SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4996-2
ALLTEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 34-0868285
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Allied Drive, Little Rock, Arkansas
72202
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(501) 661-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock New York and Pacific
$2.06 No Par Cumulative Convertible
Preferred Stock New York and Pacific
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
(X)
Aggregate market value of voting stock held by non-affiliates as
of January 31, 1995 - $ 5,341,217,327
Common shares outstanding, January 31, 1995 - 188,236,734
DOCUMENTS INCORPORATED BY REFERENCE
Document Incorporated Into
Portions of the annual report to stockholders
for the year ended December 31, 1994 Parts I, II and IV
Proxy statement for the 1995 annual meeting
of stockholders Part III
The Exhibit Index is located on pages 24 to 27.
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY
GENERAL
ALLTEL Corporation ("ALLTEL" or the "Company"), incorporated in June 1960
under the laws of Ohio as Mid-Continent Telephone Corporation, changed its
name to ALLTEL Corporation in October 1983. During 1990, the Company
changed its state of incorporation to Delaware. ALLTEL is a diversified
telecommunications and information services company. The Company provides
local and network access services to customers throughout 22 states. The
Company also owns subsidiaries or investments that provide cellular
telephone, wide-area paging and fiber optic-based long-distance telephone
service. Information processing management services and advanced
applications software are provided to the financial, healthcare and
telecommunications industries by the Company's information services
subsidiaries. Telecommunications products and electronic and electric wire
and cable are warehoused and sold by the Company's distribution
subsidiaries. In addition, the Company publishes telephone directories and
provides cable television service.
ACQUISITIONS
In November 1994, the Company completed its acquisition of Medical
Data Technology, Inc. ("MDT"). MDT provides information processing
services to 14 hospitals in the northeastern United States utilizing
comprehensive application software developed by ALLTEL's healthcare
information services subsidiary.
Effective November 1, 1993, the Company and GTE Corporation completed an
exchange of telephone service areas in several states. ALLTEL exchanged
approximately 95,000 access lines in Illinois, Indiana and Michigan and
$443 million in cash for GTE's Georgia telephone operations, which serve
approximately 320,000 access lines.
In October 1993, the Company completed its merger with TDS Healthcare
Systems Corporation ("TDS"). TDS is a leading provider of comprehensive
patient care and healthcare enterprise information systems serving more
than 200 hospitals in the United States, Canada and Europe.
In October 1993, ALLTEL Publishing Corporation ("ALLTEL Publishing")
completed its purchase of GTE Directories Service Corporation's ("GTE
Directories") independent publishing business which includes contracts with
more than 125 independent telephone companies across the country.
During 1993, ALLTEL Mobile Communications, Inc. ("ALLTEL Mobile") acquired
a 100% interest in one Georgia Rural Service Area ("RSA") which has a
population of approximately 145,000. In addition, ALLTEL Mobile acquired
interests in two other Georgia RSAs and increased its ownership in one
Texas RSA and one Mississippi RSA.
In January 1993, ALLTEL Mobile acquired an additional 20% interest
in the Ft. Smith, Arkansas Metropolitan Statistical Area ("MSA").
This transaction increased ALLTEL Mobile's interest in the Ft. Smith
MSA to 80%.
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<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY (continued)
ACQUISITIONS (continued)
On December 31, 1992, ALLTEL Mobile acquired a 60% interest and a
90% interest in the Ft. Smith, Arkansas and Fayetteville, Arkansas
MSAs, respectively.
In December 1992, the Company acquired SLT Communications, Inc. ("SLT").
SLT serves approximately 49,000 telephone customers primarily in suburban
Houston. It also has approximately 328,000 cellular "pops," including 2.34%
ownership in the Houston, Galveston and Beaumont, Texas MSA, a 1% interest
in the Little Rock, Arkansas MSA, and has interest in four Texas RSA
markets. In addition, SLT serves approximately 6,900 cable television
subscribers and owns one-third of Metropolitan Houston Paging Services, one
of the largest paging networks in Texas.
During 1992, ALLTEL Mobile increased its ownership to 100% in the
Springfield, Missouri and Charlotte, North Carolina MSAs, to 80% in the
Savannah, Georgia MSA and to 64% in the Little Rock, Arkansas
MSA.
In February 1992, the Company acquired Computer Power, Inc. ("CPI"), the
nation's largest provider of software and processing services to the
mortgage industry. CPI has a comprehensive set of proprietary software
systems which includes the Mortgage Servicing Package, Residential Loan
Inventory Control Package, the Residential Loan Production Control Package,
and a number of related systems as well as consulting, training, portfolio
conversion and other services.
During 1992, ALLTEL Mobile purchased an additional 42% interest in the
Savannah, Georgia, MSA, increasing its total interest to 80%, purchased
operating control of the Ft. Smith and Fayetteville, Arkansas, MSAs, as
well as additional interests in three Arkansas and Oklahoma RSAs, one
Missouri RSA, and three Alabama RSAs.
In 1991, the Company acquired Missouri Telephone Company. Missouri
Telephone Company serves approximately 20,000 customer access lines and
2,600 cable television customers in Missouri. It also has 320,000 cellular
"pops" including 48% ownership in the Springfield, Mo. MSA cellular market
where together with ALLTEL Mobile, the Company now owns a 98% interest.
In early 1991, Systematics Information Services, Inc. ("Systematics") (now
known as ALLTEL Information Services, Inc.) acquired Systems Limited, an
international banking software firm headquartered in Hong Kong. Systems
Limited is a provider of wholesale banking software.
In January 1991, Systematics (now known as ALLTEL Information Services,
Inc.) completed its acquisition of the cellular telephone billing and
information system software of C-TEC Corporation ("C-TEC"), an
independent telecommunications company.
2
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY (continued)
ACQUISITIONS (continued)
In October 1990, Systematics (now known as ALLTEL Information Services,
Inc.) acquired Computer Dynamics, Inc. ("CDI"), a mortgage data processor
that services 200,000 loans for financial institutions in six states.
During 1993, these mortgages were transferred to the CPI system.
In July 1990, Systematics (now known as ALLTEL Information Services, Inc.)
acquired HORIZON Financial Software Corporation ("Horizon") of Orlando,
Florida. HORIZON develops and markets software for mid-sized community
financial institutions using the IBM AS/400r computer technology.
In May 1990, the Company acquired Systematics (now known as ALLTEL
Information Services, Inc.) headquartered in Little Rock, Arkansas.
Systematics is one of the nation's leading providers of information
processing management services and advanced application software for
the financial services, healthcare and telecommunications industries.
In 1990, ALLTEL Mobile acquired the remaining 55% of the Aiken, South
Carolina / Augusta, Georgia system, where ALLTEL Mobile already held a 45%
interest thereby increasing its ownership to
100%.
DISPOSITIONS
In 1992, the Company sold substantially all of the assets of Ocean
Technology, Inc. ("OTI"). OTI designed, developed, and manufactured
command, control, and communication systems primarily for military use. In
September 1991, the Company completed the sale of all of its natural gas
operations. During 1990, the Company sold Denro, Inc., a manufacturing
subsidiary.
MANAGEMENT
The Company's headquarters and regional offices staff supervise, coordinate
and assist subsidiaries in management activities, investor relations,
acquisitions, corporate planning, insurance, and technical research. They
also coordinate the financing program for the entire corporate system.
EMPLOYEES
At January 31, 1995, the Company had 16,363 employees. Some of the
employees of the Company's telephone subsidiaries are part of collective
bargaining units. The Company maintains good relations with all employee
groups.
INDUSTRY SEGMENTS
Financial information about industry segments is included in the Company's
1994 Annual Report to Stockholders, which is incorporated herein by
reference.
3
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS
LOCAL SERVICE
General
The Company's telephone operating subsidiaries provide local service to
over 1,643,000 customer lines through 667 exchanges. The telephone
operating subsidiaries also offer facilities for private line, data
transmission and other communications services. In addition, these
subsidiaries sell and lease end user telephone equipment (terminal
equipment) as well as maintenance and protection plans for customer-owned
equipment.
Regulation
The Company's telephone operating subsidiaries are subject to regulation by
the utility commissions of the states in which they operate. These
commissions have jurisdiction over various matters including local and
intrastate toll rates, conditions of service, securities issues,
depreciation rates, the encumbering or disposition of public utility
properties and the prescription of a uniform system of accounts. There were
no local rate increases granted to any of the Company's telephone operating
subsidiaries in 1994, nor are there any rate requests currently pending
before regulatory commissions. During 1994, telephone operations were
affected by certain regulatory commission orders designed to reduce
earnings levels. These orders did not materially impact the results of
operations of the Company.
Competition
The Company's telephone subsidiaries provide local telephone service in
their service areas without significant competition from other regulated
carriers. However, ALLTEL does experience competition in its territories
from alternative telecommunications systems which include facilities
constructed by large end users or by interexchange carriers, satellite
transmission services, cellular communications, cable television systems,
radio-based personal communications services, competitive access providers
and other systems which are capable of completely or partially bypassing
the local telephone facilities. ALLTEL's subsidiaries are also competing
for the sale and leasing of terminal equipment to business and residential
customers as well as for the installation and maintenance of inside wire
and terminal equipment.
ACCESS SERVICES
General
The Company's customers have access to message and private line toll
services through the local exchanges of the Company's telephone operating
subsidiaries. Local exchanges provide toll service and network access for
interexchange telephone traffic to locations outside of the Company's
service areas through connections with other local exchange and
interexchange carriers. These connections permit communications from any
telephone in the ALLTEL system to nationwide locations and to points in
most foreign countries.
4
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Regulation
The Federal Communications Commission ("FCC") authorizes a rate-of- return
("ROR") that telephone companies may earn on interstate services they
provide. Effective January 1, 1991, the FCC replaced rate-of-return
regulation with price cap regulation for the Bell Operating Companies and
GTE Corporation with an optional election for all other companies not
remaining in the National Exchange Carrier Association ("NECA") Common Line
and Traffic Sensitive Pools. The FCC reduced the ROR from 12.0% to 11.25%
for companies remaining under ROR regulation. This 11.25% ROR continued
through 1994. As of December 31, 1994, certain of the Company's telephone
operating subsidiaries have exited the NECA traffic sensitive and end user
tariffs.
Price cap regulation for holding companies, such as ALLTEL, requires all
affiliated operating telephone companies settling on a cost basis to choose
price cap regulation at the same time or all remain under ROR regulation
(with the exception of average schedule affiliates). Price cap regulation
allows for different earnings potential than ROR depending on the
"productivity offset" the company chooses. In addition, companies electing
price cap regulation may make adjustments for the rate of inflation and
exogenous (non-controllable) costs. Price cap regulation is designed to
allow greater pricing flexibility and includes the risk of earnings lower
than under ROR regulation. The FCC undertook a comprehensive review of the
LEC price cap plan in 1994. An order mandating any changes for price cap
companies is expected in early 1995. In 1992, the FCC initiated a
rulemaking proceeding (CC Docket No. 92-135) to address regulatory
alternatives for mid-size and small local exchange carriers. This
proceeding resulted in a set of rules, adopted in September of 1993, that
provide for a non price cap form of incentive regulation for which ALLTEL
would be eligible.
Certain states in which the Company operates, either through legislative
changes or by commission actions, have adopted various forms of
alternatives to rate-of-return regulation. However, most of these plans
have been adopted for the Bell Operating Companies and have not been widely
used by commissions in dealing with other telephone companies including the
Company's telephone operating subsidiaries.
To date, the Company has not elected price cap (incentive) regulation, but
is monitoring the activity of the FCC and the states in which the Company
operates telephone companies and will determine the appropriate action
required as these activities develop.
5
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Interexchange carrier charges
The FCC establishes access procedures by which interexchange carriers
reimburse the Company's telephone operating subsidiaries for the use of
their local networks to complete long-distance calls. With the exception of
ALLTEL Carolina, Inc., ALLTEL Florida, Inc., ALLTEL Georgia Communications
Corp., ALLTEL Pennsylvania, Inc., ALLTEL New York, Inc., ALLTEL Tennessee,
Inc., Georgia ALLTEL Telecom Inc., Oklahoma ALLTEL, Inc. and Sugar Land
Telephone Company, all of the Company's telephone operating subsidiaries
participated in NECA's interstate traffic sensitive tariff and settlements
processes during 1994. All companies, with the exception of ALLTEL Georgia
Communications Corp. and Georgia ALLTEL Telecom Inc., also participated in
NECA's common line tariffs and pools during 1994. For those companies
remaining in the NECA common line and traffic sensitive pools,
participation in NECA's revenue distribution process was entirely based on
actual costs. Intrastate interlata services are reimbursed to the Company's
telephone operating subsidiaries under arrangements ordered by state
commissions. These arrangements are based on access and can be on a
bill-and-keep or pooled basis. The Company's telephone operating
subsidiaries receive reimbursement for intrastate intralata services
through access or toll based revenue arrangements, once again on either a
bill-and-keep or pooled basis.
Equal access
The Company's telephone operating subsidiaries offer equal access to nearly
94% of their customers. The availability of equal access provides customers
with the opportunity to choose the long-distance company they want to use.
The Company's telephone operating subsidiaries then program their equipment
to allow the customer to use the selected long-distance company by dialing
1, the area code, and a seven-digit telephone number.
Billing and collection
Interstate billing and collection services were previously detariffed as
ordered by the FCC. The Company's telephone operating subsidiaries continue
to provide interstate billing and collection services for interexchange
carriers through various agreements and also provide intrastate billing and
collection services under state tariff arrangements or under contract where
these services are detariffed.
Competition
Long-distance services are provided by several competing companies. One
aspect of competition is the potential bypass of the local exchange
carrier's facilities by large volume toll users. Certain states in which
the Company's telephone subsidiaries operate allow various forms of
intralata competition for select functions or complete intralata service.
There has been no significant measurable effect on the operations of the
Company's telephone subsidiaries as a result of this competition.
6
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Competition (continued)
The long-range effect of competition on the provision and cost of
telecommunications services and equipment will depend on technological
advances, regulatory actions at both the state and federal levels, court
decisions, and possible future federal and state legislation. The continued
growth of competition may have an effect on the cost of telephone service
to customers and on the telephone revenues of the Company's telephone
operating subsidiaries. The FCC has ordered that the larger (Tier 1) local
exchange carriers provide switched and special transport interconnection as
well as tandem signaling to competitive providers. Local exchange carriers
are no longer required to provide physical collocation but are required to
tariff virtual interconnection arrangements.
OTHER
In November 1994, the Company signed definitive agreements to sell certain
telephone properties serving approximately 111,000 access lines in Arizona,
California, Nevada, New Mexico, Oregon, Tennessee, Utah and West Virginia
to Citizens Utilities Company in exchange for approximately $290 million in
cash, assumed debt and 3,600 access lines in Pennsylvania. This sale will
be completed on a state-by-state basis as necessary regulatory approvals
are obtained. Once completed, this transaction will result in the Company's
telephone operating subsidiaries serving approximately 1.5 million access
lines in 14 states.
INFORMATION SERVICES
GENERAL
Effective February 15, 1995, the Company changed the names of its
principal information services subsidiaries. Systematics
Information Services, Inc. was changed to ALLTEL Information
Services, Inc., Systematics Financial Services, Inc. was changed to
ALLTEL Financial Information Services, Inc., Computer Power, Inc.
was changed to ALLTEL Mortgage Information Services Inc.,
Systematics Healthcare Services, Inc. was changed to ALLTEL
Healthcare Information Services, Inc. and Systematics
Telecommunications Services, Inc. was changed to ALLTEL Telecom
Information Services, Inc.
ALLTEL Information Services, Inc. ("ALLTEL Information Services") provides
a wide range of information processing services to the financial services,
healthcare and telecommunications industries through information processing
centers that it staffs, equips and operates. Information processing
contracts are generally for a multi-year period. ALLTEL Financial
Information Services Inc.'s software and services have been developed and
improved continuously over the last 26 years and are designed to fulfill
substantially all of the retail information processing and management
information requirements of financial institutions. ALLTEL Information
Services also markets software worldwide to financial services, healthcare
and telecommunications companies operating their own information processing
departments.
7
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
GENERAL (continued)
ALLTEL Healthcare Information Services, Inc. is primarily engaged in the
development and marketing of comprehensive patient centered healthcare
enterprise information systems to medium to large healthcare companies
throughout North America and Europe. These systems are designed to enhance
the quality of patient care, control processing costs and provide
substantially all of the information requirements of its users. Under
typical arrangements with hospitals, software is licensed under perpetual
license arrangements. Software and hardware maintenance are normally
contracted for periods of five to seven years. Contracts to install
software normally range over periods from twelve to eighteen months. Other
services provided include training, consulting and data processing
services.
ALLTEL Mortgage Information Services, Inc. provides data processing and
related computer software and systems to financial institutions originating
and/or servicing single family mortgage loans. This subsidiary's software
products and processing services, combined with its team of mortgage
bankers, are intended to offer a cost-effective alternative to the
extensive technical support staff and the enlarged group of mortgage
bankers which would otherwise have to be assembled in-house by each
customer. ALLTEL Mortgage Information Services, Inc.'s on-line systems
automate processing functions required in the origination of mortgage
loans, the management of such loans while in inventory before they are sold
in the secondary market, and their subsequent servicing.
CUSTOMERS
ALLTEL Financial Information Services, Inc.'s primary market for its
financial products and services are the nation's commercial banks and
savings institutions and financial institutions outside the United States,
primarily in Europe and Asia. Financial software and services are also
marketed to mortgage service companies, credit unions and healthcare
companies. ALLTEL Telecom Information Services, Inc.'s primary market
for its telecommunications products and services is the top 150 telephone
companies and top 50 cellular companies in the United States. ALLTEL
Healthcare Information Services, Inc.'s primary market for its healthcare
software products are hospitals with 400 or more beds. Many of these
customers are large, state funded hospitals which include a significant
number of university hospitals and other large healthcare providers.
ALLTEL Mortgage Information Services, Inc. provides its services primarily
to financial institutions originating and/or servicing single family
mortgage loans that have sold the loans in the secondary market while
continuing to service the loans. These institutions which include more than
one-half of the top 100 servicers of residential mortgages are located
throughout the United States. In total, nearly 15 million mortgage loans
representing over $1.1 trillion are processed by its software.
8
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
COMPETITION
ALLTEL Financial Information Services, Inc.'s competition primarily comes
from "in-house" bank information processing departments and other companies
engaged in active competition for financial institution outsourcing
contracts. Numerous large financial institutions provide information
processing for smaller institutions in their respective geographic areas,
along with other companies that perform such services for small
institutions. There are also other companies that provide information
processing services to the telecommunications industry. Competition in the
healthcare industry primarily comes from other companies that provide
comprehensive integrated hospital information systems and from companies
which offer solutions for individual departments within the respective
healthcare enterprises.
ALLTEL Mortgage Information Services, Inc.'s competition comes from
"in-house" information processing departments and from other companies that
offer information processing services to the mortgage banking industry.
This subsidiary competes in its business by providing a high level of
service and support.
The information services subsidiaries substantially rely upon and
vigorously enforce contract and trade secret laws and internal
non-disclosure safeguards to protect the proprietary nature of their
computer software.
REGULATION AND EXAMINATION
Both ALLTEL Financial Information Services, Inc. and ALLTEL Mortgage
Information Services, Inc. are regulated by the federal agencies that have
supervisory authority over banking, thrift, and credit union operations.
ALLTEL Financial Information Services, Inc. is also classified as one of
twelve national vendors that, as a result of their market share, process a
significant portion of the financial industry assets. These industry
leaders are also examined by the federal Financial Institutions Examination
Council on an ongoing basis. The information services subsidiaries'
management practices, policies, procedures, standards, and overall
financial condition are components of these reviews. In addition to these
corporate examinations, the information services subsidiaries' individual
processing sites are examined, as if they were departments of their
respective clients, by federal and state regulators, as well as the
clients' internal audit departments and their independent auditing firms.
The same standards of performance are applied to those information
processing centers as are applied to the client financial institutions.
Reports of the information services subsidiaries' data center performance
are furnished to the Board of Directors of ALLTEL Information Services and
to the Board of Directors of the examined client. The supervisory agencies
include applicable state banking departments, the Federal Deposit Insurance
Corporation, the Office of Thrift Supervision, the Office of the
Comptroller of the Currency, the Board of Governors of the Federal Reserve
System, and the National Credit Union Administration. The information
services subsidiaries' processing contracts include a commitment to install
all necessary changes in its computer software that are required by changes
in regulations.
ALLTEL Healthcare Information Services, Inc.'s operations are not
specifically regulated by any federal or state healthcare agency. However,
its software must meet all federal and state reporting requirements of its
customers, including Medicare, Medicaid and other state sponsored programs.
9
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
REGULATION AND EXAMINATION (continued)
ALLTEL Mortgage Information Services, Inc. operates transmitters at the
network's information processing facility hub and operates very small
aperture technology ("VSAT") earth stations at numerous customer locations.
Prior to initiation, construction or operation of the transmitters used in
a VSAT satellite network, operators of these transmitters are required by
the Communications Act of 1934 to be authorized by the FCC. The FCC grants
licenses to VSAT operators for a predetermined number of earth stations
that may be placed at unspecified locations in the domestic United States.
ALLTEL Mortgage Information Services, Inc. has FCC authorization to operate
its domestic earth station satellite network, consisting of one hub located
in Jacksonville, Florida and various 1.8m and 2.4m VSATs.
PRODUCT DEVELOPMENT AND SUPPORT
In the past five years, the information services subsidiaries have spent
approximately $134.1 million ($37.7 million in 1994) on IBM mainframe COBOL
software design and development, or an average of 4.6% of their total
information services operating revenues in those years. One of the
information services subsidiaries has also begun to develop products which
will be utilized in a UNIX based environment. Changes in regulatory
requirements of both state and federal authorities, increasing competition,
and the development of new products and markets create the need continually
to update or modify existing software and systems offered to customers. The
information services subsidiaries intend to continue to maintain, improve,
and expand the functions and capabilities of their software products over
the next several years.
OTHER
In 1994, ALLTEL Information Services signed a long-term agreement to
provide information processing services for the telephone operations of
Citizens Utilities Company. Under terms of the ten year contract, ALLTEL
Information Services will provide complete outsourcing services for
Citizens' 750,000 telephone access lines, including generating Citizens'
billing, customer service information, engineering, and operational
support.
In 1993, ALLTEL Information Services signed a long-term agreement with GTE
Telecommunications Products and Services Group to outsource GTE's cellular
billing operations.
Within three months of acquiring TDS, ALLTEL Information Services signed
its first hospital outsourcing contract with St. Joseph's Hospital in
Parkersburg, West Virginia. Under terms of the five-year contract,
Systematics assumed all healthcare information systems operations for this
375 bed hospital, including providing on-site and remote management,
software implementation and support, hardware and network management and
maintenance. TDS was merged with Systematics Healthcare Services, Inc.
during 1994. As discussed previously, Systematics Healthcare Services,
Inc.'s name was changed to ALLTEL Healthcare Information Services, Inc. on
February 15, 1995.
During 1991, ALLTEL Information Services signed a long-term facilities
management contract to handle all information processing activities for
ALLTEL's telephone and cellular operations.
10
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
PRODUCT DISTRIBUTION OPERATIONS
GENERAL
ALLTEL Supply, Inc. ("ALLTEL Supply"), with fourteen warehouses and
thirteen counter-sales showrooms across the United States, is a major
distributor of telecommunications equipment and materials. It supplies
equipment to affiliated and non-affiliated telephone companies, business
systems suppliers, railroads, governments, and retail and industrial
companies. HWC, with ten warehouses throughout the United States, is one of
the nation's leading suppliers of specialty wire and cable products.
COMPETITION
ALLTEL Supply and HWC (the "Distribution companies") experience substantial
competition throughout their sales territories from other distribution
companies and direct sales by manufacturers. Competition is based primarily
on quality, product availability, service, price, and technical assistance.
PRODUCTS
ALLTEL Supply offers more than 35,000 products for sale. In addition,
ALLTEL Supply inventories single and multi-line telephone sets, local area
networks ("LANS"), switching equipment modules, interior cable, pole line
hardware, and various other telecommunications supply items.
HWC inventories more than 44,000 reels of specialty wire and cable. These
include shielded and unshielded power cables, flame resistant cables, and
high temperature precision engineered cables.
The Distribution companies have not encountered any material shortages or
delays in delivery of products from their suppliers.
CELLULAR OPERATIONS
GENERAL
ALLTEL Mobile provides cellular mobile telephone service in various major
markets throughout the United States. Cellular telephone service combines
the latest advances in telephone, radio and computer technology and is
being marketed to business executives, on- the-move professional people and
individual consumers. As cellular has become increasing more popular with
broader segments of the population, ALLTEL Mobile has opened several retail
stores, in addition to its traditional sales offices, where customers can
purchase equipment and learn more about wireless services.
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
CELLULAR OPERATIONS (continued)
BUSINESS
One potential of a cellular telephone market's investment is quantified by
the market's population times the percent of a company's ownership interest
of the cellular operation in that market ("pops"). ALLTEL Mobile owns a
majority interest in cellular operations in 12 MSAs and a minority interest
in 13 other MSAs. This represents 4.6 million cellular pops. ALLTEL Mobile
also owns a majority interest in cellular operations in 47 RSAs and a
minority interest in 23 other RSAs. This represents 3.3 million cellular
pops.
ALLTEL Mobile operates systems in Charlotte, North Carolina; Little Rock,
Arkansas, Jackson, Mississippi; Montgomery, Alabama; Springfield, Missouri;
Ocala/Gainesville, Florida; Albany, Georgia; Aiken, South Carolina/Augusta,
Georgia; Savannah, Georgia; Ft. Smith, Arkansas; and Fayetteville,
Arkansas.
