<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) PLAN FOR FLIGHT ATTENDANTS
(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>
- ---------------------------------------------------------------------------------------------
Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Registered Offering Price Per Aggregate Registration
Share Offering Price Fee
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Common Stock 233,134(1) $3.69(2) $860,265.00(2) $297.00(2)
- ---------------------------------------------------------------------------------------------
Preferred Stock
Purchase Rights 233,134(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) Plan for Flight Attendants (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: $860,265.00 with respect to 233,134
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 233,134 shares
of Common Stock (the "Common Stock" or the "Securities") which have been
reserved for issuance under the Hawaiian Airlines, Inc. 401(k) Plan for
Flight Attendants, as amended (the "Plan") (including 233,134 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.
Exhibit No. Description
----------- -----------
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) Plan for Flight Attendants
________________________________
(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.
(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.
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act 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) Plan for Flight
Attendants, as amended since its most recent determination letter, to be
submitted to the Internal Revenue Service in a timely manner and will
make all changes required by the Internal Revenue Service in order to
qualify said Plan.
II-4
<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-5
<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 August 6, 1996
----------------------------------- Officer (Principal Executive Officer)
Bruce R. Nobles
/s/ John L. Garibaldi Executive Vice President and Chief
----------------------------------- Financial Officer (Principal August 6, 1996
John L. Garibaldi 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
</TABLE>
II-6
<PAGE>
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 233,134
shares of Common Stock (the "Common Stock") of the Company issuable under its
Hawaiian Airlines, Inc. 401(k) Plan for Flight Attendants (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 233,134 shares of Common
Stock and 233,134 Preferred Stock Purchase Rights pursuant to the Hawaiian
Airlines, Inc. 401(k) Plan for Flight Attendants, 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 # 9001a
12/94
HAWAIIAN AIRLINES, INC.
401(k) PLAN FOR FLIGHT ATTENDANTS
<PAGE>
TABLE OF CONTENTS
Page
----
PROLOGUE ................................................................. 1
ARTICLE I DEFINITIONS ................................................. 2
ARTICLE II SERVICE RULES
2.1 Vesting Service Rules ......................................... 10
2.2 Break In Service Rules ........................................ 10
2.3 Special Rule for Maternity or Paternity
Absences and Certain Other Absences ........................... 11
2.4 Employment By Associated Companies ............................ 11
2.5 Transfers of Participants ..................................... 11
ARTICLE III ELIGIBILITY
3.1 Eligibility To Become A Participant ........................... 13
3.2 Re-Employment Rules ........................................... 13
ARTICLE IV CONTRIBUTIONS
4.1 Salary Reduction Contributions ................................ 14
4.2 Participating Employer Contributions .......................... 15
4.3 Participant Contributions ..................................... 16
4.4 Matching Contributions ........................................ 16
4.5 Time For Making Contributions ................................. 16
4.6 Return of Contributions ....................................... 16
ARTICLE V CONTRIBUTION LIMITATIONS OF SECTIONS
402(g), 401(k), and 401(m)
5.1 Definitions ................................................... 18
5.2 Section 402(g) Limitations on Salary
Reduction Contributions ....................................... 20
5.3 Section 401(k) Limitations on Elective
Deferral Contributions ........................................ 21
5.4 Section 401(m) Limitations on
Matching Contributions ........................................ 24
5.5 Combined Section 401(k) and Section
401(m) Limitations ............................................ 26
(i)
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE VI MAXIMUM CONTRIBUTION AND BENEFIT
LIMITATIONS
6.1 Limitation On Annual Additions To The
Plan -- No Participation In Other
Defined Contribution Arrangement .............................. 28
6.2 Limitation on Annual Additions To The
Plan -- Participation In Another
Defined Contribution Arrangement .............................. 28
6.3 Limitation on Annual Additions To The
Plan -- Participation In Defined
Benefit Plan .................................................. 30
6.4 Definitions ................................................... 30
ARTICLE VII TRUST AND INVESTMENT PROVISIONS
7.1 Assets To Be Held by Trustee .................................. 35
7.2 Appointment of Investment Manager ............................. 35
7.3 Commingling of Assets ......................................... 35
7.4 No Investment in Participating
Employers ..................................................... 36
7.5 Adjustment Of Accounts For Income
Or Loss ....................................................... 36
ARTICLE VIII VESTING AND DISTRIBUTIONS
8.1 Vested Rights To Accounts ..................................... 38
8.2 Distributions ................................................. 38
8.3 Special Distribution Rules .................................... 42
8.4 Loans ......................................................... 44
8.5 Section 401(a)(31) Eligible Distributions ..................... 45
ARTICLE IX ADMINISTRATION OF THE PLAN
9.1 Administration ................................................ 47
9.2 Expenses of the Plan .......................................... 47
9.3 Records ....................................................... 47
9.4 Authorization of Benefit Payments ............................. 48
9.5 Misc. Company Duties .......................................... 48
9.6 Fiduciary Responsibilities .................................... 48
9.7 Bonding, Indemnification, Insurance ........................... 48
9.8 Claims Procedure .............................................. 49
(ii)
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE X PARTICIPATION BY AFFILIATED
EMPLOYERS; PORTABILITY
10.1 Participation of Affiliated Employer ........................... 50
10.2 Withdrawal of Participating Employer ........................... 50
ARTICLE XI AMENDMENT, TERMINATION, AND MERGER
11.1 Amendment ...................................................... 51
11.2 Termination or Discontinuance .................................. 51
11.3 Merger ......................................................... 52
ARTICLE XII MISCELLANEOUS
12.1 Right to Employment or Benefits ................................. 53
12.2 Inalienability .................................................. 53
12.3 Misc. Payment of Benefit Rules .................................. 53
12.4 Changes to Plan Necessary to Qualify
Under ERISA and the Code ........................................ 54
12.5 Company Action .................................................. 54
12.6 Construction of Plan ............................................ 54
12.7 Top-Heavy Rules ................................................. 55
Appendix 1 Distribution Requirements .................................... 56
Appendix 2 Letter Agreement Establishing
Retirement Board ............................................. 64
(iii)
<PAGE>
PROLOGUE
Effective as of January 1, 1989, the Retirement Plan for Flight Attendants
of Hawaiian Airlines, Inc. is hereby amended and restated in its entirety. The
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 provisions
set forth herein shall determine as of January 1, 1989 the rights and benefits
of all employees who terminate employment on or after said date. Unless
otherwise specifically provided herein or by law, the rights and benefits of
eligible employees who terminated employment on or before December 31, 1988
shall be determined in accordance with the provisions of this Plan as in effect
on the date their employment terminated.
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 Participating Employer
Contribution Account, Salary Reduction Contribution Account, Participant
Investment Account, and Matching Account.
1.2 "Association" shall mean the Association of Flight Attendants.
1.3 "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)(C) of the Code) as a Participating Employer, (ii) an entity under
common control (within the meaning of Section 414(c) of the Code) with a
Participating Employer, (iii) a member of 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.
1.4 "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/her spouse, he/she 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 spouse, or if there is no surviving spouse, the executor,
administrator, or other proper legal representative of the Participant's
estate.
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1.5 "Board" shall mean the Board of Directors of the Company.
1.6 "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.
1.7 "Company" shall mean Hawaiian Airlines, Inc. or any successor
corporation.
1.8 "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/she is a Participant that is required to be set
forth on the Participant's Form W-2 for a particular Plan Year and any amount
that is contributed by a Participating Employer pursuant to a salary reduction
agreement and is not includible in the Participant's gross income under
Section 125, 402(e)(3), 402(h)(l)(B), or 403(b) of the Code. Compensation
shall include amounts paid by a Participating Employer to or on behalf of the
Participant as per diem or expense allowance. If the U.S. income tax
treatment of "fringe benefits" (such as, but not limited to, group life and
health insurance) is changed so that any such benefit becomes taxable to the
Employee, the Company and the Association shall meet and negotiate under the
Railway Labor Act concerning whether such benefits shall be included as
Compensation.
For Plan Years beginning after December 31, 1988 and before January
1, 1994, the Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan Year 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 effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed $150,000,
as adjusted 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 determination period beginning in such
calendar year.
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If Compensation for any prior determination period shall be taken
into account in determining a Participant's allocations for the current Plan
Year, the Compensation for that prior determination period shall be subject to
the applicable annual Compensation limit in effect for that prior determination
period. For this purpose, in determining allocations in Plan Years beginning
on or after January 1, 1989, the annual Compensation limit in effect for
determination periods beginning before that date shall be $200,000. In
addition, in determining allocations in Plan Years beginning on or after
January 1, 1994, the annual Compensation limit in effect for determination
periods beginning before that date shall be $150,000.
If a determination period contains fewer than 12 months, then the
annual Compensation limit shall be an amount equal to the otherwise applicable
annual Compensation limit multiplied by a fraction, the numerator of which is
the number of months in the short 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 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 1.8 prior
to the application of this limitation.
1.9 "Disability" shall mean a mental or physical illness or injury
that prohibits the Participant from performing the duties of his/her occupation
as an Employee for a period of three consecutive months from the date he/she
was last actively employed on a full-time basis or is of a nature that can be
reasonably expected to be of a long and indefinite duration or to terminate in
death, except any such illness or injury resulting from (i) habitual use of
alcoholic beverages or addiction to narcotics or harmful drugs or
(ii) intentionally self-inflicted injury. The Retirement Board shall determine
the existence and continuance of a Disability.
