<PAGE>
As filed with the Securities and Exchange Commission on August 6, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
HAWAIIAN AIRLINES, INC.
(Exact Name of Registrant as Specified in Its Charter)
----------------
HAWAII 99-0042880
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
----------------
3375 Koapaka Street
Suite G350
Honolulu, Hawaii 96819
(Address of Principal Executive Offices) (Zip Code)
----------------
HAWAIIAN AIRLINES, INC.
401(K) SAVINGS PLAN
(Full Title of the Plan)
----------------
Rae A. Capps, Esq.
Vice President, General Counsel and Corporate Secretary
3375 Koapaka Street
Suite G350
Honolulu, Hawaii 96819
(Name and Address of Agent For Service)
----------------
(808) 835-3700
Telephone Number, Including Area Code, of Agent For Service
----------------
WITH A COPY TO:
Joseph Salamunovich, Esq.
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
(213) 229-7000
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered Per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock 780,494(1) $3.69(2) $2,880,023.00(2) $994.00(2)
Preferred Stock
Purchase Rights 780,494(3) $0.00 $0.00 $0.00
</TABLE>
(1) These shares are issued and reserved for issuance pursuant to the
Hawaiian Airlines, Inc. 401(k) Savings Plan (the "Plan"). Pursuant to
Rule 416, also being registered are additional shares of Common Stock as
may become available under the Plan through the operation of
anti-dilution provisions.
(2) Estimated in accordance with Rule 457(h) and Rule 457(c) of the
Securities Act of 1933, as amended solely for the purpose of calculating
the registration fee, as follows: $2,880,023.00 with respect to 780,494
shares of Common Stock, based on a price of $3.69 per share, the average of
the high and low trading prices of the Common Stock of Hawaiian Airlines,
Inc. (the "Company") on the American Stock Exchange on August 5, 1996.
(3) These Preferred Stock Purchase Rights attach to each share of Common
Stock upon issuance.
<PAGE>
EXPLANATORY NOTE
This Registration Statement is being filed by Hawaiian Airlines, Inc.
("Hawaiian" or the "Company") in order to register 780,494 shares of Common
Stock (the "Common Stock" or the "Securities") which have been reserved for
issuance under the Hawaiian Airlines, Inc. 401(k) Savings Plan, as amended
(the "Plan") (including 780,494 Preferred Stock Purchase Rights (the
"Rights"), one of which attaches to each share of Common Stock issued,
pursuant to the Rights Agreement dated as of December 23, 1994, as amended by
and between the Company and Chemical Trust Company of California, as Rights
Agent). The additional shares of Common Stock that may become available for
purchase in accordance with the provisions of the Plan in the event of
certain changes in the outstanding shares of Common Stock of Hawaiian,
including, among other things, stock dividends, stock splits, reverse stock
splits, reorganizations and recapitalizations, are also being registered.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company with the
Commission are by this reference incorporated in and made a part of this
Registration Statement:
(1) The Company's Annual Report on Form l0-K for the fiscal year ended
December 31, 1995, including the Financial Statements and the Financial
Statement Schedule and the Reports of KPMG Peat Marwick LLP, Independent
Auditors filed April 1, 1996, as amended by Amendment No. 1 on Form 10-K/A
and Amendment No. 2 on Form 10-K/A;
(2) The Quarterly Report on Form 10-Q, filed May 15, 1996, for the
period ended March 31, 1996;
(3) The Current Report on Form 8-K filed January 10, 1996 (date of
event January 10, 1996);
(4) The Current Report on Form 8-K filed January 17, 1996 (date of
event January 15, 1996);
(5) The Current Report on Form 8-K filed January 23, 1996 (date of
event January 18, 1996);
(6) The Current Report on Form 8-K filed February 1, 1996 (date of
event January 30, 1996);
(7) The Current Report on Form 8-K filed February 2, 1996 (dated
January 31, 1996);
(8) The Current Report on Form 8-K filed February 7, 1996 (dated
February 2, 1996);
(9) The Registration Statement on Form S-2 filed May 30, 1996, as
amended by Amendment No. 1 filed July 12, 1996, as amended by Amendment No. 2
filed July 19, 1996, as amended by Amendment No. 3 filed July 23, 1996, as
amended by Amendment No. 4 filed July 24, 1996, as amended by Amendment No. 5
filed August 1, 1996 (Registration No. 333-04817);
(10) The Registration Statement on Form 8-A/A filed July 1, 1996; and
(11) All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Registration
Statement and prior to the filing of a post-effective amendment which
indicates that all Securities offered hereby have been sold or which
deregisters all Securities then remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the Common Stock has been passed upon for the Company by
Rae A. Capps, its Vice President, General Counsel and Corporate Secretary.
Ms. Capps owns no shares of Common Stock.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 415-5 of the Hawaii Business Corporation Act (the "Hawaii
Indemnification Statute") provides that a corporation may indemnify any
person who was or is a party to or is threatened to be made a party to any
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that the person was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation in such a
capacity with another enterprise (such person being hereinafter referred to
as the "Indemnitee"). The indemnity may cover expenses (including attorneys'
fees), judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be
in, or not opposed to, the best interests of the corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe the Indemnitee's conduct was unlawful.
Section 415-48.5 of the Hawaii Business Corporation Act ("HBCA")
provides that a corporation does not have the power to eliminate or limit the
personal liability of a director for (a) any breach of the director's duty of
loyalty to the corporation or its shareholders, (b) any act or omission of
the director not performed in good faith, or which involves intentional
misconduct or knowing violation of the law, or which constitutes a willful or
reckless disregard of the director's fiduciary duty, (c) the director's
willful or negligent violation of any provision of the HBCA regarding payment
of dividends or stock purchase or redemption, or (d) any transaction from
which the director received an improper benefit.
The Hawaii Indemnification Statute also provides that, in the case of an
action or suit by or on behalf of the corporation, the corporation has the
power to indemnify an Indemnitee against expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement
of such action or suit if the Indemnitee acted in good faith and in a manner
the Indemnitee reasonably believes to be in, or not opposed to, the best
interests of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which the Indemnitee had been
adjudged to be liable for negligence or misconduct in the performance of the
Indemnitee's duties to the corporation unless, and only to the extent that,
the court in which the action or suit was brought determines that, despite
the adjudication of liability, but in view of all circumstances of the case,
the Indemnitee is fairly and reasonably entitled to indemnity for such
expenses as such court deems proper. The provision does not, however,
expressly authorize the corporation to indemnify the Indemnitee against
judgments, fines and amounts paid in settlement arising out of a
shareholder's derivative action.
The Hawaii Indemnification Statute further provides that indemnification
is mandatory with respect to expenses incurred in connection with any action,
suit or proceeding, to the extent the Indemnitee is successful on the merits
or otherwise in defense of any such action or claim.
The Hawaii Indemnification Statute allows the payment by the corporation
of expenses incurred by an Indemnitee in advance of the final disposition of
an action, suit or proceeding if the Indemnitee provides an undertaking of
repayment. Additionally, it provides that the indemnity provided by the
statute is not exclusive of any other rights to which an Indemnitee may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise. It also provides that a corporation may purchase
insurance for officers or directors of the corporation.
Article VII of the Registrant's Amended Articles of Incorporation
incorporates the provisions of the Hawaii Indemnification Statute so as to
provide the indemnification of the Hawaii Indemnification Statute to officers
and directors of the Company. Article VII also provides that the indemnity
provided thereunder is nonexclusive of any other rights of indemnification to
which an Indemnitee may be entitled.
In addition, the Registrant has entered into indemnification agreements
with each of its directors and executive officers providing indemnification
to the fullest extent permitted by law. Furthermore, the Registrant has a
policy of directors' and officers' liability insurance which insures
directors and officers against the cost of defense, settlement or payment of
a judgment under certain circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
None.
II-2
<PAGE>
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
4.1 Rights Agreement dated December 23, 1994. (1)
4.2 Amendment No. 1 dated as of May 4, 1995 to Rights
Agreement dated as of December 23, 1994 by and between
Hawaiian Airlines, Inc. and Chemical Trust Company of
California. (2)
4.3 Amendment No. 1 to 1994 Stock Option Plan dated as of
May 4, 1995. (2)
4.4 Amendment No. 1 dated as of May 4, 1995 to Warrants
Nos. 1-10. (2)
4.5 1994 Stock Option Plan. (3)
4.6 Rightsholders Agreement dated as of January 31, 1996,
by and among Hawaiian Airlines, Inc., Airline Investors
Partnership, L.P., AMR Corporation, Martin Anderson
and Robert Midkiff. (4)
4.7 Amendment No. 2 to the Rights Agreement, as amended,
dated as of January 31, 1996 by and between Hawaiian
Airlines, Inc. and Chemical Trust Company of
California. (4)
4.8 Amendment No. 2 to 1994 Stock Option Plan, as amended,
dated as of December 8, 1995. (4)
4.9 The Company agrees to provide the Securities and
Exchange Commission, upon request, copies of instruments
defining the rights of security holders of long-term
debt of the Company.
5.1 Opinion of Rae A. Capps, Esq.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Rae A. Capps, Esq. (included in Exhibit 5.1)
24.1 Power of Attorney (included on Signature Pages)
99.1 Hawaiian Airlines, Inc. 401(k) Savings Plan
</TABLE>
- ----------------
(1) Previously filed with the Securities and Exchange Commission as an
exhibit to the Company's Current Report on Form 8-K as filed January 5,
1995 and incorporated herein by reference.
(2) Previously filed with the Securities and Exchange Commission as an
exhibit to the Company's Quarterly Report on Form 10-Q as filed August 14,
1995 and incorporated herein by reference.
(3) Previously filed with the Securities and Exchange Commission as an exhibit
to the Company's Registration Statement on Form S-8 as filed November 15,
1995 and incorporated herein by reference.
II-3
<PAGE>
(4) Previously filed with the Securities and Exchange Commission as an
exhibit to the Company's Annual Report on Form 10-K as filed April 1,
1996 and incorporated herein by reference.
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective 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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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 the time shall be deemed to be the initial BONA FIDE offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.
(d) Pursuant to the instructions to Item 8(b) of Form S-8, the
registrant will cause Hawaiian Airlines, Inc. 401(k) Savings Plan, as amended
since its most recent determination letter, to be submitted to the Internal
II-4
<PAGE>
Revenue Service in a timely manner and will make all changes required by the
Internal Revenue Service in order to qualify said Plan.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of Honolulu, State of
Hawaii, on this 6th day of August, 1996.
HAWAIIAN AIRLINES, INC.
By: /s/ Bruce R. Nobles
-------------------------------------
Bruce R. Nobles
President and Chief Executive Officer
II-6
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Bruce
R. Nobles, John L. Garibaldi, Rae A. Capps and Clarence K. Lyman his or her
true and lawful attorneys-in-fact and agents, each acting alone, with full
powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting
alone, full powers and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might, or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, each
acting alone, or his or her substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Bruce R. Nobles Director, President and Chief
- ----------------------------- Executive Officer (Principal August 6, 1996
Bruce R. Nobles Executive Officer)
/s/ John L. Garibaldi Executive Vice President and
- ----------------------------- Chief Financial Officer August 6, 1996
John L. Garibaldi (Principal Financial and
Accounting Officer)
/s/ John W. Adams Director, Chairman of the
- ----------------------------- Board August 6, 1996
John W. Adams
/s/ Todd G. Cole
- ----------------------------- Director August 6, 1996
Todd G. Cole
/s/ Richard F. Conway
- ----------------------------- Director August 6, 1996
Richard F. Conway
/s/ Robert G. Coo
- ----------------------------- Director August 6, 1996
Robert G. Coo
/s/ Carol A. Fukunaga
- ----------------------------- Director August 6, 1996
Carol A. Fukunaga
/s/ William Boyce Lum
- ----------------------------- Director August 6, 1996
William Boyce Lum
/s/ Richard K. Matros
- ----------------------------- Director August 6, 1996
Richard K. Matros
/s/ Reno F. Morella
- ----------------------------- Director August 6, 1996
Reno F. Morella
/s/ Samson Poomaihaelani
- ----------------------------- Director August 6, 1996
Samson Poomaihaelani
/s/ Edward Z. Safady
- ----------------------------- Director August 6, 1996
Edward Z. Safady
II-7
</TABLE>
<PAGE>
EXHIBIT 5
August 6, 1996
Hawaiian Airlines, Inc.
3375 Koapaka Street
Suite G350
Honolulu, HI 96819
Re: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
I have acted as counsel for Hawaiian Airlines, Inc., a Hawaii
corporation (the "Company"), in connection with the registration of 780,494
shares of Common Stock (the Common Stock") of the Company issuable under its
Hawaiian Airlines, Inc. 401(k) Savings Plan (the "Plan"). In connection
therewith, I have examined, among other things, the Registration Statement on
Form S-8 (the "Registration Statement") proposed to be filed by the Company
with the Securities and Exchange Commission on or about August 6, 1996. I
have also examined the proceedings and other actions taken by the Company in
connection with the authorization and reservation of the shares of Common
Stock issuable under the Plan and such other matters as I deemed necessary
for purposes of rendering this opinion.
Based upon the foregoing, and in reliance thereon, I am of the opinion
that the shares of Common Stock issuable under the Plan, when issued,
delivered and paid for in accordance with the Plan and the agreements
evidencing awards thereunder and in the manner described in the Registration
Statement, will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ RAE A. CAPPS
Rae A. Capps
RAC/hjh
<PAGE>
EXHIBIT 23.1
The Board of Directors
Hawaiian Airlines, Inc.:
We consent to incorporation by reference in the Registration Statement on
Form S-8 of Hawaiian Airlines, Inc., registering 780,494 shares of Common
Stock and 780,494 Preferred Stock Purchase Rights pursuant to the Hawaiian
Airlines, Inc. 401(k) Savings Plan, of our reports dated March 15,
1996, relating to the balance sheets of Hawaiian Airlines, Inc. as of
December 31, 1995 and 1994, and the related statements of operations,
shareholders' equity (deficit) and cash flows for the year ended December 31,
1995, the period September 12, 1994 through December 31, 1994, the period
January 1, 1994 through September 11, 1994, and for the year ended
December 31, 1993, and relating to the financial statement schedule for the
three-year period ended December 31, 1995, which reports appear in the
December 31, 1995 annual report on Form 10-K of Hawaiian Airlines, Inc.