COMPETITION
Direct competition in the cellular telephone market consists of a
non-wireline carrier licensed to provide cellular telephone service in the
same area. Additionally, non-cellular mobile telephone service may be
available in the licensed area but is not currently considered a direct
competitor within the cellular market.
ALLTEL Mobile expects to face additional new competitors in its markets as
a result of the licensing of personal communication services ("PCS")
providers currently under way by the FCC. It is expected that these new
competitors will begin operations in 1996 or 1997. ALLTEL Mobile has and
continues to take actions in its markets to minimize the impact of these
new competitors; however, the long-term impacts of new competition can not
be determined at this time.
OTHER
In January 1995, ALLTEL Mobile and BellSouth Mobility signed a definitive
agreement involving cellular transactions impacting markets in five states.
The agreement, which is contingent on BellSouth's success in winning a
PCS license to provide services in North and South Carolina, would create
a limited partnership comprising cellular properties owned by the
two companies in five markets. The limited partnership would consist
of BellSouth's interest in cellular properties in Columbia, South Carolina
(85.5%) and Florence, South Carolina (100%) and ALLTEL Mobile's cellular
interests in Columbia, South Carolina (14.5%), Jackson, Mississippi and
eight contiguous RSAs (49.9%), Chattanooga, Tennessee (15.5%) and
Pittsburgh, Pennsylvania (3.6%). ALLTEL Mobile and BellSouth Mobility
would share ownership of the partnership 53.5% and 46.5%, respectively,
with ALLTEL Mobile serving as managing partner. In addition, under terms
of the agreement, BellSouth Mobility will purchase 0.1% of ALLTEL Mobile's
ownership interest in its Jackson, Mississippi and eight contiguous RSA
cellular properties. ALLTEL Mobile will purchase BellSouth Mobility's
interest in six cellular properties in North and South Carolina. Purchase
of the properties is subject to rights of first refusal by BellSouth's
partners in these six cellular properties.
12
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
CELLULAR OPERATIONS (continued)
OTHER (continued)
In November 1994, ALLTEL Mobile signed a definitive agreement to exchange
several of its cellular telephone properties for several cellular
properties owned by United States Cellular Corp. ("U.S. Cellular"). Under
terms of the agreement, ALLTEL Mobile will exchange certain assets in a
West Virginia RSA and an Oklahoma RSA for U.S. Cellular's certain assets in
a Georgia RSA and a North Carolina RSA. The acquired properties are
contiguous to ALLTEL Mobile's Albany, Georgia and Charlotte, North Carolina
markets. In January 1995, ALLTEL Mobile purchased U.S. Cellular's 20
percent interest in the Fort Smith, Arkansas, MSA, thereby increasing
ALLTEL Mobile's ownership interest in the Fort Smith MSA to 100 percent.
PAGING
ALLTEL Mobile also operates wide-area computer-driven paging networks as a
complementary service to cellular telephones. In addition to paging
networks in Arkansas and Florida, the Company's acquisition of SLT in 1992
added a one-third ownership in one of the largest paging networks in Texas,
which serves more than 177,000 subscribers.
DIRECTORY PUBLISHING
ALLTEL Publishing currently coordinates advertising, sales, printing, and
distribution for 362 telephone directories in 39 states.
In October 1993, ALLTEL Publishing completed its purchase of GTE
Directories independent publishing business, which includes contracts with
more than 125 independent telephone companies across the country. Under
terms of the agreement, ALLTEL Publishing provides all directory publishing
services including contract management, production and marketing. As
subcontractor, GTE Directories provides directory sales and printing
services through a separate contract with ALLTEL Publishing.
CABLE TELEVISION SERVICE
The Company provides cable television service to more than 17,500 customers
in certain areas of the Navajo Indian Reservation (which covers an area
including parts of New Mexico, Arizona, and Utah), and to residents of
Needles, California, Springfield, Missouri, and central Texas.
In November 1994, as part of its agreement to sell certain telephone
properties, the Company also signed definitive agreements to sell certain
of its cable television properties to Citizens Utilities Company. These
cable television properties serve approximately 7,000 customers in Arizona,
California, New Mexico and Utah.
13
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
NATURAL GAS DISTRIBUTION
In 1991, the Company disposed of all of natural gas distribution operations.
MANUFACTURING
During 1992, the Company sold substantially all of the assets of OTI, which
designed, developed, manufactured and marketed products for use in military
command, control and communications systems. During 1990, the Company sold
Denro, Inc., which designs and manufactures microprocessor-based air
traffic control voice switching and control systems. After the sale of OTI,
the Company did not have any manufacturing operations.
INVESTMENTS
LDDS
ALLTEL owns approximately an 8% interest in LDDS Communications, Inc.
("LDDS"), a publicly-held company. The investment was acquired in exchange
for the Company's previous interest in Advanced Telecommunications
Corporation ("ATC"), which was acquired by LDDS during 1992.
LDDS is one of the largest regional long-distance companies in the United
States and provides long-distance telecommunications services to customers
located in 41 states.
COMDIAL
ALLTEL owns approximately a 6% interest in Comdial Corporation, a producer
of quality telephone sets and key systems.
CHILLICOTHE
ALLTEL owns a 19.8% interest in Chillicothe Telephone Company, which serves
approximately 27,000 telephone lines in Ohio. Frederick G. Griech,
President of ALLTEL Telephone Services Corporation's Northeast Region, and
Americo Cornacchione, Senior Vice President-Accounting and Finance of
ALLTEL Telephone Services Corporation's Northeast Region, are members of
Chillicothe's Board of Directors.
OTHER
During 1991, the Company sold its stock in Luz International Limited, a
provider of solar energy, to an investment group in a private transaction.
During 1990, the Company completed the sale of its 14.5% interest in TPI
Enterprises, Inc., which had been a supplier of business communications
systems.
14
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 2. Properties
TELEPHONE PROPERTY
The Company's telephone property in service consists primarily of land and
buildings, central office equipment, telephone lines, and related
equipment. The gross investment by category in telephone property as of
December 31, 1994 was as follows:
(Thousands)
Telephone-
Land, buildings and leasehold
improvements $ 267,030
Central office equipment 1,232,517
Outside plant 1,953,600
Furniture, fixtures,
vehicles and other 303,747
Total $3,756,894
Standard practices prevailing in the telephone industry are followed by the
Company's telephone operating subsidiaries in the construction and
maintenance of plant and facilities. Certain properties of the Company and
its telephone operating subsidiaries are pledged as collateral for
long-term debt.
OTHER PROPERTY
Other properties of the Company in service consist primarily of property,
plant and equipment used in information services, product distribution and
cellular telephone operations. The total investment by category for these
operations as of December 31, 1994 was as follows:
(Thousands)
Land, buildings and leasehold
improvements $164,623
Data processing equipment 257,830
Cellular telephone plant
and equipment 236,675
Furniture, fixtures
and miscellaneous 70,323
Total $729,451
All of the Company's property is considered to be in reasonably sound
operating condition.
15
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 3. Legal Proceedings
The Company is not currently involved in any material pending legal
proceedings, other than routine litigation incidental to its business,
and, to the knowledge of the Company's management, no material legal
proceedings, either private or governmental, are contemplated or
threatened.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to the security holders for a vote during
the fourth quarter of the fiscal year.
Item 10(b). Executive Officers of the Registrant.
Name Age Position
* Joe T. Ford 57 Chairman, President and
Chief Executive Officer
(beginning January 26, 1995)
** Max E. Bobbitt 50 President and Chief
Operating Officer
(up until January 4, 1995)
Dennis J. Ferra 41 Senior Vice President -
Accounting and Administration
Francis X. Frantz 41 Senior Vice President -
External Affairs, General
Counsel and Secretary
Tom T. Orsini 44 Senior Vice President - Finance
and Corporate Development
John L. Comparin 42 Vice President -Human Resources
Ronald D. Payne 48 Vice President - Corporate
Communications
Jerry M. Green 47 Treasurer
John M. Mueller 44 Controller
Deborah J. Akins 39 Assistant Treasurer
* - On January 26, 1995, the Board of Directors named Joe T. Ford as
President of the Company, in addition to his other responsibilities as
Chairman and Chief Executive Officer.
** - On January 4, 1995, Max E. Bobbitt announced his retirement from
the Company. Mr. Bobbitt had most recently served as the Company's
President and Chief Operating Officer. On January 26, 1995, Mr. Bobbitt
also resigned from his position as Director of the Company.
16
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 10(b). Executive Officers of the Registrant (continued)
There are no arrangements between any officer and any other person
pursuant to which he was selected as an officer. Except for Francis
X. Frantz and John L. Comparin, each of the officers named above has
been employed by ALLTEL or a subsidiary for the last five years.
Mr. Frantz joined the Company in March, 1990 as Senior Vice
President and General Counsel. Prior to joining ALLTEL, Mr. Frantz
was a partner in the law firm of Thompson, Hine and Flory,
Cleveland, Ohio. Mr. Comparin joined the Company in February, 1990
as Vice President - Human Resources. Prior to joining ALLTEL, Mr.
Comparin was Director of Human Resources for Maxus Corp. (formerly
Diamond Shamrock Corp.) of Dallas Texas.
FORM 10-K Part II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
As of January 31, 1995, the approximate number of stockholders
of common stock including an estimate for those holding shares in
brokers' accounts was 93,000. For additional information
pertaining to Markets for ALLTEL Corporation's Common Stock and
Related Stockholder Matters, refer to pages 35, 37, 42 and the
inside back cover of ALLTEL's 1994 Annual Report to Stockholders,
which is incorporated herein by reference.
Item 6. Selected Financial Data.
For information pertaining to Selected Financial Data of
ALLTEL Corporation, refer to page 32 of ALLTEL's 1994 Annual
Report to Stockholders, which is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
For information pertaining to Management's Discussion and
Analysis of Financial Condition and Results of Operations of
ALLTEL Corporation, refer to pages 27-30 of ALLTEL's 1994 Annual
Report to Stockholders, which is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
For information pertaining to Financial Statements and
Supplementary Data of ALLTEL Corporation, refer to pages 31 and
33-45 of ALLTEL's 1994 Annual Report to Stockholders, which is
incorporated herein by reference.
17
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part II
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
During the two most recent fiscal years or the subsequent interim
period up to the date of this Form 10-K, there were no
disagreements with the Company's independent certified public
accountants on any matter of accounting principles or practices,
financial statement disclosures or auditing scope or procedures. In
addition, none of the "kinds of events" described in item
304(a)(1)(v)(A), (B), (C) and (D) of Regulation S-K have occurred.
FORM 10-K PART III
Item 10(a). Directors of the Registrant.
For information pertaining to Directors of ALLTEL Corporation refer
to "Election of Directors" in ALLTEL's Proxy Statement for its 1995
Annual Meeting of Stockholders, which is incorporated herein by
reference.
Item 10(b). Executive Officers of the Registrant.
For information pertaining to Executive Officers of ALLTEL
Corporation, refer to Part I, pages 16 and 17 of this Report.
Item 11. Executive Compensation.
For information pertaining to Executive Compensation, refer to
"Management Compensation" in ALLTEL's Proxy Statement for its 1995
Annual Meeting of Stockholders, which is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
For information pertaining to beneficial ownership of ALLTEL
securities, refer to "Security Ownership of Certain Beneficial
Owners and Management" in ALLTEL's Proxy Statement for its 1995
Annual Meeting of Stockholders, which is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
For information pertaining to Certain Relationships and Related
Transactions, refer to "Management Compensation" in ALLTEL's Proxy
Statement for its 1995 Annual Meeting of Stockholders, which is
incorporated herein by reference.
18
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements:
The following Consolidated Financial Statements of ALLTEL
Corporation and subsidiaries, included in the annual
report of ALLTEL Corporation to its stockholders
for the year ended December 31, 1994, are
incorporated herein by reference:
Annual Report
Page Number
Report of Independent Public Accountants 31
Consolidated Balance Sheets - December 31, 1994
and 1993 34-35
Consolidated Statements of Income - for the
years ended December 31, 1994, 1993, and 1992 33
Consolidated Statements of Shareholders' Equity
- for the years ended December 31, 1994,
1993 and 1992 37
Consolidated Statements of Cash Flows
- for the years ended December 31, 1994,
1993 and 1992 36
Notes to Consolidated Financial Statements 40-45
Supplementary Information-Business Segment and
Quarterly (Unaudited) Financial Information
38, 39
and 45
The Consolidated Financial Statements and Supplementary
Financial Information listed in the above index which are
included in the 1994 Annual Report to Stockholders of ALLTEL
Corporation are hereby incorporated by reference.
19
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(continued):
2. Financial Statement Schedules:
Form 10-K
Page Number
Report of Independent Public Accountants 22
Schedule II. Valuation and Qualifying Accounts 23
3. Exhibits:
See "Exhibit Index" located on page 24-27 of this document.
(b) No reports on Form 8-K were filed during the last quarter of 1994.
Separate condensed financial statements of ALLTEL Corporation have
been omitted since the Company meets the tests set forth in Regulation
S-X Rule 4-08(e)(3). All other schedules are omitted since the
required information is not present or is not present in amounts
sufficient to require submission of the schedule, or because the
information required is included in the consolidated financial
statements and notes thereto.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ALLTEL Corporation
Registrant
By /s/ Joe T. Ford
Joe T. Ford, Chairman, President and Date: February 21, 1995
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By /s/ Dennis J. Ferra Date: February 21, 1995
Dennis J. Ferra, Senior Vice President -
Accounting and Administration
(Principal Accounting Officer)
Joe T. Ford, Chairman, President,
Chief Executive Officer, and Director
(Principal Executive Officer)
Dennis J. Ferra, Senior Vice President -
Accounting and Administration
(Principal Accounting Officer)
Tom T. Orsini, Senior Vice President -
Finance and Corporate Development
(Principal Financial Officer)
By /s/ Dennis J. Ferra
Ben W. Agee, Director (Dennis J. Ferra,
Attorney-in-fact)
Lawrence L. Gellerstedt III, Director
Date: February 21, 1995
W. W. Johnson, Director
Emon A. Mahony, Jr., Director
George C. McConnaughey, Director
John P. McConnell, Director
Philip F. Searle, Director
John E. Steuri, Director
Carl H. Tiedemann, Director
Ronald Townsend, Director
William H. Zimmer, Jr., Director
21
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
ALLTEL Corporation:
We have audited in accordance with generally accepted auditing standards,
the financial statements included in ALLTEL Corporation's Annual Report to
stockholders incorporated by reference in this Form 10-K, and have issued
our report thereon dated January 23, 1995. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
schedule on page 23 is the responsibility of the company's management and
is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not a required part of the basic financial
statements. This information has been subjected to the auditing procedures
applied in the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
As explained in Note 3 to the financial statements, as of December 31,
1993, the Company changed its method of accounting for investments in
conjunction with the adoption of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities."
ARTHUR ANDERSEN LLP
Little Rock, Arkansas,
January 23, 1995.
22
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
Column A Column B Column C Column D Column E
Additions
Per Adjusted Charged to Charged Balance at
Previous Adjustments Beginning Cost and to Other Deduction End of
Description Report (B) Balance Expenses Accounts Describe Period
Allowance for doubtful accounts,
subscribers and others:
For the years ended
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1994 $10,766 $ 39 $10,805 $33,504 -- $22,799 (A) $21,510
December 31, 1993 $ 8,849 $656 $ 9,505 $13,636 -- $12,375 (A) $10,766
December 31, 1992 $10,961 $10,961 $10,506 $205 $12,823 (A) $ 8,849
<FN>
Notes:
(A) Accounts charged off less recoveries of amounts previously charged off.
(B) Reclassification of amount for companies purchased in 1994 and 1993.
</FN>
</TABLE>
23
<PAGE>
EXHIBIT INDEX
Number and Name Page
(3)(a) Amended and Restated Certificate of Incorporation of *
ALLTEL Corporation (incorporated herein by reference
to Exhibit B to Proxy Statement, dated March 9, l990).
(b) By-Laws of ALLTEL Corporation (Exhibit 3(b) to Form SE *
dated February 17, 1993).
(4)(a) Amended and Restated Rights Agreement dated as of *
April 26, l989, between ALLTEL Corporation and
Ameritrust Company N.A. (incorporated herein by
reference to Form 8 dated April 26, l989, filed with
the Commission on April 28, l989).
(b) First Amendment to Amended and Restated Rights *
Agreement dated as of April l6, l990, between ALLTEL
Corporation and Ameritrust Company N.A. (incorporated
herein by reference to Form SE of ALLTEL Corporation
filed with the Commission on April 23, l990). *
(c) The Company agrees to provide to the Commission, upon --
request, copies of any agreement defining rights of
long-term debt holders.
(10)(a)(1) Executive Compensation Agreement and amendments *
thereto by and between the Corporation and Joe T.
Ford (incorporated herein by reference to Exhibit
10(b) to Form 10-K for the fiscal year ended December
31, 1983).
(a)(2) Modification to Executive Compensation Agreement by *
and between the Corporation and Joe T. Ford
effective as of January 1, 1987 (incorporated herein
by reference to Exhibit 10(b)(2) to Form 10-K for the
fiscal year ended December 31, 1986).
(a)(3) Modification to Executive Compensation Agreement by *
and between ALLTEL Corporation and Joe T. Ford,
effective as of January 1, 1991 (incorporated herein
by reference to Exhibit 10 of ALLTEL Corporation
Registration Statement (No. 33-44736) on Form S-4
dated December 23, 1991).
(a)(4) Split-dollar Life Insurance Agreement by and between 63
the Corporation and Joe T. Ford effective as of
March 1, 1994.
(b)(1) Executive Retirement Agreement by and between the 69
Corporation and Max E. Bobbitt effective as of
January 24, 1995.
(b)(2) Split- dollar Life Insurance Agreement by and between 84
the Corporation and Max E. Bobbitt effective as of
March 1, 1994.
* Incorporated herein by reference as indicated.
24
<PAGE>
EXHIBIT INDEX, Continued
Number and Name Page
(10)(c)(1) Executive Compensation Agreement by and between the *
Company and John E. Steuri effective as of April l7,
l990 (incorporated herein by reference to Exhibit B
of ALLTEL Corporation Registration Statement (No.
33-34495) on Form S-4 dated April 23, 1990).
(c)(2) Change in Control Agreement by and between the 89
Company and John L. Comparin effective as of
October 24, 1994.
(c)(3) Change in Control Agreement by and between the 109
Company and Dennis J. Ferra effective as of
October 24, 1994.
(c)(4) Change in Control Agreement by and between the 129
Company and Francis X. Frantz effective as of
October 24, 1994.
(c)(5) Change in Control Agreement by and between the 149
Company and Tom T. Orsini effective as of
October 24, 1994.
(c)(6) Change in Control Agreement by and between the 169
Company and Ronald D. Payne effective as of
October 24, 1994.
(d)(1) Split- dollar Life Insurance Agreement by and 189
between the Corporation and Dennis J. Ferra
effective as of March 1, 1994.
(d)(2) Split - dollar Life Insurance Agreement by and 195
between the Corporation and Francis X. Frantz
effective as of March 1, 1994.
(d)(3) Split - dollar Life Insurance Agreement by and 201
between the Corporation and Tom T. Orsini
effective as of March 1, 1994.
(e)(1) ALLTEL Corporation Supplemental Executive Retirement 207
Plan, effective October 24, 1994.
(e)(2) Directors' Retirement Plan of ALLTEL Corporation, as *
amended and restated effective January 1, 1994
(incorporated herein by reference to Exhibit 10(d)
to Form 10-K for the fiscal year ended December 31,
1993).
(f)(1) Executive Deferred Compensation Plan of ALLTEL *
Corporation, as amended and restated effective
October 1, 1993 (incorporated herein by reference to
Exhibit 10(e) to Form 10-K for the fiscal year ended
December 31, 1993).).
(f)(2) Deferred Compensation Plan for Directors of ALLTEL *
Corporation, as amended and restated effective
October 1, 1993 (incorporated herein by reference to
Exhibit 10(f) to Form 10-K for the fiscal year ended
December 31, 1993).).
* Incorporated herein by reference as indicated.
25
<PAGE>
EXHIBIT INDEX, Continued
Number and Name Page
(10)(g)(l) ALLTEL Corporation 1975 Incentive Stock Option Plan *
(as amended and restated effective July 26, 1988)
(incorporated herein by reference to Exhibit 10(i)
to Form 10-K for the fiscal year ended December 31,
1988).
(g)(2) ALLTEL Corporation 1991 Stock Option Plan *
(incorporated herein by reference to Exhibit A to
Proxy Statement, dated March 8, 1991).
(g)(3) ALLTEL Corporation l994 Stock Option Plan for *
Nonemployee Directors (incorporated herein by
reference to Exhibit B to Proxy Statement dated
March 4, l994).
(g)(4) ALLTEL Corporation l994 Stock Option Plan for *
Employees (incorporated herein by reference to
Exhibit A to Proxy Statement dated March 4, l994).
(h)(1) Systematics, Inc. 1981 Incentive Stock Option Plan *
and Amendment No. 1 thereto (incorporated herein
by reference to Form S-8 (No. 33-35343) of ALLTEL
Corporation filed with the Commission on June 11,
1990).
(h)(2) Stock Purchase Plan for Employees of Systematics *
Information Services, Inc. and its Affiliates,
effective June 18, 1991 (incorporated herein by
reference to Exhibit 10(h)(2) to Amendment No.1 to
Form 10-K for the fiscal year ended December 31,
1993).
(i) ALLTEL Corporation Performance Incentive *
Compensation Plan as amended, effective January 1,
1993 (Exhibit 10(i) to Form SE dated February 17,
1993).
(j) ALLTEL Corporation Long-Term Performance Incentive *
Compensation Plan, as amended and restated
effective January 1, 1993 (Exhibit 10(j) to Form SE
dated February 17, 1993).
(j)(1) Amendment No. 1 to ALLTEL Corporation Long-Term *
Performance Incentive Compensation Plan as amended
and restated effective January 1, 1993,
(incorporated herein by reference to Exhibit
10(j)(1) to Amendment No.1 to Form 10-K for the
fiscal year ended December 31, 1993).
(k) ALLTEL Corporation Pension Plan (January 1, 1994 226
Restatement).
(l) ALLTEL Corporation Profit-Sharing Plan (January 1, 533
1994 Restatement).
(m) ALLTEL Corporation Excess Benefit Plan, as restated *
January 1, 1994 (incorporated herein by reference
to Exhibit 10(m) to Amendment No. 1 to Form 10-K for
the fiscal year ended December 31, 1993).
* Incorporated herein by reference as indicated.
26
<PAGE>
EXHIBIT INDEX, Continued
Number and Name Page
(10)(n) Amended and Restated ALLTEL Corporation Supplemental *
Medical Expense Reimbursement Plan (incorporated
herein by reference to Exhibit 10(p) to Form 10-K
for the fiscal year ended December 31, 1990).
(o) Systematics Information Services, Inc. Excess *
Benefit Plan, effective January 1, 1994
(incorporated herein by reference to Amendment No. 1
to Form 10-K for the fiscal year ended December 31,
1993).
(p) ALLTEL Corporation Thrift Plan (January 1, 1994 612
Restatement).
(11) Statement re computation of per share earnings. 28
(13) Annual report to stockholders for the year ended 33
December 31, 1994. Such report, except for the
portions incorporated by reference herein, is
furnished for the information of the SEC and is not
"filed" as part of this report.
(21) Subsidiaries of the registrant. 29
(23) Consents of experts and counsel. 32
(24) Powers of Attorney. 696
(27) Financial Data Schedule for the year ended December 698
31, 1994.
(99)(a) Annual report on Form 11-K for the Stock Purchase --
Plan for Employees of Systematics Information
Services, Inc. and its Affiliates for the year ended
December 31, 1994 will be filed by amendment.
(99)(b) Annual report on Form 11-K for the ALLTEL --
Corporation Thrift Plan for the year ended
December 31, 1994 will be filed by amendment.
(99)(c) Annual report on Form 11-K for the Computer Power, --
Inc. Retirement Savings Plan for the year ended
December 31, 1994 will be filed by amendment.
(99)(d) Annual report on Form 11-K for the CP National --
Corporation Incentive Thrift Savings Plan for the
year ended December 31, 1994 will be filed by
amendment.
* Incorporated herein by reference as indicated.
27
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
ALLTEL CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Dollars and Shares in Thousands, except per share amounts)
For the Years Ended December 31, 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net income applicable to
common shares $270,521 $260,439 $226,894 $196,883 $197,249
Adjustments for convertible securities:
preferred stocks 258 293 355 566 716
Net income applicable to common
shares, assuming conversion
of above securities $270,779 $260,732 $227,249 $197,449 $197,965
Average common shares outstanding
for the year including equivalents 189,454 187,665 185,672 180,007 181,453
Increase in shares which would
result from conversion of
convertible preferred stocks 670 755 905 2,921 3,519
Average common shares, assuming
conversion of the above securities 190,124 188,420 186,577 182,928 184,972
Earnings per share of
common stock:
Primary $1.43 $1.39 $1.22 $1.09 $1.09
Fully-diluted $1.42 $1.38 $1.22 $1.08 $1.07
<FN>
Note: Amounts have been restated for mergers accounted for as a pooling-of-interests.