1.10 "Eligible Employee" shall mean a Participant who is eligible to
receive an allocation of Salary Reduction Contributions for all or a portion of
the Plan Year.
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1.11 "Employee" shall mean an employee of a Participating Employer
whose name appears on the Flight Attendants System Seniority List.
1.12 "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.
1.13 "Family Member" shall mean the Participant's spouse, lineal
ascendants or descendants, and the spouses of such lineal ascendants and
descendants.
1.14 "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
determination year, and was a highly compensated active
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employee for either the separation year or any determination year
ending on or after the his/her 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.
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.
A "non-Highly Compensated Employee" is an Employee who is not a Highly
Compensated Employee.
1.15 "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;
(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; and
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(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.
The Hour of Service rules stated in Department of Labor Regulations
Section 2530.200b-2(b) and (c) are herein incorporated by reference. For
eligibility and vesting purposes, Hours of Service shall be credited for
employment with an Associated Company that is not a Participating Employer.
Hours of Service shall also be credited for any individual considered an
Employee for purposes of the Plan under Section 414(n) or (o) of the Code and
the regulations thereunder.
1.16 "Matching 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 Matching Contributions on behalf of the
Participant pursuant to Section 4.4 for service after December 31, 1993.
1.17 "Matching Contributions" shall mean contributions made by the
Participating Employers pursuant to Section 4.4 to a Participant's Matching
Account.
1.18 "Normal Retirement Age" shall mean the first day of the month
coinciding with or immediately following a Participant's 60th birthday. "Early
Retirement Age" shall mean, the first day of any month prior to the
Participant's Normal Retirement Age that coincides with or follows the
Participant's 40th birthday and completion of five years of Vesting Service.
1.19 "One-Year Break in Service" shall mean severance from the
employment of all Associated Companies for a 12-consecutive month period.
1.20 "Participant" shall mean any person who has satisfied the
eligibility requirements of Article III and whose Accounts remain in the Plan
and allocated to him/her. An "active Participant" shall mean a Participant
during the period he/she is employed in an eligible class of Employees and is,
therefore, eligible to receive an allocation of Salary Reduction Contributions,
Participating Employer Contributions, and Matching Contributions.
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1.21 "Participant Investment 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 his/her "Regular Contribution
Account" and "Optional Contribution Account" as such existed on December 31,
1988 and from his/her contributions to the Plan pursuant to Section 4.3 for
service after December 31, 1988.
1.22 "Participating Employer" shall mean the Company and any other
employer that the Company authorizes to be a Participating Employer pursuant to
Article XI.
1.23 "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 his/her
"Company Contribution Account" as it existed on December 31, 1988 and
Participating Employer contributions on behalf of the Participant pursuant to
Section 4.2 for service after December 31, 1988.
1.24 "Plan" shall mean the Hawaiian Airlines, Inc. 401(k) Plan for
Flight Attendants, as set forth herein and any amendments hereto. Until the
amendment and restatement effective as of January 1, 1989, the Plan was known as
the "Retirement Plan for Flight Attendants of Hawaiian Airlines, Inc."
1.25 "Plan Year" shall mean the calendar year.
1.26 "Qualified Joint and Survivor Annuity" shall mean an annuity (i)
for the life of the Participant with a survivor annuity for the life of the
spouse of the Participant to whom he/she is married at the time the distribution
of his/her Accounts commences that is one-half of the amount of the annuity
payable during the joint lives of the Participant and the Participant's spouse,
and (ii) that is the actuarial equivalent of a single life annuity for the life
of the Participant.
1.27 "Retirement Board" shall mean the Board established under a
separate agreement between the Company and the Association.
1.28 "Salary Reduction 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 the Salary Reduction
Contributions made on his/her behalf.
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1.29 "Salary Reduction Contributions" shall mean contributions made by
the Participating Employer on a Participant's behalf pursuant to Section 4.1.
1.30 "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.
1.31 "Trustee" shall mean any bank or trust company appointed by the
Company.
1.32 "Vesting Service" shall mean a period for which vesting credit is
granted pursuant to the provisions of Section 2.1.
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ARTICLE II
SERVICE RULES
SECTION 2.1 VESTING SERVICE RULES.
(a) Vesting Service shall be granted for the period of time beginning
with the date the Employee commences employment with a Participating Employer to
the date the Employee terminates employment with all of the Participating
Employers.
(b) If a person who was formerly employed by a Participating Employer
is re-employed by a Participating Employer, Vesting Service shall be granted for
the period of time beginning with the date the Employee commences re-employment
to the date the Employee subsequently terminates employment with all of the
Participating Employers.
(c) If an Employee subject to Section 2.1(b) is so re-employed within
the 12-consecutive months following the date on which the Employee terminated
employment, Vesting Service shall also be granted for the period commencing with
such termination date and ending with such re-employment date.
(d) Except as provided in Section 2.2, all of an Employee's Vesting
Service shall be recognized for purposes of the Plan.
SECTION 2.2 BREAK IN SERVICE RULES.
(a) Vesting Service for service prior to January 1, 1976 shall be
disregarded if such service would have been disregarded under the rules of the
Plan with regard to continuous service on the applicable date.
(b) Vesting Service for service prior to January 1, 1985 shall be
disregarded if such service would have been disregarded under the rules of the
Plan in effect on December 31, 1984.
(c) If an Employee who does not have a vested right to his/her
Participating Employer Contribution Account incurs a One-Year Break in Service,
Vesting Service granted prior to such One-Year Break in Service shall be
disregarded after the continuous period of severance equals or exceeds the
greater of (i) the Employee's Vesting Service credited prior to such One-Year
Break in Service or (ii) five years.
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(d) Vesting Service credited after five consecutive One-Year Breaks
in Service that commenced after December 31, 1984 shall not be taken into
account for purposes of increasing the Employee's vested interest in his/her
Participating Employer Contribution Account or Matching Account that accrued
before such break in service.
SECTION 2.3 SPECIAL RULE FOR MATERNITY OR PATERNITY ABSENCES AND CERTAIN OTHER
ABSENCES.
(a) If an Employee is 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, the Employee shall be credited with additional Vesting
Service equal to the lesser of such period or 12 months. The period between the
first and second anniversaries of the first date of such absence shall not be
regarded as a period of service or a period of severance.
(b) If an Employee is absent from work for any period due to illness,
accident, layoff, authorized leave of absence, service in the armed forces, or a
labor-management dispute between a Participating Employer and the Association,
the Employee shall not be regarded as incurring a One-Year Break in Service on
account of such absence, provided he/she returns to employment within the time
specified by the Participating Employer.
SECTION 2.4 EMPLOYMENT BY ASSOCIATED COMPANIES.
If an individual is at any time employed by a company while it is an
Associated Company, such employment shall (subject to Sections 2.1 through 2.3)
be treated as employment by a Participating Employer for purposes of
participation in the Plan and determining such individual's Vesting Service.
However, the individual shall not be an active Participant for any such service
with any Associated Company during the period the Associated Company is not a
Participating Employer. If the Participant is terminated while in the employ of
the Associated Company, he/she shall be treated in the same manner as if he/she
had been terminated while in the employ of a Participating Employer.
SECTION 2.5 TRANSFERS OF PARTICIPANTS.
If a Participant is transferred to another position in a Participating
Employer so that he/she is no
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longer eligible to participate in the Plan, he/she shall be immediately eligible
to participate in the pension plan for the group of employees to which he/she is
transferred, provided he/she otherwise satisfies the eligibility requirements of
such plan.
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ARTICLE III
ELIGIBILITY
SECTION 3.1 ELIGIBILITY TO BECOME A PARTICIPANT.
Each Employee as of January 1, 1989 who was a Participant in the Plan
on December 31, 1988 or who on or prior to December 31, 1988 has completed one
year of Vesting Service shall become a Participant as of January 1, 1989.
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/she has
completed one year of Vesting Service.
SECTION 3.2 RE-EMPLOYMENT RULES.
(a) A former Participant shall become an active Participant
immediately upon his/her return to the employ of a Participating Employer in an
eligible class of Employees.
(b) A former Employee who was not a Participant at the time of
his/her termination of service shall be considered a new Employee for
eligibility purposes, if the number of consecutive One-Year Breaks in Service
equal or exceed the greater of (i) the aggregate number of years of Vesting
Service before such break in service or (ii) five. If such former Employee's
years of Vesting Service before such termination exceed the number of
consecutive One-Year Breaks in Service after such termination, such Employee's
prior Vesting Service shall not be disregarded.
(c) If a Participant becomes ineligible to participate because he/she
is no longer a member of an eligible class of Employees, he/she shall become an
active Participant immediately upon his/her return to an eligible class of
Employees.
(d) 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/she has satisfied the requirements of
Section 3.1 and would have previously become a Participant had he/she been in
the eligible class.
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ARTICLE IV
CONTRIBUTIONS
SECTION 4.1 SALARY REDUCTION CONTRIBUTIONS.