Our reports dated March 15, 1996, indicate that the financial statements of
the Reorganized Company reflect the impact of adjustments to reflect the fair
value of assets and liabilities under fresh start accounting and, as a
result, the financial statements of the Reorganized Company are presented on
a different basis than those of the Predecessor Company.
In addition, our reports dated March 15, 1996, contain an explanatory
paragraph that states that the Company's recurring losses from operations,
deficit working capital and limited sources of additional liquidity raise
substantial doubt about its ability to continue as a going concern. The
financial statements and financial statement schedule do not include any
adjustments that might result from the outcome of that uncertainty.
/s/ KPMG Peat Marwick LLP
Honolulu, Hawaii
August 6, 1996
<PAGE>
ID# 2322t
HAWAIIAN AIRLINES, INC.
401(k) SAVINGS PLAN
12/94
<PAGE>
TABLE OF CONTENTS
Page
----
PROLOGUE ............................................................... 1
ARTICLE I DEFINITIONS ............................................... 2
ARTICLE II SERVICE RULES
2.1 Year Of Service Rules............................................ 9
2.2 Employment By Associated Companies............................... 9
2.3 Maternity Or Paternity Absences.................................. 10
ARTICLE III ELIGIBILITY
3.1 Eligibility To Become A Participant.............................. 11
3.2 Re-Employment Rules ............................................. 11
ARTICLE IV CONTRIBUTIONS
4.1 Savings Contributions............................................ 12
4.2 Participating Employer Contributions............................. 13
4.3 Return Of Contributions.......................................... 13
ARTICLE V CONTRIBUTION LIMITATIONS OF Sections
402(g) AND 401(k)
5.1 Definitions.................................................... 15
5.2 Section 402(g) Limitations On Elective
Deferral Contributions....................................... 16
5.3 Section 401(k) Limitations On Elective
Deferral Contributions....................................... 17
ARTICLE VI MAXIMUM CONTRIBUTION AND BENEFIT
LIMITATIONS
6.1 Limitation On Annual Additions To The
Plan -- No Participation In Other
Defined Contribution Arrangement............................. 21
6.2 Limitation On Annual Additions To The
Plan -- Participation In Another
Defined Contribution Arrangement............................. 21
(i)
<PAGE>
TABLE OF CONTENTS
Page
----
6.3 Limitation On Annual Additions To The
Plan -- Participation In Defined
Benefit Plan................................................. 23
6.4 Definitions................................................... 23
ARTICLE VII TRUST AND INVESTMENT PROVISIONS
7.1 Assets To Be Held By Trustee.................................. 29
7.2 Appointment Of Investment Manager............................. 29
7.3 Commingling Of Assets......................................... 29
7.4 Investment In Participating Employers......................... 30
ARTICLE VIII VESTING AND DISTRIBUTIONS
8.1 Vested Rights To Accounts .................................... 31
8.2 Distributions................................................. 31
8.3 No Withdrawals Or Loans....................................... 31
8.4 Special Distribution Rules.................................... 31
8.5 Section 401(a)(31) Eligible Distributions..................... 33
ARTICLE IX ADMINISTRATION OF THE PLAN
9.1 Administration................................................ 35
9.2 Expenses Of The Plan.......................................... 35
9.3 Records....................................................... 35
9.4 Authorization Of Benefit Payments............................. 35
9.5 Misc. Company Duties.......................................... 35
9.6 Fiduciary Responsibilities.................................... 36
9.7 Bonding....................................................... 36
9.8 Claims Procedure.............................................. 36
ARTICLE X PARTICIPATION BY AFFILIATED EMPLOYERS;
PORTABILITY
10.1 Participation Of Affiliated Employer.......................... 38
10.2 Withdrawal Of Participating Employer.......................... 38
ARTICLE XI AMENDMENT, TERMINATION, AND MERGER
11.1 Amendment..................................................... 39
11.2 Termination Or Discontinuance................................. 39
11.3 Merger........................................................ 40
(ii)
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE XII MISCELLANEOUS
12.1 Right To Employment Or Benefits............................. 41
12.2 Inalienability.............................................. 41
12.3 Misc. Payment Of Benefit Rules.............................. 41
12.4 Changes To Plan Necessary To Qualify
Under ERISA And The Code.................................. 42
12.5 Company Action.............................................. 42
12.6 Construction Of Plan........................................ 42
ARTICLE XIII TOP-HEAVY PROVISIONS
13.1 Determination Of Top-Heavy Status............................ 43
13.2 Special Top-Heavy Rules...................................... 46
13.3 Miscellaneous................................................ 47
APPENDIX 1 DISTRIBUTION REQUIREMENTS................................ 48
(iii)
<PAGE>
PROLOGUE
Effective as of April 1, 1993, Hawaiian Airlines, Inc. adopted the
Hawaiian Airlines, Inc. 401(k) Savings Plan for the benefit of certain of its
employees. Effective as of April 1, 1993, this Plan is hereby amended and
restated in its entirety to reflect amendments thereto. This Plan is intended
to qualify as a profit sharing plan under Section 401(a) of the Internal
Revenue Code of 1986, as amended, and meet the requirements of a qualified cash
or deferred arrangement under Section 401(k) of such Code.
Unless otherwise specifically provided for herein or by law, the rights
and benefits of eligible employees shall be determined in accordance with the
provisions hereof.
1
<PAGE>
ARTICLE I
DEFINITIONS
As used herein the following terms shall have the following meanings
unless the context clearly requires otherwise. Whenever appropriate, words
used in the singular may include the plural and vice versa, and the masculine
gender shall always include the feminine gender.
1.1 "Accounts" shall mean the Participant's Savings Account and
Participating Employer Contribution Account.
1.2 "Associated Company" shall mean (i) a corporation that is a member
of the same controlled group of corporations (within the meaning of Section
1563(a) of the Code, determined without regard to Section 1563(a)(4) and (e)(3)
of the Code) as a Participating Employer, (ii) any trade or business (whether
or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with a Participating Employer, (iii) any organization in an
affiliated service group (within the meaning of Section 414(m) of the Code)
with a Participating Employer, or (iv) any other entity required to be
aggregated with a Participating Employer pursuant to Section 414(o) of the Code
and the regulations thereunder.
1.3 "Beneficiary" shall mean the Participant's surviving spouse. If
the Participant is not married or if the Participant wishes to designate a
Beneficiary other than his spouse, he may do so on a form furnished for that
purpose by the Company and filed with the Company. Such a designation of a
Beneficiary other than a spouse shall not be effective unless consented to by
the Participant's spouse in a written instrument (i) in which the spouse
acknowledges the effect of such election and (ii) witnessed by an authorized
representative of the Plan or a notary public. Such written consent shall not
be required if it is established to the satisfaction of the authorized
representative of the Plan that such consent may not be obtained because there
is no spouse, the spouse cannot be located, or such other circumstances as
Treasury Regulations may prescribe. If a Participant fails to make any
designation, the person so designated shall not survive the Participant, or the
legal entity so designated shall no longer be in existence or shall be legally
incapable of receiving benefits hereunder, Beneficiary shall mean the
Participant's estate.
1.4 "Board" shall mean the Board of Directors of the Company.
2
<PAGE>
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or such other provision of law of similar purport as may at
any time be substituted therefor.
1.6 "Company" shall mean Hawaiian Airlines, Inc. or any successor
corporation.
1.7 "Compensation" shall mean the total salary, wages, and other
monetary remuneration, if any, paid to a Participant by a Participating
Employer during the period he is a Participant that is required to be set forth
on the Participant's Form W-2 for a particular Plan Year and prior to reduction
for an arrangement qualifying under Section 125 or 401(k) of the Code.
For Plan Years beginning before January 1, 1994, the Compensation of
each Participant taken into account for determining all benefits provided under
the Plan for any determination period shall not exceed $200,000 (hereinafter
the "$200,000 limitation"). For each such Plan Year, this limitation shall be
adjusted by the Secretary of the Treasury at the same time and in the same
manner as under Section 415(d) of the Code, except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year
beginning in such calendar year and the first adjustment to the $200,000
limitation shall be for the Plan Year beginning on or after January 1, 1990.
In addition to other applicable limitations set forth in the Plan and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the following provisions shall apply:
(i) The annual Compensation of each Participant taken into account
under the Plan shall not exceed the Omnibus Budget Reconciliation
Act of 1993 (hereinafter "OBRA '93") annual compensation limit. The
"OBRA '93 annual compensation limit" shall be $150,000, as adjusted by
the Commissioner of Internal Revenue for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code. The cost-
of-living adjustment in effect for a calendar year shall apply to any
period, not exceeding 12 months, over which Compensation is determined
(hereinafter "determination period") beginning in such calendar year.
(ii) For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to
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the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this paragraph.
(iii) If Compensation for any prior determination period shall be
taken into account in determining a Participant's benefits accruing in
the current Plan Year, the Compensation for that prior determination
period shall be subject to the OBRA '93 annual compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first Plan
Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit shall be $150,000.
If the period for determining Compensation used in calculating a
Participant's allocation for a Plan Year that contains fewer than 12 calendar
months, then the adjusted $200,000 limitation or the 'OBRA annual compensation
limitation shall be an amount equal to the otherwise applicable limitation
multiplied by a fraction, the numerator of which is the number of months in the
determination period and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of this
limitation the rules of Section 414(q)(6) of the Code shall apply, except that
in applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If as a result of the application of such
rules the adjusted $200,000 limitation or the 'OBRA annual compensation
limitation is exceeded, then the limitation shall be prorated among the
affected individuals in proportion to each such individual's Compensation as
determined under this Section 1.7 prior to the application of this limitation.
1.8 "Disability" shall mean a total and permanent disability that,
in the opinion of a medical examiner satisfactory to the Company, prevents a
Participant from further performance of service for a Participating Employer
and is likely to be permanent.
1.9 "Eligible Employee" shall mean a Participant who is eligible to
receive an allocation of Savings Contributions for all or a portion of the Plan
Year.
1.10 "Employee" shall mean an employee of a Participating Employer
who (i) is in a collectively
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bargaining group represented by the International Association of Machinists and
Aerospace Workers, (ii) is in a collectively bargaining group represented by
the Transport Workers Union of America (AFL-CIO), or (iii) is not in a
collectively bargaining group.
1.11 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, or any other provision of law of similar
purport as may at any time be substituted therefor.
1.12 "Family Member" shall mean the Participant's spouse, lineal
ascendants or descendants, and the spouses of such lineal ascendants and
descendants.
1.13 "Highly Compensated Employee" shall mean a "highly compensated
active employee" and a "highly compensated former employee." A "highly
compensated active employee" includes any employee who performs service for a
Participating Employer during the determination year and who during the look-
back year (i) received compensation (as defined in Section 415(c)(3) of the
Code) from a Participating Employer in excess of $75,000 (as adjusted pursuant
to Section 415(d) of the Code), (ii) received compensation (as defined in
Section 415(c)(3) of the Code) from a Participating Employer in excess of
$50,000 (as adjusted pursuant to Section 415(d) of the Code) and was a member
of the top-paid group for such year, or (iii) was an officer of a Participating
Employer and received compensation (as defined in Section 415(c)(3) of the
Code) during such year that was greater than 50% of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code. In addition, a "highly
compensated active employee" includes (i) an employee who is both described in
the preceding sentence if the term "determination year" is substituted for the
term "look-back year" and is one of the 100 employees who received the most
compensation (as defined in Section 415(c)(3) of the Code) from a Participating
Employer during the determination year and (ii) an employee who is a 5% owner
of a Participating Employer at any time during the look-back year or
determination year. If no officer has satisfied the compensation requirement
of (iii) above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a highly compensated
employee.
A "highly compensated former employee" includes any Employee who
separated from service or was deemed to have separated prior to the
determination year, performs no service for a Participating Employer during
the
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determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's
55th birthday.
If during a determination year or look-back year an employee is a
Family Member of either a 5% owner who is an active or former employee or a
Highly Compensated Employee who is one of the ten most Highly Compensated
Employees ranked on the basis of compensation (as defined in Section 415(c)(3)
of the Code) paid by a Participating Employer during such year, then the Family
Member and the 5% owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the Family Member and 5% owner or top-ten Highly
Compensated Employee shall be treated as a single employee receiving
compensation (as defined in Section 415(c)(3) of the Code) and Plan
contributions or benefits equal to the sum of such compensation and
contributions or benefits of the Family Member and 5% owner or top-ten Highly
Compensated Employee. The determination of who is a Highly Compensated
Employee (including the determinations of the number and identity of employees
in the top-paid group, the top 100 employees, the number of employees treated
as officers, and the compensation (as defined in Section 415(c)(3) of the Code)
that is considered) shall be made in accordance with Section 414(q) of the Code
and the regulations thereunder.
For these purposes, the "determination year" shall be the Plan Year
and the "look-back year" shall be the 12-month period immediately preceding the
determination year.
1.14 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for a Participating Employer. These
hours shall be credited to the Employee for the computation period or periods
in which the duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to
payment, by a Participating Employer on account of a period of time during
which no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave of absence.
No more than 501 Hours of Service shall be credited under this subparagraph (b)
for any single continuous period (whether
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or not such period occurs in a single computation period). Hours under
this subparagraph (b) shall be calculated and credited pursuant to
Section 2530.200b-2 of the Department of Labor Regulations, which is
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by a Participating Employer. The
same Hours of Service shall not be credited under subparagraph (a) or
subparagraph (b), as the case may be, and under this subparagraph (c). These
hours shall be credited to the Employee for the computation period or periods
to which the award or agreement pertains rather than the computation period in
which the award, agreement, or payment is made.
Hours of Service shall be credited for employment with other members
of an affiliated service group (within the meaning of Section 414(m) of the
Code), a controlled group of corporations (within the meaning of Section 414(b)
of the Code), or a group of trades of businesses under common control (within
the meaning of Section 414(c) of the Code), of which a Participating Employer
is a member, and any other entity required to be aggregated with a
Participating Employer pursuant to Section 414(o) of the Code and the
regulations thereunder. Hours of Service shall also be credited for any
individual considered an Employee for purposes of the Plan under Section 414(n)
or Section 414(o) of the Code and the regulations thereunder.