</FN>
</TABLE>
28
<PAGE>
EXHIBIT 21
ALLTEL Corporation
Subsidiaries of the Registrant
State of
Incorporation
NORTHEAST REGION:
ALLTEL New York, Inc. New York
ALLTEL Ohio, Inc. Ohio
ALLTEL Pennsylvania, Inc. Pennsylvania
Mountain State Telephone Company West Virginia
The Western Reserve Telephone Company Ohio
SOUTHERN REGION:
ALLTEL Alabama, Inc. Alabama
ALLTEL Carolina, Inc. North Carolina
ALLTEL Florida, Inc. Florida
ALLTEL Georgia, Inc. Georgia
ALLTEL Georgia Communications Corp. Georgia
ALLTEL Kentucky, Inc. Kentucky
ALLTEL Mississippi, Inc. Mississippi
ALLTEL South Carolina, Inc. South Carolina
ALLTEL Tennessee, Inc. Tennessee
Georgia ALLTEL Communicon Co. Illinois
Georgia ALLTELCOM Co. Indiana
Georgia ALLTEL Telecom Inc. Georgia
SOUTHWEST REGION:
ALLTEL Arkansas, Inc. Arkansas
ALLTEL Missouri, Inc. Missouri
ALLTEL Nevada, Inc. Nevada
ALLTEL Oklahoma, Inc. Arkansas
ALLTEL Oregon, Inc. Oregon
CP National Corporation California
Eastern Missouri Telephone Company Missouri
Missouri Telephone Company Missouri
Navajo Communications Co., Inc. New Mexico
NCC Systems, Inc. Texas
Oklahoma ALLTEL, Inc. Oklahoma
SLT Communications, Inc. Texas
Sugar Land Telephone Company Texas
SLT Cable TV, Inc. Texas
Texas ALLTEL, Inc. Texas
Tuolumne Telephone Company California
29
<PAGE>
EXHIBIT 21
ALLTEL Corporation
Subsidiaries of the Registrant, cont.
State of
Incorporation
OTHER COMPANIES:
ALLTEL Communications Corporation Ohio
ALLTEL Communications Group, Inc. Delaware
ALLTEL Corporate Services, Inc. Delaware
ALLTEL Distribution, Inc. Delaware
ALLTEL Holding, Inc. Delaware
ALLTEL Mobile Communications, Inc. Delaware
ALLTEL Mobile Communications of Alabama, Inc. Alabama
ALLTEL Mobile Communications of Arkansas, Inc. Arkansas
ALLTEL Mobile Communications of the Carolinas, Inc. North Carolina
ALLTEL Mobile Communications of Florida, Inc. Florida
ALLTEL Mobile Communications of Georgia, Inc. Georgia
ALLTEL Mobile Communications of Mississippi, Inc. Mississippi
ALLTEL Mobile Communications of Missouri, Inc. Missouri
ALLTEL Mobile Communications of Nevada, Inc. Nevada
ALLTEL Mobile Communications of Northwest Arkansas, Inc. Arkansas
ALLTEL Mobile Communications of West Virginia, Inc. West Virginia
ALLTEL Publishing Corporation Ohio
ALLTEL Publishing Listing Management Corporation Pennsylvania
ALLTEL Supply, Inc. Ohio
ALLTEL Telephone Services Corporation Ohio
Alma Cellular II, Inc. Georgia
Brantley Cellular Company Georgia
Cellular Investments, Inc. Georgia
Cellular Phone of Aiken-Augusta, Inc. South Carolina
Chattanooga-Northwest Georgia Cellular Radio, Inc. Tennessee
ITC Cellular Holdings, Inc. Delaware
Meridian Cellular, Inc. Mississippi
Missouri Telephone Cellular Systems, Inc. Missouri
Pembroke Cellular Company II, Inc. Georgia
Planters Cellular Co. Georgia
Southwest Missouri Cellular Delaware
Statesboro Cellular Company, Inc. Georgia
Control Communications Industries, Inc. Delaware
Dynalex, Inc. California
HWC Distribution Corp. Delaware
Houston Wire & Cable Company Texas
Ocean Technology, Inc. California
OTI International, Inc. California
Sygnis, Inc. Arkansas
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EXHIBIT 21
ALLTEL Corporation Subsidiaries of the Registrant, cont.
State of
Incorporation
OTHER COMPANIES (continued):
SLT Communications Supply Company Texas
SLT Communications Construction & Sales Co. Texas
Worldwide Electrical Sales Texas
ALLTEL Financial Information Services, Inc. Arkansas
ALLTEL Healthcare Information Services, Inc. Delaware
ALLTEL Healthcare Information Services, Limited United Kingdom
ALLTEL Information Services, Inc. Delaware
ALLTEL Information International Services, Ltd. Delaware
ALLTEL Mortgage Information Services, Inc. Delaware
ALLTEL Telecom Information Services, Inc. Delaware
ALLTEL Wireless Information Services, Inc. Delaware
Computer Power, Inc. Florida
CPI Datanet, Inc. Delaware
Horizon Financial Software Corporation Florida
Medical Data Technology, Inc. New Jersey
Systematics Commonwealth of Independent States of Russia Russia
Systematics Healthcare Services, Inc. - Europe Delaware
Systematics, Incorporated Limited United Kingdom
Systematics International Limited Jamaica
Systematics International Resource Management, Inc. Delaware
Systematics International Telecommunications Services, Inc. Delaware
Systematics of California, Inc. California
Systematics Processing Corporation Wisconsin
Systematics Thailand Limited Thailand
Systems Limited Hong Kong
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EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
ALLTEL Corporation:
As independent public accountants, we hereby consent to the incorporation by
reference in the previously filed registration statements of ALLTEL
Corporation on Forms S-8 (Registration No's. 2-99523, 33-25382, 33-34495,
33-35343, 33-34495, 33-41234, 33-48476, 33- 51047, 33-54175, 33-54823 and
33-56291) of our report dated January 23, 1995, on our audits of the
financial statements of ALLTEL Corporation as of December 31, 1994 and 1993
and for each of the three years in the period ended December 31, 1994, which
report is incorporated by reference in this Annual Report on Form 10-K.
ARTHUR ANDERSEN LLP
Little Rock, Arkansas,
February 21, 1995.
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EXHIBIT 13
PORTIONS OF ANNUAL REPORT TO STOCKHOLDERS
FOR THE YEAR ENDED DECEMBER 31, 1994
(incorporated by reference into this filing)
Form 10-K
Page Number
Management's Discussion and Analysis of Financial 34-41
Condition and Results of Operations
Report of Independent Certified Public Accountants 42
Selected Financial Data 43
Consolidated Statements of Income 44
Consolidated Balance Sheets 45-46
Consolidated Statements of Cash Flows 47
Consolidated Statements of Shareholders' Equity 48
Business Segments 49
Quarterly Financial Data 50
Notes to Consolidated Financial Statements 51-62
Investor Information 63
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Financial Condition
(Dollars in millions,
except per share amounts) 1994 1993 1992
Capital expenditures $ 596.1 $ 426.2 $ 367.2
Cash provided from operations $ 580.9 $ 569.1 $ 523.0
Long-term debt issued $ 404.9 $ 627.8 $ 105.0
Total capital structure $3,531.0 $3,203.5 $2,368.5
Percent debt to total capital 54% 51% 45%
Interest coverage ratio 4.58x 5.28x 4.89x
Book value per share $ 8.60 $ 8.24 $ 7.01
The Company's financial strength continues to provide it the
flexibility to make necessary and desirable capital
expenditures. During 1994, the Company financed the majority
of its capital expenditures through the internal generation of
funds. Capital expenditures are forecast at $527.1 million for
1995, which is expected to be primarily internally financed.
The Company's capital expenditures were directed toward
telephone operations to modernize its network and invest in
new equipment to provide telecommunications services. In
addition, capital expenditures were incurred for expansion
into new cellular and information services markets and to
upgrade existing cellular network facilities.
During 1994, the Company and its subsidiaries issued long-term
debt of $404.9 million, compared to $627.8 million in 1993 and
$105.0 million in 1992. In 1994, the Company issued $250
million of 7.25 percent debentures to reduce borrowings under
its revolving credit agreement. In addition, subsidiaries
issued $60 million of 8.05 percent notes and $30 million of
8.17 percent notes during the fourth quarter of 1994. Proceeds
from these note issuances were used to further reduce the
outstanding revolving credit agreement borrowings and to
refinance existing high-cost indebtedness. The issuance of
$400 million of 6.5 percent debentures by the Company and a
subsidiary to finance the acquisition of certain telephone
properties of GTE Corporation in Georgia and an increase in
the use of the Company's revolving credit agreement accounted
for the majority of long-term debt issued in 1993. The
issuance of $50 million of 7.47 percent notes by a subsidiary
and $43 million of 8.05 percent notes as part of the
realignment of debt in the Company's Western Division
telephone operations represent a significant portion of long-
term debt issued in 1992. The remaining borrowings for the
three years were used for investments, acquisitions and other
general corporate requirements. The loans were obtained
through the private placement market, public issuance and the
Rural Electrification Administration financing programs for
telephone companies. The Company and its subsidiaries expect
these sources to continue to be available for future
borrowings. (See Note 4 to the Consolidated Financial
Statements for additional information regarding the Company's
long-term debt.)
The Company has a $500 million revolving credit
agreement. Total borrowings outstanding against this agreement
at December 31, 1994 and 1993 were $132.0 million and $214.5
million, respectively. Borrowings under this agreement in 1994
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were for general corporate requirements and the expansion of
cellular investments.
As a result, the Company's debt ratio was 54 percent as of
December 31, 1994 compared with 51 percent as of December 31,
1993. There were no changes in the Company's bond ratings
during 1994. Moody's Investors Service and Standard & Poor's
Corporation senior debt ratings for the Company are A2 and A+,
respectively.
Common dividends declared totaled $168.8 million in 1994
or 62 percent of net income. In October 1994, the Board of
Directors approved a 9 percent increase in the quarterly
dividend to $.24 per share. This action raised the annualized
dividend to $.96 per share and marks the 34th consecutive year
in which the Company has increased its common stock dividend.
Results of Operations
Overview
During 1994, each of the Company's four major business
segments produced growth in both operating revenues and
income. Telephone's strong operating results reflect the
November 1993 acquisition of certain properties in Georgia,
steady access line growth and cost savings from
reorganizational efforts initiated in 1993. Information
services produced double-digit growth in revenues primarily
due to the expansion of its international, telecommunications
and healthcare operations. This growth was partially offset by
continuing consolidation in the domestic banking industry.
Product distribution showed increased profitability as demand
for its products grew as a result of an improved national
economy. Cellular produced outstanding operating results
reflecting significant growth in its customer base and network
usage.
In 1994, revenues and sales increased to $2,961.7 million from
$2,342.1 million in 1993 and $2,082.5 million in 1992. This
represents an increase of 26 percent in 1994 compared to an
increase of 12 percent in 1993. Total costs and expenses
increased to $2,327.9 million from $1,823.0 million in 1993
and $1,639.7 million in 1992. This represents an increase of
28 percent in 1994 compared to an increase of 11 percent in
1993. The Company's consolidated net income for 1994 increased
to $271.8 million from $262.0 million in 1993 and $228.6
million in 1992, an increase of 4 percent in 1994 and 15
percent in 1993. Earnings per share in 1994 increased to $1.43
from $1.39 in 1993 and $1.22 in 1992, reflecting an increase
of 3 percent in 1994 compared to an increase of 14 percent in
1993. The 1994 results include an approximately $32 million
one-time, write-down on the check processing and community
banking divisions of the Company's information services
business, announced in December. Excluding the write-down,
the Company's consolidated results from operations continued
to show strong growth, with net income increasing 16 percent
to $304.0 million and earnings per share increasing 15 percent
to $1.60.
27
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Telephone Operations
(Dollars in millions) 1994 1993 1992
Revenues and sales $1,178.3 $1,016.1 $ 947.8
Operating income $ 400.2 $ 353.2 $ 315.8
Access lines in service 1,643,041 1,576,361 1,301,981
In 1994, telephone operations of the Company continued to
perform well in a challenging regulatory environment. Revenues
and sales increased $162.2 million or 16 percent for 1994,
compared to increases of $68.3 million or 7 percent in 1993
and $56.9 million or 6 percent in 1992. Operating income
increased $47.0 million or 13 percent for 1994, compared
to an increase of $37.4 million or 12 percent in 1993
and an increase of $20.7 million or 7 percent in 1992.
In the fourth quarter of 1993, the Company purchased all
the assets of the telephone operations of GTE Corporation
in Georgia ("GTE Georgia") in exchange for the Company's
telephone operations in Illinois, Indiana and Michigan
and $443 million in cash. The exchange was accounted
for as a purchase, and accordingly, GTE Georgia's results of
operations have been included in the Company's financial
statements as of November 1, 1993. This acquisition accounted
for 14 percent of the increase in revenues and operating
income in 1994 and 3 percent of the increase in revenues and
operating income in 1993. In connection with this acquisition,
the Company reorganized its telephone headquarters staff and
consolidated its five telephone regions into three.
In November 1994, the Company signed definitive agreements to
sell telephone properties serving approximately 111,000 access
lines in Arizona, California, Nevada, New Mexico, Oregon,
Tennessee, Utah and West Virginia to Citizens Utilities in
exchange for approximately $290 million in cash, assumed debt
and 3,600 access lines in Pennsylvania. The telephone
properties to be disposed of represent approximately 10
percent and 11 percent of the 1994 telephone operations
revenues and operating income, respectively. This sale will be
completed on a state-by-state basis as necessary regulatory
approvals are obtained and represents a continuation of the
Company's ongoing efforts to achieve efficiencies and enhance
the competitive position of its telephone operations. Once
completed, this transaction, along with the 1993 property
exchange with GTE, will result in the Company serving 1.5
million access lines in 14 states compared to 1.4 million
access lines in 25 states. The Company anticipates future
access line growth to come from population growth in its
remaining service areas and through strategic acquisitions.
Local service revenues increased $79.3 million or 26 percent
in 1994, compared to increases of $27.5 million or 10 percent
in 1993 and $14.0 million or 5 percent in 1992. Local service
revenues increased in 1994 and 1993 primarily due to the GTE
Georgia acquisition. Increases in customer lines and growth in
custom calling feature revenues also contributed to the growth
in local service revenues for all periods. There were no local
rate increases granted to any of the Company's telephone
subsidiaries in 1994, nor are there any rate requests
currently pending before regulatory commissions. Management
does not anticipate filing for any local rate increases during
1995. During 1994, telephone operations were affected by
certain regulatory commission orders designed to reduce
earnings levels. These orders did not materially affect the
results of operations of the Company.
Network access and long-distance revenues increased $62.5
million or 11 percent in 1994, compared to increases of $36.5
million or 7 percent in 1993 and $33.5 million or 6 percent in
1992. Network access and long-distance revenues increased in
1994 and 1993 primarily due to the GTE Georgia acquisition.
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Increases in universal service fund revenues and higher
volumes of access connections also contributed to the growth
in network access and long-distance revenues in all periods.
The increase in revenues for 1994 was partially offset by the
impact of changing from an average schedule to cost method of
settling interstate access revenues by two of the Company's
telephone operating subsidiaries.
Miscellaneous revenues increased $20.4 million or 16 percent
in 1994, compared to increases of $4.4 million or 4 percent in
1993 and $9.3 million or 8 percent in 1992. The increases in
miscellaneous revenues in 1994 and 1993 are primarily due to
the GTE Georgia acquisition and increases in directory
advertising revenues. Increases in telephone equipment sales
and rentals, sales of telephone equipment maintenance and
protection plans and increases in intrastate billing and
collection revenues also contributed to the growth in revenues
in 1994. The increase in revenues for 1993 was partially
offset by decreases in billing and collection revenues from
AT&T. The increase in miscellaneous revenue in 1992 was the
result of increases in directory advertising, telephone
equipment rentals and sales of protection plans, partially
offset by decreases in telephone equipment maintenance plans
and message center revenues.
Total telephone operating expenses increased $115.2 million or
17 percent to $778.1 million in 1994. This compares to an
increase of 5 percent in 1993 and 6 percent in 1992. The
acquisition of the GTE Georgia properties accounted for 14
percent of the increase in 1994 and 3 percent of the increase
in 1993. In addition to the impact of the GTE Georgia
acquisition, operating expenses increased in 1994 due to
increased expense for maintenance and repair of cable, digital
electronic switching and circuit equipment, and an increase in
cost of products sold related to the sales of telephone
equipment and maintenance and protection plans. The increase
in 1994 was partially offset by lower maintenance expense
related to electro-mechanical switching equipment and by a
reduction in accounting, financial and human resource
management expenses resulting from the reorganization and
consolidation of the Company's telephone operations. Operating
expenses increased in 1993 primarily due to increased expense
for repair and maintenance of cable, digital electronic
switching and circuit equipment, and increased information
services charges. The increase in operating expenses in 1992
was due to increased expense for maintenance and repair of
cable, digital electronic switching and circuit equipment,
increases in real estate, personal property, gross receipts
and franchise taxes, and increased information services
charges. The increase in 1992 was partially offset by lower
maintenance expense related to electro-mechanical switching
equipment and a reduction in cost of products sold related to
protection plans, deregulated equipment and telephone
equipment maintenance plans.
The Company's telephone subsidiaries follow the accounting for
regulated enterprises prescribed by Statement of Financial
Accounting Standards No. 71, "Accounting for the Effects of
Certain Types of Regulation" ("SFAS 71"). If the Company's
telephone subsidiaries no longer qualify for the provisions of
SFAS 71, the accounting impact to the Company would be an
extraordinary non-cash charge to operations of an amount that
could be material. Criteria that would give rise to the
discontinuance of SFAS 71 include (1) increasing competition
that restricts the telephone subsidiaries' ability to
establish prices to recover specific costs, and (2) a
significant change in the manner in which rates are set by
regulators from cost-based regulation to another form of
regulation. The Company periodically reviews these
criteria to ensure the continuing application of SFAS 71 is
appropriate.
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<PAGE>
Information Services Operations
(Millions) 1994 1993 1992
Revenues and sales $861.5 $677.8 $569.4
Operating income $129.8 $116.6 $ 94.4
The information services segment provided double-digit growth
in both revenues and sales and operating income for the
Company. Revenues and sales reflect increases of $183.7
million or 27 percent in 1994, $108.4 million or 19 percent in
1993, and $92.8 million or 19 percent in 1992. Operating
income reflects increases of $13.2 million or 11 percent in
1994, $22.2 million or 23 percent in 1993, and $38.2 million
or 68 percent for 1992.
Although revenue and operating income growth for this segment
continue to be adversely affected by the number of mergers and
consolidations taking place in the financial services
industry, the expansion of its international,
telecommunications and healthcare operations has positioned
this segment with opportunities for future growth in revenues
and operating income. In November 1994, information services
enhanced the telecommunications portion of its outsourcing
business when it signed a long-term contract to provide
customer billing, facilities management and other support
services for the telephone operations of Citizens Utilities.
Information services revenues and sales increased in all
periods as a result of new facilities management and remote
processing contracts including telecommunications, additional
services provided under existing facilities management
contracts, an increase in the number of mortgage loans
processed and related reporting services and additional fees
associated with specialized programming and software
conversions. The acquisition of TDS Healthcare Systems
Corporation ("TDS"), effective October 1, 1993, also
contributed to the increase in revenues and sales in 1994 and
1993. Revenues and sales also increased in 1993 and 1992 as a
result of the increased nationwide refinancing activity that
provided additional transaction processing charges. The
increases in revenues and sales in all periods were partially
offset by lost operations from contract terminations due
primarily to merger and acquisition activity in the financial
services market. Both the community and commercial banking
industries continue to experience a high level of
consolidation due to mergers, which are anticipated to
continue over the next few years.
Operating income increased for all periods due to the revenue
increases previously mentioned. The growth in operating income
in 1994 was slower than the growth in revenues and sales due
to increased costs to procure and support additional
international service contracts, the reduction in revenues as
a result of early termination of facilities management
contracts, operating losses sustained by this segment's check
processing and community banking operations, increased
operating expenses to support the growth in business and an
increase in depreciation and amortization expense.
Depreciation and amortization expense increased primarily due
to the acquisition of additional data processing equipment, as
a result of the growth in business, and due to an increase in
amortization of internally developed software. Operating
income in 1993 also increased due to higher margins realized
on contract termination fees. A reduction in the amortization
of software at Computer Power, Inc. ("CPI") also contributed
to the increase in operating income in 1992.
As a result of the declining contributions from this segment's
check processing and community banking operations, the Company
recorded a write-down in the carrying value of these operations
in December 1994. This write-down resulted in an
after-tax charge of approximately $32 million.
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Product Distribution Operations
(Millions) 1994 1993 1992
Revenues and sales $436.6 $370.7 $377.0
Operating income $ 23.9 $ 17.0 $ 18.3
Product distribution operations showed improved operating
results in 1994, as revenues and sales increased $66.0 million
or 18 percent, and operating income increased $6.9 million or
41 percent from 1993. The increase in revenues and sales in
1994 is primarily due to growth in the sale of
telecommunications and data products to new and existing
customers, including sales to affiliates as discussed in the
"Accounting Policies" note. Sales of electrical wire and cable
products also increased in 1994 reflecting increased copper
prices and a slightly higher demand for these products. The
product distribution companies continue to experience
competition from other distribution companies and from direct
sales by manufacturers.
As a result of sluggish market conditions and intense
competitive pressures especially affecting the Company's
specialty wire and cable subsidiary, product distribution
operations reflected a decrease in revenues and sales in 1993
of $6.3 million or 2 percent. Although growth in the sale of
telecommunications and data products to new and existing
customers including sales to affiliates occurred in 1993,
these increases were offset by decreased sales of electrical
wire and cable products. Revenues and sales increased $43.9
million or 13 percent in 1992 primarily due to growth in sales
of telecommunications and data products to new and existing
customers including sales to affiliates.
Operating income increased in 1994 primarily due to the
increase in revenues and sales previously noted, partially
offset by an increase in selling-related expenses. As a result
of the decrease in revenues and sales, operating income also
decreased $1.3 million or 7 percent in 1993. Operating income
increased $2.8 million or 18 percent in 1992 primarily due to
the growth in revenues and sales. Inventory controls and
flexible pricing techniques helped operating income grow
faster than revenues in 1992.
Cellular Operations
(Dollars in millions) 1994 1993 1992
Revenues and sales $321.4 $201.2 $125.5
Operating income $ 84.7 $ 44.3 $ 20.9
Total customers 468,542 275,611 161,419
Cellular operations provided solid operating results and
continued its trend of making an increasingly larger
contribution to the Company's overall earnings growth.
Revenues and sales increased $120.2 million or 60 percent for
1994, compared to increases of $75.7 million or 60 percent in
1993 and $49.6 million or 65 percent in 1992. Operating income
increased $40.4 million or 91 percent in 1994, $23.4 million
or 111 percent in 1993 and $12.4 million or 144 percent in
1992. Cellular operations are expected to continue producing
strong growth rates in revenues and operating income.
Subscriber growth remained strong, as the number of cellular
customers at year-end 1994 totaled 468,542, an increase of
192,931 customers or 70 percent over 1993.
Cellular operations revenues and sales and operating income
increased in all periods primarily due to the significant
growth in its customer base. The acquisition of new cellular
properties and increased ownership interest in existing
cellular properties also contributed to the growth in revenues
and sales in 1993 and 1992. Operating income also increased
for all periods reflecting the increases in revenues and sales
noted above, partially offset by higher expenses for selling
and advertising, depreciation and other operating expenses.
29
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Other Operations
(Millions) 1994 1993 1992
Revenues and sales $163.9 $ 76.3 $ 62.8
Operating income $ 15.3 $ 9.2 $ 9.1
Other operations produced increases in revenues and sales of
$87.6 million or 115 percent and operating income of $6.1
million or 66 percent in 1994. These increases are primarily
due to the significant growth in the Company's publishing
operations attributable to the purchase of the independent
telephone directory operations of GTE Directories Corporation
in October 1993. As a result of this acquisition, the number
of directories published during 1994 increased to 362 compared
to 155 directories published in 1993, an increase of 134
percent.
The increase in revenues and sales in 1993 of $13.5 million or
22 percent was primarily due to the purchase of the GTE
directory publishing business, partially offset by the loss of
revenues due to the sale of Ocean Technology, Inc. ("OTI") in
the second quarter of 1992. The decrease in revenues and sales
in 1992 of $44.6 million or 42 percent was primarily due to
the sale of OTI.
Operating income increased in 1994 primarily due to the
increase in revenues and sales previously noted, partially
offset by increases in directory services expense, contract
services, and selling and marketing expenses related to the
publication of additional independent directories.
Depreciation and other operating expenses also increased in
1994 as a result of the expansion and rapid growth in the
directory publishing operations. The slight increase in
operating income in 1993 primarily resulted from the increase
in revenues and sales, partially offset by one-time costs
incurred with the purchase and start-up of the GTE directory
publishing business and the reduction in income due to the
sale of OTI. Operating income decreased $5.9 million or 39
percent in 1992 primarily due to the sale of OTI and the
Company's natural gas distribution operations in September
1991.
Other Income, Net
Other income, net decreased $8.3 million in 1994 primarily due
to an increase in the minority interest in earnings of the
Company's cellular operations by others and the amortization
of telephone plant acquisition adjustments related to the GTE
Georgia properties acquisition, partially offset by an
increase in equity income recognized on investments in
cellular limited partnerships. The increase in equity income
reflects the improved operating results of those partnership
interests not managed by the Company.
Other income, net decreased $11.1 million or 83 percent in
1993 primarily due to the elimination of equity income
recognized from the Company's investment in LDDS
Communications, Inc. ("LDDS"). This investment is now
accounted for under the cost method, since the Company's
ownership is currently less than 20 percent. Other income, net
increased $1.2 million or 10 percent in 1992 due primarily to
an increase in interest income.