(a) Effective as of March 1, 1990 or such other date as the Company
and the Association shall agree upon, in consideration of an active
Participant's reduction in salary pursuant to a salary reduction agreement under
Section 4.1(c), the Participating Employer shall (subject to Articles V and VI)
make Salary Reduction Contributions to the Participant's Salary Reduction
Contribution Account in an amount equal to the amount by which his/her
Compensation was reduced.
(b) For Federal tax purposes (and, wherever permitted, for state tax
purposes) Salary Reduction Contributions shall be deemed to be contributions by
a Participating Employer.
(c) (1) An active Participant shall authorize Salary Reduction
Contributions by completing a salary reduction agreement form furnished by and
filed with the Company on which he/she (i) designates the rate of Salary
Reduction Contributions to be made on his/her 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
at least 30 days prior to the first day of the pay period as of which the
Participant's Salary Reduction Contributions are to commence. If a Participant
does not enter into a salary reduction agreement as of the initial date he/she
is eligible therefor, he/she may thereafter enter into a salary reduction
agreement 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/her Compensation. For periods
prior to January 1, 1994, such percentage may not exceed 15% of his/her
Compensation. For periods after December 31, 1993, such percentage may not
exceed 12% of his/her Compensation.
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(4) A salary reduction agreement shall remain in effect until
amended or revoked. A salary reduction agreement may be amended effective as of
January 1, April 1, July 1, or October 1 provided such amendment is received by
the Company at least 30 day prior to such January 1, April 1, July 1, or October
1. A salary reduction agreement may be revoked effective as of the first day of
any pay period, provided such revocation is received by the Company at least 30
days prior to the first day of the pay period as of which such revocation is to
be effective. Pursuant to such an amendment, a Participant may increase or
decrease the rate of salary reduction (and Salary Reduction Contributions).
Pursuant to such a revocation, a Participant may discontinue salary reduction
(and Salary Reduction Contributions).
(5) After an amendment additional amendments may only be made,
and after a revocation Salary Reduction 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 satisfy the requirements of Articles V and VI.
SECTION 4.2 PARTICIPATING EMPLOYER CONTRIBUTIONS.
Subject to Article VI, the Participating Employer shall (regardless of
its profits) contribute each month to each Participant's Participating Employer
Contribution Account the following amounts:
(a) For the period from January 1, 1989 through June 30, 1989 --
5.25% of the Participant's Compensation.
(b) For the period from July 1, 1989 through December 31, 1991 --
6.25% of the Participant's Compensation.
(c) For the period from January 1, 1992 through December 31, 1993 --
7.00% of the Participant's Compensation.
(d) On and after January 1, 1994 -- 5.00% of the Participant's
Compensation.
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SECTION 4.3 PARTICIPANT CONTRIBUTIONS.
Subject to Articles V and VI, until February 28, 1990 or such other
date as the Company and the Association shall agree upon, a Participant may
contribute to his/her Participant Investment Account in even percentage of
Compensation up to a maximum of 10%. Effective as of March 1, 1990 or such other
date as the Company and the Association shall agree upon, a Participant may not
contribute to his/her Participant Investment Account.
SECTION 4.4 MATCHING CONTRIBUTIONS.
Subject to Articles V and VI, for each Plan Year that commences on or
after December 31, 1993 each Participant's Matching Account shall be allocated a
Matching Contribution equal to the lesser of (i) 2% of the Participant's
Compensation during such Plan Year or (ii) the aggregate of the Participant's
Salary Reduction Contributions for such Plan Year.
SECTION 4.5 TIME FOR MAKING CONTRIBUTIONS.
All contributions of the Company and the Participants 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 4.6 RETURN OF CONTRIBUTIONS.
(a) All contributions to the Plan pursuant to Sections 4.1, 4.2, and
4.3 are conditioned upon deductibility under Section 404 of the Code. If such
deduction shall be denied, a Participant shall be entitled to a distribution of
the affected amounts, if any, of his/her Salary Reduction Contribution Account
(as adjusted in each case for any earnings or losses thereon); affected amounts,
if any, of the Participating Employer Contribution Accounts (as adjusted in each
case for any earnings or losses thereon); affected amounts, if any, of the
Participant Investment Account (as adjusted in each case for any earnings or
losses thereon); and affected amounts, if any, of the Matching Account (as
adjusted in each case for any earnings or losses thereon). In addition, the
Association and the Company shall meet to negotiate the form of future
Participating Employer contributions and Matching Contributions, provided that
in no event shall there be a gap in contributions made due to the
disqualification. Such distributions shall be made as soon as practicable, but
in any event within one year after denial of such deduction.
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(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/her
Salary Reduction Contribution Account or Participant Investment Account (as
adjusted in each case for any earnings or losses thereon) and (ii) the
Participating Employer shall be entitled to a distribution of the affected
amounts, if any, of the Participating Employer Contribution Accounts and
Matching Accounts (as adjusted for any earnings or losses thereon). Such
distributions shall be made as soon as practicable, but in any event within one
year after of the making of such contribution.
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ARTICLE V
CONTRIBUTION LIMITATIONS OF
SECTIONS 402(g), 401(k), AND 401(m)
SECTION 5.1 DEFINITIONS.
In addition to the definitions in Article I, 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 any Salary
Reduction 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 Salary Reduction Contributions made under this Plan or any
other plans of a Participating Employer. An Eligible Employee who is eligible to
but does not make any Salary Reduction Contributions for a Plan Year shall be
treated as a Participant on whose behalf no Salary Reduction Contributions are
made.
(b) "Aggregate Limit" shall mean the sum of (i) 125% of the greater
of the Actual Deferral Percentage of the group of Eligible Employees who are
non-Highly Compensated Employees or the Average Contribution Percentage of such
group for the Plan Year beginning with or within the Plan Year and (ii) the
lesser of 200% or two plus the lesser of such Actual Deferral Percentage or
Average Contribution Percentage. "Lesser" shall be substituted for "greater" in
(i) in the prior sentence and "greater" shall be substituted for "lesser" after
"two plus the" in (ii) in the prior sentence if it would result in a larger
Aggregate Limit.
(c) "Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the Contribution Percentages of the Eligible
Employees in a group.
(d) "Compensation" shall mean Compensation as defined in Section
6.4(b).
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(e) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to the
Participant's Compensation, whether or not he/she was a Participant for the
entire Plan Year.
(f) "Contribution Percentage Amounts" shall mean the Matching
Contributions made to the Plan on behalf of the Participant for the Plan Year.
Such Contribution Percentage Amounts shall not include Matching Contributions
that are forfeited either to correct Excess Aggregate Contributions or because
the contributions to which they relate are Excess Elective Deferrals, Excess
Contributions, or Excess Aggregate Contributions. Salary Reduction Contributions
shall also be included in the Contribution Percentage Amounts so long as the
Actual Deferral Percentage test is met before the Salary Reduction Contributions
are used in the Average Contribution Percentage test and continues to be met
following the exclusion of those Salary Reduction Contributions that are used to
meet the Average Contribution Percentage test.
(g) "Excess Aggregate Contributions" shall mean with respect to any
Plan Year the excess of (i) the aggregate Contribution Percentage Amounts taken
into account in computing the numerator of the Contribution Percentage made on
behalf of Highly Compensated Employees for such Plan Year over (ii) the maximum
Contribution Percentage Amounts permitted by the Average Contribution Percentage
test (determined by reducing contributions made on behalf of Highly Compensated
Employees in order of their Contribution Percentages, beginning with the highest
of such percentages). Such determination shall be made after first determining
Excess Elective Deferrals pursuant to Section 5.2 and then determining Excess
Contributions pursuant to Section 5.3.
(h) "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).
(i) "Excess Elective Deferrals" shall mean the Salary Reduction
Contributions that are includible in a
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Participant's gross income under Section 402(g) of the Code to the extent such
Participant's Salary Reduction Contributions for a taxable year exceed the
dollar limitation under Section 402(g). Excess Elective Deferrals shall be
treated as Annual Additions under Section 6.4 of 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 SALARY REDUCTION CONTRIBUTIONS.
(a) No Participant shall be permitted to have Salary Reduction
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 Salary Reduction 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.
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(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 Salary
Reduction Contribution Account for the taxable year 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 Salary
Reduction Contribution 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 Salary Reduction 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.
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(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 allocated to his/her 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 mandatorily 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. 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.
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(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.
(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
Salary Reduction 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 Salary Reduction 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.
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(4) Excess Contributions shall be distributed from the
Participant's Salary Reduction Contribution Account.
SECTION 5.4 SECTION 401(m) LIMITATIONS ON MATCHING CONTRIBUTIONS.
(a) AVERAGE CONTRIBUTION PERCENTAGE TESTS. For each Plan Year the
Company shall review Matching Contributions on behalf of each Eligible Employee
to determine whether such contributions with respect to all Participants satisfy
one of the following tests:
(1) The Average Contribution Percentage for the group of
Eligible Employees who are Highly Compensated Employees for such Plan Year does
not exceed the Average Contribution Percentage for the group of all other
Eligible Employees for the Plan Year multiplied by 1.25.