1.15 "Normal Retirement Age" shall mean the Participant's 55th
birthday.
1.16 "One-Year Break in Service" shall mean a 12-consecutive month
computation period determined pursuant to Section 2.1 during which a
Participant is credited with less than 500 Hours of Service.
1.17 "Participant" shall mean any person who has satisfied the
eligibility requirements of Article III and whose Savings Account or
Participating Employer Contribution Account remains in the Plan and allocated
to him. An "active Participant" shall mean a Participant during the period he
is employed in an eligible class of Employees and is, therefore, eligible to
receive an allocation of Savings Contributions.
1.18 "Participating Employer" shall mean the Company and any other
employer that the Company authorizes to be a Participating Employer pursuant to
Article XI.
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1.19 "Participating Employer Contribution Account" shall mean an
account maintained for each Participant that represents such Participant's
proportion of the value of the assets of the Trust Fund arising from
Participating Employer Contributions made on his behalf.
1.20 "Participating Employer Contributions" shall mean contributions
made on a Participant's behalf pursuant to Section 4.2.
1.21 "Plan" shall mean the Hawaiian Airlines, Inc. 401(k) Savings
Plan, as set forth herein and any amendments hereto.
1.22 "Plan Year" shall mean the period from April 1, 1993 through
December 31, 1993 and each subsequent calendar year.
1.23 "Savings Account" shall mean an account maintained for each
Participant that represents such Participant's proportion of the value of the
assets of the Trust Fund arising from Savings Contributions made on his behalf.
1.24 "Savings Contributions" shall mean contributions made on a
Participant's behalf pursuant to Section 4.1.
1.25 "Trust Fund" shall mean all cash and property received and/or
held by a Trustee pursuant to the Plan and a related trust agreement and all
income, profits, or increments therefrom or thereto.
1.26 "Trustee" shall mean any bank or trust company appointed by the
Company.
1.27 "Year of Service" shall mean a 12-consecutive month computation
period determined pursuant to Section 2.1 during which the Employee completes
at least 1,000 Hours of Service. Certain Year of Service rules are specified
in Article II.
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ARTICLE II
SERVICE RULES
SECTION 2.1 YEAR OF SERVICE RULES.
(a) In determining an Employee's Years of Service and One-Year
Breaks in Service, the initial computation period shall be the 12-consecutive
month period beginning on the date the Employee first performs an Hour of
Service for a Participating Employer. The succeeding 12-consecutive month
periods shall commence with the first anniversary of the Employee's employment
commencement date.
(b) All of an Employee's Years of Service shall be recognized
except that if an Employee incurs a One-Year Break in Service before satisfying
the eligibility requirements of Section 3.1, service before such break shall
be disregarded.
SECTION 2.2 EMPLOYMENT BY ASSOCIATED COMPANIES.
(a) If an individual is at any time employed by a company while
it is an Associated Company, such employment shall be treated as employment by
a Participating Employer for purposes of determining such individual's
eligibility for participation in this Plan. However, he shall not be an
active Participant during any such service.
(b) If a Participant's employment with a Participating Employer
is terminated and he is immediately employed by an Associated Company, his
Savings Account and Participating Employer Contribution Account shall remain in
the Plan so long as he is employed by an Associated Company. However, he shall
not be an active Participant while he is so employed. During any such
employment with an Associated Company, the Participant's Savings Account and
Participating Employer Contribution Account shall continue to share in earnings
of the Trust Fund and to bear and share expenses and losses. Further
employment by any Associated Company shall be similarly treated. If the
Participant is re-employed by a Participating Employer in an eligible class of
employees, he shall immediately become an active Participant. If the
Participant is terminated while in the employ of the Associated Company, he
shall be treated in the same manner as if he had been terminated while in the
employ of a Participating Employer.
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SECTION 2.3 MATERNITY OR PATERNITY ABSENCES.
An Employee absent from work for any period (i) by reason of her
pregnancy, the birth of his/her child, or the placement of a child with him/her
in connection with his/her adoption of such child or (ii) for purposes of
his/her caring for such child for a period beginning immediately following such
birth or placement shall be credited with the additional Hours of Service that
otherwise would normally have been credited to such individual but for such
absence for purposes of determining whether a One-Year Break in Service has
been incurred. The Hours of Service described in the prior sentence shall be
treated as Hours of Service only in (i) the Plan Year in which the absence from
work began if such credit is necessary to prevent a One-Year Break in Service
in such year, or (ii) in any other case, in the immediately following Plan
Year. Such credit when added to Hours of Service otherwise credited to the
Employee shall not result in crediting more than 501 Hours of Service for the
applicable Plan Year.
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ARTICLE III
ELIGIBILITY
SECTION 3.1 ELIGIBILITY TO BECOME A PARTICIPANT.
Each Employee as of April 1, 1993 who on or prior to March 31, 1993 has
completed one Year of Service shall become a Participant as of April 1, 1993.
Thereafter, an Employee shall become a Participant as of the first day of the
month coincident with or next following the date upon which he has completed
one Year of Service.
SECTION 3.2 RE-EMPLOYMENT RULES.
(a) A former Participant shall become an active Participant
immediately upon his return to the employ of a Participating Employer in an
eligible class of Employees.
(b) If a Participant becomes ineligible to participate because he is
no longer employed by a Participating Employer in an eligible class of
Employees, he shall become an active Participant immediately upon his return to
an eligible class of Employees.
(c) If an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall become an
active Participant immediately if he has satisfied the requirements of Section
3.1 and would have previously become a Participant had he been in the eligible
class.
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ARTICLE IV
CONTRIBUTIONS
SECTION 4.1 SAVINGS CONTRIBUTIONS.
(a) Effective as of April 1, 1993, in consideration of an active
Participant's reduction in Compensation pursuant to a salary reduction
agreement under Section 4.1(c), the Participating Employer shall (subject to
Articles V and VI) make Savings Contributions to the Participant's Savings
Account in an amount equal to the amount by which his Compensation was reduced.
Such contributions shall be made no less often than monthly.
(b) For Federal tax purposes (and, wherever permitted, for state tax
purposes) Savings Contributions shall be deemed to be contributions by a
Participating Employer.
(c) (1) An active Participant shall authorize Savings Contributions
by completing a salary reduction agreement form furnished by and filed with the
Company on which he (i) designates the rate of Savings Contributions to be made
on his behalf and (ii) agrees to comply with the provisions of the Plan and to
provide such information as may be necessary for the administration of the
Plan.
(2) A salary reduction agreement must be received by the
Company prior to the 30th day of the month preceding the first day of the
calendar month as of which the Participant's Savings Contributions are to
commence. If a Participant does not enter into a salary reduction agreement as
of the initial date he is eligible therefor, he may thereafter enter into a
salary reduction agreement only as of a subsequent January 1, April 1, July 1,
or October 1, provided such agreement is received by the Company at least 30
days prior to such January 1, April 1, July 1, or October 1.
(3) A salary reduction agreement shall provide that the
Participant agrees to accept a reduction in Compensation from a Participating
Employer equal to any whole percentage of his Compensation, but not more than
15% percent of his Compensation.
(4) A salary reduction agreement shall remain in effect until
amended or revoked. A salary reduction agreement may be revoked effective as
of January 1, April 1, July 1, or October 1, provided such revocation is
received by the Company at least 30 days prior to such January 1, April 1, July
1, or October 1. Pursuant to
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such a revocation, a Participant may discontinue salary reduction (and Savings
Contributions). A salary reduction agreement may be amended effective only as
of a January 1, April 1, July 1, or October 1, provided such amendment is
received by the Company at least 30 days prior to such January 1, April 1, July
1, or October 1. Pursuant to such an amendment, a Participant may increase or
decrease the rate of salary reduction (and Savings Contributions).
(5) After an amendment, additional amendments may only be made,
and after a revocation, Savings Contributions may be resumed, only as of a
January 1, April 1, July 1, or October 1 following the amendment or revocation.
Such an amendment or election to resume must be received by the Company at
least 30 days prior to such January 1, April 1, July 1, or October 1.
(d) The Company may amend or revoke a salary reduction agreement
with any Participant at any time if the Company determines that such revocation
or amendment is necessary to insure that the requirements of Articles V and VI
are satisfied or that the Plan does not become subject to the top-heavy
provisions of Section 416 of the Code.
(e) All Savings Contributions shall be deposited in the Trust Fund
by the 20th day of the month following the month to which they apply, provided
that no contribution shall be made after the date prescribed by law.
SECTION 4.2 PARTICIPATING EMPLOYER CONTRIBUTIONS.
(a) For the period commencing on September 1, 1993 and ending on
August 31, 1994, the Participating Employers shall make Participating Employer
Contributions to the Participating Employer Contribution Account of each active
Participant as of September 1, 1993 equal to 2% of the active Participant's
Compensation for services rendered during such period.
(b) For the period commencing on September 1, 1994 and ending on
February 27, 1997, the Participating Employers shall make Participating
Employer Contributions to the Participating Employer Contribution Account of
each active Participant equal to 4.04% of the active Participant's Compensation
for services rendered during such period.
SECTION 4.3 RETURN OF CONTRIBUTIONS.
(a) All contributions to the Plan are conditioned upon initial
qualification of the Plan under
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Section 401 of the Code or deductibility under Section 404 of the Code. If
such qualification or deduction shall be denied, (i) a Participant shall be
entitled to a distribution of the affected amounts, if any, of his Savings
Account (as adjusted in each case for any earnings or losses thereon) and (ii)
the Participating Employers shall be entitled to a distribution of the affected
amounts, if any, of the Participating Employer Contribution Accounts. Any such
distribution shall be made as soon as practicable, but in any event within one
year after denial of such qualification or deduction.
(b) If a contribution is made by a mistake of fact, (i) a
Participant shall be entitled to a distribution of the affected amounts, if
any, of his Savings Account (as adjusted in each case for any earnings or
losses thereon) and (ii) the Participating Employers shall be entitled to a
distribution of the affected amounts, if any, of the Participating Employer
Contribution Accounts. Any such distribution shall be made as soon as
practicable, but in any event within one year of the making of such
contribution.
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ARTICLE V
CONTRIBUTION LIMITATIONS OF
SECTIONS 402(g) and 401(k)
SECTION 5.1 DEFINITIONS.
In addition to the definitions in Article I of the Plan, the
following definitions shall apply for purposes of this Article V:
(a) "Actual Deferral Percentage" for a specified group of Eligible
Employees for a Plan Year shall mean the average of the ratios (calculated
separately for each Eligible Employee in such group) of (i) the amount of the
contributions actually paid over to the Trust Fund on behalf of each such
Employee for such Plan Year to (ii) such Employee's Compensation for such Plan
Year, whether or not the Employee was an Eligible Employee for the entire Plan
Year. Contributions on behalf of any Participant shall include (i) any Savings
Contributions made pursuant to the Participant's salary reduction election
(including Excess Elective Deferrals of Highly Compensated Employees), but
excluding Excess Elective Deferrals of non-Highly Compensated Employees that
arise solely from Savings Contributions made under this Plan or any other
plans of a Participating Employer, and (ii) at the election of the Company,
Participating Employer Contributions. An Eligible Employee who is eligible to
but does not make any Savings Contributions for a Plan Year shall be treated as
a Participant on whose behalf no Savings Contributions are made.
(b) "Compensation" shall mean compensation as defined in
Section 6.4(b).
(c) "Excess Contributions" shall mean with respect to any Plan Year
the excess of (i) the aggregate amount of contributions actually taken into
account in computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year over (ii) the maximum amount of such contributions
permitted by the Actual Deferral Percentage test (determined by reducing
contributions made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such percentages).
(d) "Excess Elective Deferrals" shall mean the Savings Contributions
that are includible in a Participant's gross income under Section 402(g) of the
Code to the extent such Participant's Savings Contributions for a taxable year
exceed the dollar limitation under Section 402(g). Excess Elective Deferral
shall be treated as Annual Additions under Section 6.4 of
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the Plan, unless such amounts are distributed no later than the first April 15
following the close of the Participant's taxable year.
SECTION 5.2 SECTION 402(g) LIMITATIONS ON ELECTIVE DEFERRAL CONTRIBUTIONS.
(a) No Participant shall be permitted to have Savings Contributions
made under this Plan or any other qualified plan maintained by a Participating
Employer during any taxable year in excess of the dollar limitation contained
in Section 402(g) of the Code in effect at the beginning of such taxable year.
(b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant by notifying the
Company on or before March 1 of the applicable year of the amount of the Excess
Elective Deferrals to be assigned to the Plan. A Participant shall be deemed
to notify the Company of any Excess Elective Deferrals that arise by taking
into account only those Savings Contributions made to this Plan and any other
plans of a Participating Employer.
(c) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 of each year to the Participant to whose
account Excess Elective Deferrals were assigned for the preceding year and who
claims Excess Elective Deferrals for such taxable year.
(d) The Participant's claim must (i) be in writing, (ii) be submitted
to the Company not later than March 1 of the applicable year, (iii) specify the
amount of the Participant's Excess Elective Deferrals for the preceding
calendar year, and (iv) be accompanied by the Participant's written statement
that if such amounts are not distributed, such Excess Elective Deferrals (when
added to amounts deferred under other plans or arrangements described in
Sections 401(k), 408(k), or 403(b) of the Code) shall exceed the limit imposed
on the Participant by Section 402(g) of the Code for the year in which the
deferral occurred.
(e) The Excess Elective Deferrals shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to Excess
Elective Deferrals shall be the sum of:
(i) the income or loss allocable to the Participant's Savings
Account for the taxable year
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multiplied by a fraction, the numerator of which is such Participant's Excess
Elective Deferrals for the year and the denominator of which is the balance of
the Participant's Savings Account without regard to any income or loss
occurring during such taxable year; and
(ii) 10% of the amount determined under (i) above multiplied by
the number of whole calendar months between the end of the Participant's
taxable year and the date of distribution, counting the month of distribution
if distribution occurs after the 15th day of such month.
The amount of Excess Elective Deferrals that may be distributed with respect to
a Participant shall be reduced by any Excess Contributions previously
distributed or recharacterized with respect to such Participant for the Plan
Year beginning with or within such taxable year. In no event may the amount
distributed exceed the Participant's total Savings Contributions for such
taxable year.
