writing to the
Named Fiduciary, the Committee or the Trustees such information as may be
necessary or desirable in order that the Named Fiduciary, the Committee or
the Trustees may be able to carry out their respective duties hereunder.
The Named Fiduciary, the Committee and the Trustees shall be entitled to
rely upon such information as being correct.
20.4 Provisions of Plan to Control. In event of any conflict between the
terms of the Plan as set forth in this instrument and in any description of the
Plan which may be furnished to Participants or others, the Plan set forth herein
shall control.
20.5 Payment for Benefit of Incompetent. The Trustees may make payment to
any incompetent who is entitled to receive payments hereunder by making the same
to the legal representative of such incompetent or to his parent or Spouse or
may apply them for the incompetent benefit.
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<PAGE>
20.6 Account to be Charged Upon Payment. When any distribution or other
payment is made to or for the benefit or on behalf of any party entitled to
receive payments hereunder, the account held for the benefit of such party shall
be charged accordingly.
20.7 Tax Qualification of Plan. The Plan is intended to qualify as a tax
exempt profit sharing plan pursuant to the provisions of Section 401, the cash
or deferred arrangement provisions of the Plan set forth in Article V and
elsewhere are intended to satisfy the requirements of Sections 401(k) and
401(m), and the Trust created hereunder is intended to qualify as a tax exempt
trust under the provisions of Section 501(a) of the Code together with any
amendments thereto and all provisions of the Plan shall be construed to obtain
those results.
20.8 Deductibility of Company Contributions. The Contributions made by the
Company under this Plan are intended to be deductible as business expenses,
under the provisions of Section 404 of the Code, together with any amendments
thereto, and all provisions of the Plan shall be construed accordingly.
20.9 Valuation of Trust Fund. The Trustees at the end of each Month and at
such other times as the Committee acting on behalf of the Named Fiduciary deems
advisable, ascertain and certify the value of all securities and other
properties held in the Trust Fund. All property held in the Trust Fund shall be
valued at its fair market value on a reasonable and consistent basis established
by the Trustees.
20.10 Restriction on Alienation or Assignment. Benefits provided under the
Plan may not be assigned or alienated, except as permitted by Article XIII and
the following:
(a) A loan made by the Plan to a Participant in accordance with
Article XI shall be secured by the Participant's After-tax Savings Account
and Company Contribution Account as provided in Article XI.
(b) If a Participant is indebted to the Company or to the Marriott
Employees Federal Credit Union at the time any payments are to be made to
such Participant or to the Participant's Beneficiary hereunder and if the
Participant, prior to September 2, 1974 has executed in favor of such
creditor an irrevocable security assignment of the Participant's account
balances in the Plan, the Trustees are authorized to pay to such creditor
all or such portion of said payments as may be required to discharge such
indebtedness.
20.11 Unclaimed Benefits. In the event that benefit payments owing to a
Participant have not been claimed by the Participant within three (3) years of
the date on which such benefits first became payable, the Plan Administrator
shall, at the end of the Fiscal Year during which such three (3) year
anniversary occurs reallocate such benefits to the remaining Participants in the
manner provided in Section 6.10(a). If subsequent to such reallocation, the
Participant entitled to such benefits makes claim therefor, the Plan
Administrator shall promptly pay such forfeited benefit. Funds with which to pay
any such benefits shall be provided as set forth in Section 6.10(b).
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<PAGE>
20.12 Recovery of Plan Benefits Payment Made by Mistake. A Participant or
Beneficiary shall be required to return to the Plan any payments made under the
Plan made by a mistake of fact or law.
20.13 Bonding. Every Fiduciary of the Plan and every person who handles
funds or other property of the Plan shall be bonded if and to the extent
required by Section 412 of ERISA.
20.14 Titles and Captions. The titles and captions to the Articles,
Sections and subsections in the Plan are placed herein for convenience of
reference only, and in case of any conflict the text of this instrument, rather
than such titles, shall control.
20.15 Execution of Counterparts. This instrument may be executed in any
number of counterparts, each of which shall be deemed to be an original.
20.16 Governing Law. The Plan shall be governed, construed, administered
and regulated in all respects by and under the laws of the State of Maryland.
20.17 Separability. If any provisions of the Plan shall for any reason be
invalid or unenforceable, the remaining provisions shall nevertheless remain in
full force and effect.
20.18 Supplements and Appendices. Supplements and Appendices to the Plan or
the Trust may be adopted, attached to and incorporated in the Plan or the Trust
at any time. The provisions of any such Supplements or Appendices shall have the
same effect that such provisions would have if they were included within the
basic text of the Plan or the Trust. Supplements and Appendices shall be adopted
by the Board pursuant to the amendment authority set forth in Section 18.2 of
the Plan and shall specify the persons affected.
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<PAGE>
ARTICLE XI
TOP HEAVY PROVISIONS
21.1 Determination of Top Heavy Status. For purposes of this Article XI,
the Plan shall be a Top Heavy Plan if, as of the Determination Date, either:
(a) The sum of the aggregated accounts of Participants who are "key
employees" (as defined in Section 416(i) of the Code) exceeds sixty percent
(60%) of the sum of the aggregated accounts of all Plan Participants; or
(b) The Plan is included in a Top Heavy Group.
If a Participant has received no compensation from the Company during the
five (5) year period preceding the Determination Date, his account balance may
be disregarded for purposes of determining whether the Plan is top-heavy. Solely
for purposes of determining which Participants are "key employees," the term
"compensation" (as used in Section 416(I) of the Code) shall mean the
compensation stated on an Employee's Form W-2 for the calendar year that ends
with or within the Plan Year.