(2) The Average Contribution Percentage for the group of
Eligible Employees who are Highly Compensated Employees for such Plan Year
does not exceed the Average Contribution Percentage for the group of all
other Eligible Employees for the Plan Year multiplied by two, provided
that the Average Contribution Percentage for the group of Eligible Employees
who are Highly Compensated Employees does not exceed the Average Contribution
Percentage for such other Eligible Employees by not more than two percentage
points.
(b) AVERAGE CONTRIBUTION PERCENTAGE RULES.
(1) The Contribution Percentage for any Eligible Employee who is
a Highly Compensated Employee eligible for Matching Contributions to his/her
account under two or more plans or arrangements described in Section 401(k) of
the Code that are maintained by a Participating Employer shall be determined as
if the total of such Matching Contributions was made under each plan. If a
Highly Compensated Employee participates in two or more arrangements subject to
Section 401(m) of the Code that have different plan years, all arrangements
subject to Section 401(m) of the Code 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 mandatorily disaggregated under
regulations under Section 401(m) of the Code.
(2) For purposes of determining the Contribution Percentage of
an Eligible Employee who is a 5% owner or one of the ten most highly-paid Highly
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Compensated Employees, the Contribution Percentage Amounts and Compensation of
such Participant shall include the Contribution Percentage Amounts and
Compensation for the Plan Year of Family Members. Family Members with respect to
Highly Compensated Employees shall be disregarded as separate employees in
determining the Contribution Percentage both for Participants who are non-Highly
Compensated Employees and for Participants who are Highly Compensated Employees.
(3) If this Plan satisfies the requirements of Sections
401(a)(4), 401(m), and 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 5.4 shall be applied by determining
the Contribution Percentages of Eligible Employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only if they have the
same Plan Year.
(4) For purposes of determining the Contribution Percentage
test, Matching Contributions shall be considered to have been made in the Plan
Year in which contributed to the Plan. Matching Contributions shall be
considered made for a Plan Year if made no later than the end of the 12-month
period beginning on the day after the close of the Plan Year.
(5) The Company shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test.
(6) The determination and treatment of the Contribution
Percentage of any Eligible Employee shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
(c) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(1) Notwithstanding any other provision of the Plan, Excess
Aggregate Contributions (plus any income and minus any loss allocable thereto)
shall be forfeited, if forfeitable, or if not forfeitable, distributed, no later
than the last day of each Plan Year to the Participating Employer. Excess
Aggregate Contributions of Participants who are subject to the family
aggregation rules shall be allocated among the Family Members in proportion to
the Matching Contributions (or amounts treated as Matching Contributions) of
each Family
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Participant that is combined to determine the combined Average Contribution
Percentage. If such Excess Aggregate Contributions 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.
(2) Excess Aggregate Contributions shall be treated as Annual
Additions under Section 6.4 of the Plan.
(3) Excess Aggregate Contributions shall be adjusted for any
income or loss up to the date of distribution. The income or loss allocable to
such Excess Aggregate Contributions shall be the sum of:
(i) the income or loss allocable to the Participant's
Matching Account for the Plan Year multiplied by a fraction, the numerator of
which is the Participant's Excess Aggregate Contributions for the year and the
denominator of which is the balance of the Participant's account attributable to
Contribution Percentage amounts 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 the Plan Year and the
date of distribution, counting the month of distribution if distribution occurs
after the 15th day of such month.
(4) Forfeitures of Excess Aggregate Contributions shall be
applied to reduce Matching Contributions.
(5) Excess Aggregate Contributions shall be forfeited, if
forfeitable, or if not forfeitable, distributed from the Participant's Matching
Account.
SECTION 5.5 COMBINED SECTION 401(k) AND SECTION 401(m) LIMITATIONS.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan maintained by a Participating Employer
subject to the Average Contribution Percentage test and the sum of the Actual
Deferral Percentage and the Average Contribution Percentage of those Highly
Compensated Employees subject to either or both tests exceeds the Aggregate
Limit, then the Average Contribution Percentage of those Highly Compensated
Employees who also participate in a cash or deferred arrangement shall be
reduced (beginning with such
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<PAGE>
Highly Compensated Employee whose Average Contribution Percentage is the
highest) so that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Compensation Percentage Amounts is reduced shall be
treated as an Excess Aggregate Contribution. The Actual Deferral Percentage and
the Average Contribution Percentage of the Highly Compensated Employees shall be
determined after any correction required to meet the Actual Deferral Percentage
and Average Contribution Percentage tests. Multiple use does not occur if both
the Actual Deferral Percentage and Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Actual Deferral
Percentage and Average Contribution Percentage of the non-Highly Compensated
Employees.
SECTION 5.6 TREAS. REG. SECTION 1.401(m)-1(a)(3).
Sections 5.4 and 5.5 shall not apply if the Plan (or a portion of the
Plan) automatically satisfies Section 410(b) of the Code.
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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
Salary Reduction 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/she commenced participation and if further reduction is
required, then from the second such plan in which he/she 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/she commenced participation and if further reduction is
required, then from the second such plan in which he/she 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) maintained by a Participating Employer, 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 Participant's wages within the meaning
of Section 3401(a) of the Code and all other payments to the Participant by the
Employer (in the course of the Employer's trade or business) for which the
Employer is required to furnish the Participant a written statement under
Sections 6041(d), 6051(a)(3), and 6052 of the Code. Compensation shall be
determined without regard to any rules under Section 3401(a) of the Code that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2) of the Code).
For purposes of applying the limitations of this Article VI,
compensation for a Limitation Year shall be the compensation actually paid or
made available in gross income during such Limitation Year.
(c) "Defined Benefit Fraction" shall mean a fraction, the numerator
of which is the sum of the
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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 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.
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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 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.
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(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(1)(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:
(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) Effective at such date as shall be established by the Company,
each Participant may elect on a form furnished by the Company the investment
fund or funds in which his/her 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 the investment manager acknowledges in writing 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 is defined in
ERISA) that is a bank or trust company supervised by a State or Federal agency
or (ii) a pooled investment fund
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of an insurance company qualified to do business in the 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 NO INVESTMENT IN PARTICIPATING EMPLOYERS.
None 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).
SECTION 7.5 ADJUSTMENT OF ACCOUNTS FOR INCOME OR LOSS.
(a) Unless otherwise required by the Trustee, the following
provisions shall determine the adjustments made to the Trust Fund and the
Accounts to reflect investment gains and losses and contributions:
(1) For each Plan Year the value of the Accounts shall be
determined by multiplying the Account values at the end of the prior Plan Year
by the Index of Change (as established in Section 7.5(a)(2)) as determined at
the end of the current Plan Year and adding in the contributions made during the
current year to the respective adjusted Accounts.
(2) For each Plan Year there shall be a valuation of the
Accounts using the Index of Change. This Index of Change shall also be
determined at the end of each month when necessary in order to calculate a
benefit payment to a Participant who becomes entitled to such a distribution.
The Index of Change shall be calculated as follows:
(i) The total contributions (Participant and Participating
Employer) received by the Trust Fund since the end of the prior Plan Year shall
be subtracted from the market value of the Trust Fund and any benefit payments
and Trustee fees paid in that period shall be added.
(ii) The adjusted market value of the Trust Fund as
determined in (i) above shall be divided by the market value of the Trust Fund
at the end of the immediately preceding Plan Year. The resulting quotient shall
be the Index of Change.
(3) The value of the Accounts at the end of the prior Plan Year
shall be multiplied by the Index of
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Change. Then the Participant contributions and the Participating Employer
contributions (including Salary Reduction Contributions) that were paid for the
Plan Year, shall be added to the respective Accounts to determine the value of
the Accounts at the end of the Plan Year for which this accounting is made. Any
contribution for the Plan Year that was paid after the end of the Plan Year
shall be included in the Accounts.
(b) If the Trustee requires a method to determine the value of the
Trust Fund and the Accounts that differs from the method set forth in Section
7.5(a), the method required by the Trustee shall be used; provided that (i) the
value of the Trust Fund and the Accounts shall be made no less often than
annually as of the last day of the Plan Year and (ii) such method treats all
Accounts in an equitable and non-discriminatory manner.
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ARTICLE VIII
VESTING AND DISTRIBUTIONS
SECTION 8.1 VESTED RIGHTS TO ACCOUNTS.
(a) A Participant shall always be 100% vested in his/her Participant
Investment Account and Salary Reduction Contribution Account. A Participant
shall be 100% vested in his/her Participating Employer Contribution Account
and Matching Account upon the earliest of (i) attaining his/her Normal
Retirement Age, (ii) attaining his/her Early Retirement Age, (iii) his/her
incurring a Disability, (iv) his/her death, or (v) his/her completion of five
years of Vesting Service.
(b) If a Participant terminates employment prior to becoming 100%
vested in his/her Participating Employer Contribution Account and Matching
Account, a suspense account shall be established into which each such account
is to be held. If the Participant is rehired prior to incurring five
consecutive One-Year Breaks in Service, he/she shall retain his/her share of
each suspense account, which shall be credited back to his/her Participating
Employer Contribution Account or Matching Account. If the Participant is not
rehired prior to incurring five consecutive One-Year Breaks in Service, each
suspense account shall be forfeited and applied to reduce future
Participating Employer contributions under Section 4.1 or Matching
Contributions under Section 4.4, as the case may be, and shall not be used to
increase the Participating Employer Contribution Accounts or Matching
Accounts of the remaining Participants.