SECTION 5.3 SECTION 401(k) LIMITATIONS ON ELECTIVE DEFERRAL CONTRIBUTIONS.
(a) ACTUAL DEFERRAL PERCENTAGE TESTS. For each Plan Year the
Company shall review the contributions on behalf of each Eligible Employee in
order to determine whether such contributions with respect to all Eligible
Employees satisfy one of the following tests:
(1) The Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for such Plan Year does not
exceed the Actual Deferral Percentage of all other Eligible Employees for
such Plan Year multiplied by 1.25.
(2) The Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for such Plan Year does not
exceed the Actual Deferral Percentage for all other Eligible Employees for such
Plan Year multiplied by two, provided that the Actual Deferral Percentage for
the group of Highly Compensated Employees does not exceed the Actual Deferral
Percentage of such other Eligible Employees by more than two percentage points.
(b) ACTUAL DEFERRAL PERCENTAGE RULES.
(1) The Actual Deferral Percentage for any Eligible Employee
who is a Highly Compensated Employee for the Plan Year and who is eligible to
have contributions
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allocated to his account under two or more arrangements described in
Section 401(k) of the Code that are maintained by a Participating Employer shall
be determined as if such contributions were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be treated as
separate if manditorily disaggregated under regulations under Section 401(k) of
the Code.
(2) For purposes of determining the Actual Deferral Percentage
of an Eligible Employee who is a 5% owner or one of the ten most highly-paid
Highly Compensated Employees, the contributions and Compensation of such
Eligible Employee shall include the contributions and Compensation for the Plan
Year of family members (as defined in Section 414(q)(6) of the Code). Family
members with respect to such Highly Compensated Employees shall be disregarded
as separate Eligible Employees in determining the Actual Deferral Percentage
both for Eligible Employees who are non-Highly Compensated Employees and for
Eligible Employees who are Highly Compensated Employees.
(3) If this Plan satisfies the requirements of Sections
401(a)(4), 401(k), or 410(b) of the Code only if aggregated with one or more
other plans or if one or more other plans satisfy such requirements only if
aggregated with this Plan, then this Section 5.3 shall be applied by
determining the Actual Deferral Percentages of Eligible Employees as if all
such plans were a single plan. Plans may be aggregated in order to satisfy
Section 401(k) of the Code only if they have the same Plan Year.
(4) For purposes of determining the Actual Deferral Percentage
test, contributions must be made before the last day of the 12-month period
immediately following the Plan Year to which contributions relate.
(5) The Company shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage test.
(6) The determination and treatment of the contributions and
the Actual Deferral Percentage of any Eligible Employee shall satisfy such
other requirements as may be prescribed by the Secretary of the Treasury.
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(c) REDUCTIONS OF EXCESS CONTRIBUTIONS.
(1) Notwithstanding any other provision of the Plan, Excess
Contributions (plus any income and minus any loss allocable thereto) shall be
distributed no later than the last day of each Plan Year to Participants to
whose Accounts such Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than 2-1/2 months after the
last day of the Plan Year in which such excess amounts arose, a 10% excise tax
shall be imposed on the Participating Employer with respect to such amounts.
Such distributions shall be made to Highly Compensated Employees on the basis
of the respective portions of the Excess Contributions attributable to each of
such employees. Excess Contributions of Participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the family members in proportion to the contributions (and
amounts treated as contributions) of each family member that is combined to
determine the combined Actual Deferral Percentage.
(2) Excess Contributions shall be treated as Annual Additions
under Section 6.4 of the Plan.
(3) Excess Contributions shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to such
Excess Contributions shall be the sum of:
(i) the income or loss allocable to the Participant's
Savings Account (and, if applicable, the Participating Employer Contribution
Account) for the Plan Year for which the Excess Contributions occurred
multiplied by a fraction, the numerator of which is the Participant's Excess
Contributions for the year and the denominator of which is the balance of the
Participant's Savings Account (and, if applicable, the Participating Employer
Contribution Account) as of the end of the Plan Year without regard to any
income or loss occurring during such Plan Year; and
(ii) 10% of the amount determined under (i) above
multiplied by the number of whole calendar months between the end of such
taxable year and the date of distribution, counting the month of distribution
if distribution occurs after the 15th day of such month.
(4) Excess Contributions shall be distributed first from the
Participant's Savings Account. If Participating Employer Contributions were
used in the
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Actual Deferral Percentage tests, Excess Contributions shall be distributed
from the Participant's Participating Employer Contribution Account only to the
extent that such Excess Contributions exceed the balance in the Participant's
Savings Account.
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ARTICLE VI
MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
Section 6.1 LIMITATION ON ANNUAL ADDITIONS TO THE PLAN -- NO PARTICIPATION IN
OTHER DEFINED CONTRIBUTION ARRANGEMENT.
(a) If a Participant does not participate in and has never
participated in another qualified plan maintained by a Participating Employer,
a welfare benefit fund (as defined in Section 419(e) of the Code) maintained by
a Participating Employer, an individual medical account (as defined in Section
415(1)(2) of the Code) maintained by a Participating Employer, or a simplified
employee pension (as defined in Section 408(k) of the Code) maintained by a
Participating Employer that provides an Annual Addition, the amount of Annual
Additions that may be credited to the Participant's Accounts for any limitation
year shall not exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in the Plan. If a contribution that would otherwise be
contributed or allocated to the Participant's Accounts would cause the Annual
Additions for the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated shall be reduced so that the Annual Additions
for the Limitation Year equal the Maximum Permissible Amount.
(b) Prior to determining the Participant's compensation for the
Limitation Year, a Participating Employer may determine the Maximum Permissible
Amount for a Participant on the basis of a reasonable estimate of the
Participant's compensation for the Limitation Year, such estimate to be
uniformly determined for all Participants similarly situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year shall
be determined on the basis of the Participant's actual compensation for the
Limitation Year.
(d) If pursuant to Section 6.1(c) there is an Excess Amount, any
Savings Contributions, to the extent such contributions would reduce the Excess
Amount, shall be returned to the Participant.
SECTION 6.2 LIMITATION ON ANNUAL ADDITIONS TO THE PLAN -- PARTICIPATION IN
ANOTHER DEFINED CONTRIBUTION ARRANGEMENT.
(a) If in addition to this Plan the Participant is covered under
another qualified plan maintained by a
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Participating Employer, a welfare benefit fund (as defined in Section 419(e) of
the Code) maintained by a Participating Employer, an individual medical account
(as defined in Section 415(1)(2) of the Code) maintained by a Participating
Employer, or a simplified employee pension (as defined in Section 408(k) of the
Code) maintained by a Participating Employer that provides an Annual Addition
during any Limitation Year, then the Annual Additions that may be credited to a
Participant's Accounts under this Plan for any such Limitation Year shall not
exceed the Maximum Permissible Amount reduced by the Annual Additions credited
to a Participant's account under such other plans and funds for the same
Limitation Year. If the Annual Additions with respect to the Participant under
such other plans and funds are less than the Maximum Permissible Amount and a
contribution that would otherwise be contributed or allocated to the
Participant's Accounts under this Plan would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated shall be reduced so that the Annual Additions under
all such plans and funds for the Limitation Year shall equal the Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other plans and funds in the aggregate are equal to or greater than
the Maximum Permissible Amount, no amount shall be contributed or allocated to
the Participant's Accounts under this Plan for the Limitation Year.
(b) Prior to determining the Participant's actual compensation for
the Limitation Year, a Participating Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in Section 6.1(b).
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year shall
be determined on the basis of the Participant's actual compensation for the
Limitation Year.
(d) If, pursuant to Section 6.2(c) or as a result of the allocation
of forfeitures, if any, a Participant's Annual Additions under this Plan and
such other plans and funds would result in an Excess Amount for a Limitation
Year, the Excess Amount shall be deemed to consist of the Annual Additions
last allocated, except that Annual Additions attributable to a welfare benefit
fund or individual medical account shall be deemed to have been allocated
first regardless of the actual allocation date.
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(e) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan that coincides with an allocation date of another
such plan or fund, the Excess Amount attributed to this Plan shall be the
product of (i) the total Excess Amount allocated as of such date and (ii) the
ratio of [a] the Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan to [b] the total Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this and all other such plans and funds.
(f) Any Excess Amount attributed to this Plan shall be disposed in
the manner described in Section 6.1(d).
SECTION 6.3 LIMITATION ON ANNUAL ADDITIONS TO THE PLAN -- PARTICIPATION IN
DEFINED BENEFIT PLAN.
If a Participating Employer maintains or at any time maintained a
qualified defined benefit plan covering any Participant in this Plan, the sum
of the Participant's Defined Benefit Fraction and Defined Contribution Fraction
shall not exceed 1.0 in any Limitation Year. Reduction of benefits and/or
contributions or allocations to the plans, where required, shall be
accomplished first by reducing the Participant's benefits under the defined
benefit plans and then by reducing the contributions or allocations under the
defined contribution plans. If the Participant participates in more than one
defined benefit plan maintained by a Participating Employer and reductions are
necessary under the defined benefit plans, such reductions shall be made first
from the first such plan in which he commenced participation and if further
reduction is required, then from the second such plan in which he commenced
participation, and proceeding in such order until the limitation of this
Section 6.3 is no longer exceeded. If the Participant participates in more
than one defined contribution plan (other than the Plan) maintained by a
Participating Employer, reductions in such category of plans shall be first
from the first such plan in which he commenced participation and if further
reduction is required, then from the second such plan in which he commenced
participation, and proceeding in such order until reductions from all such
plans have been appropriately effected.
SECTION 6.4. DEFINITIONS.
In addition to the definitions in Article I, the following definitions
shall apply for purposes of this Article VI:
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(a) "Annual Additions" shall mean the sum of the following amounts
credited to a Participant's Accounts for the Limitation Year:
(1) employer contributions,
(2) employee contributions,
(3) forfeitures,
(4) amounts allocated after March 31, 1984 to an individual
medical account (as defined in Section 415(1)(2) of the Code) that is part of
a pension or annuity plan maintained by a Participating Employer,
(5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, that are
attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Section 419A(d)(3) of the Code) under
a welfare benefit fund (as defined in Section 419(e) of the Code) maintained by
a Participating Employer,
(6) allocations under a simplified employee pension (as
defined in Section 408(k) of the Code), and
(7) any Excess Amount applied under Section 6.1(d) or 6.2(f)
in the Limitation Year to reduce employer contributions.
(b) "compensation" shall mean a Participant's earned income, wages,
salaries, and fees for professional services and other amounts received for
personal services actually rendered in the course of employment with a
Participating Employer (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, and bonuses), and excluding the
following:
(1) employer contributions to a plan of deferred compensation
that are not includible in the employee's gross income for the taxable year in
which contributed, employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
(2) amounts realized (i) from the exercise of a non-qualified
stock option or (ii) when restricted stock (or property) held by the
employee either becomes
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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
(4) other amounts that received special tax benefits, or
contributions made by an employer (whether or not under an elective deferral
agreement) towards the purchase of an annuity described in Section 403(b) of
the Code (whether or not the amounts are actually excludable from the gross
income of the employee).
For purposes of applying the limitations of this Article VI,
compensation for a Limitation Year shall be the compensation actually paid or
includible in gross income during such Limitation Year.
(c) "Defined Benefit Fraction" shall mean a fraction, the numerator
of which is the sum of the Participant's Projected Annual Benefits under all
the defined benefit plans (whether or not terminated) maintained by a
Participating Employer, and the denominator of which is the lesser of 125% of
the dollar limitation determined for the Limitation Year under Sections 415(b)
and (d) of the Code or 140% of the Highest Average Compensation, including any
adjustments under Section 415(b) of the Code.
Notwithstanding the prior paragraph, if the Participant was a
participant as of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more defined benefit plans maintained by a
Participating Employer that were in existence on May 6, 1986, the denominator
of this fraction shall not be less than 125% of the sum of the annual benefits
under such plans that the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of such plan after May 5, 1986. This paragraph
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 for all Limitation Years beginning
before January 1, 1987.
(d) "Defined Contribution Dollar Limitation" shall mean $30,000, or
if greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in effect for the Limitation Year.
(e) "Defined Contribution Fraction" shall mean a fraction, the
numerator of which is the sum of the Annual Additions to the Participant's
accounts under all the
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defined contribution plans (whether or not terminated) maintained by a
Participating Employer for the current and all prior Limitation Years
(including the Annual Additions attributable to the Participant's nondeductible
employee contributions to all defined benefit plans, whether or not terminated,
maintained by a Participating Employer and the Annual Additions attributable to
all welfare benefit funds (as defined in Section 419(e) of the Code) and
individual medical accounts (as defined in Section 415(1)(2) of the Code)
maintained by a Participating Employer), and the denominator of which is the
sum of the maximum aggregate amounts for the current and all prior Limitation
Years with a Participating Employer (regardless of whether a defined
contribution plan was maintained by a Participating Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125% of the dollar
limitation determined under Sections 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code or 35% of the Participant's compensation for
such year.
If the Participant was a participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by a Participating Employer that were in
existence on May 6, 1986, the numerator of this fraction shall be adjusted if
the sum of this fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal
to the product of (i) the excess of the sum of the fractions over 1.0 times
(ii) the denominator of this fraction, shall be permanently subtracted from the
numerator of this fraction. The adjustment shall be calculated using the
fractions as they would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 6, 1986, but using the Section 415
limitation applicable to the first Limitation Year beginning on or after
January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all employee contributions as Annual
Additions.
(f) "Participating Employer" shall mean a Participating Employer and
all members of a controlled group of corporations (as defined in Section 414(b)
of the Code as modified by Section 415(h) of the Code), all commonly controlled
trades or businesses (as defined in Section 414(c) of the Code as modified by
Section 415(h) of the Code ), or all members of an affiliated service group (as
defined in Section 414(m) of the Code) of which
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the Participating Employer is a part, and any other entity required to be
aggregated with a Participating Employer pursuant to Section 414(o) of the
Code.
(g) "Excess Amount" shall mean the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(h) "Highest Average Compensation" shall mean the average
compensation for the three consecutive Years of Service with a Participating
Employer that produces the highest average.
(i) "Limitation Year" shall mean a calendar year. All qualified
plans maintained by a Participating Employer must use the same Limitation Year.