Interest Expense
Interest expense increased 39 percent or $38.4 million in
1994, increased 6 percent or $5.5 million in 1993 and
decreased 1 percent or $1.0 million in 1992. The increase in
interest expense in 1994 reflects both the issuance of the
$250 million of debentures in April 1994 to reduce borrowings
under the Company's revolving credit agreement and the
issuance of $400 million debentures in November 1993 to
finance the GTE Georgia properties acquisition, as previously
discussed. The increase in interest expense in 1993 is
primarily due to the issuance of the $400 million of
debentures. The decrease in interest expense in 1992 is
primarily due to a reduction in the usage and lower rates on
the
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Company's revolving credit agreement, partially offset by a
subsidiary debt issuance totaling $50 million.
Gain on Exchange of Assets, Write-down of Assets and Other
In 1994, the Company recorded a write-down to reflect the net
realizable value of its information services segment's
community banking and check processing operations. This write-
down decreased net income by approximately $32 million or $.17
per share for the year ended December 31, 1994.
In 1993, the Company recorded a gain on the exchange of
telephone properties with GTE, which was partially offset by
the reorganization of its telephone operations as a result of
this transaction. During the fourth quarter of 1993, the
Company also recorded a partial write-down to reflect an
impairment in the carrying value of its product distribution
operations. The net income impact from these transactions is
not significant to the results of operations.
As a result of the acquisition of CPI in 1992, merger expenses
were recorded, which decreased net income by $5.0 million or
$.03 per share for the year ended December 31, 1992.
Income Taxes
The decrease in income taxes in 1994 was primarily due to the
tax benefit resulting from the write-down of the information
services operations. The increase in income taxes for 1993
resulted primarily from an increase in taxable income and
additional taxes due to the Revenue Reconciliation Act of
1993, which increased the statutory federal corporate income
tax rate 1 percent to 35 percent effective January 1, 1993.
Income taxes for 1993 do not reflect a tax benefit from the
write-down of the product distribution operations in 1993,
since utilization of this benefit is not certain. The increase
in income taxes for 1992 resulted primarily from an increase
in taxable income, partially offset by the recording in 1991
of a net gain from the sale of natural gas operations and the
write-down to the market value of OTI.
Average Common Shares Outstanding
The average number of common shares outstanding increased 1
percent in 1994. During 1994, common shares issued through
stock option plans amounted to 535,000 shares, 324,000 shares
were issued for the acquisition of a subsidiary, and
debentures and preferred stock were converted into 71,000
shares. These increases were offset by the Company's
repurchase on the open market of 407,000 shares of its own
common shares. In June 1993, 92,559,000 common shares were
issued in connection with a 2-for-1 stock split. The average
number of common shares outstanding increased 1 percent in
1993, primarily due to the issuance of approximately 2 million
common shares for the acquisition of TDS. Also in 1993, stock
option plan issuances amounted to 721,000 common shares, and
debentures and preferred stock were converted into 81,000
shares. The average number of common shares outstanding
increased 3 percent in 1992. Contributing to the increase was
the issuance of 2.7 million shares of common stock previously
repurchased. In 1992, 3,994,000 common shares were issued
through stock option plans, and debentures and preferred stock
were converted into 188,000 shares.
Other Financial Information
Management is currently not aware of any environmental matters
which in the aggregate would have a material adverse effect on
the financial condition or results of operations of the
Company. The financial information included in the Quarterly
Financial Data reflects all adjustments necessary for a fair
presentation.
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<PAGE>
Report of Independent Public Accountants
To the Shareholders of ALLTEL Corporation:
We have audited the accompanying consolidated balance sheets
of ALLTEL Corporation (a Delaware corporation) and
subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of income, shareholders' equity and
cash flows for each of the three years in the period ended
December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial
position of ALLTEL Corporation and subsidiaries as of December
31, 1994 and 1993, and the results of their operations and
their cash flows for each of the three years in the period
ended December 31, 1994, in conformity with generally accepted
accounting principles.
As explained in Note 3 to the financial statements, as of
December 31, 1993, the Company changed its method of
accounting for investments in conjunction with the adoption of
Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities."
Arthur Anderson LLP
Little Rock, Arkansas,
January 23, 1995.
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<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data
For the years ended December 31,
(Dollars in thousands, except per share amounts)
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Revenues and sales $2,961,717 $2,342,087 $2,082,481 $1,883,954 $1,691,163 $1,556,718
Costs and expenses:
Cost of products sold 456,119 353,120 359,148 357,049 361,973 316,658
Operating expenses 1,871,732 1,469,921 1,280,591 1,154,066 961,296 905,500
Total costs and expenses 2,327,851 1,823,041 1,639,739 1,511,115 1,323,269 1,222,158
Operating income 633,866 519,046 442,742 372,839 367,894 334, 560
Other income, net (6,064) 2,230 13,364 12,117 11,973 7,818
Interest expense (137,120) (98,746) (93,245) (94,244) (83,702)
Income before gain on exchange or
disposal of assets, write-down of
assets, other, and income taxes 490,682 422,530 362,861 290,712 292,402 258,676
Gain on exchange or disposal of
assets, write-down of assets
and other (54,157) 27,390 (5,512) 8,347 -- --
Income before income taxes 436,525 449,920 357,349 299,059 292,402 258,676
Income taxes 164,772 187,903 128,713 99,633 92,275 80,131
Net income 271,753 262,017 228,636 199,426 200,127 178,545
Preferred dividends 1,232 1,578 1,742 2,543 2,878 3,214
Net income applicable
to common shares $ 270,521 $ 260,439 $ 226,894 $ 196,883 $ 197,249 $ 175,331
Primary earnings per share $1.43 $1.39 $1.22 $1.09 $1.09 $1.01
Dividends per common share $.90 $.82 $.77 $.71 $.66 $.59
Common shares -
average including equivalents 189,454,000 187,665,000 185,672,000 180,007,000 181,453,000 174,437,000
at year end 187,981,000 187,458,000 184,678,000 177,796,000 171,951,000 174,584,000
Total assets $4,713,878 $4,270,458 $3,125,976 $2,957,232 $2,774,584 $2,666,940
Total shareholders'equity $1,625,369 $1,554,708 $1,304,454 $1,127,878 $1,043,771 $1,003,311
Total redeemable preferred
stock and long-term debt $1,853,979 $1,604,659 $1,027,803 $1,057,277 $1,003,844 $ 917,151
32
43
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
For the years ended December 31,
(Dollars in thousands, except per share amounts) 1994 1993 1992
<S> <C> <C> <C>
Revenues and sales $2,961,717 $2,342,087 $2,082,481
Costs and expenses:
Cost of products sold 456,119 353,120 359,148
Operations 1,292,251 989,848 852,879
Maintenance 151,248 131,159 121,881
Depreciation and amortization 361,963 289,812 250,787
Taxes, other than income taxes 66,270 59,102 55,044
Total costs and expenses 2,327,851 1,823,041 1,639,739
Operating income 633,866 519,046 442,742
Other income, net (6,064) 2,230 13,364
Interest expense (137,120) (98,746) (93,245)
Income before gain on exchange of assets,
write-down of assets, other, and income taxes 490,682 422,530 362,861
Gain on exchange of assets, write-down of assets
and other (54,157) 27,390 (5,512)
Income before income taxes 436,525 449,920 357,349
Federal and state income taxes 164,772 187,903 128,713
Net income 271,753 262,017 228,636
Preferred dividends 1,232 1,578 1,742
Net income applicable to common shares $ 270,521 $ 260,439 $ 226,894
Primary earnings per share $1.43 $1.39 $1.22
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
33
44
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
December 31,
(Dollars in thousands)
Assets 1994 1993
<S> <C> <C>
Current assets:
Cash and short-term investments $ 26,098 $ 7,881
Accounts receivable 533,244 379,743
Materials and supplies 24,348 22,321
Inventories 94,458 68,673
Prepaid expenses 14,579 15,520
Total current assets 692,727 494,138
Investments 332,748 382,343
Excess of cost over equity in subsidiary companies 494,861 508,227
Property, plant and equipment:
Telephone 3,756,894 3,555,020
Information services 380,182 290,737
Cellular 324,258 213,380
Other 25,011 22,504
Under construction 210,496 153,196
Total property, plant and equipment 4,696,841 4,234,837
Less accumulated depreciation 1,733,610 1,558,403
Net property, plant and equipment 2,963,231 2,676,434
Other assets 230,311 209,316
Total assets $4,713,878 $4,270,458
<FN>
The accompanying notes are an integral part of these consolidated balance sheets.
</FN>
34
45
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Liabilities and shareholders' equity 1994 1993
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt $ 51,676 $ 44,138
Accounts payable 259,723 221,569
Advance payments and customers' deposits 57,042 62,490
Accrued taxes 21,171 35,053
Accrued dividends 45,158 41,472
Other current liabilities 170,845 140,837
Total current liabilities 605,615 545,559
Deferred credits:
Investment tax 31,077 38,575
Income taxes 385,469 377,253
Total deferred credits 416,546 415,828
Long-term debt 1,846,150 1,596,032
Other liabilities 212,369 149,704
Preferred stock, redeemable 7,829 8,627
Shareholders' equity:
Preferred stock 9,320 9,405
Common stock 187,981 187,458
Additional capital 339,436 333,698
Unrealized holding gain on investments 84,275 121,507
Retained earnings 1,004,357 902,640
Total shareholders' equity 1,625,369 1,554,708
Total liabilities and shareholders' equity $4,713,878 $4,270,458
<FN>
The accompanying notes are an integral part of these consolidated balance sheets.
</FN>
35
46
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
For the years ended December 31,
(Dollars in thousands) 1994 1993 1992
<S> <C> <C> <C>
Cash provided from operations:
Net income $271,753 $262,017 $228,636
Non-cash operating activities:
Depreciation and amortization 361,963 289,812 250,787
Gain on exchange of assets, write-down
of assets and other 32,223 (48,669) --
Other, net 41,355 35,380 4,906
Increase (decrease) in deferred credits 32,754 19,096 (18,534)
Changes in operating assets and liabilities:
Accounts receivable (181,997) (84,854) (28,907)
Inventories (27,812) (8,749) 6,311
Accounts payable 38,154 41,050 3,582
Other current liabilities (9,505) 50,174 61,687
Other, net 21,989 13,848 14,557
Net cash provided by operating activities 580,877 569,105 523,025
Cash used in investing:
Additions to property, plant and equipment 596,112 426,171 367,203
Purchase of subsidiaries, net of cash acquired -- 443,000 --
Sale of property -- -- (8,394)
Additions to investments 9,464 20,441 43,510
Other, net 49,627 86,536 30,906
Net cash used in investing activities 655,203 976,148 433,225
Cash (provided) used in financing:
Dividends on preferred and common stock 170,036 154,110 134,981
Reductions in long-term debt 147,784 91,136 173,439
Purchase of common stock 10,932 -- --
Preferred stock redemptions and purchases 438 3,813 1,630
Long-term debt issued (404,883) (627,804) (105,011)
Common stock issued (16,850) (5,756) (69,719)
Net cash (provided) used in financing activities (92,543) (384,501) 135,320
Increase (decrease) in cash and short-term investments 18,217 (22,542) (45,520)
Cash and short-term investments:
Beginning of year 7,881 30,423 75,943
End of year $ 26,098 $ 7,881 $ 30,423
Supplemental cash flow disclosures:
Interest paid $129,788 $ 91,574 $ 89,585
Income taxes paid $150,224 $163,583 $110,132
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
36
47
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Shareholders' Equity
For the years ended December 31,
(Dollars in thousands, except per share amounts) 1994 1993 1992
<S> <C> <C> <C>
Preferred stock:
Balance at beginning of the year $ 9,405 $ 9,488 $ 9,634
Conversion of preferred stock (85) (83) (146)
Balance at end of the year 9,320 9,405 9,488
Common stock:
Balance at beginning of the year 187,458 92,339 88,898
Employee plans 535 721 1,997
Acquisition of subsidiary 324 1,758 --
Conversion of preferred stock and debentures 71 81 94
Stock split -- 92,559 --
Reissuance/(purchase) of stock (407) -- 1,350
Balance at end of the year 187,981 187,458 92,339
Additional capital:
Balance at beginning of the year 333,698 399,955 320,329
Employee plans 7,815 20,485 27,536
Acquisition of subsidiary 8,176 5,422 --
Conversion of preferred stock and debentures 272 395 838
Stock split -- (92,559) --
Reissuance/(purchase) of stock (10,525) -- 51,252
Balance at end of the year 339,436 333,698 399,955
Unrealized holding gain on investments:
Balance at beginning of the year 121,507 -- --
Change in unrealized holding gain on investments (37,232) 121,507 --
Balance at end of the year 84,275 121,507 --
Retained earnings:
Balance at beginning of the year 902,640 802,672 709,017
Acquisition of subsidiary -- (7,939) --
Net income for the year 271,753 262,017 228,636
Dividends:
Common per share, $.90 in 1994,
$.82 in 1993 and $.77 in 1992 (168,804) (152,532) (133,239)
Preferred (1,232) (1,578) (1,742)
Balance at end of the year 1,004,357 902,640 802,672
Total shareholders' equity $1,625,369 $1,554,708 $1,304,454
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
37
48
<PAGE>
Business Segments
For the years ended December 31,
(Dollars in thousands) 1994 1993 1992
Revenues and sales:
Telephone:
Local service $ 389,784 $ 310,495 $ 283,015
Network access and long-distance 644,020 581,520 545,052
Miscellaneous 144,473 124,079 119,692
Total telephone 1,178,277 1,016,094 947,759
Information services 861,500 677,753 569,370
Product distribution 436,643 370,692 377,036
Cellular 321,387 201,215 125,531
Other operations 163,910 76,333 62,785
Total $2,961,717 $2,342,087 $2,082,481
Operating income:
Telephone $ 400,207 $ 353,194 $ 315,782
Information services 129,765 116,608 94,454
Product distribution 23,920 16,994 18,336
Cellular 84,655 44,292 20,945
Other operations 15,270 9,191 9,128
Total business segments 653,817 540,279 458,645
Corporate expenses 19,951 21,233 15,903
Total $ 633,866 $ 519,046 $ 442,742
Identifiable assets:
Telephone $2,909,028 $2,795,984 $2,101,454
Information services 632,518 468,490 299,240
Product distribution 163,628 157,561 204,986
Cellular 573,314 401,791 318,553
Other operations 65,601 28,157 17,100
Corporate 369,789 418,475 184,643
Total $4,713,878 $4,270,458 $3,125,976
Capital expenditures:
Telephone $ 331,395 $ 257,238 $ 247,300
Information services 124,005 110,169 71,104
Product distribution 6,029 707 546
Cellular 107,647 52,918 30,748
Other operations and corporate 27,036 5,139 17,505
Total $ 596,112 $ 426,171 $ 367,203
Depreciation and amortization expense:
Telephone $ 229,474 $ 191,076 $ 173,902
Information services 88,627 64,861 49,742
Product distribution 1,181 1,520 1,468
Cellular 36,821 26,444 17,497
Other operations and corporate 5,860 5,911 8,178
Total $ 361,963 $ 289,812 $ 250,787
(Refer to page 45 for additional information concerning business segments.)
38
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<PAGE>
<TABLE>
<CAPTION>
Quarterly Financial Data (unaudited)
(Dollars in thousands, except per share amounts) 1994 1993
Total 4th 3rd 2nd 1st Total 4th 3rd 2nd 1st
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and sales $2,961,717 $772,422 $745,324 $734,563 $709,408 $2,342,087 $654,817 $571,678 $568,868 $546,724
Operating income $ 633,866 $155,553 $166,128 $161,908 $150,277 $ 519,046 $139,904 $129,202 $126,699 $123,241
Income before gain on
exchange of assets,
write-down of assets,
other, and income taxes $ 490,682 $120,920 $127,912 $124,340 $117,510 $ 422,530 $111,325 $106,428 $103,085 $101,692
Net income $ 271,753 $ 43,952 $ 79,728 $ 76,187 $ 71,886 $ 262,017 $ 69,057 $ 65,975 $ 63,829 $ 63,156
Preferred dividends 1,232 301 304 317 310 1,578 382 387 403 406
Net income applicable
to common shares $ 270,521 $ 43,651 $ 79,424 $ 75,870 $ 71,576 $ 260,439 $ 68,675 $ 65,588 $ 63,426 $ 62,750
Primary earnings
per share $ 1.43 $ .23 $ .42 $ .40 $ .38 $ 1.39 $ .36 $ .35 $ .34 $ .34
Net income and earnings
per share excluding
gain on exchange of
assets, write-down of
assets and other:
Net income $ 303,976 $ 76,175 $ 79,728 $ 76,187 $ 71,886 $ 262,038 $ 69,078 $ 65,975 $ 63,829 $ 63,156
Primary earnings
per share $ 1.60 $ .40 $ .42 $ .40 $ .38 $ 1.39 $ .36 $ .35 $ .34 $ .34
Dividends per
common share $ .90 $ .24 $ .22 $ .22 $ .22 $ .82 $ .22 $ .20 $ .20 $ .20
</TABLE>
39
50
<PAGE>
Notes to Consolidated Financial Statements
1. Accounting Policies:
Consolidation - The consolidated financial statements include
the accounts of ALLTEL Corporation, its subsidiary companies
and majority-owned partnerships (the "Company"). Investments
in 20% to 50% owned entities and all unconsolidated
partnerships are accounted for using the equity method. Other
investments are recorded in accordance with Statement of
Financial Accounting Standards No. 115 (see Note 3). All
intercompany transactions, except those with certain
affiliates described below, have been eliminated in the
consolidated financial statements. Certain amounts have been
reclassified to conform with the 1994 financial statement
presentation.
Transactions with Certain Affiliates - ALLTEL Supply, Inc.
sells equipment and materials to telephone subsidiaries of the
Company ($140,410,000 in 1994, $93,232,000 in 1993, and
$81,766,000 in 1992) as well as to other telephone companies
and related industries. The cost of equipment and materials
sold to such subsidiaries is included, principally, in
telephone plant in the consolidated financial statements.
ALLTEL Information Services, Inc. provides the data processing
services for the Company's telephone operations ($77,427,000
in 1994, $65,925,000 in 1993, and $57,730,000 in 1992) in
addition to other companies. Intercompany profit, to the
extent not offset by depreciation on the capitalized cost of
equipment and materials, has not been eliminated because
prices charged by the supply and information services
subsidiaries are comparable to prices the individual telephone
subsidiaries would be required to pay other suppliers and are
recovered through the regulatory process.
Cash and Short-term Investments - Cash and short-term
investments consist of highly liquid investments with original
maturities of less than three months. These investments are
readily convertible into cash.
Inventories - Inventories are stated at the lower of cost or
market value. Cost is determined using the first-in, first-out
method of valuation.
Property, Plant and Equipment - Property, plant and equipment
are stated at original cost. Depreciation is computed using
the straight-line method for financial reporting purposes. The
composite depreciation rates by class of property as a percent
of average depreciable plant and equipment were:
1994 1993 1992
Telephone 6.3% 6.4% 6.5%
Information services 16.3 16.9 16.9
Cellular 12.2 12.6 12.2
Other 9.7 10.0 9.6
51
<PAGE>
For the Company's telephone operations, when utility property,
plant and equipment are retired, the original cost, net of
salvage, is charged against accumulated depreciation. All
other property, plant and equipment retirements are recorded
at net book value plus salvage, if any, with the corresponding
gain or loss recognized in the accompanying statements of
income. The cost of maintenance and repairs of property, plant
and equipment, including the cost of replacing minor items not
affecting substantial betterments, is charged to maintenance
expense as incurred. The Company capitalized estimated
interest during periods of construction. Capitalized interest
amounts were $3,361,000, $2,005,000 and $1,957,000 for 1994,
1993 and 1992, respectively.
Excess of Cost Over Equity in Subsidiary Companies - Excess of
cost over equity of $469,467,000 relating to certain companies
purchased subsequent to November 1970 is being amortized on a
straight-line basis for periods up to 40 years. Amortization
expense amounted to $15,427,000 in 1994, $12,633,000 in 1993,
and $10,872,000 in 1992.
Investment Tax Credit - The investment tax credit is amortized
to income over the productive lives of the related property,
plant and equipment.
Revenue Recognition - Telephone revenues are recognized when
earned and are primarily derived from usage of the Company's
local exchange networks and facilities or under revenue-
sharing arrangements with other telecommunications carriers.
Information services revenues primarily consist of data
processing revenue recognized as services are performed.
Software licensing revenue is recognized when delivery of the
software occurs, while related software maintenance revenue is
recognized ratably over the maintenance period. Certain long-
term contracts are accounted for using the percentage-of-
completion method, whereby revenue and profit are recognized
throughout the performance of the contract. In accordance with
contractual arrangements with customers, cellular access
service revenue is recognized when billed, while revenue from
network usage is recognized when the services are rendered.
For all other operations, revenue is recognized when products
are delivered or services are rendered to customers.
Included in accounts receivable are unbilled amounts of
$111,853,000 and $40,267,000 at December 31, 1994 and 1993,
respectively, which include costs and estimated earnings in
excess of billings on contracts accounted for under the
percentage-of-completion method. These amounts are recoverable
from the customer upon presentation of bills or completion of
services provided under the contract.
40
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<PAGE>
Earnings Per Share - Primary earnings per share of common
stock was determined by dividing net income applicable to
common shares by the average number of common shares
outstanding, including common stock equivalents, during each
year. The numbers of shares used in computing primary earnings
per share were 189,454,000 in 1994, 187,665,000 in 1993, and
185,672,000 in 1992. Conversion of all convertible preferred
stock and convertible debentures would not have a significant
dilutive effect on earnings per share.
2. Acquisitions:
On November 1, 1993, the Company purchased substantially all
of the assets of the telephone operations of GTE Corporation
in the State of Georgia ("GTE Georgia") in exchange for the
Company's telephone operations in Illinois, Indiana and
Michigan, which had a net book value of $112 million, and $443
million in cash. This acquisition was accounted for as a
purchase. GTE Georgia's results of operations are included in
the Company's Consolidated Statements of Income beginning
November 1, 1993, and the excess cost resulting from this
transaction is being amortized on a straight-line basis over
40 years.
Unaudited pro forma consolidated results of operations, as
though the Company acquired GTE Georgia on January 1, 1992,
are as follows:
(Thousands, except per share)
1993 1992
Revenues and sales $2,487,068 $2,256,440
Income before gain on exchange of
assets, write-down of assets,
other, and income taxes $ 469,133 $ 411,861
Income before income taxes $ 496,523 $ 406,349
Net income applicable to
common shares $ 288,370 $ 257,680
Primary earnings per share $1.53 $1.38
3. Financial Instruments and
Investment Securities:
The carrying amount of cash and short-term investments
approximates fair value due to the short maturity of those
instruments. The fair value of other investments is $332.7
million based on the quoted market price and the carrying
value of investments for which there is no quoted market
price. The fair value of the Company's long-term debt, after
deducting current maturities, is estimated to approximate the
carrying value based on the overall weighted rates and
maturity compared to rates and terms currently available in
the long-term financing markets. The fair value of the
Company's redeemable preferred stock is estimated to be $19.0
million in 1994 and $20.7 million in 1993 versus a carrying
amount of $7.8 million in 1994 and $8.6 million in 1993. The
fair value
53
<PAGE>
estimates are based on the conversion of the Series D
convertible redeemable preferred stock to common stock of the
Company and the carrying value of the Series A redeemable
preferred stock for which there is no quoted market price. The
fair value of all other financial instruments is estimated by
management to approximate the carrying value.
In May 1993, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 115
("SFAS 115") which establishes accounting for certain
investments in debt and equity securities. Under SFAS 115,
equity securities owned by the Company have been classified as
available-for-sale and are reported at fair value, with
unrealized gains and losses reported, net of tax, in a
separate component of shareholders' equity. The Company
adopted the provisions of this standard in its financial
statements as of December 31, 1993. The adoption of this
pronouncement resulted in a non-cash increase in investments
of $217.8 million, an increase in deferred taxes of $96.3
million and an increase in shareholders' equity of $121.5
million. At December 31, 1994, the Company had an unrealized
gain of $84.3 million, net of tax, on its investment in LDDS
Communications, Inc. The unrealized gain, including the
related tax impact, are non-cash items and accordingly have
been excluded from the Consolidated Statements of Cash Flows.
All other unrealized gains and losses on investments in equity
securities are not material to the Company's financial
position or results of operations.
4. Debt:
Long-term debt, after deducting current maturities, was as
follows at December 31:
(Thousands)
1994 1993
First mortgage bonds and collateralized notes,
Weighted rate 8.8% in 1994 and 8.4% in 1993
Weighted maturity 6 years in 1994 and 1993 $ 25,118 $ 41,684
Debentures and notes, without collateral,
Weighted rate 8.1% in 1994 and 8.3% in 1993
Weighted maturity 16 years in 1994 and 19 years in 1993 1,307,223 1,001,755
Industrial revenue bonds and collateralized notes,
Weighted rate 5.3% in 1994 and 4.7% in 1993
Weighted maturity 10 years in 1994 and 11 years in 1993 8,732 8,992
Revolving credit agreement,
Weighted rate 6.6% in 1994 and 3.4% in 1993
Weighted maturity 3 years in 1994 and 1993 132,005 214,545
Rural Electrification Administration notes,
Weighted rate 4.4% in 1994 and 4.2% in 1993
Weighted maturity 18 years in 1994 and 19 years in 1993 100,392 94,047
Rural Telephone Bank and Federal Financing Bank notes,
Weighted rate 8.2% in 1994 and 1993
Weighted maturity 19 years in 1994 and 20 years in 1993 272,680 234,861
Other -- 148
Total long-term debt $1,846,150 $1,596,032
Weighted rate 7.7% 7.3%
Weighted maturity 16 years 16 years
41
54
<PAGE>
The Company has a $500 million revolving credit agreement
which has a termination date of October 1, 1997, with
provision for annual extensions. It is the Company's intention
to continue to renew the agreement. The revolving credit
agreement provides a variety of pricing options.