SECTION 8.2 DISTRIBUTIONS.
(a) Except as otherwise required by Section 8.3, a Participant's vested
interest in his/her Accounts shall be distributed only upon his/her death,
Disability, or 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/she is not eligible to participate in this Plan.
(b) Subject to Section 8.3, 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/her Beneficiary, to such distribution.
(c) (1) Unless a Participant otherwise elects in accordance with the
provisions contained in this
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Section 8.2(c), a Participant's Accounts shall be applied to the purchase of
a (i) Qualified Joint and Survivor Annuity if the Participant is married on
his/her annuity starting date or (ii) single life annuity for any other
Participant, and such form of annuity shall be distributed to the Participant.
(2) A Participant may at any time within 90-day period prior
to the annuity starting date make a written election to convert the form of
distribution of his/her Accounts into one of the optional benefits described
in Section 8.2(c)(5). Such election must clearly indicate that the
Participant is electing to receive a form other than the normal form.
Additionally, in the case of a married Participant, such election must be
consented to by the Participant's spouse in a written instrument (i) in which
the spouse acknowledges the effect of such election and (ii) that is
witnessed by an authorized representative of the Plan or notary public. Such
written instrument 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 of such other circumstances as Treasury regulations may prescribe.
(3) (i) The Company shall no less than 30 days and no more
than 90 days prior to the annuity starting date provide the Participant a
written explanation of the terms and conditions of the Qualified Joint and
Survivor Annuity; his/her right to make, and the effect of, an election to
waive such annuity; the rights of his/her spouse; and the right to make, and
the effect of, a revocation of an election under Section 8.2(c)(2).
During such period any election may be revoked in writing and another
election made during such period. However, if a vested Participant is to
receive a Qualified Joint and Survivor Annuity, he/she (i) may elect not to
take such an annuity only with the consent of his/her spouse and (ii) may
revoke an election not to take such an annuity or elect to take such an
election at any time and any number of times within such period.
(4) The "annuity starting date" means the first day of the
first period for which an amount is payable as an annuity or any other form.
(5) In lieu of the normal form of distribution, a Participant
may elect one of the following forms:
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(i) A lump sum payment of the value of his/her Accounts as
of the valuation date preceding distribution.
(ii) One of the following optional forms of annuity purchased
from an insurance company:
[1] A life annuity that provides for equal or
variable monthly payments to be made to the Participant, commencing on the
annuity starting date and ceasing with the last payment due immediately
prior to the death of the Participant with no death benefit.
[2] A cash refund annuity that provides for equal or
variable monthly payments to be made to the Participant, commencing on the
annuity starting date and ceasing with the last payment due immediately prior
to the death of the Participant. However, if at the Participant's death the
sum of the monthly payments made under the annuity is less than the death
benefit specified by the Participant in the election of the annuity, the
difference shall be paid to the Participant's beneficiary. The death benefit
so specified may not exceed the actuarial equivalent of such annuity.
[3] A life annuity with payments for a period
certain that provides for equal or variable monthly payments to be made to
the Participant commencing on the annuity starting date and ceasing with the
last payment due immediately prior to the death of the Participant. If the
Participant dies before either 60, 120, or 180 payments (whichever number of
payments is designated by the Participant) are made to him/her, the payments
shall continue to his/her beneficiary until the total designated number of
payments has been made. In no event shall the guaranteed payment period
exceed the life expectancy of the Participant.
[4] A contingent annuitant annuity that provides for
equal or variable monthly payments to be made to the Participant, commencing
on the annuity starting date and ceasing with the last payment due
immediately prior to the death of the Participant. However, if the
Participant predeceases the contingent annuitant specified by the Participant
in the election of such annuity, the contingent annuitant shall be entitled
to monthly payments until the last payment due immediately prior to the death
of the contingent annuitant. The amount of each equal monthly payment to the
contingent annuitant may be 50%, 66-2/3%, 75%, or 100% of the amount
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of each monthly payment to the Participant as the Participant may elect.
This form of annuity shall not be available unless the designated contingent
annuitant is the spouse of the annuitant on the date election to receive this
benefit is made. If either the annuitant or contingent annuitant dies after
election of this optional form but prior to the annuity starting date, the
election of this optional form shall be null and void.
[5] A life annuity with social security
adjustment that provides for monthly payments to be made to the Participant,
commencing on the annuity starting date and ceasing with the last payment due
immediately prior to the death of the Participant, except that such payments
shall be decreased once, and only once, at a date and by an amount specified
by the Participant at the time election of this form is made. The date and
amount of the reduction shall be estimated so that, as nearly as possible,
the Participant shall receive a level income when estimated Social Security
benefits and the annuity payments are combined.
[6] An annuity certain that provides equal or variable
monthly payments for a specified period of time. In the election of this
option, the Participant must specify the period of time over which payments
are to be made. If the Participant dies before the designated number of
payments have been made, payments shall be continued to his/her beneficiary
until the total designated number of payments has been made. In no event
shall the payment period exceed the life expectancy of the Participant at the
time election was made.
Reference in this Section 8.2(c)(5) to variable payments shall mean payments
which vary in relationship to a cost of living index, the performance of a
specified common stock index, or other index that may be specified by the
Company or by the insurance company.
(d) (1) If a Participant who has a vested interest in all or a
portion of his/her Accounts dies prior to commencement of distribution of
his/her Accounts, his/her surviving spouse shall (except as provided below)
receive a "qualified preretirement survivor annuity" as defined in Section
8.2(d)(4).
(2) A Participant may elect at any time to waive the
qualified preretirement survivor annuity (and thereby have a lump sum
distribution of his/her Accounts paid to his/her Beneficiary) or revoke such
waiver. Such waiver shall not take effect unless the Participant's
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spouse consents in writing to the waiver of the qualified preretirement
survivor annuity, acknowledges the effect of such waiver, and such waiver is
witnessed by an authorized representative of the Plan or a notary public.
Such a written waiver shall not be required if it is established to the
satisfaction of the authorized representative of the Plan that the consent of
the spouse may not be obtained because there is no spouse, the spouse cannot
be located, or such other circumstances as Treasury regulations may prescribe.
(3) The Plan shall provide each Participant on the later of
his/her date of hire or his/her attainment of age 32 a written explanation
the terms and conditions of the qualified preretirement survivor annuity;
his/her right to make, and the effect of, an election to waive the qualified
preretirement survivor annuity; the rights of his/her spouse under Section
8.2(d)(2); and the right to make, and the effect of, a revocation of such an
election.
(4) For purposes of this Section 8.2(d), "qualified
preretirement survivor annuity" shall mean an annuity for the life of the
surviving spouse that is purchased by the balance of the Participant's vested
Accounts as of the valuation date preceding such purchase.
SECTION 8.3 SPECIAL DISTRIBUTION RULES.
(a) (1) If a Participant terminates service and the value of
his/her 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/her Accounts. For purposes of this Section 8.3(a)(1), if the
value a Participant's Accounts is zero, the Participant shall be deemed to
have received a distribution of his/her 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 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
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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 8.3(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/her 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/her
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/her Accounts are immediately distributable (within the
meaning of Section 8.3(a)(4)) shall be deemed to he an election to defer
commencement of payment of any benefit sufficient to satisfy this Section
8.3(b)(1).
(2) A Participant may request that the payment to him/her of
his/her Accounts commence at a date later than the latest date provided under
Section 8.3(b)(1). 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 he 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 for calendar years beginning after December 31, 1984.
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(d) A Participant may elect to withdraw the value of his/her
Participant Investment Account while he/she is still an Employee. Such
election must be submitted to the Company not less than 30 days prior to the
date of withdrawal and may not exceed the value of the Participant Investment
Account. If a Participant makes such a withdrawal, he/she shall not be
permitted to make further additional contributions to his/her Participant
Investment Account until the date that is 12 months after the date of
withdrawal, provided that no such contributions may be made after the date
established by the second sentence of Section 4.3.
SECTION 8.4 LOANS.
(a) In accordance with uniform rules established by the Company,
effective as of May 1, 1993, a Participant may request a loan of up to 50% of
the value of his/her Accounts; provided that such request is for a loan of at
least $1,000 and the Participant does not have an outstanding loan from the
Plan. Any such loan shall:
(1) Be adequately secured by the value of the Participant's
Accounts or such other security deemed to be sufficient by the Company;
(2) Be available to all Participants on a reasonably
equivalent basis;
(3) Be repaid by payroll deduction (except as otherwise
agreed to by the Company) in periodic installments over a definite term not
to exceed 60 months unless such loan is used to acquire, construct, or
rehabilitate a dwelling unit that within a reasonable time (determined at the
time the loan is made) shall be used as the principal residence of the
Participant or a member of the family of the Participant; and
(4) Be made at a reasonable rate of interest, which shall he
equal to the prime or base rate charged by a bank whose principal place of
business is Hawaii plus 1%, but in no event in excess of the legal rate of
interest.
(b) The outstanding balance of any loan from the Plan to the
Participant shall not exceed the lesser of (i) $50,000 (as adjusted by
Section 72(p) of the Code) or (ii) one-half the present value of the Accrued
Benefit of the Participant or, if greater, his/her total Accounts up to
$10,000. For the purpose of this limitation, all loans from all plans of the
Participating Employers and other members of a group of employers described
in Section 414(b), 414(c), and 414(m) of the Code shall be aggregated.