If the Limitation Year is amended to a different 12-consecutive month period,
the new Limitation Year must begin on a date within the Limitation Year in
which the amendment is made.
(j) "Maximum Permissible Amount" shall mean the lesser of $30,000 (or
beginning January 1, 1988, such larger amount determined in accordance with
Section 415(d) of the Code for the Limitation Year). The maximum Annual
Addition that may be contributed or allocated to a Participant's Accounts under
the Plan for any Limitation Year shall not exceed the lesser of (i) the Defined
Contribution Dollar Limitation or (ii) 25% of the Participant's compensation
for the Limitation Year. The compensation limitation referred to in clause
(ii) of the prior sentence shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or 419A(f)(2) of the Code) that
is otherwise treated as an Annual Addition under Section 415(l)(1) or
419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the Maximum
Permissible Amount shall not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
12
(k) "Projected Annual Benefit" shall mean the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which the participant would be entitled under
the terms of the plan assuming:
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(1) the participant shall continue employment until normal
retirement age under the plan (or current age, if later), and
(2) the participant's compensation for the current Limitation
Year and all other relevant factors used to determine benefits under the
plan shall remain constant for all future Limitation Years.
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ARTICLE VII
TRUST AND INVESTMENT PROVISIONS
SECTION 7.1 ASSETS TO BE HELD BY TRUSTEE.
(a) All contributions to the Plan shall be paid to a Trustee and
held and invested pursuant to a Trust Agreement. No part of the corpus or
income of the Trust Fund shall be used for or diverted to purposes other than
for the exclusive benefit of Participants and Beneficiaries.
(b) The Company may remove any Trustee at any time upon reasonable
notice. Upon such removal or upon the resignation of any Trustee, the
Company may designate a successor Trustee.
(c) The Company shall be responsible for determining the manner in
which the assets of the Trust Fund shall be disbursed in accordance with the
terms of the Plan.
(d) Each Participant may elect on a form furnished by the Company
the investment fund or funds in which his Accounts shall be invested. The
Company, subject to acceptance by the Trustee, shall establish rules
regarding such elections.
SECTION 7.2 APPOINTMENT OF INVESTMENT MANAGER.
The Company may authorize the retention of an investment manager to
manage (including the power to acquire and dispose of) any assets of the
Trust Fund, provided that there is an acknowledgment in writing by the
investment manager that it is (i) qualified to so act under the terms of
ERISA, and (ii) by acceptance of such appointment, a Plan fiduciary.
SECTION 7.3 COMMINGLING OF ASSETS.
(a) The assets of each Participating Employer may be commingled with
the assets of the other Participating Employers.
(b) A transaction may be made between the Plan (including a trust
forming a part thereof) and (i) a common or collective trust fund or pooled
investment fund maintained by a party in interest (as such term in defined in
ERISA) that is a bank or trust company supervised by a State or Federal
agency or (ii) a pooled investment fund of an insurance company qualified to
do business in the
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State, if (A) the transaction is a sale or purchase of an interest in such
fund, and (B) the bank, trust company, or insurance company receives not more
than reasonable compensation.
SECTION 7.4 INVESTMENT IN PARTICIPATING EMPLOYERS.
Up to 100% of the assets of the Trust Fund may be invested in
"qualifying employer real property" or qualifying employer securities" (as
such terms are defined in ERISA).
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ARTICLE VIII
VESTING AND DISTRIBUTIONS
SECTION 8.1 VESTED RIGHTS TO ACCOUNTS.
A Participant shall always be 100% vested in his Accounts.
SECTION 8.2 DISTRIBUTIONS.
(a) Except as required by Section 8.4, a Participant's Accounts
shall be distributed only upon his termination of employment with the
Participating Employers and the Associated Companies. No distributions shall
be made if a Participant remains employed by a Participating Employer or an
Associated Company in a capacity in which he is not eligible to participate
in this Plan. Except for distribution to a Beneficiary in the case of death,
all distributions shall be to the Participant.
(b) Subject to Section 8.4, distributions shall be made as soon as
practicable after the event that entitled the Participant, or in the case of
a Participant's death, his Beneficiary, to such distribution.
(c) Distributions shall be made in a lump sum and shall be based
upon the balance of the Participant's Accounts as of the valuation date
immediately preceding distribution.
SECTION 8.3 NO WITHDRAWALS OR LOANS.
No withdrawals prior to termination of employment (subject to
Section 8.4) or loans from a Participant's Accounts shall be permitted.
SECTION 8.4 SPECIAL DISTRIBUTION RULES.
(a) (1) If a Participant terminates service and the value of his
Accounts does not exceed (or at the time of any prior distribution did not
exceed) $3,500, the Participant shall receive a distribution of the value of
his Accounts. For purposes of this Section 8.4(a)(1), if the value a
Participant's Accounts is zero, the Participant shall be deemed to have
received a distribution of his Accounts.
(2) If the value of a Participant's Accounts exceeds (or at
the time of any prior distribution exceeded) $3,500 and the Accounts are
immediately
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distributable, the Participant must consent to any distribution of his/her
Accounts. The consent of the Participant shall be obtained in writing within
the 90-day period ending on the first day of the first period for which an
amount is paid in any form. The Company shall notify the Participant of the
right to defer any distribution until his/her Accounts are no longer
immediately distributable. Such notification shall be provided no less than
30 days and no more than 90 days prior to the distribution date. However,
distribution may commence less than 30 days after the notice described in the
preceding sentence is given, provided the distribution is one to which
Sections 401(a)(11) and 417 of the Code do not apply, the Company clearly
informs the Participant that he/she has a right to a period of at least 30
days after receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution option),
and the Participant after receiving the notice affirmatively elects a
distribution.
(3) Notwithstanding Section 8.4(a)(2), the consent of the
Participant shall not be required to the extent that a distribution is
required to satisfy Section 401(a)(9) or 415 of the Code.
(4) Accounts are immediately distributable if any part of the
Accounts could be distributed to the Participant (or surviving spouse) before
the Participant attains, or would have attained if deceased, the later of his
Normal Retirement Age or age 62.
(b) (1) Unless the Participant elects otherwise, distribution of
benefits shall begin no later than the 60th day after the latest of the close
of the Plan Year in which (i) the Participant attains age 65 (or his Normal
Retirement Age, if earlier), (ii) occurs the tenth anniversary of the year in
which the Participant commenced participation in the Plan, or (iii) the
Participant terminates service with the Participating Employers.
Notwithstanding the foregoing, the failure of a Participant to consent to a
distribution while his Accounts are immediately distributable (within the
meaning of Section 8.4(a)(4)) shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this Section
8.4(b)(l).
(2) A Participant may request that the payment to him of his
Accounts commence at a date later than the latest date provided under
Section 8.4(b)(1).
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This request must be made by submitting to the Company a written statement,
signed by the Participant, that describes the date on which the Participant
requests payment to commence. The Company shall not grant this request if
such request would cause death benefits payable under the Plan with respect
to the Participant to be more than "incidental" within the meaning of the
applicable Treasury Regulations.
(c) The requirements of Appendix 1 shall apply to any distribution
of a Participant's Accounts and shall take precedence over any inconsistent
provisions of the Plan.
SECTION 8.5 SECTION 401(a)(31) ELIGIBLE DISTRIBUTIONS.
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section 8.5,
effective as of January 1, 1993, a distributee may elect, at the time and in
the manner prescribed by the Company, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
(b) For purposes of this Section 8.5, the following definitions
shall apply:
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary
or for a specified period of ten years or more; any distribution to the
extent such distribution is required under Section 401(a)(9) of the Code; the
portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and any other distribution that is
reasonably expected to total less than $200 during a year.
(2) "Eligible retirement plan" shall mean an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity
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described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(3) "Distributee" shall mean an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section
414(p) of the Code, shall be distributees with regard to the interest of the
spouse or former spouse.
(4) "Direct rollover" shall mean a payment by the Plan to the
eligible retirement plan specified by the distributee.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
SECTION 9.1 ADMINISTRATION.
(a) The Plan shall be operated and administered by the Company. The
Company shall decide all questions arising in the administration,
interpretation, and application of the Plan, including all questions of
eligibility.
(b) The Company shall be responsible for the development of a funding
policy and method for the Plan that is consistent with the needs of the Plan
and the requirements of ERISA.
SECTION 9.2 EXPENSES OF THE PLAN.
The Participating Employer shall pay all expenses of administering the
Plan.
SECTION 9.3 RECORDS.
The Company shall maintain adequate records for the operation of the
Plan and shall keep in convenient form such data as may be necessary for
actuarial valuations, if any, of the assets and liabilities of the Plan.
Each Participant shall be furnished an annual statement of his Accounts.
SECTION 9.4 AUTHORIZATION OF BENEFIT PAYMENTS.
The Company shall issue directions to the Trustee concerning all
benefits that are to be paid from the Trust Fund. All such directions shall
be in accordance with this Plan.
SECTION 9.5 MISC. COMPANY DUTIES.
(a) The Company shall exercise such authority and responsibility as
it deems appropriate in order to comply with all governmental regulations
issued relating to records of Participants' service, notifications to
Participants, annual registration with the Internal Revenue Service, and
annual reports to the Department of Labor.
(b) The Company shall designate the Plan's agent for service of any
notice of process authorized by law.
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SECTION 9.6 FIDUCIARY RESPONSIBILITIES.
(a) The duties of each fiduciary (as defined in ERISA) with
respect to the Plan shall be discharged solely in the interests of
Participants and Beneficiaries and for the exclusive purpose of providing
benefits to Participants and Beneficiaries and defraying reasonable expenses
of administering the Plan. Each fiduciary shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of like character with like aims. Each
fiduciary shall act in accordance with the Plan documents to the extent they
are consistent with such person's responsibilities as a fiduciary.
(b) The Company and its officers, directors, and agents shall be
entitled to rely upon tables, valuations, certificates, and reports furnished
by any duly appointed legal counsel or investment counsel and shall sustain
no liability in respect of any action taken in good faith in reliance upon
any such tables, valuations, certificates, reports, or opinions.
SECTION 9.7 BONDING.
The Participating Employers shall arrange to have the appropriate
persons bonded in accordance with the provisions of ERISA or the regulations
thereunder.
SECTION 9.8 CLAIMS PROCEDURE.
The procedure for claiming benefits under the Plan shall be as
follows:
(a) The Company shall determine the benefits due hereunder, but
a Participant or Beneficiary may file a claim for benefits by written notice
to the Company. Such notice shall be mailed or delivered to the following
address:
Hawaiian Airlines, Inc.
P.O. Box 30008
Honolulu, Hawaii 96820
Attn: Employee Benefits Department
(b) If a claim is denied in whole or in part, the Company shall
give the claimant written notice of such denial, within 30 days of the filing
of the claim. Such notice shall (i) specify the reason or reasons for the
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denial, (ii) refer to the pertinent Plan provisions on which the denial is
based, (iii) describe any additional material or information necessary to
perfect the claim and explain the need therefor, and (iv) explain the review
procedure described in paragraph (c) hereof.
(c) The claimant or his authorized representative may then appeal
the denial of the claim to the Company by filing written notice of such
appeal with the Company within 90 days after receipt of the notice of denial.
The claimant or any authorized representative may, before or after filing
notice of appeal, review any documents pertinent to the claim and submit
issues and comments in writing. The Company shall make its decision on such
appeal within 30 days after receipt of the appeal (unless a longer period is
requested by the claimant), and shall forthwith give written notice of such
decision to the claimant, his authorized representative, and, if applicable,
the Retirement Board. The decision shall include specific reasons therefor,
shall be written in a manner calculated to be understood by the claimant, and
shall include references to pertinent Plan provisions on which it is based.
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ARTICLE X
PARTICIPATION BY AFFILIATED EMPLOYERS; PORTABILITY
SECTION 10.1 PARTICIPATION OF AFFILIATED EMPLOYER.
Any employer affiliated with the Company may with the consent of the
Board become a Participating Employer by executing and delivering such
instruments and taking such other action as may be necessary or desirable to
put the Plan into effect with respect to such employer.
SECTION 10.2 WITHDRAWAL OF PARTICIPATING EMPLOYER.
Any Participating Employer may withdraw from participation in the Plan
at any time (i) by giving written notice of its withdrawal to the Company,
the other Participating Employers, and the Trustee prior to the effective
date of withdrawal and (ii) if it has made all contributions required under
Article IV to be made up to the date of its withdrawal.
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ARTICLE XI
AMENDMENT, TERMINATION, AND MERGER
SECTION 11.1 AMENDMENT.
(a) The Board may at any time amend the Plan, subject to any applicable
collective bargaining agreement, and (to the extent permitted by ERISA and
the Code) give any such amendment retroactive effect. No amendment shall,
however, have the effect of (i) revesting in any of the Participating
Employers any part of the assets of the Plan, (ii) diverting any part of the
assets of the Plan for purposes other than for the exclusive benefit of the
Participants and Beneficiaries, or (iii) reducing the vested percentage of
any Participant. No amendment to the Plan shall substantially increase the
duties or responsibilities of the Trustee without its consent.
(b) If the vesting schedule of the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's vested
percentage, each Participant with at least three Years of Service may elect
within a reasonable period after such amendment to have his vested percentage
computed under the Plan without regard to such amendment. The period during
which the election may be made shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of (i) 60 days after
the amendment is adopted, (ii) 60 days after the amendment becomes effective,
or (iii) 60 days after the Participant is issued written notice of the
amendment by the Company.
SECTION 11.2 TERMINATION OR DISCONTINUANCE.
(a) The Board may at any time terminate (in full or in part) the Plan
or suspend contributions to the Plan. A Participating Employer may at any
time terminate its participation in or suspend its contributions to the Plan.
If the Plan is terminated (in full or in part) or if contributions to the
Plan are discontinued as to any of the Participating Employers, then the
Accounts of each affected Participant shall be 100% vested. Upon such a
termination, the Trust Fund shall thereupon be converted into cash as
directed by the Company, and after payment of all appropriate costs, charges,
or expenses, the cash balance remaining shall be distributed in proportion to
the values of the Accounts.
(b) If the Company shall be dissolved or liquidated; shall by
appropriate legal proceedings be adjudged a bankrupt; or in the event legal
proceedings of
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any kind shall be involuntary dissolved, the Plan shall thereupon terminate.