21.2 Definitions. For purposes of this Article, the following terms shall
have the meanings set forth herein:
(a) "Aggregation Group" means:
(1) Each Section 401 Plan of the Company in which a "key
employee" (as defined in Section 416(i) of the Code) is a participant;
and
(2) Each Section 401 Plan of the Company which enables any plan
described in subsection (a)(i) of this Section to meet the
requirements of Section 401(a)(4) or 410 of the Code.
(b) "Determination Date" means, with respect to any Plan Year, the
last day of the preceding Plan Year. In the case of the Plan Year which
includes the Effective Date of the Plan, the last day of such Plan Year.
(c) "Section 401 Plan" means any stock bonus, pension, or profit
sharing plan subject to the qualification requirements of Section 401 of
the Code.
(d) "Top Heavy Group" means any Aggregation Group determined to be a
Top Heavy Group in accordance with the test set forth in Code Section
416(g)(2)(B).
(e) "Valuation Date" shall have the same meaning as set forth in
Section 1.73.
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<PAGE>
21.3 Requirements if Plan is a Top Heavy Plan. Notwithstanding any other
provision of this Plan, for any Plan Year for which the Plan is a Top Heavy
Plan, a minimum allocation shall be made on behalf of each Participant who is
not a "key employee" (as defined in Section 416(i) of the Code) and who is
employed on the last day of such Plan Year in an amount equal to the lesser of
(a) three percent (3%) of such Participant's Compensation or (b) the largest
percentage of Compensation allocated to any key employee during such Plan Year.
The minimum allocation shall not apply to any non-key employee who receives a
minimum contribution or a minimum benefit under any other plan of the Company or
a Subsidiary. Notwithstanding the above, if a non-key employee participates in
this Plan and a defined benefit plan that is included in an Aggregation Group,
the non-key employee shall receive a minimum benefit under the defined benefit
plan rather than a minimum allocation under this Plan, provided that if the
defined benefit plan does not provide for a minimum benefit, the non-key
employee shall receive a minimum allocation under this Plan of five percent (5%)
of Compensation.
1217076
- 74 -
EXHIBIT 5.1
[HOST MARRIOTT CORPORATION LAW DEPARTMENT LETTERHEAD]
July 25, 1996
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
Re: Host Marriott Corporation (HMC)
Retirement and Savings
Plan: Registration on Form S-8
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-8 (the
"Registration Statement") of Host Marriott Corporation, a Delaware corporation
(the "Company"), to be filed on or about July 25, 1996, with the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the
"Act"), in connection with a proposed offering by the Company to certain of its
employees and other plan participants of 300,000 shares of the Company's common
stock, $1.00 par value per share (the "Shares") under the Host Marriott
Corporation (HMC) Retirement and Savings Plan (the "Plan"), you have asked for
my opinion as to the validity of the shares.
In my capacity as Deputy General Counsel for the Company, I am familiar
with and have reviewed (1) the Company's Certificate of Incorporation and its
by-laws, in each case as amended as of the date hereof, (2) the Registration
Statement, including the exhibits thereto, (3) the materials maintained by the
Company as Part I of the Registration Statement, and (4) resolutions of the
board of directors of the Company approving the issuance of the Shares under the
Plan. In addition, I have made such legal and factual examinations and
inquiries, including an examination of originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate papers and
instruments, as I have deemed appropriate to determine the genuineness of all
signatures, the authenticity of all documents submitted to me as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.
<PAGE>
Subject to the foregoing and the other matters set forth herein, it is my
opinion that upon issuance the Shares will be duly and validly authorized and,
when sold pursuant to the offering contemplated by the Registration Statement,
will be validly issued, fully paid and nonassessable.
I consent to your filing this opinion as an exhibit to the Registration
Statement.
By: /s/ Christopher G. Townsend
-------------------------------
Christopher G. Townsend
Title: Senior Vice President,
Corporate Secretary &
Deputy General Counsel
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 26,
1996 included in the Company's Form 10-K for the year ended December 29, 1995
and to the incorporation by reference in this registration statement of our
reports dated November 3, 1995 of the Dallas/Fort Worth Airport Marriott,
February 22, 1996 of the Pacific Landmark Hotel, Ltd. and Pacific Gateway, Ltd.,
August 18, 1995 of the San Antonio Marriott Riverwalk and December 15, 1995 of
TEC Entities included in the Company's Form 8-K dated February 28, 1996 and to
all references to our Firm included in this registration statement.
Arthur Andersen LLP
Washington, D.C.
July 19, 1996
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the reference to our firm in this registration
statement (Form S-8 No. 333- ______) pertaining to the Retirement and Savings
Plan of Host Marriott Corporation and to the incorporation by reference therein
of our report dated January 20, 1995 (except for the matter discussed in Notes
6, 7 and 8, as to which the date is February 22, 1996), with respect to the
financial statements of the New York Vista for the years ended December 31,
1994, 1993 and 1992 included in the registration statement (Form S-1 No.
333-00147) filed with the Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
July 19, 1996
Securities and Exchange Commission
April 15, 1996
Page 2
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The General Partner
Pacific Landmark Hotel, Ltd. and Pacific Gateway, Ltd.:
We consent to incorporation by reference in this registration statement
(No. 333-_________) of Host Marriott Corporation of our report dated March 10,
1995, except as to Note 6 to the combined financial statements, which is as of
January 5, 1996, included in Host Marriott Corporation's Form 8-K, dated January
17, 1996, relating to the combined financial statements of Pacific Landmark
Hotel, Ltd. and Pacific Gateway, Ltd., as of December 31, 1994 and 1993, and for
each of the years in the two-year period ended December 31, 1994.
KPMG Peat Marwick LLP
San Diego, California
July 19, 1996