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(c) All fees incurred in connection with any loan request or loan
shall be charged to the Participant's Accounts, provided that such fees shall
not exceed $35 per request for 1993 and shall not be increased more than 10%
during any subsequent calendar year.
(d) (1) Each loan request shall be made on a form made available
by the Company and shall set forth the amount requested to be borrowed and
the duration of the loan. Such a request must be accompanied by the consent
of the Participant's spouse in a written instrument dated within the 90-day
period prior to the date of the loan (i) in which the spouse acknowledges the
effect of such consent 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.
(2) In such request the Participant shall designate the
investment fund or funds and the amount therein to be liquidated to fund the
loan. A special account shall be established in the Participant's name in
the amount of the loan, which account shall be regarded as an investment
solely of the Participant and shall bear all expenses or losses in connection
with the loan. Each repayment shall be invested in accordance with the
investment options in effect at the date of repayment for contributions made
on behalf of the Participant to the Plan.
(e) A loan shall be made as soon as practicable after the
requirements of this Section 8.4 are satisfied.
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 paid directly to an eligible retirement plan specified
by the distributee in a direct rollover, except for the small amounts
exceptions in subsection (b).
(b) Where the total amount of the distributee's eligible rollover
distributions during the year are reasonably expected to be less than $200,
subsection (a)
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shall not apply. In addition, if a distributee elects to have only a portion
of an eligible rollover distribution paid to an eligible retirement plan in a
direct rollover, that portion must be equal to at least $500. If the entire
amount of the eligible rollover distribution is $500 or less, the distributee
may not divide the distribution.
(c) 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
expectancy) 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 includable in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(4) Direct rollover: A direct rollover is 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
Retirement Board shall decide, subject to the terms thereof, all questions
arising in the administration, interpretation, and application of the Plan,
including all questions of eligibility. Any such decisions or
interpretations, having broad or overall application, shall be submitted in
writing and copies thereof shall be directed to the Association and the
Trustee, if affected.
(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 Company shall pay all costs of administration and reporting the
status of the Trust Fund, including, but not limited to, required annual
reports and actuarial reports and studies, filing fees for continued Plan
qualification, legal expenses, recordkeeping fees, and the fees of the
Trustee. The Company shall, at its own expense, also furnish a booklet
setting forth a summary plan description, which it shall distribute to all
Participants. The cost of any investment manager, agent, or broker shall be
paid from the Trust Fund. In addition, investment fees that relate directly
to transactions involving Participants' Accounts shall be paid by
Participants. Any dispute involving fees shall be resolved by the Retirement
Board.
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.
Following the close of each Plan Year, the Trust Fund shall he valued and an
accounting rendered setting forth all securities purchased and sold, all
receipts, disbursements, and other transactions effected during such annual
period and the securities held at the end of such period. Each Participant
shall be furnished an annual statement on a form agreed to be the Company and
the Association. The Company shall furnish to the Association copies of all
booklets, reports, certificates, and other documents necessary to the
performance of its duties.
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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, and warrants that 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 Participant's service, notifications to
Participants, annual registration with the Internal Revenue Service, and
annual reports to the Department of Labor. Copies of all such records or
reports shall be sent to the Association and the members of the Retirement
Board.
(b) The Company shall designate the Plan's agent for service of
any notice of process authorized by law.
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 Plan documents to the extent they are
consistent with such person's responsibilities as a fiduciary.
(b) The Company, its officers, directors and agents; the members
of the Retirement Board; and the Association 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, INDEMNIFICATION, INSURANCE.
The Participating Employers shall arrange to have the appropriate
persons bonded in accordance with the provisions of ERISA or the regulations
thereunder.
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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 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/her 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/her authorized representative, and 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.
(d) The claimant or his/her authorized representative shall
have the right to appeal the Company's decision to the Retirement Board.
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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, (ii) if it has made all contributions required under
Article IV to be made up to the date of its withdrawal, and (iii) the
Retirement Board consents to such a 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 the
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 Vesting Service may
elect within a reasonable period after such amendment to have his/her 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 he 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 Plan is adopted with the expectation that is shall he
continued indefinitely, but the Board may at any time terminate the Plan (in
whole or in part), subject to the collective bargaining agreement. If the
Plan is terminated (in full or in part) or if the 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 the full termination
of the Plan, the Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent with and satisfies
the provisions of Sections 8.2, 8.3, and Appendix 1. Distributions to a
Participant shall be made in cash or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in the reduction of
"Section 411(d)(6) protected benefits."
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(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 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/her
age, Vesting Service, Compensation, or any other relevant fact, the
53
<PAGE>
amount of payments shall be equitably adjusted to the amount that is based on
the correct facts with respect to him/her. 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/she 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 and the
Association shall meet and negotiate under the Railway Labor Act 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.
(c) The Letter of Agreement establishing the Retirement Board is
attached as Appendix 2 and any action required or permitted to be taken by
the Company or Participating Employer must be made in a manner that does not
violate such agreement.
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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SECTION 12.7 TOP-HEAVY RULES.
The top-heavy provisions set forth in Section 416 of the Code do
not apply to this Plan because it is not top-heavy and covers only employees
who are included in a unit of employees covered by a collective-bargaining
agreement in which retirement benefits were the subject of good faith
bargaining between employers and employee representatives.
IN WITNESS WHEREOF, the Company has executed this document
effective as of January 1, 1989.
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
FOR THE ASSOCIATION OF FLIGHT
ATTENDANTS IN THE SERVICE OF
HAWAIIAN AIRLINES, INC.
By /s/ Dee Maki 12/30/94
--------------------------------------
President
Association of Flight Attendants
By /s/ Sharon Soper 12/30/94
--------------------------------------
MEC President
Association of Flight Attendants
By /s/ Diana HuiHui 12/30/94
--------------------------------------
Association of Flight Attendants
55
<PAGE>
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 Accounts and shall take
precedence over any inconsistent provisions of the Plan. Unless otherwise
specified, the provisions of this Appendix 1 apply to calendar years
beginning after December 31, 1984.
(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 Accounts are to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or after
the Required Beginning Date:
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(a) INDIVIDUAL ACCOUNT.
(1) If a Participant's Accounts are to be distributed over (i)
a period not extending beyond the 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 Accounts by the applicable life
expectancy.
(2) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least 50% of the present value of
the amount available for distribution is paid within the life expectancy of
the Participant.
(3) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the
first distribution calendar year shall not be less than the quotient obtained
by dividing the Participant's Accounts 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.
(4) 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.
(b) OTHER FORMS.
If the Participant's Accounts are distributed in the form of an
annuity purchased from an insurance company, distributions thereunder shall
be made in accordance with the requirements of Section 401(a)(9) of the Code
and the proposed regulations thereunder.
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SECTION 5. DEATH DISTRIBUTION PROVISIONS.
(a) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant
dies after distribution of his/her Accounts has begun, the remaining portion
of such Accounts 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/her Accounts begins, distribution of the
Participant's entire Accounts 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:
(1) If any portion of the Participant's Accounts are
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/her 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 Accounts 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
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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 Accounts are 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 1. If distribution in the form of an annuity described
in Section 4(b)(1) of this Appendix 1 irrevocably commences to the
Participant before the Required Beginning Date, the date distribution is
considered to begin is the date distribution actually commences.
SECTION 6. DEFINITIONS.
In addition to the definitions in Article I, the following
definitions shall apply for purposes of this Appendix I:
(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
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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 1.
(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) "Accounts" shall mean:
(1) The Accounts as of the last Valuation Date in the
calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions or forfeitures
allocated to the 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:
(1) GENERAL RULE. The Required Beginning Date of a
Participant is the first day of April of the calendar year following
the calendar year in which the Participant attains age 70-1/2.
(2) TRANSITIONAL RULES. The Required Beginning Date of a
Participant who attains age 70-1/2 before January 1, 1988, shall be
determined in accordance with (i) or (ii) below:
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(i) Non-5% owners. The Required Beginning Date of a
Participant who is not a 5% owner is the first day of April of the calendar
year following the calendar year in which the later of retirement or
attainment of age 70-1/2 occurs.
(ii) 5% owners. The Required Beginning Date of a Participant
who is a 5% owner during any year beginning after December 31, 1979, is the
first day of April following the later of [a] the calendar year in which the
Participant attains age 70-1/2 or [b] the earlier of the calendar year with
or within which ends the Plan Year in which the Participant becomes a 5%
owner or the calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is not a 5% owner who
attains age 70-1/2 during 1988 and who has not retired as of January 1, 1989
is April 1, 1990.
(3) A Participant shall be treated as a 5% owner for purposes
of this Appendix 1 if such Participant is a 5% owner as defined in Section
416(i) of the Code (determined in accordance with Section 416 but without
regard to whether the Plan is top-heavy) at any time during the Plan Year
ending with or within the calendar year in which such owner attains age
66-1/2 or any subsequent Plan Year.
(4) Once distributions have begun to a 5% owner under this
Appendix 1, they must continue to be distributed even if the
Participant ceases to be a 5% owner in a subsequent year.