The indentures and agreements, as amended, provide among other
things, for various restrictions on the payment of dividends
by the Company and subsidiary companies. Retained earnings
unrestricted as to payment of dividends by the Company
amounted to $765.8 million at December 31, 1994. Certain
properties have been pledged as collateral on $406.9 million
of obligations.
Interest expense on long-term debt amounted to $135.2 million
in 1994, $96.2 million in 1993, and $91.4 million in 1992.
Maturities and sinking fund requirements for the four years
after 1995 for long-term debt outstanding, excluding the
revolving credit agreement as of December 31, 1994, were $39.2
million, $41.7 million, $48.5 million, and $53.6 million for
the years 1996 through 1999, respectively.
5. Common Stock:
There are 500,000,000 shares of $1 par value common stock
authorized of which 187,980,669 and 187,457,609 shares were
outstanding at December 31, 1994 and 1993, respectively. At
December 31, 1994, the Company had 19,601,218 common shares
reserved for issuance in connection with convertible preferred
stock (1,005,204) and stock options (18,596,014).
The Company's stock option plan provides for the granting of
options to officers and key employees at prices not less than
the market value of the stock at the date of grant.
The following is a summary of stock options outstanding,
granted, exercised and cancelled:
Average Price
Shares Per Share
1994 1993 1994 1993
Outstanding at
beginning
of period 6,945,928 5,566,674 $19.06 $14.26
Granted 650,500 2,325,000 26.41 28.12
Acquisition of
subsidiary -- 242,313 -- 3.83
Exercised (553,194) (1,014,495) 11.59 10.14
Cancelled (232,032) (173,564) 21.35 17.55
Outstanding at
end of period 6,811,202 6,945,928 $20.32 $19.06
Exercisable at
end of period 3,178,800 2,643,591 $15.44 $12.21
Reserved for
future options 11,784,812 1,212,711
55
<PAGE>
For stock options exercisable at December 31, 1994 and 1993,
the option prices ranged from $6.58 to $29.00 for each year,
respectively.
During 1992, 1,331,570 shares were exercised at an average
price of $10.08 per share.
6. Preferred Stock:
Cumulative preferred stock is issuable in series, and the
Board of Directors is authorized to designate the number of
shares and fix the terms. There are 50,000,000 $25 par value
voting shares and 50,000,000 no par value non-voting shares
authorized.
The outstanding cumulative preferred stock, which is not
redeemable at the option of the holder, was as follows at
December 31:
Quarterly Amount Outstanding
Dividend (Thousands)
Per Share 1994 1993 1992
$25 par value:
Series A, 5%
Shares - 39,853 in 1994, 1993
and 1992 $.31 1/4 $ 996 $ 996 $ 996
Series C, 5%
Shares - 5,000 in 1994, 1993
and 1992 .31 1/4 125 125 125
Series E, 6%
Shares - 32,000 in 1994, 1993
and 1992 .37 1/2 800 800 800
Series F, 5 1/2%
Shares - 245,955 in 1994, 1993
and 1992 .34 3/8 6,149 6,149 6,149
Series H, 6%
Shares - 12,184 in 1994, 1993
and 1992 .37 1/2 305 305 305
Series I, 5 1/2%
Shares - 4,000 in 1994, 1993
and 1992 .34 3/8 100 100 100
Series J, 6%
Shares - 1,800 in 1994, 1993
and 1992 .37 1/2 45 45 45
No par value:
Series C, $2.06 Convertible
Shares - 31,991 in 1994, 35,419 in
1993 and 38,713 in 1992 .51 1/2 800 885 968
$9,320 $9,405 $9,488
The $25 par value preferred stock may be redeemed at the
option of the Company at par value. The no par value
Series C preferred shares are convertible at any time prior to
redemption into 5.963 shares of the Company's common stock.
The rate of conversion is subject to adjustment under certain
conditions.
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The outstanding cumulative preferred stock, which is
redeemable at the option of the holder, was as follows at
December 31:
Quarterly Amount Outstanding
Dividend (Thousands)
Per Share 1994 1993 1992
No par value:
Series A, 7 3/4%
Shares - 55,600 in 1994, 61,000
in 1993 and 66,400 in 1992 $1.93 3/4 $5,560 $6,100 $6,640
Series D, $2.25 Convertible
Shares - 81,046 in 1994, 90,240
in 1993 and 104,814 in 1992 .56 1/4 2,269 2,527 2,935
$7,829 $8,627 $9,575
The Company's Series A preferred stock is redeemed through
required annual sinking fund payments. The sinking fund
requirements in each of the five years ending
December 31, 1995 through 1999 amount to $540,000.
In addition to redemption at the option of the holder and
through required sinking fund payments, at the stated value
per share, the Company may at its option under certain
conditions redeem outstanding cumulative preferred stock at
varying premiums above par or stated value.
The Company's Series D stock is convertible at any time prior
to redemption into 5.486 shares of the Company's common stock.
The rate of conversion is subject to adjustment under certain
conditions. During 1994, $258,000 of Series D stock was
converted. The stock may be redeemed at the option of the
Company or the holder at the $28 per share stated value.
7. Retirement Plans:
The Company has a trusteed, noncontributory, defined benefit
pension plan which provides retirement benefits for eligible
employees of the Company. Pension benefits are based on an
employee's years of service and compensation. The Company's
funding policy for the defined benefit contributions is to
satisfy the funding requirements of the Employees' Retirement
Income Security Act of 1974 ("ERISA").
Certain key officers have unfunded executive compensation
agreements. These agreements provide that retirements paid
thereunder shall be in lieu of payments under the Company's
pension plan.
Pension expense (credit), including provision for executive
compensation agreements, totaled $2,225,000 in 1994,
$(3,892,000) in 1993 and $(5,594,000) in 1992.
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Pension expense (credit) includes the following
components:
(Thousands)
1994 1993 1992
Benefits earned during the year $13,386 $10,504 $ 8,842
Interest cost on projected
benefit obligation 21,410 16,964 15,841
Actual return on plan assets 13,092 (34,176) (23,624)
Net amortization and deferral (45,663) 2,816 (6,653)
Pension expense (credit) $12,225 $(3,892) $(5,594)
The following table presents the funded status of the plan at
December 31:
(Thousands)
1994 1993
Actuarial present value of accumulated
benefit obligation, including
vested benefits of $209,783 in 1994
and $220,404 in 1993 $217,557 $228,386
Actuarial present value of projected
benefit obligation 261,171 282,816
Plan assets at fair value 316,235 336,812
Plan assets in excess of projected benefit
obligation 55,064 53,996
Unrecognized net gain (21,925) (20,873)
Remaining unrecognized prior service cost (5,982) (7,036)
Unrecognized transition asset being
amortized over 16 years (10,650) (11,833)
Prepaid pension expense $ 16,507 $ 14,254
Actuarial assumptions used to calculate the projected benefit
obligations were 8.5% for the settlement rate in 1994 and 7.5%
for 1993, and 5% for future compensation level increases in
1994 and 1993. The investment earnings rate was 9% in 1994 and
8.5% for 1993. Assets of the plan consist primarily of listed
stocks, including common stock of the Company amounting to
$17,480,000 and $18,690,000 at December 31, 1994 and 1993,
respectively, and corporate and government debt.
The Company has a noncontributory defined contribution plan in
the form of profit sharing arrangements for eligible
employees, except bargaining unit employees. The amount of
profit sharing contributions to the plans is determined
annually by the Company's and subsidiaries' Board of
Directors. Profit sharing expense amounted to $26,351,000 in
1994, $22,717,000 in 1993, and $20,659,000 in 1992.
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8. Postretirement Benefits Other Than Pensions:
The Company provides healthcare and life insurance benefits
for eligible employees. The healthcare benefit is based on
comprehensive hospital, medical and surgical benefit
provisions, while the life insurance is based on annual
earnings at the time of retirement. The employees share in the
cost of these benefits. The Company is not currently funding
these plans.
The postretirement expense includes the following
components:
(Thousands)
1994 1993
Benefits earned $ 426 $ 423
Amortization of transition obligation 973 1,000
Service and interest cost for former
GTE employees -- 50
Interest cost on accumulated postretirement
benefit obligation 2,722 2,987
Postretirement expense $4,121 $4,460
The following table presents the plan status at
December 31:
(Thousands)
1994 1993
Accumulated postretirement benefit obligation:
Retirees $27,621 $28,829
Fully eligible active plan participants 884 1,164
Other active plan participants 1,799 7,296
Total accumulated postretirement benefit obligation 30,304 37,289
Unrecognized net gain 12,261 3,752
Unrecognized transition obligation being amortized
over 20 years (17,566) (18,542)
Accrued postretirement benefit obligation $24,999 $22,499
Actuarial assumptions used to calculate the accumulated
postretirement benefit obligation were 8.5% for the weighted
average discount rate in 1994 and 7.5% for 1993, and 11% for
the healthcare cost trend rate in 1994 and 12% for 1993,
decreasing on a graduated basis to an ultimate rate of 6% in
the year 2000. A one percentage point change in the assumed
healthcare cost trend rate for each future year would increase
the postretirement benefit cost by approximately $284,000 for
the year ended December 31, 1994, and the accumulated
postretirement benefit obligation as of December 31, 1994, by
approximately $1.5 million.
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9. Gain on Exchange of Assets, Write-down of Assets and Other:
In 1994, the Company recorded a write-down of $54.2 million to
reflect the net realizable value of its information services
segment's community banking and check processing operations.
This write-down resulted in a decrease of $.17 in earnings per
share in 1994.
In 1993, the Company recorded a gain on the exchange of
telephone properties with GTE Corporation, which was partially
offset by the reorganization of its telephone operations as a
result of this transaction. These transactions amounted to
$69.9 million. In addition, the Company recorded a write-down
of $42.5 million in 1993 to reflect an impairment in the
carrying value of its product distribution operations. The net
income impact from these transactions is not significant to
the results of operations.
In 1992, the Company recorded merger expenses of $5.5 million
for the acquisitions of CPI Acquisition, Inc. and SLT
Communications, Inc. These merger expenses resulted in a
decrease in earnings per share of $.03 in 1992.
10. Income Taxes:
Income tax expense was as follows:
(Thousands)
1994 1993 1992
Federal $137,277 $158,376 $106,846
State and other 27,495 29,527 21,867
$164,772 $187,903 $128,713
The federal income tax expense consists of the following:
(Thousands)
1994 1993 1992
Currently payable $104,359 $119,489 $125,516
Deferred 40,416 46,289 (10,874)
Investment tax credit amortized (7,498) (7,402) (7,796)
$137,277 $158,376 $106,846
Deferred income tax expense results principally from temporary
differences between depreciation expense for income tax
purposes and depreciation expense recorded in the financial
statements. Deferred tax balances are adjusted to reflect tax
rates, based on currently enacted tax laws, that will be in
effect in the years in which the temporary differences are
expected to reverse. For the Company's regulated opera-
44
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<PAGE>
tions, the adjustment in deferred tax balances for the change
in tax rates is reflected as a regulatory asset or liability.
These regulatory assets and liabilities are amortized over the
lives of the related depreciable asset or liability concurrent
with recovery in rates.
Differences between the federal income tax statutory rates and
effective income tax rates, which include both federal and
state income taxes, were as follows:
1994 1993 1992
Statutory income tax rates 35.0% 35.0% 34.0%
Increase (decrease):
Investment tax credit (1.7) (1.6) (2.2)
State income taxes, net of
federal benefit 4.1 4.3 4.0
Reversal of excess deferred
federal taxes (0.6) (0.9) (1.6)
Write-down of product
distribution operations -- 3.3 --
Other items 1.0 1.7 1.8
Effective income tax rates 37.8% 41.8% 36.0%
The Revenue Reconciliation Act of 1993 increased the federal
corporate income tax rate to 35%, effective January 1, 1993.
During 1993, the write-down of the product distribution
operations resulted in capital losses for which the tax
benefit can only be recognized to the extent of available
capital gains. Without this write-down, the effective income
tax rate would have been 38.5% in 1993.
The significant components of the Company's net deferred
income tax liability were as follows at December 31:
(Thousands)
1994 1993
Property, plant and equipment $ 355,416 $ 318,711
Unrealized holding gain on investments 63,659 96,301
Other, net (33,606) (37,759)
Total $ 385,469 $ 377,253
At December 31, 1994 and 1993, total deferred tax assets were
$236.1 million and $151.1 million, respectively, and total
deferred tax liabilities were $621.6 million and $528.4
million, respectively.
11. Business Segments:
The Company's telephone operating subsidiaries provide
primary local service and network access in 22 states.
Information services provides electronic information
processing services and software primarily through long-term
contracts and markets other information processing products
and
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services to the financial, telecommunications and healthcare
industries. Product distribution sells equipment and materials
to affiliated and non-affiliated telephone companies and
related industries and electrical and electronic wire and
cable to other distributors and wholesalers. Cellular includes
cellular mobile telephone services in various major U.S. markets.
Other operations primarily include directory publishing and wide-
area paging services. Corporate identifiable assets consist
primarily of cash, investments, and headquarters facilities
and equipment. Corporate items represent general corporate
expenses and assets not allocated to segments. (Refer to page
38 for a schedule of business segment information.)
In 1994, 1993 and 1992, AT&T provided approximately 19%, 21%
and 23%, respectively, of the Company's total telephone
revenues, primarily related to network access revenues and
billing and collection services.
12. Pending Sale of Certain Telephone
Properties:
In November 1994, the Company signed definitive agreements to
sell certain telephone properties serving approximately
111,000 access lines in Arizona, California, Nevada, New
Mexico, Oregon, Tennessee, Utah and West Virginia to Citizens
Utilities in exchange for approximately $290 million in cash,
assumed debt and 3,600 access lines in Pennsylvania. The
operations of the telephone properties to be disposed of
represented approximately 4% and 9% of the Company's 1994
revenues and net income, respectively. This sale will be
completed on a state-by-state basis as necessary regulatory
approvals are obtained. Once completed, this transaction will
result in the Company's telephone operating subsidiaries
serving approximately 1.5 million access lines in 14 states.
Net proceeds from this transaction will be used to reduce the
Company's outstanding long-term debt.
45
62
<PAGE>
Investor Information
Corporate Headquarters
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
(501) 661-8000
Annual Meeting
The Annual Meeting of ALLTEL Corporation stockholders will be
held at 11 a.m. (CDT) on Thursday, April 20, 1995, at the
Statehouse Conference Center, #2 Statehouse Plaza, Little
Rock, Arkansas.
Transfer Agent, Registrar and Dividend Disbursing Agent
KeyCorp Shareholder Services, Inc.
P.O. Box 6477
Cleveland, OH 44101-1477
Common Stock Price and Dividend Information
Ticker Symbol AT
Newspaper Listings ALLTEL, ALTEL
Market Price
Dividend
Year Qtr. High Low Close Declared
1994 4th 31 3/8 25 1/2 30 1/8 .24
3rd 28 1/2 25 27 .22
2nd 27 1/2 24 25 1/8 .22
1st 29 1/2 25 25 5/8 .22
1993 4th 30 7/8 25 5/8 29 1/2 .22
3rd 31 1/4 25 1/2 30 1/2 .20
2nd 26 15/16 23 7/8 26 3/4 .20
1st 25 5/16 22 7/8 24 11/16 .20
The above figures have been restated to reflect the 2-for-1
stock split in 1993.
The common stock is listed and traded on the New York and
Pacific Stock Exchanges. The above table reflects the range of
high, low and closing prices as reported by Dow Jones &
Company, Inc.
Dividend Reinvestment and
Stock Purchase Plan
ALLTEL offers a Dividend Reinvestment and Stock Purchase Plan
for registered common stockholders.
In addition to reinvesting dividends, the plan allows
participants to invest cash toward the purchase of ALLTEL
common stock. Further information about dividend
reinvestment may be obtained from the Shareholder Services
Department.
Annual Report on Form 10-K
The 1994 report on Form 10-K filed with the Securities
and Exchange Commission is available without charge
to stockholders upon request to the Corporate Headquarters.
Investor Relations
Information requests from investors, security analysts, other
members of the investment community and the
news media should be addressed to Ron Payne, Vice President-
Corporate Communications, at One Allied Drive, Little Rock,
Arkansas 72202 (501) 661-8989.
Shareholder Services
General questions about accounts, stock certificates or
dividend checks may be directed to the Shareholder Services
Department at 2000 Highland Road,
Twinsburg, Ohio 44087 (216) 963-1469.
(Inside Back Cover)
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EXHIBIT (10)(a)(4)
SPLIT DOLLAR INSURANCE AGREEMENT
THIS SPLIT DOLLAR INSURANCE AGREEMENT ("Agreement") is
made as of March 1, 1994, by and between ALLTEL Corporation, a
Delaware corporation (the "Company"), and the undersigned
employee of the Company (the "Employee").
In consideration of the services rendered and to be
rendered by the Employee to the Company or any of its
subsidiaries or affiliates (employment or duties with the
Company shall include employment or duties with any subsidiary
or affiliate of the Company) and of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Purchase of Insurance. The Company shall maintain the life insurance
policy or policies (individually, a "policy" and, collectively, the "policies")
on the life of the Employee from the insurance company or companies
(individually, an "Insurance Company" and, collectively, the "Insurance
Companies") specified on the Policy Specification attached hereto as Exhibit A),
shall pay all premiums on the policies when due, and shall be designated as sole
owner of the policies subject to the conditions hereafter set forth.
2. Payment of Proceeds. Upon the death of the Employee
while this Agreement remains in effect, the proceeds of the
policies shall be paid as follows:
(a) To the Employee's beneficiary or beneficiaries designated in
accordance with Paragraph 3, an amount calculated in the manner set forth
on the schedule attached hereto as Exhibit B, for the Plan Year of the
Employee's death.
(b) To the Company, an amount equal to the balance, if any, of the
proceeds of the policy, and of any additional insurance purchased in
accordance with Paragraph 3, after payment of the applicable amount to the
Employee's beneficiary or beneficiaries in accordance with clause (a) of
this Paragraph 2.
3. Rights Under Policy. Each and every right of ownership of each policy
is reserved to the Company. Each policy shall provide that the dividends payable
with respect to the policy may be applied as determined by the Company in its
sole discretion. The Company shall be entitled to any premiums paid on the
policies that are refunded by the Insurance Companies. The Company shall make no
loan against the policies that would prevent payment of the proceeds of the
policies in accordance with the provisions of clause (a) of Paragraph 2. Payment
of the proceeds of the policies in accordance with the provisions of clause (a)
of Paragraph 2 shall be made in accordance with the Employee's written
designation of beneficiary or beneficiaries specified to the Company from time
to time (which, as of the date hereof, are as set forth on the schedule attached
hereto as Exhibit B).
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<PAGE>
4. Liability of Insurance Company. In issuing any policy of insurance
covered by this Agreement, an Insurance Company shall have no liability except
as set forth in the policy. The Insurance Company shall not be bound to inquire
into or take notice of any of the provisions of this Agreement as to the policy
or as to the application of the proceeds of the policy. Rights under the policy
may be exercised during the life of the Employee in accordance with the
provisions of the policy. Upon the death of the Employee, the Insurance Company
shall be discharged from all liability on payment of the proceeds in accordance
with the policy provisions without regard to this Agreement or any amendment
thereof.
5. Termination.
(a) This Agreement may be terminated by either the Company or the
Employee by written notice to the other specifying the effective date of
termination.
(b) This Agreement automatically shall terminate at
the end of the first month in which:
(1) the Company fails to make the premium payments
required under Paragraph 1; or
(2) the Employee's service with the Company is
terminated for any reason other than death or
total and permanent disability.
6. Non-Payment of Benefits. If the Employee dies by suicide, while sane or
insane, within two years after the date of issue or reissue of the policy, or if
for any reason an Insurance Company does not pay benefits under the policy
during the contestable period (not to exceed two years after the date of issue
or reissue of the policy) because of fraud, misrepresentation, or other action
by the Employee falling within the applicable provisions of the policy, the
Company shall have no liability under this Agreement.
7. Plan Year. For purposes of this Agreement, the first Plan year shall
begin on the effective date of this Agreement and extend through the next
December 31. Each subsequent Plan year shall begin on January 1 of the
succeeding year and end on December 31 of such year.
8. Miscellaneous. Nothing contained in this Agreement
shall be construed as giving the Employee the right to be
retained in the service of the Company or shall in any way
affect the right of the Company to control the Employee or to
terminate the employment of the Employee at any time.
9. Amendment. This Agreement may be amended by a
writing signed by the Company and the Employee and attached
hereto.
10. Notices. Notices under this Agreement shall be
effective if delivered, in the case of the Company, to One
Allied Drive, Little Rock, Arkansas 72202, attn: Vice
President-
2
65
<PAGE>
Human Resources, and, in the case of the Employee, to the address set forth on
the schedule attached hereto as Exhibit B. The Company and the Employee each may
change the address to which notices should be sent by written notice to the
other.
11. Applicable Law. This Agreement shall be construed
and interpreted in accordance with the laws of the State of
Delaware.
IN WITNESS WHEREOF, the Company and the Employee have signed this
Agreement, in the case of the Company, by its duly authorized officers,
effective as of the date first above written.
ALLTEL Corporation
By: /s/ Francis X. Frantz
Title: Senior Vice President
the "Company"
/s/ Joe Ford
Signature
Joe T. Ford
Name (Typed or Printed)
the "Employee"
3
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<PAGE>
Exhibit A
Insurance Company Policy No. Specified Amount Issue Date
Pacific Corinthian 210989-00M $185,185 July 5,1982
Life Insurance Company
The Penn Insurance 9 038 118 500,000 March 8, 1983
and Annuity Group
The Cincinnati Life U2320458 1,500,000 May 4, 1989
Insurance Company
The Cincinnati Life U2429666 2,000,000 March 1, 1994
Insurance Company
4
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<PAGE>
Exhibit B
Proceeds Payable to the Employee's Beneficiary(ies)
The amount of insurance proceeds payable to the Employee's beneficiary or
beneficiaries under Paragraph 2(a) of this Agreement in the event of the
Employee's death shall be determined as follows:
"The Employee's annual earnings (as determined by the Company for purposes
of calculating amounts payable under the Company's group life insurance
plan), minus the sum of the amount paid under the Company's "basic" portion
of its group life insurance plan and the total amount paid or that would be
payable under the Company's "supplemental" portion of its group life
insurance plan (assuming the Employee were a participant thereunder),
excluding any amount paid or payable under any "accidental death" portion
thereof."
Beneficiary(ies) of the Employee
The beneficiary or beneficiaries of the Employee as designated by the
Employee under Paragraph 3 of this Agreement are as follows:
Jo Ellen Ford, Trustee of the Joe T. Ford Life Insurance
Trust Dated January 19, 1988
The Employee's Notice Address
The address to which notices to the Employee under this Agreement should
be sent is as follows:
Joe T. Ford
2100 Country Club Lane
Little Rock, AR 72207
5
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AGREEMENT EXHIBIT (10)(b)(1)
This Agreement, dated as of January 24, 1995, is made
between ALLTEL Corporation, a Delaware corporation (as defined below, the
"Corporation"), and Max E. Bobbitt (the "Executive").
In consideration of the mutual covenants contained
herein, the Corporation and the Executive agree as follows:
1. Defined Terms. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Allied Profit Sharing Plan" means the Allied
Telephone Company Profit Sharing Plan, as amended.
(B) "ALLTEL Profit-Sharing Plan" means the ALLTEL
Corporation Profit-Sharing Plan, as amended.
(C) "Board" or "Board of Directors" means the Board
of Directors of the Corporation.
(D) "Corporation" means ALLTEL Corporation and any
successor to its business or assets by operation of law or otherwise.
(E) "Deferred Compensation Plan" means the ALLTEL
Corporation Executive Deferred Compensation Plan as in effect on December 31,
1994.
(F) "Excess Benefit Plan" means the ALLTEL
Corporation Excess Benefit Plan as in effect on December 31, 1994.
(G) "Executive Compensation Agreement" means the
Executive Compensation Agreement between the Corporation and the Executive
entered into effective October 29, 1986, as amended by a Modification of
Executive Compensation Agreement, effective as of January 1, 1987, and a
Modification of Executive Compensation Agreement, effective as of January 1,
1991.
(H) "Long-Term Plan" means the ALLTEL Corporation
Long-Term Performance Incentive Plan as in effect on December 31, 1994.
(I) "Releasee" or "Releasees" shall have the meaning
specified in subparagraph (i) of paragraph (F) of Section 4 herein.
(J) "Short-Term Plan" means the ALLTEL Corporation
Performance Incentive Compensation Plan as in effect on December 31, 1994.
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(K) "Split Dollar Agreement" shall mean the Split
Dollar Insurance Agreement between the Corporation and the Executive, dated as
of March 1, 1994.
2. Retirement of Executive.
(A) The Executive retires from employment with the
Corporation and any subsidiary of the Corporation (as an employee and as an
officer) and resigns as a director of any subsidiary of the Corporation of which
he is a director, in each case effective at the close of business on January 4,
1995. The Executive acknowledges and agrees that he shall not be eligible to
receive any payments or benefits under any severance plan, program, or policy of
the Corporation or any subsidiary of the Corporation.
(B) The Executive and the Corporation agree that the
Executive's membership on the Board of Directors shall end on April 20, 1995, at
the end of the Executive's current term thereof, unless terminated sooner by the
Executive's resignation, death, or otherwise. The Executive agrees not to attend
any meeting of the Board of Directors occurring after the date of this Agreement
and waives any notice of any such meeting and any right to receive any materials
provided to directors for any such meeting.