If, however, the Company (i) is consolidated or merged with another company
or (ii) sells all or substantially all of its assets to another company,
provision shall be made by which the Plan shall be continued by such
successor or purchaser, and in such event the successor or purchaser shall be
substituted for the Company hereunder.
SECTION 11.3 MERGER.
The Plan and its assets shall not be merged or consolidated with, nor
shall any assets or liabilities be transferred to, any other plan, unless
each Participant would (if the Plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer that is equal to or
greater than the benefit such persons would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan then
terminated).
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ARTICLE XII
MISCELLANEOUS
SECTION 12.1 RIGHT TO EMPLOYMENT OR BENEFITS.
(a) Nothing contained in the Plan shall be deemed to give any
Participant a right to remain in the employ of the Participating Employers or
the Associated Companies.
(b) Nothing contained in the Plan shall be deemed to give any
Participant or Beneficiary any right or claim to benefits except as expressly
provided in the Plan.
SECTION 12.2 INALIENABILITY.
Benefits under the Plan may not be assigned or alienated. However,
the prior sentence shall not apply to the creation, assignment, or
recognition of any benefit payable with respect to a Participant pursuant to
a "qualified domestic relations order" as defined in Section 414(p) of the
Code.
SECTION 12.3 MISC. PAYMENT OF BENEFIT RULES.
(a) If any Participant or Beneficiary eligible to receive benefits
under this Plan is, in the opinion of the Company, legally, physically, or
mentally incapable of personally receiving and receipting for any payment
under the Plan, the Company may direct payments to such other person,
persons, or institutions who (in the opinion of the Company) are then
maintaining or having custody of such payee until claims are made by a duly
appointed guardian or other legal representative of such payee. Such payments
shall constitute a full discharge of the liability of the Plan to the extent
thereof.
(b) The Company may require a Participant or Beneficiary to complete
and file with the Company such information as requested by the Company. All
consents, elections, applications, designations, etc. required or permitted
under the Plan must be made on forms prescribed and furnished by the Company,
and shall be recognized only if properly completed, executed, and filed with
the Company. The Company may rely upon all such information so furnished it,
including the Participant's or Beneficiary's current mailing address and age.
(c) If it is found that the amount of a benefit under the Plan with
respect to a Participant is incorrect because of a misstatement as to his
age, Compensation, or
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any other relevant fact, the amount of payments shall be equitably adjusted
to the amount that is based on the correct facts with respect to him. If it
is ascertained that an overpayment has been made, the amount of such
overpayment shall be charged against any further payment to be made to the
Participant to whom such overpayment was made. If it is ascertained that an
underpayment has been made, the amount of such underpayment shall be paid to
the person entitled thereto.
(d) The Company shall have the right to require of any person
entitled to a payment under the Plan satisfactory evidence that he is living
on the date such payment is due.
SECTION 12.4 CHANGES TO PLAN NECESSARY TO QUALIFY UNDER ERISA AND THE CODE.
If any provisions of the Plan do not meet the requirements of the
Code as now in effect or as hereafter amended, the Company may make such
modifications to the Plan as are necessary to meet the requirements of the
Code.
SECTION 12.5 COMPANY ACTION.
(a) Except as may be specifically provided herein, any action
required or permitted to be taken by the Company may be taken on behalf of
the Company by any officer of the Company.
(b) Except as may be specifically provided herein, any action
required or permitted to be taken by a Participating Employer may be taken on
behalf of such Participating Employer by any officer of such Participating
Employer.
SECTION 12.6 CONSTRUCTION OF PLAN.
(a) The headings of articles and sections are included herein solely
for convenience of reference. If there is any conflict between such headings
and the text of the Plan, the text shall be controlling.
(b) To the extent not preempted by ERISA, the Plan shall be
governed, construed, administered, and regulated according to the laws of the
State of Hawaii.
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ARTICLE XIII
TOP-HEAVY PROVISIONS
SECTION 13.1 DETERMINATION OF TOP-HEAVY STATUS.
In addition to the definitions in Article I, the following
definitions shall apply for purposes of this Article XIII:
(a) Key Employee: Any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the determination
period was:
(1) An officer of a Participating Employer having annual
compensation greater than 50% of the dollar limit specified in Section
415(b)(1)(A) of the Code for any such year; provided however, no more than
the lesser of (i) 50 Employees or (ii) the greater of three Employees or 10%
of all Employees shall be regarded as officers,
(2) One of the ten Employees having annual compensation from a
Participating Employer of more than the dollar limit specified in Section
415(c)(1)(A) of the Code and owning (or considered as owning within the
meaning of Section 318 of the Code) the largest interests in a Participating
Employer; provided that if two or more Employees own an equal interest, the
Employee having the greater annual compensation shall be regarded as having
the larger interest,
(3) A 5% owner of a Participating Employer, or
(4) A 1% owner of a Participating Employer who has an annual
compensation of more than $150,000.
The determination period is the Plan Year containing the Determination Date
and the four preceding Plan Years. The determination of who is a Key
Employee shall be made in accordance with Section 416(i)(1) of the Code and
the regulations thereunder, and "compensation" shall have the meaning set
forth in Section 414(q)(7) of the Code.
A "non-Key Employee" is any Employee who is not a Key Employee.
(b) Top-heavy plan: The Plan shall be top-heavy if any of the
following conditions exists:
(1) If the Top-Heavy Ratio for the Plan exceeds 60% and the
Plan is not part of any required aggregation group or permissive aggregation
group of plans.
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(2) If the Plan is a part of a required aggregation group of
plans but not part of a permissive aggregation group and the Top-Heavy Ratio
for the group of plans exceeds 60%.
(3) If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the Top-Heavy Ratio for
the permissive aggregation group exceeds 60%.
(c) Top-Heavy Ratio:
(1) If a Participating Employer maintains one or more defined
benefit plans and a Participating Employer has not maintained any defined
contribution plan (including a simplified employee pension plan) that during
the five-year period ending on the Determination Date has or had account
balances, the Top-Heavy Ratio for the Plan alone or for the required or
permissive aggregation group, as appropriate, is a fraction, the numerator of
which is the sum of the present values of accrued benefits of all Key
Employees as of the Determination Date (including any part of any accrued
benefit distributed in the five-year period ending on the Determination Date)
and the denominator of which is the sum of all present values of all accrued
benefits (including any part of any accrued benefit distributed in the
five-year period ending on the Determination Date) of all Participants as of
the Determination Date, determined in accordance with Section 416 of the Code
and the regulations thereunder. Both the numerator and denominator of the
Top-Heavy Ratio shall be adjusted to reflect any contribution that is due but
unpaid as of the Determination Date and is required to be taken into account
on that date under Section 416 of the Code and the regulations thereunder.
(2) If a Participating Employer maintains one or more defined
benefit plans and a Participating Employer maintains or has maintained one or
more defined contribution plans (including any simplified employee pension
plan) that during the five-year period ending on the Determination Date has
or had account balances, the Top-Heavy Ratio for any required or permissive
aggregation group, as appropriate, is a fraction, the numerator of which is
the sum of the present value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees and the sum of account balances
under the aggregated defined contribution plan or plans for all Key Employees
as of the Determination Date and the denominator of which is the sum of the
present value of accrued benefits under the aggregated defined benefit plan or
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plans for all participants and the sum of account balances under the
aggregated defined contribution plan or plans for all participants as of the
Determination Date, all as determined in accordance with Section 416 of the
Code and the regulations thereunder. The account balances under a defined
contribution plan in both the numerator and denominator of the top-heavy
ratio shall be increased for any distribution of an account balance made in
the five-year period ending on the Determination Date.
(3) For purposes of Section 13.1(c)(1) and (2), the value of
account balances and the present value of accrued benefits shall be
determined as of the most recent Valuation Date that falls within or ends
with the 12-month period ending on the Determination Date, except as provided
in Section 416 of the Code and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account balances and
accrued benefits of a Participant (i) who is not a Key Employee but who was a
Key Employee in a prior year or (ii) who has not been credited with at least
one Hour of Service with any employer maintaining the plan at any time during
the five-year period ending on the Determination Date shall be disregarded.
The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account shall be made
in accordance with Section 416 of the Code and the regulations thereunder.
Deductible employee contributions shall not be taken into account for
purposes of computing the Top-Heavy Ratio. When aggregating plans the value
of account balances and accrued benefits shall be calculated with reference
to the Determination Dates that fall within the same calendar year.
(d) Permissive aggregation group: The required aggregation group of
plans plus any other plan or plans of a Participating Employer that, when
considered as a group with the required aggregation group, would continue to
satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required aggregation group: (i) Each qualified plan of a
Participating Employer in which at least one Key Employee participates or
participated at any time during the determination period (regardless of
whether the plan has terminated), and (ii) any other qualified plan of a
Participating Employer that enables a plan described in (i) to meet the
requirements of Sections 401(a)(4) or 410 of the Code. For this purpose,
"Participating Employer" shall include all employers aggregated under Section
414(b), (c), or (m) with a Participating Employer.
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(f) Determination Date: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan Year,
the last day of that year.
(g) Valuation Date: The Determination Date as of which account
balances or accrued benefits are valued for purposes of calculating the
Top-Heavy Ratio.
(h) Present Value: The present value of an accrued benefit of a
participant as of any Determination Date shall be calculated (i) as of the
most recent actuarial valuation date that is within a 12-month period ending
on the Determination Date, (ii) as if his employment terminated as of such
valuation date, (iii) without regard to any disability or preretirement death
benefit provided under the plan, and (iv) using the actuarial bases with
regard to interest and mortality as promulgated by the PBGC for plans
terminating on such actuarial valuation date and assuming retirement at age
65; provided that the present value of the accrued benefit of a non-Key
Employee shall be determined under the method used for accrual purposes for
all defined benefit plans of a Participating Employer, or if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
permitted under Section 411(b)(1)(C) of the Code.
SECTION 13.2 SPECIAL TOP-HEAVY RULES.
(a) If the Plan is or becomes top-heavy in any Plan Year, the
provisions of this Article XIII shall supersede any conflicting provisions in
the Plan.
(b) (1) Except as otherwise provided in Section 13.2(b)(3), (4),
and (5), for any Plan Year in which this Plan is top-heavy, each Participant
who is not a Key Employee and has completed 1,000 Hours of Service shall not
be less than the lesser of (i) 3% of such Participant's compensation or (ii)
the largest percentage of contributions, as a percentage of the first
$200,000 ($150,000 for Plan Years commencing on and after January 1, 1994) of
the Key Employee's compensation, allocated on behalf of any Key Employee for
that year. The minimum allocation shall be determined without regard to any
Social Security contribution. This minimum allocation shall be made even
though under other Plan provisions the Participant would not otherwise be
entitled to receive an allocation or would have received a lesser allocation
because of the Participant's failure to (i) complete 1,000 Hours of Service
(or any equivalent provided in the Plan), (ii) to make mandatory Employee
contributions to the Plan, or (iii) to earn compensation in excess of a
stated amount.
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(2) For purposes of computing the minimum allocation,
compensation shall be compensation as defined in Section 6.4(b).
(3) Subparagraph (1) above shall not apply to any
Participant who was not employed by a Participating Employer on the last day
of the Plan Year.
(4) Subparagraph (1) above shall not apply to any Participant
to the extent the Participant is covered under any other plan or plans of the
Participating Employer and the Participating Employer has provided in such
other plan or plans that the minimum allocation or benefit requirement
applicable to top-heavy plans shall be met in the other plan or plans.
(5) The minimum allocation required (to the extent required to
be nonforfeitable under Section 416(b) of the Code) may not be forfeited
under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
SECTION 13.3 MISCELLANEOUS.
The provisions of this Article XIII shall not apply with respect to
any Employee included in a unit of employees covered by a collective
bargaining agreement if there is evidence the retirement benefits were the
subject of good faith bargaining between Employee representatives and the
Participating Employer. For this purpose, the term "Employee representative"
does not include any organization more than half of whose members are
employees who are owners, officers, or executives of the Participating
Employer.
IN WITNESS WHEREOF, the Company has executed this document effective
as of April 1, 1993.
HAWAIIAN AIRLINES, INC.
By /s/ Bruce R. Nobles 12/23/94
-------------------------------------
Its Chairman, President and CEO
By /s/ Rae A. Capps 12/23/94
-------------------------------------
Its Vice President, General Counsel
and Corporate Secretary
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APPENDIX 1
DISTRIBUTION REQUIREMENTS
SECTION 1. GENERAL RULES.
(a) Subject to Section 8.2, the requirements of this Appendix 1
shall apply to any distribution of a Participant's Accrued Benefit and shall
take precedence over any inconsistent provisions of the Plan.
(b) All distributions required under this Appendix 1 shall be
determined and made in accordance with the proposed regulations under Section
401(a)(9) of the Code, including the minimum distribution incidental benefit
requirement of Prop. Treas. Reg. Section 1.401(a)(9)-2.
SECTION 2. REQUIRED BEGINNING DATE.
The entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's Required Beginning Date.
SECTION 3. LIMITS ON DISTRIBUTION PERIODS.
As of the first distribution calendar year, distributions (if not made
in a single-sum) may only be made over one of the following periods (or a
combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a designated beneficiary,
(c) a period certain not extending beyond the life expectancy of the
Participant, or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated beneficiary.
SECTION 4. DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR.
If the Participant's Accrued Benefit is to be distributed in other
than a single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(a) If a Participant's Accrued Benefit is to be distributed over (i)
a period not extending beyond the
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life expectancy of the Participant or the joint life and last survivor
expectancy of the Participant and the Participant's designated beneficiary or
(ii) a period not extending beyond the life expectancy of the designated
beneficiary, then the amount required to be distributed for each calendar
year (beginning with distributions for the first distribution calendar year)
must at least equal the quotient obtained by dividing the Participant's
Accrued Benefit by the applicable life expectancy.
(b) The amount to be distributed each year, beginning with
distributions for the first distribution calendar year shall not be less than
the quotient obtained by dividing the Participant's Accrued Benefit by the
lesser of (i) the applicable life expectancy, or (ii) if the Participant's
spouse is not the designated beneficiary, the applicable divisor determined
from the table set forth in Q&A-4 of Prop. Treas. Reg. Section 1.401(a)(9)-2.