SECTION 7. TRANSITIONAL RULE.
(a) Notwithstanding the other requirements of this Appendix 1 and
subject to the requirements of Section 8.2(c), distribution on behalf of any
Participant, including a 5% owner, may be made in accordance with all of the
following requirements (regardless of when such distribution commences):
(1) The distribution by the Plan is one that would not have
disqualified the Plan under Section 401(a)(9) of the Code as in effect prior
to amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Participant whose Accounts are being
distributed, or if the employee is deceased, by a beneficiary of such
employee.
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(3) Such designation was in writing, was signed by the
Participant or the beneficiary, and was made before January 1, 1984.
(4) The Participant had an Accounts under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Participant
or the beneficiary specifies the time at which distribution shall commence,
the period over which distributions shall be made, and in the case of any
distribution upon the Participant's death, the beneficiaries of the
Participant listed in order of priority.
(b) A distribution upon death shall not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be made upon
the death of the Participant.
(c) For any distribution which commences before January 1, 1984 but
continues after December 31, 1983, the Participant or the beneficiary to whom
such distribution is being made shall be presumed to have designated the
method of distribution under which the distribution is being made if the
method of distribution was specified in writing and the distribution
satisfies the requirements in Sections 7(a)(1) and (5) of this Appendix l.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Section 401(a)(9) of the Code and the proposed
regulations thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Plan must distribute by the end of
the calendar year following the calendar year in which the revocation occurs
the total amount not yet distributed that would have been required to have
been distributed to satisfy Section 401(a)(9) of the Code and the proposed
regulations thereunder but for the Section 242(b)(2) election. For calendar
years beginning after December 31, 1988, such distributions must meet the
minimum distribution incidental benefit requirements in Prop. Treas. Reg.
Section 1.401(a)(9)-2. Any changes in the designation shall be considered to
be a revocation of the designation. However, the mere substitution or
addition of another beneficiary (one not named in the designation) under the
designation shall not be considered to be a revocation of the designation so
long as such substitution or addition does not alter,
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directly or indirectly, the period over which distributions are to be made
under the designation, directly or indirectly, for example, by altering the
relevant measuring life. If an amount is transferred or rolled over from one
plan to another plan, the rules in Q&A J-2 and Q&A J-3 of Prop. Treas. Reg.
Section 1.409(a)(9)-2 shall apply.
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APPENDIX 2
LETTER OF AGREEMENT ESTABLISHING RETIREMENT BOARD
LETTER OF AGREEMENT
between
HAWAIIAN AIRLINES, INC.
and
THE FLIGHT ATTENDANTS
in the service of
HAWAIIAN AIRLINES, INC.
as represented by
THE ASSOCIATION OF FLIGHT ATTENDANTS
------------------------------------
RETIREMENT BOARD
------------------------------------
THIS LETTER OF AGREEMENT (hereinafter referred to as the Retirement
Board Letter of Agreement) is made and entered into in accordance with the
Railway Labor Act, as amended, by and between HAWAIIAN AIRLINES, INC.
(hereinafter referred to as the "Company") and the FLIGHT ATTENDANTS in the
service of the Company as represented by the ASSOCIATION OF FLIGHT ATTENDANTS
(hereinafter referred to as the "Association").
WITNESSETH:
It is hereby mutually agreed as follows:
1. ESTABLISHMENT OF RETIREMENT BOARD.
A. There shall be established a Retirement Board (hereinafter
referred to as the "Board") hereunder for the purpose of hearing and
determining all disputes which may arise out of the application,
interpretation or administration of the Retirement Plan (hereinafter
referred to as the "Plan") provided by the Company or with respect to the
Trustee, Trustees or Insuring Companies utilized in connection therewith or
concerning participation in or benefits under the Plan, and the actuarial
soundness and adequacy of funding such Plan with respect to the
beneficiaries covered thereby. The Board may also recommend benefits
and administrative procedures to the Company which the Company may wish
to provide on a voluntary basis and shall review any benefits the Company
wishes to provide on a voluntary basis to the individuals covered by this
Retirement Board Letter of Agreement.
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Page 2
Letter of Agreement re Retirement Board
B. The Board shall consist of four (4) members, two (2) of
whom shall be selected by the Company and two (2) of whom shall be
selected by the Association (the latter shall hereafter be referred
to as the Retirement Committee). The Company shall establish its
own rules for the selection of the members of the Board to be
selected by it and the Association shall likewise establish its own
rules for the selection of the members of the Board to be selected
by it. The Company shall also select one (1) alternate member who
may act for either of the two (2) members of the Board appointed by
the Company in the event of inability to act of one (1) of such
members, and the Association shall likewise select one (1) alter-
nate member who may act for either of the two (2) members of the
Board appointed by the Association in the event of the absence or
inability to act of one (1) of such members. Either the Company or
the Association may, at any time, remove a member appointed by and
may select a member to fill any vacancy among the members selected
by it. Both the Company and Association shall, in writing, notify
each other respectively concerning such selections which shall con-
tinue until further written notice.
C. Three (3) members of the Board shall constitute a quorum
for the transaction of business. At all Board meetings, Company
members present shall be entitled to one (1) vote each. If at any
such meeting two (2) Company members are not present, the Company
member present may cast two (2) votes and if two (2) Association
members are not present, the Association member present may cast
two (2) votes.
D. The Board shall have the authority to appoint sub-commit-
tees from among the members of the Board to handle any problems
within the jurisdiction of the Board. Such sub-committees shall
report exclusively to the Board.
E. The compensation, travel and other reasonable living ex-
penses, if any, of members of the Board selected by the Company
which are incidental to the holding of such meetings and performing
functions of the Board, shall be paid by the Company. The compen-
sation, travel and other reasonable living expenses, if any, of
members of the Board selected by the Association which are inci-
dental to the holding of such meetings and performing functions of
the Board shall be paid by the Association.
F. All decisions and actions taken by the Board shall be by
the affirmative vote or agreement of not less than three (3) mem-
bers. Such affirmative vote or agreement shall be set forth in
writing and signed by the members of the Board. All decisions of
the Board shall be final and binding upon the Company, the Associa-
tion and any other person having an interest in, under or derived
from the Plan.
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<PAGE>
Page 3
Letter of Agreement re Retirement Board
G. If the Board shall fail to agree on any matter or dispute
coming before it, it shall within ten (10) days from the date of
such failure to agree, designate an Impartial Referee. If the
Board does not agree upon the selection of an Impartial Referee
within such ten (10) day period, then either the Company or the
Association may apply to the National Mediation Board for the
designation by the National Mediation Board of an Impartial
Referee. The matter or dispute shall be submitted to the Board
sitting with the Impartial Referee, who shall act as chairman
during the proceedings pertaining to such matter or dispute. Such
Impartial Referee shall have one (1) vote. Three (3) affermative
votes shall be required to render a decision or determination on
matters coming before the Board sitting together with the Impartial
Referee.
H. The compensation and expenses of the Impartial Referee
and expenses incidental to the conduct of proceedings coming before
the Board shall be shared equally between the Company and the
Association.
I. The Board shall meet at least twice each year. Such
meetings and other meetings of the Board may be called by mutual
agreement of the members of the Board upon thirty (30) days notice
to the other members of the Board. Such meetings shall be
conducted at the Company's offices unless otherwise agreed to by
the members of the Board.
2. POWERS OF THE BOARD. The powers of the Board shall include, but
not necessarily be limited to, the following:
A. The Board shall have the power and obligation to deter-
mine all disputes which may arise out of the application, inter-
pretation or administration of the Plan or with respect to the
Trustee, Trustees, Insuring Companies or Investment Advisors
utilized in connection therewith, or concerning participation in or
benefits under the Plan, or the actuarial soundness and adequacy of
funding the Plan with respect to the beneficiaries covered thereby.
B. The Board shall have the power to affirm, reverse or
otherwise modify any administrative system, form, or decision and
affirm, reverse or otherwise modify any action or proposed action
which gives rise to any dispute.
C. The Board shall have no power to add to, subtract from,
or modify any of the terms of the Plan.
D. The Board shall have the power to establish rules of
procedures for the conduct of its business and of hearings before
it, which rules shall not be inconsistent with the provisions of
the Plan or Trust.
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<PAGE>
Page 4
Letter of Agreement re Retirement Board
3. FUNCTIONS OF THE BOARD. The rights and functions of the Board
shall include, but not necessarily be limited to the following;
A. The Board shall have the right to approve, remove or
change any Trustee or Insuring Company appointed by it or the
Company used in connection with the Plan.
B. The Board shall have the right to approve, remove or
change the Company's appointment of any persons or firms used to
provide administrative services to the Plan (hereinafter referred
to as the Administrator).
C. The Board shall have the right to approve, remove or
change the Company's appointment of any persons or firms who have
the power to direct investment of any funds held by the Trustee,
Trustees or Insuring Company (hereinafter called the Investment
Advisor) in connection with any of the Plan.