(C) The Executive advised the Chief Executive Officer
of LDDS Communications, Inc. ("LDDS") on January 17, 1995 that the Executive
will not stand for reelection to the LDDS board of directors at LDDS' 1995
annual stockholders meeting in May 1995 as a representative of the Corporation.
The Executive agrees to use his reasonable best efforts to effect the election
of a person designated by the Corporation as the Executive's replacement as a
director of LDDS and to collaborate with that replacement concerning background
and other information helpful to the replacement's service as an LDDS director.
3. Certain Covenants of the Corporation and Related
Provisions.
(A) Joint and Spouse Survivor Payments. The
Corporation agrees to pay to the Executive, following the date of this Agreement
until the Executive's death, semi-monthly payments on the first day and the
fifteenth day of each calendar month, each in the amount of $23,958.34,
commencing as of January 15, 1995, and continuing during the Executive's
lifetime, the last semi-monthly payment being for the semi-monthly period during
which the Executive's death occurs. In the event the Executive is survived by
his wife, Patricia H. Bobbitt, the Corporation shall pay to said surviving wife
of the Executive, for the remainder of her lifetime, semi-monthly payments on
the first day and the fifteenth day of each calendar month, each in the amount
of $11,979.17, commencing on the semi-monthly payment date immediately following
the last semi-monthly payment date for which the Executive received a payment in
accordance with the immediately proceeding sentence and continuing during her
lifetime, the last monthly payment being for the semi-monthly period during
which her death occurs. The Corporation and the Executive agree
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<PAGE>
(and the Executive acknowledges) that the payments to be made by the Corporation
in accordance with this paragraph (A) shall be in lieu of any payments or
benefits under any pension plan of the Corporation or any subsidiary or
affiliate of the Corporation, including, but not limited to, the ALLTEL
Corporation Pension Plan (as in effect from time to time) (hereinafter, a
"Company Pension Plan"), that the Executive has not been, is not, and shall not
be a participant in any Company Pension Plan, and that neither the Executive,
his spouse, nor any other person or entity, claiming through the Executive has,
has had, or shall have any right to any benefit or payment from any Company
Pension Plan. The Executive's right to semi-monthly payments, and, in the event
the Executive is survived by his wife, Patricia H. Bobbitt, Patricia H.
Bobbitt's right to semi-monthly payments, under this paragraph (A), and any
associated property right or interest, is a personal and individual right or
interest.
(B) Health and Dental Coverage. The Corporation
agrees to provide to the Executive and to the Executive's spouse and dependents,
on a non-contributory basis, during the Executive's lifetime, health and dental
coverage not less favorable than the health and dental coverage(s) provided by
the Corporation to the Executive and his spouse on January 4, 1995., The
Corporation shall continue that coverage on a non-contributory basis, of the
surviving wife of the Executive and her dependents for the remainder of her
lifetime, except that, in the event she remarries, any rights of the surviving
wife of the Executive and her dependents under the ALLTEL Corporation
Supplemental Medical Employee Reimbursement Plan (or its successor, if any)
automatically shall terminate. Notwithstanding the foregoing provisions of this
paragraph (B), the Corporation may provide all or any portion of the foregoing
health and dental coverage(s) through the purchase by the Corporation of
insurance and the Corporation may coordinate against any government-provided (or
similar) coverage ("other coverage") with the other coverage as primary, if, in
the case the other coverage is contributory, the Corporation reimburses the
Executive or his spouse, as applicable, for amounts paid by the Executive or his
spouse as applicable, to obtain the other coverage within 30 days following the
date the Executive or his spouse, as applicable, provides to the Corporation
reasonable written evidence of the amount that is to be reimbursed.
(C) Split Dollar Policies.
(i) The Split Dollar Agreement shall remain in
effect, as modified by the following:
(1) Exhibit B of the Split Dollar Agreement is hereby
amended to delete the text under the section captioned "Proceeds Payable to the
Employee's Beneficiaries" and substitute the following: "The full amount of the
proceeds payable under both policies reflected on Exhibit A."
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(2) Paragraph 5 of the Split Dollar Agreement is
hereby amended to provide as follows: "This Agreement shall automatically
terminate on the earlier to occur of the day following the date of the
Employee's death or the date of the Employee's sixty-fifth (65th) birthday."
(ii) At the Executive's sixty-fifth birthday, the
Corporation shall receive the cash surrender value of the policies and shall
transfer the ownership of the policies to the Executive. Prior to the
Executive's sixty-fifth birthday, the Corporation shall make all premium
payments on the policies and the proper amounts with respect thereto shall be
imputed as income to the Executive.
(D) Group Life Plan. Under the Corporation's Group
Life, AD&D, and LTD Insurance Plan (the "Group Life Plan"), the Executive's
participation in the Group Life Plan will continue until January 31, 1994,
whereupon, in accordance with the provisions of the Group Life Plan, the
Executive's participation in and coverage under the Group Life Plan will
terminate, after which the Executive will have the right, during the ensuing 31
day period, to convert all or any portion of his then coverage under the Group
Life portion of the Group Life Plan (but not the AD&D and LTD portions) to an
individual life insurance policy. The Corporation agrees to provide the
Executive, promptly following his request, with the necessary application to
effect the foregoing conversion.
(E) Incentive Plans.
(i) Set forth on Exhibit A is the amount of award to
which the Executive is entitled under the Short-Term Plan for the 1994 year,
which the Corporation and the Executive agree is the correct amount. The
Executive acknowledges that he has no right or entitlement of any type or
description under the Short-Term Plan with respect to any year other than 1994
(other than the right to awards with respect to any such other year that were
deferred and remain unpaid, to which paragraph (I) of this Section 3 shall
apply) and that his sole right and entitlement under the Short-Term Plan with
respect to 1994 is limited to his receipt of the foregoing amount.
(ii) Set forth on Exhibit A is the amount of any
award to which the Executive will be entitled under the Long-Term Plan for the
1992 through 1994 period, which the Corporation and the Executive agree is the
correct amount. The Executive acknowledges that he has no right or entitlement
of any type or description under the Long-Term Plan with respect to any period
other than 1992 through 1994 (other than the right to awards with respect to any
such other year that were deferred and remain unpaid, to which paragraph (I) of
this Section 3 shall apply) and that his sole right and entitlement under the
Long-Term Plan with respect to the 1992 through 1994 period is limited to his
receipt of the foregoing amount.
(iii) Any awards to which the Executive is entitled
under the Short-Term Plan, the Long-Term Plan, or both, shall be paid to the
Executive at the time awards are paid to the Corporation's officers, but not
later than March 1, 1995, in accordance with
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the terms of those plans.
(F) Profit-Sharing Plans.
(i) Set forth on Exhibit A is a reasonable, best
estimate of the amount of the Executive's vested interest under the ALLTEL
Profit-Sharing Plan, as of the valuation date occurring on December 31, 1994,
which the Corporation and the Executive agree is a reasonable, best estimate of
the amount. The Executive's vested interest under the ALLTEL Profit-Sharing Plan
shall be paid in accordance with the terms of and at such time or times as may
be required thereunder.
(ii) Set forth on Exhibit A is a reasonable best
estimate of the amount of the Executive's vested interest under the Allied
Profit Sharing Plan, as of the valuation date occurring on December 31, 1994,
which the Corporation and the Executive agree is a reasonable best estimate of
the amount. The Executive's vested interest under the Allied Profit Sharing Plan
shall be paid in accordance with the terms of and at such time or times as may
be required thereunder.
(G) Excess Benefit Plan. Set forth on Exhibit A is
the amount of the Executive's vested interest under the Excess Benefit Plan, as
of December 31, 1994, which the Corporation and the Executive agree is a
reasonable best estimate of the amount. The Executive's vested interest under
the Excess Benefit Plan shall be paid in accordance with the terms of and at
such time or times as may be required thereunder.
(H) Stock Options.
(i) Notwithstanding any provision of the applicable
stock option plan or option agreement to the contrary, effective as of January
4, 1995, the Executive's vested interest in the incentive options and
non-qualified options set forth in Exhibit B to this Agreement, shall be 100
percent. In accordance with the application stock option plans, the Executive
shall be entitled to exercise the foregoing options at any time during the three
year period following January 4, 1995.
(ii) Subject to the foregoing provisions of this
paragraph (H), all matters pertaining to the options set forth in Exhibit B
shall be governed by the stock option plan and option agreement.
(I) Deferrals Under Deferred Compensation Plan. Set
forth on Exhibit A are the amounts through and as of the end of calendar year
1994 the receipt of which the Executive has elected to defer under, and that
have not been paid to the Executive under, one or more of the ALLTEL Corporation
Executive Deferred Compensation Plan, the ALLTEL Corporation Performance
Incentive Plan, and the ALLTEL Corporation Long-Term Performance Incentive Plan.
The Executive's vested interest under the plans described in the immediately
preceding sentence shall be paid in accordance with the terms of and at such
time or times as may be provided under the terms
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thereof, which the parties agree shall require that the Corporation pay the
Executive the foregoing amount as of December 31, 1994, plus the interest or
"return" calculated in accordance with the Deferred Compensation Plan for the
plan year 1995, on or before March 1, 1996.
(J) Rabbi Trust. As of the date of this Agreement,
the Executive is a beneficiary under the trust established by a Trust Agreement
between the Corporation and Nationsbank Texas, N.A., dated July 20, 1993 (the
"Rabbi Trust"), with respect to the Executive's rights and benefits under the
Executive Compensation Agreement, the Excess Benefit Plan and the Deferred
Compensation Plan, and the Corporation has made certain contributions for the
Executive's account thereunder the balance of which totaled $390,385 as of
December 31, 1994. The Corporation agrees that, subject to and in reliance upon
the acknowledgments by the Executive in the immediately following sentence, the
Corporation will, for so long as the Corporation continues to maintain the Rabbi
Trust with executive officers of the Corporation as beneficiaries, maintain the
Executive as a beneficiary thereunder with respect to the Executive's rights and
benefits referred to above and the Executive's rights and benefits under this
Agreement (in substitution for the Executive Compensation Agreement), and will
maintain balances in the Executive's account under the Rabbi Trust from time to
time consistent with the manner in which the Corporation maintains balances in
the accounts of the executive officers of the Corporation. The Executive
acknowledges that the Rabbi Trust is a revocable trust under which a beneficiary
is entitled to exercise no rights prior to a "change of control" (as defined
thereunder), that no beneficiary has any "vested" right or entitlement
thereunder of any type or description prior to such a "change of control" and
that, in the event the Corporation, prior to such a change of control, amends or
terminates the Rabbi Trust (which the Corporation has the unqualified right to
do in its sole discretion) or its application to the executive officers of the
Corporation, the Corporation's agreements in the immediately preceding sentence
automatically shall terminate.
(K) Disclosure By the Corporation. The Corporation
shall have the right to disclose this Agreement and the terms hereof in the
Corporation's proxy statement with respect to its 1995 annual meeting of
stockholders and in the Corporation's Form 10-K Report for its fiscal year ended
December 31, 1994, and otherwise to the extent the Corporation determines that
disclosure is either required by applicable law or regulation or is in the
Corporation's best interest. To the extent reasonably practicable, the
Corporation shall afford the Executive a reasonable opportunity to review and
comment upon any such disclosure prior to the making thereof.
4. Certain Other Agreements.
(A) Return of Property. Concurrent with execution of
this Agreement, the Executive shall deliver to the Corporation all of the
Corporation's and its subsidiaries' property in the Executive's possession,
custody or control, including, without limitation, all keys and credit cards,
and all files, documents, data and information in any medium relating in any way
to the Corporation and its subsidiaries' or its or their
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employees, suppliers, customers or business. Concurrent with the execution of
this Agreement, the Corporation shall deliver all of the Executive's property in
the Corporation's possession, custody or control, including, without limitation,
the Executive's leather Mark Cross brief case (under credenza), the Executive's
1994 calendar and telephone directory, without leather cover, prior years
calendars (located in second drawer on left hand side of desk), 1968 to 1986
Annual Reports on Allied Telephone Company and the Corporation which were loaned
to Ron Payne and the four framed golf prints hanging on the walls, and the
bronze "golfer" on the credenza.
(B) Non-Disclosure. The Executive acknowledges that
in the course of his employment with the Corporation he has had access to
confidential information or trade secrets that are proprietary to the
Corporation and its subsidiaries, including, without limitation, information
relating to the Corporation's and its subsidiaries' suppliers and customers, the
sources, costs and prices of the Corporation's and its subsidiaries' products
and services, the names, addresses, contact persons, purchasing and sales
histories, and preference of the Corporation's and its subsidiaries' suppliers
and customers, the Corporation's and its subsidiaries' business plans and
strategies, and the names and addresses of, amounts of compensation paid to, and
the trading and sales performance of the Corporation's and its subsidiaries
employees and agents (the "Confidential Information"). The Executive further
acknowledges that the Confidential Information is proprietary to the Corporation
and its subsidiaries, that the unauthorized disclosure of any of the
Confidential Information to any person or entity will result in immediate and
irreparable competitive injury to the Corporation and its subsidiaries, and that
such injury cannot adequately be remedied by an award of monetary damages. The
Executive agrees not to disclose at any time any Confidential Information to any
person or entity without the prior written permission of the Corporation.
(C) Non-Competition. The Executive agrees that, for a
period of five years after January 4, 1995, the Executive shall not become
employed, directly or indirectly, by a competitor of the Corporation. In the
event the Executive inquires of the Corporation, in writing, whether a potential
employment being considered by the Executive would constitute a breach of this
paragraph (and provides the Corporation, in writing, with all relevant
information related thereto), the Corporation agrees to evaluate that inquiry,
reasonably and in good faith, and, within 30 days after receipt of the inquiry,
to advise the Executive whether the Corporation would consider that employment,
if undertaken, to constitute a breach of this paragraph. In the event the
Corporation's response is that the proposed employment would not constitute a
breach and the Executive thereafter undertakes the proposed employment in the
manner described by the Executive to the Corporation, the Executive shall have
no liability to the Corporation for a breach of this paragraph as a result of
undertaking the proposed employment in the manner described by the Executive to
the Corporation.
(D) Harmful Statements. The Executive agrees that he
will not, and will cause his spouse not to, make any unfavorable, disparaging or
negative comment, remark or statement, whether written or oral, about the
Corporation, any of its subsidiaries
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<PAGE>
or affiliates, or any of their respective officers, directors or employees (or
the spouses of any of the foregoing). The Corporation agrees, in turn, that it
will not, and it will cause its officers and the principal officers of its
subsidiaries (and those officers will cause their respective spouses), and
directors not to, make any unfavorable, disparaging or negative comment, remark,
or statement, whether written or oral, about the Executive or his spouse.
(E) Confidentiality. Except as otherwise contemplated
by paragraph (K) of Section 3, the terms of this Agreement shall remain
confidential and shall not be disclosed by or permitted to be disclosed by the
Executive to any persons other than the Executive's counsel, financial advisor,
his spouse, Patricia H. Bobbitt, his daughter, Melinda A. Bobbitt, and each
person to whom the Executive is permitted to and does disclose the terms of this
Agreement shall be advised by the Executive of this confidentiality agreement
and shall be directed to observe the requirements thereof, except to the extent
the Corporation has disclosed this Agreement in accordance with paragraph (K) of
Section 3.
(F) Reciprocal Release and Covenant Not to Sue.
(i) In consideration of the monies and other benefits
to be provided by the Corporation under this Agreement, the sufficiency of which
as good and valuable consideration the Executive hereby acknowledges, the
Executive, for and on behalf of himself, his heirs, executors, administrators
and assigns, hereby releases and discharges the Corporation, its subsidiaries
and affiliates, and their respective officers, directors, employees, trustees,
administrators, employee benefit plans, all other representatives of the
Corporation and agents of any of the foregoing, and their successors and assigns
(hereinafter the "Releasees"), from and against any and all claims, liabilities,
causes of action, debts, demands, charges and claims of any nature whatsoever of
any and every kind, whether in tort, contract or pursuant to constitution,
statute or regulation, and whether for attorneys' fees or otherwise, which he
now has , whether known or unknown, accrued or matured, arising out of the
employment relationship between the Executive and the Corporation or any
Releasee or the termination thereof, except for the amounts, rights and benefits
under this Agreement. The foregoing release includes, but is not limited to, all
claims for compensation and fringe or other benefits and is a complete and
legally binding general release that releases all claims that the Executive has
or may have against any Releasee under local, state or federal laws concerning
civil rights, age discrimination, disability, employee benefits, wrongful
discharge, workers' compensation or any other claims that may have arisen in
connection with his employment with the Corporation or any Releasee or the
termination thereof. The foregoing release, however, does not apply to any
amount, right or benefit to which the Executive is entitled under this
Agreement. The Executive agrees not to file any claim, charge, lawsuit or the
like against any of the Releasees concerning any matter in any way connected
with his employment with the Corporation or any Releasee or the termination
thereof.
(ii) In consideration of the covenants by the
Executive under this Agreement, the sufficiency of which as good and valuable
consideration the Corporation hereby acknowledges, the Corporation, for and on
behalf of itself and its successors and
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<PAGE>
assigns, hereby releases and discharges the Executive and his heirs, executors,
administrators and assigns from and against any and all claims, liabilities,
causes of action, debts, demands, charges and claims of any nature whatsoever of
any and every kind, whether in tort, contract or pursuant to constitution,
statute or regulation, and whether for attorneys' fees or otherwise, which the
Corporation now has, whether known or unknown, accrued or matured, arising out
of the employment relationship between the Executive and the Corporation, or any
of the Corporation's subsidiaries, except for the amounts, rights and benefits
under this Agreement. The Corporation agrees not to file any claim, charge,
lawsuit or the like against the Executive concerning any matter in any way
connected with his employment with the Corporation or any of the Corporation's
subsidiaries.
5. Termination of Other Agreements.
Except as otherwise expressly provided in this
Agreement, this Agreement shall terminate any and all other agreements or
arrangements between the Corporation or any of its subsidiaries and the
Executive under which the Corporation or any such subsidiary would be obligated
to make any payment to or pay any benefit to or with respect to the Executive or
any person or entity claiming through the Executive, including, but not limited
to, the Executive Compensation Agreement, and neither the Corporation nor any
subsidiary of the Corporation shall have any obligation to make any such payment
or pay any such benefit.
6. General Provisions.
(A) Each and every provision of this Agreement is
subject to, and shall become effective only upon, express approval by the Board
and the execution by Patricia Bobbitt of the paragraph immediately following the
Executive's signature on the signature page of this Agreement. The Corporation
shall seek approval of this Agreement by the Board on or before January 26,
1995. On or before January 27, 1995, the Corporation shall notify the Executive
of the Board's decision whether to approve this Agreement, which, in the case of
such approval, shall be accompanied by a certified resolution to that effect. If
this Agreement is not approved by the Board on or before January 26, 1995 or
Patricia H. Bobbitt fails to sign the paragraph referred to in the first
sentence of this paragraph (A) concurrent with the signature of this Agreement
by the Executive, this Agreement shall be void ab initio.
(B) Each party warrants that it or he fully
understands this Agreement; that no promise or inducement has been offered to it
or him to enter into this Agreement except as expressly set forth herein; that
this Agreement is executed without reliance upon any statements or
representations made by either party or its or his attorneys or representatives
to the other concerning the nature and extent of any claims or damages or legal
liability therefor; that this Agreement evidences the entire settlement of the
claims released herein; and the Executive warrants that he is competent and
authorized to enter into this Agreement and that this Agreement is executed by
the Executive with full knowledge and understanding of its contents.
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<PAGE>
(C) Applicable Withholding. Any payments or benefits
to be provided to the Executive, Patricia H. Bobbitt, or any person or entity
claiming through the Executive, in accordance with this Agreement or otherwise
shall be subject to any applicable withholding required under federal, state or
local law and any additional withholding to which the Executive has agreed. No
Releasee shall be responsible for any tax imposed upon the Executive, Patricia
H. Bobbitt, or other person or entity with respect to any such payment.
7. Non-Admission. Neither the Corporation nor the
Executive makes any admission of any failing or wrongdoing by entering into this
Agreement. Rather, both parties recognize that they merely have agreed to
resolve amicably any existing or potential disputes arising out of the
Executive's employment and the termination thereof.
8. No Reemployment. The Corporation does not intend
to reinstate the Executive to employment at any time in the future, and the
Executive does not intend to seek such reinstatement at any time in the future.
The Corporation and its parents and subsidiaries shall have no obligation to
consider the Executive for re-employment at any time hereafter.
9. Specific Performance; Other Remedies.
(A) The Executive acknowledges that the covenants
contained in Section 4 of this Agreement are reasonably necessary to protect the
trade secrets, confidential information and other business interests of the
Corporation and its subsidiaries and affiliates and that the Executive's
compliance with those covenants is necessary to protect them from unfair
competition and competitive injury. The Executive further recognizes that a
breach of any of those covenants will result in irreparable and continuing harm
and damage to the Corporation and its parent subsidiaries and affiliates, for
which there will be no adequate remedy at law. The Executive therefore agrees
that in the event of a breach of any of the covenants in Section 4 of this
Agreement, the Corporation and its subsidiaries and affiliates shall be entitled
to injunctive relief and to such other relief (whether at law or in equity) as a
court of competent jurisdiction deems proper in the circumstances, in addition
to any other remedy or relief to which any of them may be entitled. The
Corporation recognizes that a breach by the Corporation of the second sentence
of paragraph (D) of Section 4 will result in irreparable and continuing harm and
damage to the Executive, for which there will be no adequate remedy at law. The
Corporation therefore agrees that, in the event of a breach of the second
sentence of paragraph (D) of Section 4 of this Agreement, the Executive shall be
entitled to injunctive relief and to such other relief (whether at law or in
equity) as a court of competent jurisdiction deems proper in the circumstances,
in addition to any other remedy or relief to which he may be entitled.
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(B) The obligations of the Corporation under
paragraph (A) of Section 3 of this Agreement are conditioned upon the
Executive's compliance with the covenants made by him under paragraphs (C), (D)
and (F) of Section 4 of this Agreement, and in the event the Executive fails to
comply with any of those covenants in any material respect and the Corporation
obtains a ruling to that effect from a court of competent jurisdiction, the
Corporation thereupon shall be excused from making any further payment required
under paragraph (A) of Section 3 of this Agreement. The Executive acknowledges
that the foregoing forfeiture of payments and benefits under this Agreement is
reasonable in relation to the harm that the Corporation would sustain if the
Executive were to violate any of the covenants contained in paragraphs (C), (D)
and (F) of Section 4 of this Agreement in any material respect.
10. Non-Assignment. Any rights to payments or
benefits under this Agreement payable to or with respect to the Executive or
Patricia H. Bobbitt may not be assigned, voluntarily or involuntarily, and any
attempt to do so shall be void. The Executive warrants and represents that he
has not assigned or attempted to assign to any third party any claim, or any
part thereof, that he may have or claim to have against the Releasees.
11. Binding Effect.
(A) This Agreement shall inure to the benefit of and
be binding upon the Corporation. This Agreement shall inure to the benefit of
each of the Releasees.
(B) This Agreement shall inure to the benefit of and
be binding upon the Executive and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, legatees and any other person or entity claiming through the
Executive. If the Executive shall die while any amount would be payable to the
Executive hereunder (other than amounts which, by their terms, terminate upon
the death of the Executive) if the Executive had continued to live, unless
otherwise provided herein, the amount(s) shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or
administrators of the Executive's estate.
(C) In the event of any action or proceeding between
the parties concerning an alleged breach of or default under this Agreement, the
prevailing party shall be entitled to collect from the other party all of the
prevailing party's reasonable costs and expenses (including, without limitation,
attorneys fees) incurred by the prevailing in connection therewith.
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12. Notices. Notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:
To the Corporation: To the Executive:
ALLTEL Corporation Mr. Max E. Bobbitt
One Allied Drive 62 Carmel Drive
Little Rock, Arkansas 72202 Little Rock, Arkansas 72212
Attention: General Counsel
13. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Executive and the Chief Executive
Officer of the Corporation. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Arkansas.
14. Construction. The provisions of this Agreement
have been mutually created with the assistance of counsel for each party, and no
provision of this Agreement shall be construed against either the Corporation or
the Executive as the drafter thereof. Paragraph and Section titles herein are
for ease of reference purposes only and shall not be considered in the
construction of this Agreement.
15. Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect. If any part of the Agreement is found to be unenforceable the other
provisions shall remain fully valid and enforceable. In the event any provision
of this Agreement is held unenforceable, such provision shall be reformed so as
to be enforced to the maximum extent possible, and if a court determines that it
is not possible to reform any such provision of this Agreement, such provision
will be severed from the Agreement and the remainder of the Agreement shall be
enforced to the full extent permitted by law.
16. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but both
of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Francis X. Frantz /s/ Joe Ford
________________________ By______________________________
Name: Francis X. Frantz Name: Joe T. Ford
Title: Secretary Title: Chairman and Chief Executive
Officer
Witness:
/s/ Donald T. Jack, Jr. /s/ Max E. Bobbitt
- ------------------------ --------------------------------
Donald T. Jack, Jr.
Max E. Bobbitt
The undersigned, Patricia H. Bobbitt, hereby (i) accepts and agrees to be bound
by the provisions of Section 3 of this Agreement, (ii) joins in and agrees to be
bound by the provisions of paragraphs (D), (E), and (F) of Section 4 of this
Agreement, (iii) consents to and agrees to be bound by the provisions of Section
5 of this Agreement, (iv) makes the warranties contained in paragraph (B) of
Section 6, and the second sentence of Section 10 of this Agreement, as though
she were "the Executive" as that term is used therein and (v) consents to and
agrees to be bound by the provisions of Sections 6 and 7 and Sections 9 through
16 of this Agreement.