Distributions after the death of the Participant shall be distributed using
the applicable life expectancy in Section 4(a)(1) of this Appendix 1 as the
relevant divisor without regard to Prop. Treas. Reg. Section 1.401(a)(9)-2.
(c) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year in
which the Participant's Required Beginning Date occurs, must be made on or
before December 31 of that distribution calendar year.
SECTION 5. DEATH DISTRIBUTION PROVISIONS.
(a) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies
after distribution of his Accrued Benefit has begun, the remaining portion of
such Accrued Benefit must continue to be distributed at least as rapidly as
under the method of distribution being used prior to the Participant's death.
(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies
before distribution of his Accrued Benefit begins, distribution of the
Participant's entire Accrued Benefit shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death,
except to the extent that an election is made to receive distributions in
accordance with (1) or (2) below:
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(1) If any portion of the Participant's Accrued Benefit is
payable to a designated beneficiary, distributions may be made over the life
or over a period certain not greater than the life expectancy of the
designated beneficiary commencing on or before December 31 of the calendar
year immediately following the calendar year in which the Participant died.
(2) If the designated beneficiary is the Participant's
surviving spouse, the date distributions are required to begin in accordance
with Section 5(b) of this Appendix 1 shall not be earlier than the later of
(i) December 31 of the calendar year immediately following the calendar year
in which the Participant died or (ii) December 31 of the calendar year in
which the Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this Section
5(b) by the time of his death, the Participant's designated beneficiary must
elect the method of distribution no later than the earlier of (i) December 31
of the calendar year in which distributions would be required to begin under
this Section 5 or (ii) December 31 of the calendar year that contains the
fifth anniversary of the date of death of the Participant. If the
Participant has no designated beneficiary or if the designated beneficiary
does not elect a method of distribution, distribution of the Participant's
entire Accrued Benefit must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(c) For purposes of Section 5(b) of this Appendix 1, if the
surviving spouse dies after the Participant but before payments to such
spouse begin, the provisions of Section 5(b) (with the exception of paragraph
(2) therein) shall be applied as if the surviving spouse were the Participant.
(d) For purposes of this Section 5, any amount paid to a child of
the Participant shall be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
(e) For purposes of this Section 5, distribution of a Participant's
Accrued Benefit is considered to begin on the Participant's Required
Beginning Date, or if Section 5(c) of this Appendix 1 is applicable, the date
distribution is required to begin to the surviving spouse pursuant to Section
5(b) of this Appendix l.
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SECTION 6. DEFINITIONS.
(a) "Applicable life expectancy" shall mean the life expectancy (or
joint and last survivor expectancy) calculated using the attained age of the
Participant (or designated beneficiary) as of the Participant's (or
designated beneficiary's) birthday in the applicable calendar year reduced by
one for each calendar year that has elapsed since the date life expectancy
was first calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so recalculated.
The applicable calendar year shall be the first distribution calendar year,
and if life expectancy is being recalculated, such succeeding calendar year.
(b) "Designated beneficiary" shall mean the individual who is
designated as the beneficiary under the Plan in accordance with Section
401(a)(9) of the Code and the regulations thereunder.
(c) "Distribution calendar year" shall mean a calendar year for
which a minimum distribution is required. For distributions beginning before
the Participant's death, the first distribution calendar year is the calendar
year immediately preceding the calendar year that contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the first distribution calendar year is the calendar year in which
distributions are required to begin pursuant to Section 5 of this Appendix l.
(d) "Life expectancy" shall mean life expectancy and joint and last
survivor expectancy are computed by use of the expected return multiples in
Tables V and VI of Treas. Reg. Section 1.72-9.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in Section 5(b)(2) of this Appendix 1) by the time
distributions are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant (or
spouse) and shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.
(e) "Accrued Benefit" shall mean:
(1) The value of the Participant's Accounts as of the last
Valuation Date in the calendar year immediately preceding the distribution
calendar year
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(valuation calendar year) increased by the amount of any contributions
allocated to the Accounts as of dates in the valuation calendar year after
the Valuation Date and decreased by distributions made in the valuation
calendar year after the Valuation Date.
(2) For purposes of the prior paragraph, if any portion of the
minimum distribution for the first distribution calendar year is made in the
second distribution calendar year on or before the Required Beginning Date,
the amount of the minimum distribution made in the second distribution
calendar year shall be treated as if it had been made in the immediately
preceding distribution calendar year.
(f) "Required Beginning Date" shall mean the first day of April of
the calendar year following the calendar year in which the Participant
attains age 70-1/2.
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ID # 2511s
AMENDMENT 1 TO
HAWAIIAN AIRLINES, INC.
401(k) SAVINGS PLAN
In accordance with Section 11.1 of the Hawaiian Airlines, Inc. 401(k)
Savings Plan (hereinafter the "Plan"), the Plan is hereby amended as set
forth herein:
1. Section 4.3 of the Plan is hereby amended to read in its entirety as
follows:
SECTION 4.3 RETURN OF CONTRIBUTIONS.
(a) Any contribution made because of a mistake of fact must be
returned to the Participating Employer within one year of the
contribution.
(b) If the deduction of a contribution is disallowed under
Section 404 of the Code, such contribution (to the extent
disallowed) must be returned to the Participating Employer within
one year of the disallowance of the deduction.
(c) If the Commissioner of Internal Revenue determines that the
Plan is not initially qualified under the Code, any contribution
made incident to that initial qualification by the Participating
Employer must be returned to the Participating Employer within one
year after the date the initial qualification is denied, but only
if the application for the qualification is made by the time
prescribed by law for filing the Participating Employer's return
for the taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
2. Section 7.1 of the Plan is hereby amended by adding a new paragraph
(e) to read in its entirety as follows:
(e) Each investment fund shall be valued annually at fair
market value as of the last day of the Plan Year and at such other
times as the Employer shall direct. On each such valuation date,
the earnings and losses of each investment fund shall be allocated
to each Participant's Accounts in the ratio that such the balance of
<PAGE>
Participant's Accounts invested in such investment fund balance
bears to all Account balances invested in such investment fund.
3. Section 13.2(b)(1) of the Plan is hereby amended to read in its
entirety as follows:
(b) (1) Except as otherwise provided in Section 13.2(b)(3),
(4), and (5) below, Participating Employer contributions allocated
on behalf of any Participant who is not a Key Employee shall not be
less than the lesser of (i) 3% of such Participant's compensation
or (ii) in the case where the Employer has no defined benefit plan
that designates the Plan to satisfy Section 401 of the Code, the
largest percentage of Participating Employer contributions
(including elective deferral contributions) and forfeitures as a
percentage of the Key Employee's compensation, as limited by
Section 401(a)(17) of the Code, allocated on behalf of any Key
Employee for that year. The minimum allocation shall be determined
without regard to any Social Security contribution. This minimum
allocation shall be made even though under other Plan provisions
the Participant would not otherwise be entitled to receive an
allocation or would have received a lesser allocation because of
the Participant's failure to (i) complete 1,000 Hours of Service
(or any equivalent provided in the Plan), (ii) to make mandatory
Employee contributions to the Plan, or (iii) to earn compensation
in excess of a stated amount.
4. Section 13.2(b)(4) of the Plan is hereby amended to read in its
entirety as follows:
(4) If a Participant is covered by both the Plan and
a defined benefit plan, the minimum benefit required by Section 416
of the Code shall be provided by the defined benefit plan, provided
that such benefit shall be offset by the benefits, if any, provided
by the Plan.
5. Section 13.2(b) of the Plan is hereby amended by adding a new
paragraph (6) to read in its entirety as follows:
(6) For purposes of computing the aggregate
limitation on benefits and contributions for an employee who
participates in
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a defined contribution and a defined benefit plan included in the
aggregation group, paragraphs (2)(B) and (3)(B) of Section 415(e)
shall be applied by substituting "1.0" for "1.25."
The amendments set forth herein shall be effective as of April 1, 1993.
To record the adoption of this amendment, Hawaiian Airlines, Inc. has
executed this document this 20th day of November, 1995.
HAWAIIAN AIRLINES, INC.
By /s/ Bruce R. Nobles
------------------------------------
Its Chairman, President & CEO
By /s/ Rae A. Capps
------------------------------------
Its Vice President, General Counsel
and Corporate Secretary
3
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ID # 2561n
AMENDMENT 2 TO
HAWAIIAN AIRLINES, INC.
401(k) SAVINGS PLAN
In accordance with Section 11.1 of the Hawaiian Airlines, Inc. 401(k)
Savings Plan (hereinafter the "Plan"), the Plan is hereby amended in the
following respects.
1. Section 1.1 of the Plan is hereby amended to read in its entirety as
follows:
1.1 "Accounts" shall mean the Participant's Savings Account,
Participating Employer Contribution Account, and Stock Account.
2. Section 1.17 of the Plan is hereby amended to read in its entirety
as follows:
1.17 "Participant" shall mean any person who has satisfied the
eligibility requirements of Article III and whose Savings Account,
Participating Employer Contribution Account, or Stock Account
remains in the Plan and allocated to him. An "active Participant"
shall mean a Participant during the period he is employed in a
class of Employees eligible to receive an allocation of Savings
Contributions.
3. Article I of the Plan is hereby amended by adding Sections
1.28, 1.29, 1.30, 1.31, and 1.32 at the end thereof to read in their
entirety as follows:
1.28 "Book Rate" shall mean the wage or salary rate of a
Participant as of November 30, 1995 plus projected increases prior to
the implementation of the 1996 restructuring agreements related to the
Stock Purchase Agreement between the Company and Airline Investors
Partnership, L.P. dated as of December 8, 1995.
1.29 "Company Stock" shall mean for periods prior to June 1,
1996, shares of Class A Common Stock issued by the Company and for
periods on and after June 1, 1996, shares of voting common stock of
the Company, which shares constitute "employer securities" as
defined in Section 409(1) of the Code. Company Stock which is
listed on the American Stock Exchange and which is regularly traded
thereon shall be valued by the Trustee at
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the closing price thereon determined as of the end of the trading
day on which such value is to be determined.
1.30 "Stock Plan" shall mean the Hawaiian
Airlines, Inc. Employee Stock Plan.
1.31 "Stock Account" shall mean the separate account
maintained for each Participant on the Plan's records reflecting
his interest in assets attributable to the Company Stock that was
transferred to the Plan from the Stock Plan and any subsequent
Company Stock received in the Stock Fund.
1.32 "Stock Fund" shall mean the investment fund consisting
of contributions of Company Stock to the Stock Plan or this Plan
pursuant to the Third Amended Consolidated Plan of Reorganization
for HAL, INC., Hawaiian Airlines, Inc. and West Maui Airport, Inc.
dated August 29, 1994, as amended, and dividends and distributions
thereon. The Stock Fund may also contain Company Stock purchased on
the open market. The Stock Fund shall be invested primarily in
Company Stock but may include cash investments to provide liquidity.
4. Section 2.2(b) of the Plan is hereby amended to read in its
entirety as follows:
(b) If a Participant's employment with a Participating
Employer is terminated and he is immediately employed by an
Associated Company, his Accounts shall remain in the Plan so long
as he is employed by an Associated Company. However, he shall not
be an active Participant while he is so employed. During any such
employment with an Associated Company, the Participant's Accounts
shall continue to share in earnings of the Trust Fund and to bear
and share expenses and losses. Further employment by any Associated
Company shall be similarly treated. If the Participant is
re-employed by a Participating Employer in an eligible class of
employees, he shall immediately become an active Participant. If
the Participant is terminated while in the employ of the Associated
Company, he shall be treated in the same manner as if he had been
terminated while in the employ of a Participating Employer.
5. Section 4.1(c) of the Plan is hereby amended by adding a new
paragraph (5) at the end thereof to read in its entirety as follows:
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(5) Notwithstanding the prior paragraph, for the
period from the effective date of Amendment 2 to the Plan through
December 31, 1996, any change to commence, increase, decrease, or
revoke a Participant's salary reduction agreement shall be
effective as of the first day of any payroll period, provided such
change is received by the Company at least 15 days prior to the
commencement of such payroll period.
6. Section 4.2 of the Plan is hereby amended by revising paragraph (b)
to read in its entirety as follows and to add a paragraph (c) at the end
thereof to read in its entirety as follows:
(b) For the period commencing on September 1, 1994 and ending
on April 15, 1996, the Participating Employers shall make
Participating Employer Contributions to the Participating Employer
Contribution Account of each active Participant equal to 4.04% of
the active Participant's Compensation for services rendered during
such period.
(c) For the period commencing on April 16, 1996 and ending
on December 31, 2002, the Participating Employers shall make
Participating Employer Contributions to the Participating Employer
Contribution Account of each active Participant equal to 4.04% of
the active Participant's Book Rate for services rendered during
such period.
7. Article IV of the Plan is hereby amended by adding Section 4.4
at the end thereof to read in its entirety as follows:
SECTION 4.4 TRANSFERS AND CONTRIBUTIONS OF COMPANY STOCK.
(a) Effective as soon as practicable on or after May 21,
1996, the Company shall cause the transfer and merger into this
Plan of all Stock Plan accounts (and the Company Stock allocable
thereto) that are not transferred as of such date to the Hawaiian
Airlines, Inc. 401(k) Plan for Flight Attendants. Each such
transferred account (and the Company Stock allocable thereto) shall
be recorded as a separate Stock Account in this Plan in the name of
each such participant in the Stock Plan. Effective as of such
transfer date, each
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Stock Account shall be subject to Participant investment direction
pursuant to Article VII of the Plan.
(b) Any Company Stock to be contributed to the Stock Plan
pursuant to the Third Amended Consolidated Plan of Reorganization
for HAL, INC., Hawaiian Airlines, Inc. and West Maui Airport, Inc.
dated August 29, 1994, as amended, (herein the "Reorganization
Plan") on behalf of Participants whose Stock Accounts were
transferred to this Plan shall be contributed to this Plan,
provided that the transfer described in Section 4.4(a) has been
completed. The Company Stock required to be contributed to the
Stock Plan pursuant to the Reorganization Plan, and/or any
amendment thereto approved by the Bankruptcy Court, shall be
allocated in the manner provided in the Reorganization Plan, or
such amendment thereto, and credited to the Participant Stock
Accounts. Effective as of such contribution date, all Company
Stock contributed to a Participant's Stock Account shall be subject
to Participant investment direction pursuant to Article VII of the
Plan.