D. Should the Board notify the Company that any Trustee,
Insuring Company, Actuary, Administrator or Investment Advisor is
unsatisfactory, the Company shall immediately notify the Trustee or
Insuring Company that the authority of such Trustee, Insuring
Company, Actuary, Administrator or Investment Advisor shall ter-
minate ninety (90) days from the date the Company was notified that
such individual or organization was found unsatisfactory to the
Board. If the Company is unable to select a replacement satis-
factory to the Board within the ninety (90) day period referred to
above, the Board shall select a replacement and the Company shall
notify the appropriate individual or organization of such replace-
cent forthwith.
E. The Board shall have the right to examine all books,
records, reports, regulations, policies and procedures relative to
the Plan including Trustee and Insuring Company instruments, amend-
ments, actuarial, Trustees' and Insuring Company reports for the
Plan, Trust Fund accounts or accounting and any other data relating
to the Plan.
F. The Board shall have the right to review the status and
administration of the Plan, Trust Fund, or Insurance Contract, and
in the appropriate case, make recommendations to the Company, the
Association, the Trustee, Insuring Company and/or Investment
Advisor. The Board shall prepare periodic reports of its
functions, actions and decisions and supply the source to the
Company and the Association.
4. DUTIES OF THE COMPANY, THE TRUSTEE AND/OR INSURING COMPANY.
A. The Company shall require the Trustee and/or Insuring
Company to keep accurate and detailed records and accounts of all
transactions affecting the funds which it holds in connection with
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Letter of Agreement re Retirement Board
the Plan. At least annually, a written report of the adminis-
tration, operation and an accounting of such funds shall be
prepared and submitted to the Board in a form satisfactory to the
Board.
B. The Company shall require the Trustee and/or Insuring
Company to issue a receipt to the Board for all contributions and
deposits remitted by the Company pursuant to the Plan. Such
receipt shall contain a description with respect to the purpose of
each contribution received. Furthermore, if deposits or
contributions are not received within thirty-one (31) days of the
date such monies should have been remitted in accordance with the
Plan or if remittances develop a pattern of recurring delinquency,
the Company shall require the Trustee or Insuring Company to notify
the Retirement Committee of such delinquencies automatically. The
Company shall also require the Trustee or Insuring Company to
report to the Retirement Committee automatically any remittance
which is obviously inadequate under the provisions of the Plan. In
this regard, the Trustee and/or Insuring Company shall only be
responsible to detect inadequacies which would be obvious to a
"reasonable man" unless the Trustee or Insuring Company has direct
notice of inadequacy.
C. In order that the Board and Retirement Committee shall
receive the information to which it is entitled, the Company shall
deliver a copy of this Retirement Board Letter of Agreement to the
Trustee and/or Insuring Company and any subsequent amendment or
modification hereto.
D. The Company shall deliver a written financial report on
the status of all Trusts, Trust Funds, or Insurance Policies to the
Board not less than annually, in a form satisfactory to the Board.
E. The Company shall submit a description of any funding
methods and actuarial assumptions used in or by the Plan to the
Board for approval and no such method or assumption shall operate
under the Plan unless approved by the Board in advance.
F. The Company shall deliver to the Board copies of any
Internal Revenue Service determination letters initially qualifying
the Plan and copies of all subsequent correspondence by and between
the Internal Revenue Service, the Company and/or the Trustees
relative to the tax status of the Plan or the benefits thereunder.
G. The Company shall deliver to the Board copies of fee
schedules for all professional services rendered to the Plan, Trust
or Insurance Policies, including, but not limited to, trustee fees,
insurance commissions, actuarial fees, administrative fees, legal
fees, investment counseling fees, etc.
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Letter of Agreement re Retirement Board
H. The Company shall deliver to the Board and to the
Association at its Home Office at 1625 Massachusetts Avenue, N.W.,
Washington, D.C. 20036, copies of all Plans and trust documents
and any master annuity contracts used in providing and/or funding
benefits of the Plan.
I. The Company shall deliver to the Board copies of all
filings in compliance with any state or federal disclosure laws or
similar or related legislation.
J. Thirty (30) days prior to the printing, distribution
and/or use, the Company shall furnish the Board with a copy of any
booklet describing the benefits of the Plan, employee statement or
any other administrative form for approval. If the form or content
of any such document should prove unsatisfactory to the Board, the
Company shall proceed to modify the document in a manner which will
satisfy the Board. If the Company cannot provide a form
satisfactory to the Board within a reasonable time, the Board shall
have the right to prepare such form on its own initiative at
Company expense.
K. The Company shall furnish the Board with any other information
reasonably related to the Trust, Plan or Insurance Policy (or their
administration) which may be requested by the Board.
L. Fifteen (15) days prior to the giving of any direction to the
Trustee and/or Insuring Company, the Company shall serve upon the Board a
copy of the proposed direction. In the event that within said fifteen
(15) day period the Board or any agent acting on its behalf shall serve
notice of objection to such direction upon the Company, the giving of
such proposed direction shall be deferred and the matter will be
submitted to the Board. When the matter shall have been determined by the
Board, the Company shall give a direction to the Trustee or Insuring
Company effectuating such determination. At the time of each direction,
the Company shall certify to the Trustee or Insuring Company that the
proposed direction was so served upon the Board and either that no
objection thereto was made within the fifteen (15) day period or that
the direction given effectuates the determination of the Board, and the
Trustee or Insuring Company may conclusively rely upon such certification.
M. The Company and the Trustee and/or Insuring Company shall
furnish to the members of the Board all records and material set forth
above within thirty (30) days from the date on which such material may
have been prepared or compiled; and in any case, annual D-2s, actuarial
reports, Trustees' and Insuring Companies' reports for the Plan shall be
furnished to the Retirement Committee not less frequently than once each
year. The Retirement Committee
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Letter of Agreement re Retirement Board
may request and shall be entitled to receive additional material
and data relating to the foregoing.
N. The Company shall pay all the expenses of administration
and operation of the Plan unless specifically indicated to the
contrary,
5. IMPLIED POWERS OF THE BOARD.
In addition to the above, the Board and Retirement Committee
shall have any and all necessary powers to carry out their duties
hereunder or which are reasonably implied by the provisions of the
Plan, this Retirement Board Letter of Agreement, Trust Agreement or
Insurance Policy.
This RETIREMENT BOARD Letter of Agreement shall become effective as of
October 1, 1979, and shall remain in full force and effect
concurrently with the basic employment agreement between the Company and the
Association effective October 1, 1979, as it may from time to time be
amended, subject to the provisions of Section 27 thereof.
IN WITNESS WHEREOF, the parties hereto have signed this RETIREMENT
BOARD Letter of Agreement as of this 29th day of April, 1980.
FOR THE FLIGHT ATTENDANTS IN THE
SERVICE OF HAWAIIAN AIRLINES, INC. FOR HAWAIIAN AIRLINES, INC.
/s/ Linda Puchala /s/ Simeon K. Bright, Jr.
- --------------------------------- ---------------------------------
Linda Puchala, President Simeon K. Bright, Jr.
Association of Flight Attendants Vice President, Customer Services
WITNESS: WITNESS:
/s/ Nina Reppun /s/ Georgia Rosen
- --------------------------------- ---------------------------------
Nina Reppun Georgia Rosen
MEC Chairperson Director -In-Flight Services
/s/ Janis S. Saito /s/ Sharon Mercer
- --------------------------------- ---------------------------------
Janis S. Saito Sharon Mercer
Committeeperson Manager - In-Flight Services
/s/ Rosalita Dawson /s/ Albert Pattison
- --------------------------------- ---------------------------------
Rosalita Dawson Albert Pattison
Committeeperson Industrial Relations Administrator
70
<PAGE>
ID # 2508s
AMENDMENT 1 TO
HAWAIIAN AIRLINES, INC.
401(k) PLAN FOR FLIGHT ATTENDANTS
In accordance with Section 11.1 of the Hawaiian Airlines, Inc.
401(k) Plan for Flight Attendants (hereinafter the "Plan"), the Plan is
hereby amended in the following respects:
1. Section 2.2 of the Plan is hereby amended to read in its
entirety as follows:
All of an Employee's years of service with a Participating Employer
shall be counted to determine the nonforfeitable percentage of the
Employee's account balance derived from employer contributions,
including years spent as a nonparticipant and those when the
Employee was in a category of Employees excluded from the Plan.
2. Section 8.3(d) of the Plan is hereby amended by adding a new
sentence at the end thereof to read in its entirety as follows:
No such withdrawals shall be permitted from a Participant's
Participating Employer Contribution Account, Salary Reduction Contribution
Account, or Matching Account.
The amendments set forth herein shall be effective as of January 1, 1989.
To record the adoption of this amendment, Hawaiian Airlines, Inc. has
executed this document this 17th day of October, 1995.
FOR THE ASSOCIATION OF FLIGHT HAWAIIAN AIRLINES, INC.
ATTENDANTS IN THE SERVICE OF
HAWAIIAN AIRLINES, INC.
By /s/ Bruce R. Nobles
---------------------------------
Its Chairman, President & CEO
By /s/ Patricia A. Friend
-------------------------------
President
Association of Flight By /s/ Rae A. Capps
Attendants ---------------------------------------
Its Vice President, General Counsel
and Corporate Secretary
By /s/ Sharon Soper
---------------------------------
MEC President
Association of Flight
Attendants
By /s/ Diana HuiHui
---------------------------------
Association of Flight
Attendants