(c) The Company shall contribute all Company Stock currently
held in any grantor trust (herein a "Rabbi Trust") established by
the Company to hold Company Stock that could not be contributed to
the Stock Plan on behalf of a Participant in this Plan because of
contribution limitations as soon as practicable after all such
contribution limitations have been removed, as determined by the
requirements of ERISA and the Code. Such transferred Company Stock
shall be credited to the Participant Stock Accounts. Effective as
of the transfer date all Company Stock contributed from the Rabbi
Trust to the Plan shall be subject to Participant investment
direction pursuant to Article VII of the Plan.
8. Article VII of the Plan is hereby amended by deleting Section 7.1(d)
and adding Sections 7.5, 7.6, 7.7, and 7.8 at the end thereof to read in their
entirety as follows:
SECTION 7.5 PARTICIPANT-DIRECTED INVESTMENTS.
All contributions and transfers to the Plan shall be invested
by the Trustee as directed by the Participants pursuant to this
Article VII.
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SECTION 7.6 INVESTMENT OPTIONS.
Each Participant shall select from any of the investment
options, available under the Plan, to invest his Accounts, provided
that investment in the Stock Fund shall be limited as set forth in
Section 7.7. Such investment elections shall be made in writing,
or if acceptable to the Trustee, by telephone or electronic
transmission, to the Trustee in accordance with procedures
established by the Company and the Trustee. Each Participant shall
be solely responsible for the selection of his investment options
provided for hereunder.
SECTION 7.7 INVESTMENT OF STOCK FUND.
(a) Except as provided in Section 7.8, a Participant may
direct the Trustee to liquidate any or all amounts held in his name
in the Stock Fund, to the extent permissible under law, and
immediately thereafter reinvest in any other investment option
available under this Article VII. Except as provided in Section
7.8, a Participant may not direct the Trustee to liquidate any
amount held in his name in any other investment option and
thereafter reinvest such amount in the Stock Fund.
(b) Cash resulting from liquidation of Company Stock
pursuant to the provisions of this Article VII shall be credited to
the Participant as of the transaction date.
SECTION 7.8 1996 SHAREHOLDER RIGHTS OFFERING.
(a) Pursuant to the requirements of the Company's 1996
restructuring commitments, Participants who have Company Stock
allocated to their Stock Accounts as of the record date for the
Company's 1996 Shareholder Rights Offering (herein the "Rights
Offering") may participate in the Rights Offering on the same terms
and conditions as all other shareholders of Company Stock as set
forth in the Rights Offering, except as provided in this Section 7.8.
(b) The Trustee shall determine the number of rights to
purchase shares of Company Stock (herein "Rights") allocable to
each Participant's Stock Account on the basis of one Right (or
fraction thereof) for each share (or fraction
5
<PAGE>
thereof) of Company Stock allocated to the Participant's Stock
Account as of the record date for the Rights Offering. With
respect to such number of Rights, a Participant may (in accordance
with such procedures as the Trustee adopts) direct the Trustee to:
(1) Liquidate all or a portion of the amounts held in
his Accounts, and to the extent permissible under law,
thereafter use such amounts in connection with the exercise of
the number of Rights specified by the Participant. Company
Stock so purchased pursuant to the Rights shall be credited to
the Participant's interest in the Stock Fund and allocated to
the appropriate Accounts.
(2) Sell the number of Rights specified by the
Participant on the open market, to the extent the Rights may
be transferred, and credit the proceeds to the Participant's
Stock Account. Such proceeds shall be invested in the money
market option under the Plan, subject to further investment
direction by the Participant pursuant to Section 7.6.
(c) A Participant may elect to apportion the number of Rights
allocable to his Stock Account between either of the alternatives
under Section 7.8(b).
(d) A Participant may return only one election to the
Trustee, which election shall be irrevocable. In the case of a
deceased Participant, such election may be exercised by his
Beneficiary. If a Participant, or in the case of a deceased
Participant, his Beneficiary, fails to return an election to the
Trustee prior to the time specified by the Trustee, the Trustee
shall, to the extent possible, sell the Rights allocated to such
Participant's Stock Account on the open market. The proceeds, if
any, of such a sale shall be invested in the money market
investment option under the Plan, subject to further investment
direction by the Participant pursuant to Section 7.6.
(e) As provided in this Section 7.8, the Participant shall
exercise sole control over whether the Trustee purchases Company
Stock for his Stock Account pursuant to the Rights. No
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<PAGE>
person who is otherwise a fiduciary of the Plan shall be liable for
any loss that results from such Participant's exercise of control.
All information and materials provided by the Company to such
Participant in connection with the Rights shall be provided by the
Company in its capacity as issuer of the Rights and Company Stock
and not as a fiduciary of the Plan.
(f) The procedures adopted by the Trustee to effect this
Section 7.8 shall be agreed to in writing by the Trustee and the
Company. Such procedures shall be disclosed to the Participants at
the same time shareholders of Company Stock are mailed the
prospectus for the Rights Offering.
9. The first sentence of Section 8.2(a) of the Plan is hereby amended
to read in its entirety as follows:
Except as specifically permitted by the Plan or as required by
Section 8.4, a Participant's Accounts shall be distributed only
upon his termination of employment with the Participating Employers
and the Associated Companies.
10. Section 8.2(c) of the Plan is hereby amended to read in its
entirety as follows:
(c) Distributions shall be made in a lump sum and shall be
based upon the balance of the Participant's Accounts as of the
valuation date immediately preceding distribution. Distributions
shall be made in cash; except for a Participant's interest in the
Stock Fund, which interest shall be distributed in shares of
Company Stock, with the value of any fractional share distributed
in cash. To the extent practicable, the Trustee may sell
fractional shares of Company Stock allocated to a Participant in
order to obtain cash that is to be distributed to a Participant or
Beneficiary.
11. The first sentence of Section 9.1(a) is hereby amended to read in
its entirety as follows:
Except as provided in Appendix 2, the Plan shall be operated and
administered by the Company.
12. The Plan is hereby amended by adding a new Appendix 2 at
the end thereof to read in its entirety as set forth in Appendix 2 attached
hereto.
The amendments set forth herein shall be effective as of May 31, 1996.
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<PAGE>
To record the adoption of these amendments, the undersigned have
executed this document this 31st day of May, 1996.
HAWAIIAN AIRLINES, INC.
/s/ RAE A. CAPPS
-----------------------------
Rae A. Capps
Vice President, General
Counsel and Corporate
Secretary
/s/ CLARENCE K. LYMAN
-----------------------------
Clarence K. Lyman
Vice President, Finance and
Treasurer
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<PAGE>
APPENDIX 2
COMPANY STOCK
SECTION 1. DEFINITION.
For purposes of this Appendix 2, "IAM Collective Bargaining
Agreement" shall mean the Agreement between the Company and International
Association of Machinists and Aerospace Workers (AFL-CI0).
SECTION 2. EXERCISE OF SHAREHOLDER VOTING RIGHTS.
(a) IAM PARTICIPANTS. Any Participant who is covered under the IAM
Collective Bargaining Agreement shall be entitled to inform the Trustee in
writing of the direction in which he would vote the shares of Company Stock
then allocated to his interest in the Stock Fund. The Trustee shall vote the
block of shares so allocated to all such Participants according to the
direction of the majority of number of shares for which the Trustee received
instruction, subject, however, to the Trustee's fiduciary obligation under
ERISA. Shares of Company Stock held by the Trust which are not then
allocated to such Participants' interests in the Stock Fund shall be voted
by the Trustee in the manner determined by the fiduciaries designated in
Section 2(d) of this Appendix 2 in accordance with the applicable fiduciary
obligations of ERISA. At the direction of the Company, the Trustee shall use
its best efforts to deliver, or cause to be delivered, to the Participants a
copy of all notices and other information that the Company generally
distributes to the shareholders of the Company. The Trustee shall establish
such procedures for the collection of the instructions of the Participants on
the voting of Company Stock as it shall determine to be appropriate.
(b) NON-CONTRACT PARTICIPANTS. Any Participant who is not covered
under the IAM Collective Bargaining Agreement shall be entitled to direct the
voting of shares of Company Stock then allocated to his interest in the Stock
Fund. Shares of Company Stock with respect to which such a Participant is
entitled to direct voting and for which voting directions are not given shall
be voted by the Trustee in the same proportion as the directions which it
received from all such non-contract Participants, subject, however, to the
Trustee's fiduciary obligations under ERISA. Shares of Company Stock held by
the Trust that are not then allocated to such Participants' interests in the
Stock Fund shall be voted by the Trustee in the manner determined by the
Committee in accordance with the applicable fiduciary obligations of ERISA.
At the direction of the Company, the Trustee shall use its
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<PAGE>
best efforts to deliver, or cause to be delivered, to the Participants a copy
of all proxies, notices, and other information that the Company generally
distributes to the shareholders of the Company. The Trustee shall establish
such procedures for the collection of the instructions of the Participants on
the voting of Company Stock as it shall determine to be appropriate. The
Trustee shall vote specifically in accordance with each Participant's
instructions to the extent of the number of whole shares allocated to such
Participant's Account.
(c) TENDER OFFERS. Procedures similar to those set forth above in
Sections 2(a) and (b) shall apply with respect to any tender offers or other
rights associated with shares of Company Stock held by the Trustee.
(d) FIDUCIARY APPOINTMENT. The collective bargaining representative
of Employees covered by the IAM Collective Bargaining Agreement shall appoint
a fiduciary to direct the Trustee as to the manner in which shares of Company
Stock shall be voted (or tender offers or other rights shall be exercised)
with respect to that portion of the Plan for which its Committee is
responsible.
SECTION 3. PUT OPTION.
If Company Stock is not publicly traded on an established market at
the time of distribution, each distributee of Company Stock (including within
the concept of "distributee" any person to whom the security passes by reason
of a Participant's death) shall have a put option to such Company Stock
against the Company or the Plan of 15 months in duration (measured from the
date of distribution of such Company Stock) to sell any or all of the Company
Stock subject to that option under a fair valuation formula. If the Company
(or Plan) is required to repurchase Company Stock which was distributed as
part of a total distribution of the balance of the recipients' Account, the
purchase price shall be paid, at the purchaser's discretion, in a single sum
or in substantially equal periodic installments (not less frequently than
annually) over a period beginning no later than 30 days after the exercise of
the put option and not exceeding five years; provided, however, that the
purchaser shall provide adequate security and shall pay a reasonable rate of
interest on the unpaid installments.
SECTION 4. CERTAIN SECURITIES LAW RESTRICTIONS.
Any distribution of Company Stock pursuant to this Plan shall be
subject to all applicable law, rules, and regulations and to such approvals
by stock exchanges or governmental agencies as may be deemed necessary or
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<PAGE>
appropriate by the Board. Each distributee may be required to give the
Company a written representation that he shall not dispose of such Company
Stock in violation of state or federal securities laws, including the
Securities Act of 1933, as amended; the form of such written representation
shall be prescribed by the Board.
SECTION 5. SHARE CERTIFICATES.
Share certificates representing Company Stock distributed pursuant to
this Plan shall be embossed or inscribed with such legends as the Board deems
necessary or appropriate and stop transfer instructions may be issued in
connection therewith.
SECTION 6. ADMINISTRATION OF STOCK PLAN ACCOUNTS.
(a) Two separate Committees shall have the authority and
responsibility for the administration of Stock Accounts.
(1) The Committee responsible for Stock Accounts of Employees
covered under the IAM Collective Bargaining Agreement shall consist of those
members who make up the Retirement Board established under the defined
benefit plan maintained for such Employees.
(2) The Committee responsible for Stock Accounts of Employees
who are not covered by the IAM Collective Bargaining Agreement shall be
appointed by the Board.
(b) Any and all acts of each Committee taken at a meeting shall be
by a majority of all members of each Committee. Each Committee may also act
by unanimous consent in writing without the formality of convening a meeting.
(c) (1) Each Committee may, by written majority decision, delegate
to each or any one of its number, or to its Secretary, authority to sign any
documents on its behalf, or to perform ministerial acts, but no person to
whom such authority is delegated shall perform any act involving the exercise
of any discretion without first obtaining the concurrence of a majority of
the members of each Committee, even though he alone may sign any document
required by third parties.
(2) Each Committee shall elect one of its members to serve as
Chairperson. The Chairperson shall preside at all meetings of the Committee
or shall delegate
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<PAGE>
such responsibility to another Committee member. The Committee shall elect
one person to serve as Secretary to the Committee. All third parties may
rely on any communication signed by the Secretary, acting as such, as an
official communication from the Committee.
(d) Each Committee shall have the following duties and
responsibilities with respect to the Stock Accounts of Participants for which
each Committee is responsible:
(1) The Committee shall take such steps as are considered
necessary and appropriate to remedy any inequity that results from incorrect
information received or communicated in good faith or as the consequence of
an administrative error. The Committee shall have the discretionary
authority to interpret and have the discretionary authority to determine the
questions arising in the administration, interpretation, and application of
Stock Accounts, with respect to issues including, but not limited to,
eligibility for Stock Account benefits. It shall endeavor to act, whether by
general rules or by particular decisions, so as not to discriminate in favor
of, or against, any person and so as to treat all persons in similar
circumstances similarly. The Committee shall correct any defect, reconcile
any inconsistency, or supply any omission with respect to Stock Accounts.
All such corrections, reconciliations, interpretations, and completions of
Stock Account provisions shall be final and binding upon the parties.
(2) Each Committee shall be responsible for determining the
status of an appealed claim pursuant to Section 9.8.
(e) In the case of the Committee responsible for the Stock Accounts
of Participants not covered by IAM Collective Bargaining Agreement, the
Committee shall have the right to direct the Trustee to vote shares of
Company Stock not allocated to the Stock Accounts of such Participants.
(f) Each Committee shall have the right to hire such professional
assistants and consultants as it deems necessary or advisable; provided,
however, that each Committee shall be required, whenever possible, to
reasonably agree on the hiring of a single professional advisor in any one
area of expertise in order to avoid duplication of services to the Plan. The
reasonable expenses incurred by each Committee in connection with the
operation of the Plan, including, but not limited to, the expenses incurred
by reason of the engagement of professional assistants and consultants, shall
be payable by the Participating Employers.
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