Witness:
/s/ Donald T. Jack, Jr. /s/ Patricia H. Bobbitt
Patricia H. Bobbitt
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EXHIBIT A
Short-Term Plan
Amount for 1994 year: $ 391,875
Long-Term Plan
Amount for 1992-94 period: $ 146,250
ALLTEL Profit Sharing Plan
Estimated amount of vested interest , including
estimated 1994 contributions (as of 12/31/94): $ 152,000
Allied Profit Sharing Plan
Estimated amount of vested interest, including
estimated 1994 contributions (as of 12/31/94): $ 764,000
Excess Benefit Plan
Estimated amount of vested interest, including
estimated amount credited for 1994
(as of 12/31/94): $ 211,000
Deferred Compensation Plan
Amount in account as of 12/31/94: $1,698,414
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<TABLE>
<CAPTION>
ALLTEL Corporation STOCK OPTION PERSONNEL SUMMARY AS OF 01/04/95 PAGE: 1
FORM: HRCm10
MAX E. BOBBITT ID: 0354 (Officer) Date: 01/19/95
62 CARMEL DRIVE Location : AT TIME: 09:52:16
LITTLE RICK, AR 72212 Department : CORP
Last Sale : None
Last Buy : None
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GRANT GRANT PLAN/ *
NUMBER DATE TYPE GRANTED PRICE EXERCISED VESTED CANCELLED UNVESTED OUTSTANDING
- ------ -------- ------- --------- ---------- ----------- ---------- ----------- ---------- ------------
001010 07/26/88 02/ISO 44,595.0 $11.2085 0.0 44,595.0 0.0 0.0 44,595.0
001011 07/26/88 02/NQ 45,405.0 $11.2085 0.0 45,405.0 0.0 0.0 44,405.0
001012 10/15/90 02/ISO 14,220.0 $14.0625 0.0 7,110.0 0.0 7,110.0 14,220.0
001013 10/15/90 02/NQ 35,780.0 $14.0625 0.0 32,890.0 0.0 2,890.0 35,780.0
001014 01/29/92 02/ISO 10,000.0 $20.0000 0.0 0.0 0.0 10,000.0 10,000.0
001026 01/29/92 02/NQ 90,000.0 $20.0000 0.0 40,000.0 0.0 50,000.0 90,000.0
001273 10/29/93 02/ISO 3,448.0 $29.0000 0.0 0.0 0.0 3,448.0 3,448.0
001274 10/29/93 02/NQ 71,552.0 $29.0000 0.0 15,000.0 0.0 56,552.0 71,552.0
--------- ---------- ----------- ---------- ----------- --------- ------------
TOTALS 315,000.0 ($18.6885) 0.0 185,000.0 0.0 130,000.0 315,000.0
<FN>
* In accordance with paragraph (H) of Section 3, these options shall vest effective January 4, 1995.
</FN>
</TABLE>
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EXHIBIT (10)(b)(2)
SPLIT DOLLAR INSURANCE AGREEMENT
THIS SPLIT DOLLAR INSURANCE AGREEMENT ("Agreement") is
made as of March 1, 1994, by and between ALLTEL Corporation, a
Delaware corporation (the "Company"), and the undersigned
employee of the Company (the "Employee").
In consideration of the services rendered and to be
rendered by the Employee to the Company or any of its
subsidiaries or affiliates (employment or duties with the
Company shall include employment or duties with any subsidiary
or affiliate of the Company) and of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Purchase of Insurance. The Company shall maintain the life insurance
policy or policies (individually, a "policy" and, collectively, the "policies")
on the life of the Employee from the insurance company or companies
(individually, an "Insurance Company" and, collectively, the "Insurance
Companies") specified on the Policy Specification attached hereto as Exhibit A),
shall pay all premiums on the policies when due, and shall be designated as sole
owner of the policies subject to the conditions hereafter set forth.
2. Payment of Proceeds. Upon the death of the Employee
while this Agreement remains in effect, the proceeds of the
policies shall be paid as follows:
(a) To the Employee's beneficiary or beneficiaries designated in
accordance with Paragraph 3, an amount calculated in the manner set forth
on the schedule attached hereto as Exhibit B, for the Plan Year of the
Employee's death.
(b) To the Company, an amount equal to the balance, if any, of the
proceeds of the policy, and of any additional insurance purchased in
accordance with Paragraph 3, after payment of the applicable amount to the
Employee's beneficiary or beneficiaries in accordance with clause (a) of
this Paragraph 2.
3. Rights Under Policy. Each and every right of ownership of each policy
is reserved to the Company. Each policy shall provide that the dividends payable
with respect to the policy may be applied as determined by the Company in its
sole discretion. The Company shall be entitled to any premiums paid on the
policies that are refunded by the Insurance Companies. The Company shall make no
loan against the policies that would prevent payment of the proceeds of the
policies in accordance with the provisions of clause (a) of Paragraph 2. Payment
of the proceeds of the policies in accordance with the provisions of clause (a)
of Paragraph 2 shall be made in accordance with the Employee's written
designation of beneficiary or beneficiaries specified to the Company from time
to time (which, as of the date hereof, are as set forth on the schedule attached
hereto as Exhibit B).
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4. Liability of Insurance Company. In issuing any policy of insurance
covered by this Agreement, an Insurance Company shall have no liability except
as set forth in the policy. The Insurance Company shall not be bound to inquire
into or take notice of any of the provisions of this Agreement as to the policy
or as to the application of the proceeds of the policy. Rights under the policy
may be exercised during the life of the Employee in accordance with the
provisions of the policy. Upon the death of the Employee, the Insurance Company
shall be discharged from all liability on payment of the proceeds in accordance
with the policy provisions without regard to this Agreement or any amendment
thereof.
5. Termination.
(a) This Agreement may be terminated by either the Company or the
Employee by written notice to the other specifying the effective date of
termination.
(b) This Agreement automatically shall terminate at
the end of the first month in which:
(1) the Company fails to make the premium payments
required under Paragraph 1; or
(2) the Employee's service with the Company is terminated for any
reason other than death or total and permanent disability.
6. Non-Payment of Benefits. If the Employee dies by suicide, while sane or
insane, within two years after the date of issue or reissue of the policy, or if
for any reason an Insurance Company does not pay benefits under the policy
during the contestable period (not to exceed two years after the date of issue
or reissue of the policy) because of fraud, misrepresentation, or other action
by the Employee falling within the applicable provisions of the policy, the
Company shall have no liability under this Agreement.
7. Plan Year. For purposes of this Agreement, the first Plan year shall
begin on the effective date of this Agreement and extend through the next
December 31. Each subsequent Plan year shall begin on January 1 of the
succeeding year and end on December 31 of such year.
8. Miscellaneous. Nothing contained in this Agreement
shall be construed as giving the Employee the right to be
retained in the service of the Company or shall in any way
affect the right of the Company to control the Employee or to
terminate the employment of the Employee at any time.
9. Amendment. This Agreement may be amended by a
writing signed by the Company and the Employee and attached
hereto.
10. Notices. Notices under this Agreement shall be
effective if delivered, in the case of the Company, to One
Allied Drive, Little Rock, Arkansas 72202, attn: Vice
President-
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Human Resources, and, in the case of the Employee, to the address set forth on
the schedule attached hereto as Exhibit B. The Company and the Employee each may
change the address to which notices should be sent by written notice to the
other.
11. Applicable Law. This Agreement shall be construed
and interpreted in accordance with the laws of the State of
Delaware.
12. Effect on Prior Agreement. This Agreement supersedes the Split-Dollar
Agreement, dated May 26, 1989 (the "Prior Agreement"), which related to The
Cincinnati Life Insurance Company Policy No. U2321406 ($1,000,000 specified
amount). The Prior Agreement is hereby terminated, and the provisions of this
Agreement shall apply to the foregoing policy formerly covered by the Prior
Agreement.
IN WITNESS WHEREOF, the Company and the Employee have signed this
Agreement, in the case of the Company, by its duly authorized officers,
effective as of the date first above written.
ALLTEL Corporation
By: /s/ Francis X. Frantz
Title: Senior Vice President
the "Company"
/s/ M. Bobbitt
Signature
Max E. Bobbitt
Name (Typed or Printed)
the "Employee"
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Exhibit A
Insurance Company Policy No. Specified Amount Issue Date
The Penn Insurance 9-037-599 $250,000 February 22 1983
and Annuity Company
The Cincinnati Life U2321406 1,000,000 May 4, 1989
Insurance Company
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Exhibit B
Proceeds Payable to the Employee's Beneficiary(ies)
The amount of insurance proceeds payable to the Employee's beneficiary or
beneficiaries under Paragraph 2(a) of this Agreement in the event of the
Employee's death shall be determined as follows:
"The Employee's annual earnings (as determined by the Company for purposes
of calculating amounts payable under the Company's group life insurance
plan), minus the sum of the amount paid under the Company's "basic" portion
of its group life insurance plan and the total amount paid or that would be
payable under the Company's "supplemental" portion of its group life
insurance plan (assuming the Employee were a participant thereunder),
excluding any amount paid or payable under any "accidental death" portion
thereof."
Beneficiary(ies) of the Employee
The beneficiary or beneficiaries of the Employee as designated by the
Employee under Paragraph 3 of this Agreement are as follows:
Patricia Holley Bobbitt
The Employee's Notice Address
The address to which notices to the Employee under this Agreement should
be sent is as follows:
Max E. Bobbitt
62 Carmel Drive
Little Rock, AR 72212
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EXHIBIT (10)(c)(2)
AGREEMENT
This Agreement, dated October 24, 1994, is made by and between ALLTEL
Corporation, a Delaware corporation (as hereinafter defined, the "Corporation"),
and John L. Comparin (as hereinafter defined, the "Executive").
WHEREAS, the Board of Directors of the Corporation (as hereinafter
defined, the "Board") recognizes that the possibility of a Change in Control (as
hereinafter defined) of the Corporation exists and that such possibility, and
the uncertainty it may cause, may result in the departure or distraction of key
management employees of the Corporation or of a Subsidiary to the detriment of
the Corporation and its stockholders; and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Board has determined that the Corporation should encourage
the continued employment of the Executive by the Corporation or a Subsidiary and
the continued dedication of the Executive to his assigned duties without
distraction as a result of the circumstances arising from the possibility of a
Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Board" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(B) "Cause" for termination by the Corporation of the
Executive's employment shall mean (i) the willful failure by the Executive
substantially to perform the Executive's duties with the Corporation or a
Subsidiary, other than any failure resulting from the Executive's incapacity due
to physical or mental illness or any actual or anticipated failure after the
issuance of a Notice of Termination for Good
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Reason by the Executive in accordance with paragraph (A) of Section 6, that
continues for at least 30 days after the Board delivers to the Executive a
written demand for performance that identifies specifically and in detail the
manner in which the Board believes that the Executive willfully has failed
substantially to perform the Executive's duties or (ii) the willful engaging by
the Executive in misconduct that is demonstrably and materially injurious to the
Corporation or any Subsidiary, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's act, or failure to act, was
in the best interest of the Corporation and its Subsidiaries:
(C) A "Change in Control" shall mean, if subsequent
to the date of this Agreement:
(i) Any "person," as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Corporation, any of its subsidiaries, or any
employee benefit plan maintained by the Corporation or any of its
subsidiaries, becomes the "beneficial owner" (as defined in Rule l3d-3
under the Exchange Act) of (A) l5% or more, but no greater than 50%, of
the outstanding voting capital stock of the Corporation, unless prior
thereto, the Continuing Directors approve the transaction that results
in the person becoming the beneficial owner of 15% or more, but no
greater than 50%, of the outstanding voting capital stock of the
Corporation or (B) more than 50% of the outstanding voting capital
stock of the Corporation, regardless whether the transaction or event
by which the foregoing 50% level is exceeded is approved by the
Continuing Directors;
(ii) At any time Continuing Directors no longer
constitute a majority of the directors of the Corporation; or
(iii) A record date is fixed for determining
stockholders entitled to vote upon (A) a merger or
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consolidation of the Corporation, statutory share exchange, or other
similar transaction with another corporation, partnership, or other
entity or enterprise in which either the Corporation is not the
surviving or continuing corporation or shares of common stock of the
Corporation are to be converted into or exchanged for cash, securities
other than common stock of the Corporation, or other property, (B) a
sale or disposition of all or substantially all of the assets of the
Corporation, or (C) the dissolution of the Corporation; or
(iv) The Corporation enters into an agreement with any
Person, the consummation of which would result in the occurrence of an
event described in clause (i), (ii) or (iii) above of this paragraph
(C).
(D) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(E) "Continuing Directors" means directors who were
directors of the Corporation at the beginning of the 24-month period
ending on the date the determination is made or whose election, or
nomination for election by the Corporation's stockholders, was approved
by at least a majority of the directors who are in office at the time
of the election or nomination and who either (i) were directors at the
beginning of the period, or (ii) were elected, or nominated for
election, by at least a majority of the directors who were in office at
the time of the election or nomination and were directors at the
beginning of the period.
(F) "Corporation" shall mean ALLTEL Corporation and
any successor to its business or assets, by operation of law or
otherwise.
(G) "Date of Termination" shall have the meaning
stated in paragraph (B) of Section 6 hereof.
(H) "Disability" shall be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been
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absent from the full-time performance of the Executive's duties with the
Corporation or a Subsidiary for a period of six consecutive months, the
Corporation shall have given the Executive a Notice of Termination for
Disability, and, within 20 business days after the Notice of Termination is
given, the Executive shall not have returned to the full-time performance of the
Executive's duties.
(I) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(J) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence, without the Executive's
express written consent, of any one of the following:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of the
Corporation or of a Subsidiary or a substantial adverse alteration in
the nature or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(ii) a reduction by the Corporation in the Executive's
annual base salary to any amount less than the Executive's annual base
salary as in effect immediately prior to the Change in Control;
(iii) the relocation of the principal executive
offices of the Corporation or of a Subsidiary, as the case may be, to a
location more than 35 miles from the location of such offices
immediately prior to the Change in Control or the Corporation's
requiring the Executive to be based anywhere other than the principal
executive offices of the Corporation or of a Subsidiary as the case may
be, except for required business travel to an extent substantially
consistent with the Executive's business travel obligations immediately
prior to the Change in Control;
(iv) the failure by the Corporation to pay to the
Executive any portion of the Executive's current compensation, or to
pay to the Executive any deferred
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compensation under any deferred compensation program of the
Corporation, within five days after the date the compensation is due or
to pay or reimburse the Executive for any expenses incurred by him for
required business travel;
(v) the failure by the Corporation to continue in
effect any compensation plan in which the Executive participates
immediately prior to the Change in Control that is material to the
Executive's total compensation, including but not limited to, stock
option, restricted stock, stock appreciation right, incentive
compensation, bonus, and other plans, unless an equitable alternative
arrangement embodied in an ongoing substitute or alternative plan has
been made, or the failure by the Corporation to continue the
Executive's participation therein (or in a substitute or alternative
plan) on a basis not materially less favorable, both in terms of the
amount of compensation provided and the level of the Executive's
participation relative to other participants, than existed immediately
prior to the Change in Control;
(vi) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Corporation's pension,
profit-sharing, life insurance, medical, health and accident,
disability, or other employee benefit plans in which the Executive was
participating immediately prior to the Change in Control; the failure
by the Corporation to continue to provide the Executive any material
fringe benefit or perquisite enjoyed by the Executive immediately prior
to the Change in Control; or the failure by the Corporation to provide
the Executive with the number of paid vacation days to which the
Executive is entitled in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in Control;
or
(vii) any purported termination by the Corporation of
the Executive's employment that is not effected in accordance with a
Notice of Termination
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satisfying the requirements of paragraph (A) of Section 6 hereof.
(K) "Notice of Termination" shall have the meaning
stated in paragraph (A) of Section 6 hereof.
(L) "Payment Trigger" shall mean the occurrence of a
Change in Control during the term of this Agreement coincident with or followed
(i) at any time before the end of the 12th month immediately following the month
in which the Change in Control occurred, by the termination of the Executive's
employment with the Corporation or a Subsidiary for any reason other than (A) by
the Executive without Good Reason, (B) by the Corporation as a result of the
Disability of the Executive or with Cause or, (C) as a result of the death of
the Executive or (ii) in the event the Executive remains continuously employed
by the Corporation or a Subsidiary until the end of the 12th month immediately
following the month in which the Change in Control occurred, the termination of
the Executive's employment with the Corporation or a Subsidiary, at any time
during the three month period immediately following the expiration of such
12-month period, for any reason other than (A) by the Corporation as a result of
the Disability of the Executive or (B) as a result of the death of the
Executive.
(M) "Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as
modified and used in Sections 13(d) and 14(d) thereof; except that, a Person
shall not include (i) the Corporation or any Subsidiary, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation
or any Subsidiary, or (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(N) "Subsidiary" shall mean any corporation or other
entity or enterprise, whether incorporated or unincorporated, of which at least
a majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others serving
similar functions with respect to such corporation or other entity or enterprise
is owned by the Corporation or other
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entity or enterprise of which the Corporation directly or indirectly owns
securities or other interests having all the voting power.
2. Term of Agreement. This Agreement shall become
effective on the date hereof and, subject to the second sentence of this Section
2, shall continue in effect until the earliest of (i) a Date of Termination in
accordance with Section 6 or the death of the Executive shall have occurred
prior to a Change in Control, (ii) if a Payment Trigger shall have occurred
during the term of this Agreement, the performance by the Corporation of all its
obligations, and the satisfaction by the Corporation of all its obligations and
liabilities, under this Agreement, (iii) the ten year anniversary of the date of
this Agreement if, as of that ten year anniversary, a Change in Control shall
not have occurred and be continuing, or (iv) in the event, as of the ten year
anniversary of the date of this Agreement, a Change in Control shall have
occurred and be continuing, either the expiration of such period thereafter
within which a Payment Trigger does not or can not occur or the ensuing
occurrence of a Payment Trigger and the performance by the Corporation of all of
its obligations and liabilities under this Agreement. Any Change in Control
during the term of this Agreement that for any reason ceases to constitute a
Change in Control or is not followed by a Payment Trigger shall not effect a
termination or lapse of this Agreement. Any transfer of the Executive's
employment from the Corporation to a Subsidiary, from a Subsidiary to the
Corporation, or from one Subsidiary to another Subsidiary shall not constitute a
termination of the Executive's employment for purposes of this Agreement.
3. General Provisions.
(A) The Corporation hereby represents and warrants to
the Executive as follows: The execution and delivery of this Agreement and the
performance by the Corporation of the actions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Corporation.
This Agreement is a legal, valid and legally binding obligation of the
Corporation enforceable in accordance with its terms. Neither the execution or
delivery of this
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Agreement nor the consummation by the Corporation of the actions contemplated
hereby (i) will violate any provision of the certificate of incorporation or
bylaws (or other charter documents) of the Corporation, (ii) will violate or be
in conflict with any applicable law or any judgment, decree, injunction or order
of any court or governmental agency or authority, or (iii) will violate or
conflict with or constitute a default (or an event of which, with notice or
lapse of time or both, would constitute a default) under or will result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or properties of the Corporation under, any term or provision of the
certificate of incorporation or bylaws (or other charter documents) of the
Corporation or of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Corporation is a
party or by which the Corporation or any of its properties or assets may be
bound or affected.
(B) No amount or benefit shall be payable under this
Agreement unless there shall have occurred a Payment Trigger during the term of
this Agreement. In no event shall payments in accordance with this Agreement be
made in respect of more than one Payment Trigger.
(C) This Agreement shall not be construed as creating
an express or implied contract of employment and, except as otherwise agreed in
writing between the Executive and the Corporation, the Executive shall not have
any right to be retained in the employ of the Corporation or of a Subsidiary.
Notwithstanding the immediately preceding sentence or any other provision of
this Agreement, no purported termination of the Executive's employment that is
not effected in accordance with a Notice of Termination satisfying paragraph (A)
of Section 6 shall be effective for purposes of this Agreement. The Executive's
right, following the occurrence of a Change in Control, to terminate his
employment under this Agreement for Good Reason shall not be affected by the
Executive's Disability or incapacity. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason under this Agreement.
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4. Payments Due Upon a Payment Trigger.
(A) The Corporation shall pay to the Executive the
payments described in this Section 4 upon the occurrence of a Payment Trigger
during the term of this Agreement.
(B) Upon the occurrence of a Payment Trigger during
the term of this Agreement, the Corporation shall pay to the Executive a lump
sum payment, in cash, equal to the product of:
(i) three multiplied by
(ii) the sum of --
(a) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the Change in
Control or the Executive's annual base salary in effect
immediately prior to the Payment Trigger, plus
(b) the higher of the aggregate maximum amounts
payable to the Executive pursuant to all incentive
compensation plans for the fiscal year or other measuring
period commencing coincident with or most recently prior to
the date on which the Change in Control occurs or the
aggregate maximum amounts payable to the Executive pursuant to
all incentive compensation plans for the fiscal year or other
measuring period commencing coincident with or most recently
prior to the date on which the Payment Trigger occurs, in each
case, assuming that the Executive were continuously employed
by the Corporation or a Subsidiary on the terms and
conditions, including, without limitation, the terms of the
incentive plans, in effect immediately prior to the Change in
Control or Payment Trigger, whichever applies, until the last
day of that fiscal year or other measuring period.
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The amount determined under the foregoing provisions of this paragraph (B) shall
be reduced by any cash severance benefit otherwise paid to the Executive under
any applicable severance plan or other severance arrangement. For purposes of
this paragraph (B), amounts payable to the Executive pursuant to an incentive
compensation plan for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which the Change of
Control or Payment Trigger, as applicable, occurs (the "applicable year/period")
shall not include amounts attributable to a fiscal year or other measuring
period that commenced prior to the applicable year/period and that become
payable during the applicable year/period. For purposes of this paragraph (B),
incentive compensation plans shall include, without limitation, the ALLTEL
Corporation Performance Incentive Compensation Plan as in effect from time to
time, the ALLTEL Corporation Long-Term Performance Incentive Compensation Plan
as in effect from time to time, and any incentive bonus plan or arrangement that
provides for payment of cash compensation, and shall exclude, without
limitation, the ALLTEL Corporation Executive Deferred Compensation Plan as in
effect from time to time, any plan qualified or intended to be qualified under
Section 401(a) of the Code and any plan supplementary thereto, executive fringe
benefits, and any plan or arrangement under which stock, stock options, stock
appreciation rights, restricted stock or similar options, stock, or rights are
issued.
(C) Notwithstanding any provision of any incentive
compensation plan, including, without limitation, any provision of any incentive
plan requiring continued employment after the completed fiscal year or other
measuring period, the Corporation shall pay to the Executive a lump sum amount,
in cash, equal to the amount of any incentive compensation that has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the occurrence of a Payment Trigger under any
incentive compensation plan but has not yet been paid to the Executive.
(D) The payments provided for in paragraphs (B) and
(C) of this Section 4 shall be made not later than the fifth day following the
occurrence of a Payment Trigger, unless the amounts of such payments cannot be
finally determined on or
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before that day, in which case, the Corporation shall pay to the Executive on
that day an estimate, as reasonably determined in good faith by the Corporation,
of the minimum amount of the payments to which the Executive is clearly entitled
and shall pay the remainder of the payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the occurrence
of a Payment Trigger. In the event the amount of the estimated payments exceeds
the amount subsequently determined to have been due, the excess shall constitute
a loan by the Corporation to the Executive, payable on the fifth business day
after demand by the Corporation (together with interest at the rate provided in
Section l274(b)(2)(B) of the Code). At the time that payments are made under
this Section 4, the Corporation shall provide the Executive with a written
statement setting forth the manner in which the payments were calculated and the
basis for the calculations including, without limitation, any opinions or other
advice the Corporation has received from outside counsel, auditors or
consultants (and any opinions or advice that are in writing shall be attached to
the statement).
5. Gross-Up Payments.
(A) This Section 5 shall apply if a Payment Trigger
shall have occurred during the term of this Agreement.
(B) In the event it shall be determined that any
payment or distribution by the Corporation or other amount with respect to the
Corporation to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5 (a "Payment"), is (or will be) subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are (or will
be) incurred by the Executive with respect to the excise tax imposed by Section
4999 of the Code with respect to the Corporation (the excise tax, together with
any interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Executive shall be entitled to receive an additional cash
payment (a "Gross-Up Payment") from the Corporation in an
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amount equal to the sum of the Excise Tax and an amount sufficient to pay the
cumulative Excise Tax and all cumulative income taxes (including any interest
and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by the Executive is equal to all
payments received pursuant to the terms of this Agreement or otherwise less
income taxes (but not reduced by the Excise Tax).
(C) Subject to the provisions of paragraph (D) of
this Section 5, all determinations required to be made under this Section 5,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Corporation and the
Executive within 30 days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the
Corporation. In the event that at any time relevant to this Agreement the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group or Person effecting the Change in Control, the Executive shall appoint
another nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Corporation. Any Gross-Up Payment, as
determined in accordance with this Section 5, shall be paid by the Corporation
to the Executive within five days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall so indicate to the Executive in writing. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive. As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Corporation should have made will not
have been made (an "Underpayment"), consistent with the calculations required to
be made hereunder. In the event the Corporation exhausts its remedies in
accordance with
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paragraph (D) of this Section 5 and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
Underpayment that has occurred and the Underpayment shall be promptly paid by
the Corporation to or for the benefit of the Executive.
(D) The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment (that has not already been paid by the Corporation).
The notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of the claim and shall
apprise the Corporation of the nature of the claim and the date on which the
claim is requested to be paid. The Executive shall not pay the claim prior to
the expiration of the 30-day period following the date on which the Executive
gives notice to the Corporation or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Corporation
notifies the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting
the claim as the Corporation shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to the claim by an attorney reasonably
selected by the Corporation;
(iii) cooperate with the Corporation in good faith in
order effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the
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Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
the representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 5, the Corporation shall control all
proceedings taken in connection with the contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings, and
conferences with the taxing authority in respect of the claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute the contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine. If the Corporation directs the Executive to pay the
claim and sue for a refund, the Corporation shall advance the amount of the
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to the advance or with respect to any imputed income with respect to the
advance; and any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which the contested
amount is claimed to be due shall be limited solely to the contested amount. The
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(E) If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this Section 5,
the Executive becomes entitled to receive any refund with respect to the claim,
the Executive shall, subject to the Corporation's compliance with the
requirements of paragraph (D) of this Section 5, promptly pay to the Corporation
the amount of the refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this
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Section 5, a determination is made that the Executive shall not be entitled to
any refund with respect to the claim and the Corporation does not notify the
Executive in writing of its intent to contest the denial of refund prior to the
expiration of 30 days after the determination, then the advance shall be
forgiven and shall not be required to be repaid and the amount of the advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6. Termination Procedures.
(A) During the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice that indicates
the specific termination provision in this Agreement relied upon, and, if
applicable, the notice shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board that was called and held for the purpose of considering the
termination finding that, in the informed, reasonable, good faith judgment of
the Board, the Executive was guilty of conduct set forth in the definition of
Cause in Section 1(B), and specifying the particulars thereof in detail.
(B) "Date of Termination" with respect to any
purported termination of the Executive's employment during the term of this
Agreement (other than by reason of death) shall mean (i) if the Executive's
employment is terminated for Disability, 20 business days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during that 20 business day
period) and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination, which, in the case of a
termination by the Corporation, shall not be less than ten business days
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except in the case of a termination for Cause, and, in the case of a termination
by the Executive, shall not be less than ten business days nor more than 20
business days, respectively, after the date such Notice of Termination is given.
7. No Mitigation. The Executive shall not be required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Corporation pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Corporation or a Subsidiary, or
otherwise.
8. Disputes.
(A) If a dispute or controversy arises out of or in
connection with this Agreement, the parties shall first attempt in good faith to
settle the dispute or controversy by mediation under the Commercial Mediation
Rules of the American Arbitration Association before resorting to arbitration or
litigation. Thereafter, any remaining unresolved dispute or controversy arising
out of or in connection with this Agreement shall, upon a written notice from
the Executive to the Corporation either before suit thereupon is filed or within
20 business days thereafter, be settled exclusively by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association in
a city located within the continental United States designated by the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Executive shall, however, be entitled to seek specific
performance of the Corporation's obligations hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other
than a mediation or an arbitration described in paragraph (A) of this Section 8,
whether instituted by the Corporation or the Executive, shall be brought and
resolved only in a state court of competent jurisdiction located in the
territory that encompasses the city, county, or parish in which
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the Executive's principal residence is located at the time such action is
commenced. The Corporation hereby irrevocably consents and submits to and shall
take any action necessary to subject itself to the personal jurisdiction of that
court and hereby irrevocably agrees that all claims in respect of the action
shall be instituted, heard, and determined in that court. The Corporation agrees
that such court is a convenient forum, and hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of the action. Any final judgment in the action may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.
(C) The Corporation shall pay all costs and expenses,
including attorneys' fees and disbursements, of the Corporation and, at least
monthly, the Executive in connection with any legal proceeding (including
arbitration), whether or not instituted by the Corporation or the Executive,
relating to the interpretation or enforcement of any provision of this
Agreement, provided that if the Executive instituted the proceeding and the
judge, arbitrator, or other individual presiding over the proceeding
affirmatively finds that the Executive instituted the proceeding in bad faith,
the Executive shall pay all costs and expenses, including attorney's fees and
disbursements, of Executive and the Corporation. The Corporation shall pay
prejudgment interest on any money judgment obtained by Executive as a result of
such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the
Code.
9. Successors; Binding Agreement.
(A) In addition to any obligations imposed by law
upon any successor to the Corporation, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the
Corporation expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
the assumption and agreement prior to the effectiveness of any succession shall
be
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a breach of this Agreement and shall entitle the Executive to compensation from
the Corporation in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate his employment for
Good Reason immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the date on
which any succession becomes effective shall be deemed the Payment Trigger
occasioned by the foregoing deemed termination of employment for Good Reason
immediately following a Change in Control. The provisions of this Section 9
shall continue to apply to each subsequent employer of Executive bound by this
Agreement in the event of any merger, consolidation, or transfer of all or
substantially all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive shall die while any amount would be payable to the Executive hereunder
(other than amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, the amount, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives, or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
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To the Corporation:
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
Attention: Chairman of the Board
To the Executive:
John L. Comparin
25 El Dorado
Little Rock, Arkansas 72212
11. Miscellaneous. No provision of this Agreement may
be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing and signed by the Executive and an officer of
the Corporation specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state, or local law and any additional withholding to which the
Executive has agreed.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed
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to be an original but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Francis X. Frantz By /s/ Joe T. Ford
Name: Francis X. Frantz Name: Joe T. Ford
Title: Secretary Title: Chairman & CEO
Witness:
/s/ Dennis J. Ferra /s/ John L. Comparin
John L. Comparin
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EXHIBIT (10)(c)(3)
AGREEMENT
This Agreement, dated October 24, 1994, is made by and between ALLTEL
Corporation, a Delaware corporation (as hereinafter defined, the "Corporation"),
and Dennis J. Ferra (as hereinafter defined, the "Executive").
WHEREAS, the Board of Directors of the Corporation (as hereinafter
defined, the "Board") recognizes that the possibility of a Change in Control (as
hereinafter defined) of the Corporation exists and that such possibility, and
the uncertainty it may cause, may result in the departure or distraction of key
management employees of the Corporation or of a Subsidiary to the detriment of
the Corporation and its stockholders; and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Board has determined that the Corporation should encourage
the continued employment of the Executive by the Corporation or a Subsidiary and
the continued dedication of the Executive to his assigned duties without
distraction as a result of the circumstances arising from the possibility of a
Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Board" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(B) "Cause" for termination by the Corporation of the
Executive's employment shall mean (i) the willful failure by the Executive
substantially to perform the Executive's duties with the Corporation or a
Subsidiary, other than any failure resulting from the Executive's incapacity due
to physical or mental illness or any actual or anticipated failure after the
issuance of a Notice of Termination for Good
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Reason by the Executive in accordance with paragraph (A) of Section 6, that
continues for at least 30 days after the Board delivers to the Executive a
written demand for performance that identifies specifically and in detail the
manner in which the Board believes that the Executive willfully has failed
substantially to perform the Executive's duties or (ii) the willful engaging by
the Executive in misconduct that is demonstrably and materially injurious to the
Corporation or any Subsidiary, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's act, or failure to act, was
in the best interest of the Corporation and its Subsidiaries:
(C) A "Change in Control" shall mean, if subsequent
to the date of this Agreement:
(i) Any "person," as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Corporation, any of its subsidiaries, or any
employee benefit plan maintained by the Corporation or any of its
subsidiaries, becomes the "beneficial owner" (as defined in Rule l3d-3
under the Exchange Act) of (A) l5% or more, but no greater than 50%, of
the outstanding voting capital stock of the Corporation, unless prior
thereto, the Continuing Directors approve the transaction that results
in the person becoming the beneficial owner of 15% or more, but no
greater than 50%, of the outstanding voting capital stock of the
Corporation or (B) more than 50% of the outstanding voting capital
stock of the Corporation, regardless whether the transaction or event
by which the foregoing 50% level is exceeded is approved by the
Continuing Directors;
(ii) At any time Continuing Directors no longer
constitute a majority of the directors of the Corporation; or
(iii) A record date is fixed for determining
stockholders entitled to vote upon (A) a merger or
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consolidation of the Corporation, statutory share exchange, or other
similar transaction with another corporation, partnership, or other
entity or enterprise in which either the Corporation is not the
surviving or continuing corporation or shares of common stock of the
Corporation are to be converted into or exchanged for cash, securities
other than common stock of the Corporation, or other property, (B) a
sale or disposition of all or substantially all of the assets of the
Corporation, or (C) the dissolution of the Corporation; or
(iv) The Corporation enters into an agreement with any
Person, the consummation of which would result in the occurrence of an
event described in clause (i), (ii) or (iii) above of this paragraph
(C).
(D) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(E) "Continuing Directors" means directors who were
directors of the Corporation at the beginning of the 24-month period
ending on the date the determination is made or whose election, or
nomination for election by the Corporation's stockholders, was approved
by at least a majority of the directors who are in office at the time
of the election or nomination and who either (i) were directors at the
beginning of the period, or (ii) were elected, or nominated for
election, by at least a majority of the directors who were in office at
the time of the election or nomination and were directors at the
beginning of the period.
(F) "Corporation" shall mean ALLTEL Corporation and
any successor to its business or assets, by operation of law or
otherwise.
(G) "Date of Termination" shall have the meaning
stated in paragraph (B) of Section 6 hereof.
(H) "Disability" shall be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been
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absent from the full-time performance of the Executive's duties with the
Corporation or a Subsidiary for a period of six consecutive months, the
Corporation shall have given the Executive a Notice of Termination for
Disability, and, within 20 business days after the Notice of Termination is
given, the Executive shall not have returned to the full-time performance of the
Executive's duties.
(I) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(J) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence, without the Executive's
express written consent, of any one of the following:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of the
Corporation or of a Subsidiary or a substantial adverse alteration in
the nature or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(ii) a reduction by the Corporation in the Executive's
annual base salary to any amount less than the Executive's annual base
salary as in effect immediately prior to the Change in Control;
(iii) the relocation of the principal executive
offices of the Corporation or of a Subsidiary, as the case may be, to a
location more than 35 miles from the location of such offices
immediately prior to the Change in Control or the Corporation's
requiring the Executive to be based anywhere other than the principal
executive offices of the Corporation or of a Subsidiary as the case may
be, except for required business travel to an extent substantially
consistent with the Executive's business travel obligations immediately
prior to the Change in Control;
(iv) the failure by the Corporation to pay to the
Executive any portion of the Executive's current compensation, or to
pay to the Executive any deferred
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compensation under any deferred compensation program of the
Corporation, within five days after the date the compensation is due or
to pay or reimburse the Executive for any expenses incurred by him for
required business travel;
(v) the failure by the Corporation to continue in
effect any compensation plan in which the Executive participates
immediately prior to the Change in Control that is material to the
Executive's total compensation, including but not limited to, stock
option, restricted stock, stock appreciation right, incentive
compensation, bonus, and other plans, unless an equitable alternative
arrangement embodied in an ongoing substitute or alternative plan has
been made, or the failure by the Corporation to continue the
Executive's participation therein (or in a substitute or alternative
plan) on a basis not materially less favorable, both in terms of the
amount of compensation provided and the level of the Executive's
participation relative to other participants, than existed immediately
prior to the Change in Control;
(vi) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Corporation's pension,
profit-sharing, life insurance, medical, health and accident,
disability, or other employee benefit plans in which the Executive was
participating immediately prior to the Change in Control; the failure
by the Corporation to continue to provide the Executive any material
fringe benefit or perquisite enjoyed by the Executive immediately prior
to the Change in Control; or the failure by the Corporation to provide
the Executive with the number of paid vacation days to which the
Executive is entitled in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in Control;
or
(vii) any purported termination by the Corporation of
the Executive's employment that is not effected in accordance with a
Notice of Termination
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satisfying the requirements of paragraph (A) of Section 6 hereof.
(K) "Notice of Termination" shall have the meaning
stated in paragraph (A) of Section 6 hereof.
(L) "Payment Trigger" shall mean the occurrence of a
Change in Control during the term of this Agreement coincident with or followed
(i) at any time before the end of the 12th month immediately following the month
in which the Change in Control occurred, by the termination of the Executive's
employment with the Corporation or a Subsidiary for any reason other than (A) by
the Executive without Good Reason, (B) by the Corporation as a result of the
Disability of the Executive or with Cause or, (C) as a result of the death of
the Executive or (ii) in the event the Executive remains continuously employed
by the Corporation or a Subsidiary until the end of the 12th month immediately
following the month in which the Change in Control occurred, the termination of
the Executive's employment with the Corporation or a Subsidiary, at any time
during the three month period immediately following the expiration of such
12-month period, for any reason other than (A) by the Corporation as a result of
the Disability of the Executive or (B) as a result of the death of the
Executive.
(M) "Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as
modified and used in Sections 13(d) and 14(d) thereof; except that, a Person
shall not include (i) the Corporation or any Subsidiary, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation
or any Subsidiary, or (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(N) "Subsidiary" shall mean any corporation or other
entity or enterprise, whether incorporated or unincorporated, of which at least
a majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others serving
similar functions with respect to such corporation or other entity or enterprise
is owned by the Corporation or other
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entity or enterprise of which the Corporation directly or indirectly owns
securities or other interests having all the voting power.
2. Term of Agreement. This Agreement shall become
effective on the date hereof and, subject to the second sentence of this Section
2, shall continue in effect until the earliest of (i) a Date of Termination in
accordance with Section 6 or the death of the Executive shall have occurred
prior to a Change in Control, (ii) if a Payment Trigger shall have occurred
during the term of this Agreement, the performance by the Corporation of all its
obligations, and the satisfaction by the Corporation of all its obligations and
liabilities, under this Agreement, (iii) the ten year anniversary of the date of
this Agreement if, as of that ten year anniversary, a Change in Control shall
not have occurred and be continuing, or (iv) in the event, as of the ten year
anniversary of the date of this Agreement, a Change in Control shall have
occurred and be continuing, either the expiration of such period thereafter
within which a Payment Trigger does not or can not occur or the ensuing
occurrence of a Payment Trigger and the performance by the Corporation of all of
its obligations and liabilities under this Agreement. Any Change in Control
during the term of this Agreement that for any reason ceases to constitute a
Change in Control or is not followed by a Payment Trigger shall not effect a
termination or lapse of this Agreement. Any transfer of the Executive's
employment from the Corporation to a Subsidiary, from a Subsidiary to the
Corporation, or from one Subsidiary to another Subsidiary shall not constitute a
termination of the Executive's employment for purposes of this Agreement.
3. General Provisions.
(A) The Corporation hereby represents and warrants to
the Executive as follows: The execution and delivery of this Agreement and the
performance by the Corporation of the actions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Corporation.
This Agreement is a legal, valid and legally binding obligation of the
Corporation enforceable in accordance with its terms. Neither the execution or
delivery of this
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Agreement nor the consummation by the Corporation of the actions contemplated
hereby (i) will violate any provision of the certificate of incorporation or
bylaws (or other charter documents) of the Corporation, (ii) will violate or be
in conflict with any applicable law or any judgment, decree, injunction or order
of any court or governmental agency or authority, or (iii) will violate or
conflict with or constitute a default (or an event of which, with notice or
lapse of time or both, would constitute a default) under or will result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or properties of the Corporation under, any term or provision of the
certificate of incorporation or bylaws (or other charter documents) of the
Corporation or of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Corporation is a
party or by which the Corporation or any of its properties or assets may be
bound or affected.
(B) No amount or benefit shall be payable under this
Agreement unless there shall have occurred a Payment Trigger during the term of
this Agreement. In no event shall payments in accordance with this Agreement be
made in respect of more than one Payment Trigger.
(C) This Agreement shall not be construed as creating
an express or implied contract of employment and, except as otherwise agreed in
writing between the Executive and the Corporation, the Executive shall not have
any right to be retained in the employ of the Corporation or of a Subsidiary.
Notwithstanding the immediately preceding sentence or any other provision of
this Agreement, no purported termination of the Executive's employment that is
not effected in accordance with a Notice of Termination satisfying paragraph (A)
of Section 6 shall be effective for purposes of this Agreement. The Executive's
right, following the occurrence of a Change in Control, to terminate his
employment under this Agreement for Good Reason shall not be affected by the
Executive's Disability or incapacity. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason under this Agreement.
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4. Payments Due Upon a Payment Trigger.
(A) The Corporation shall pay to the Executive the
payments described in this Section 4 upon the occurrence of a Payment Trigger
during the term of this Agreement.
(B) Upon the occurrence of a Payment Trigger during
the term of this Agreement, the Corporation shall pay to the Executive a lump
sum payment, in cash, equal to the product of:
(i) three multiplied by
(ii) the sum of --
(a) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the Change in
Control or the Executive's annual base salary in effect
immediately prior to the Payment Trigger, plus
(b) the higher of the aggregate maximum amounts
payable to the Executive pursuant to all incentive
compensation plans for the fiscal year or other measuring
period commencing coincident with or most recently prior to
the date on which the Change in Control occurs or the
aggregate maximum amounts payable to the Executive pursuant to
all incentive compensation plans for the fiscal year or other
measuring period commencing coincident with or most recently
prior to the date on which the Payment Trigger occurs, in each
case, assuming that the Executive were continuously employed
by the Corporation or a Subsidiary on the terms and
conditions, including, without limitation, the terms of the
incentive plans, in effect immediately prior to the Change in
Control or Payment Trigger, whichever applies, until the last
day of that fiscal year or other measuring period.
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The amount determined under the foregoing provisions of this paragraph (B) shall
be reduced by any cash severance benefit otherwise paid to the Executive under
any applicable severance plan or other severance arrangement. For purposes of
this paragraph (B), amounts payable to the Executive pursuant to an incentive
compensation plan for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which the Change of
Control or Payment Trigger, as applicable, occurs (the "applicable year/period")
shall not include amounts attributable to a fiscal year or other measuring
period that commenced prior to the applicable year/period and that become
payable during the applicable year/period. For purposes of this paragraph (B),
incentive compensation plans shall include, without limitation, the ALLTEL
Corporation Performance Incentive Compensation Plan as in effect from time to
time, the ALLTEL Corporation Long-Term Performance Incentive Compensation Plan
as in effect from time to time, and any incentive bonus plan or arrangement that
provides for payment of cash compensation, and shall exclude, without
limitation, the ALLTEL Corporation Executive Deferred Compensation Plan as in
effect from time to time, any plan qualified or intended to be qualified under
Section 401(a) of the Code and any plan supplementary thereto, executive fringe
benefits, and any plan or arrangement under which stock, stock options, stock
appreciation rights, restricted stock or similar options, stock, or rights are
issued.
(C) Notwithstanding any provision of any incentive
compensation plan, including, without limitation, any provision of any incentive
plan requiring continued employment after the completed fiscal year or other
measuring period, the Corporation shall pay to the Executive a lump sum amount,
in cash, equal to the amount of any incentive compensation that has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the occurrence of a Payment Trigger under any
incentive compensation plan but has not yet been paid to the Executive.
(D) The payments provided for in paragraphs (B) and
(C) of this Section 4 shall be made not later than the fifth day following the
occurrence of a Payment Trigger, unless the amounts of such payments cannot be
finally determined on or
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before that day, in which case, the Corporation shall pay to the Executive on
that day an estimate, as reasonably determined in good faith by the Corporation,
of the minimum amount of the payments to which the Executive is clearly entitled
and shall pay the remainder of the payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the occurrence
of a Payment Trigger. In the event the amount of the estimated payments exceeds
the amount subsequently determined to have been due, the excess shall constitute
a loan by the Corporation to the Executive, payable on the fifth business day
after demand by the Corporation (together with interest at the rate provided in
Section l274(b)(2)(B) of the Code). At the time that payments are made under
this Section 4, the Corporation shall provide the Executive with a written
statement setting forth the manner in which the payments were calculated and the
basis for the calculations including, without limitation, any opinions or other
advice the Corporation has received from outside counsel, auditors or
consultants (and any opinions or advice that are in writing shall be attached to
the statement).
5. Gross-Up Payments.
(A) This Section 5 shall apply if a Payment Trigger
shall have occurred during the term of this Agreement.
(B) In the event it shall be determined that any
payment or distribution by the Corporation or other amount with respect to the
Corporation to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5 (a "Payment"), is (or will be) subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are (or will
be) incurred by the Executive with respect to the excise tax imposed by Section
4999 of the Code with respect to the Corporation (the excise tax, together with
any interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Executive shall be entitled to receive an additional cash
payment (a "Gross-Up Payment") from the Corporation in an
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amount equal to the sum of the Excise Tax and an amount sufficient to pay the
cumulative Excise Tax and all cumulative income taxes (including any interest
and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by the Executive is equal to all
payments received pursuant to the terms of this Agreement or otherwise less
income taxes (but not reduced by the Excise Tax).
(C) Subject to the provisions of paragraph (D) of
this Section 5, all determinations required to be made under this Section 5,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Corporation and the
Executive within 30 days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the
Corporation. In the event that at any time relevant to this Agreement the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group or Person effecting the Change in Control, the Executive shall appoint
another nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Corporation. Any Gross-Up Payment, as
determined in accordance with this Section 5, shall be paid by the Corporation
to the Executive within five days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall so indicate to the Executive in writing. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive. As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Corporation should have made will not
have been made (an "Underpayment"), consistent with the calculations required to
be made hereunder. In the event the Corporation exhausts its remedies in
accordance with
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paragraph (D) of this Section 5 and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
Underpayment that has occurred and the Underpayment shall be promptly paid by
the Corporation to or for the benefit of the Executive.
(D) The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment (that has not already been paid by the Corporation).
The notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of the claim and shall
apprise the Corporation of the nature of the claim and the date on which the
claim is requested to be paid. The Executive shall not pay the claim prior to
the expiration of the 30-day period following the date on which the Executive
gives notice to the Corporation or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Corporation
notifies the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting
the claim as the Corporation shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to the claim by an attorney reasonably
selected by the Corporation;
(iii) cooperate with the Corporation in good faith in
order effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the
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Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
the representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 5, the Corporation shall control all
proceedings taken in connection with the contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings, and
conferences with the taxing authority in respect of the claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute the contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine. If the Corporation directs the Executive to pay the
claim and sue for a refund, the Corporation shall advance the amount of the
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to the advance or with respect to any imputed income with respect to the
advance; and any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which the contested
amount is claimed to be due shall be limited solely to the contested amount. The
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(E) If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this Section 5,
the Executive becomes entitled to receive any refund with respect to the claim,
the Executive shall, subject to the Corporation's compliance with the
requirements of paragraph (D) of this Section 5, promptly pay to the Corporation
the amount of the refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this
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Section 5, a determination is made that the Executive shall not be entitled to
any refund with respect to the claim and the Corporation does not notify the
Executive in writing of its intent to contest the denial of refund prior to the
expiration of 30 days after the determination, then the advance shall be
forgiven and shall not be required to be repaid and the amount of the advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6. Termination Procedures.
(A) During the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice that indicates
the specific termination provision in this Agreement relied upon, and, if
applicable, the notice shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board that was called and held for the purpose of considering the
termination finding that, in the informed, reasonable, good faith judgment of
the Board, the Executive was guilty of conduct set forth in the definition of
Cause in Section 1(B), and specifying the particulars thereof in detail.
(B) "Date of Termination" with respect to any
purported termination of the Executive's employment during the term of this
Agreement (other than by reason of death) shall mean (i) if the Executive's
employment is terminated for Disability, 20 business days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during that 20 business day
period) and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination, which, in the case of a
termination by the Corporation, shall not be less than ten business days
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except in the case of a termination for Cause, and, in the case of a termination
by the Executive, shall not be less than ten business days nor more than 20
business days, respectively, after the date such Notice of Termination is given.
7. No Mitigation. The Executive shall not be required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Corporation pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Corporation or a Subsidiary, or
otherwise.
8. Disputes.
(A) If a dispute or controversy arises out of or in
connection with this Agreement, the parties shall first attempt in good faith to
settle the dispute or controversy by mediation under the Commercial Mediation
Rules of the American Arbitration Association before resorting to arbitration or
litigation. Thereafter, any remaining unresolved dispute or controversy arising
out of or in connection with this Agreement shall, upon a written notice from
the Executive to the Corporation either before suit thereupon is filed or within
20 business days thereafter, be settled exclusively by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association in
a city located within the continental United States designated by the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Executive shall, however, be entitled to seek specific
performance of the Corporation's obligations hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other
than a mediation or an arbitration described in paragraph (A) of this Section 8,
whether instituted by the Corporation or the Executive, shall be brought and
resolved only in a state court of competent jurisdiction located in the
territory that encompasses the city, county, or parish in which
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the Executive's principal residence is located at the time such action is
commenced. The Corporation hereby irrevocably consents and submits to and shall
take any action necessary to subject itself to the personal jurisdiction of that
court and hereby irrevocably agrees that all claims in respect of the action
shall be instituted, heard, and determined in that court. The Corporation agrees
that such court is a convenient forum, and hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of the action. Any final judgment in the action may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.
(C) The Corporation shall pay all costs and expenses,
including attorneys' fees and disbursements, of the Corporation and, at least
monthly, the Executive in connection with any legal proceeding (including
arbitration), whether or not instituted by the Corporation or the Executive,
relating to the interpretation or enforcement of any provision of this
Agreement, provided that if the Executive instituted the proceeding and the
judge, arbitrator, or other individual presiding over the proceeding
affirmatively finds that the Executive instituted the proceeding in bad faith,
the Executive shall pay all costs and expenses, including attorney's fees and
disbursements, of Executive and the Corporation. The Corporation shall pay
prejudgment interest on any money judgment obtained by Executive as a result of
such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the
Code.
9. Successors; Binding Agreement.
(A) In addition to any obligations imposed by law
upon any successor to the Corporation, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the
Corporation expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
the assumption and agreement prior to the effectiveness of any succession shall
be
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a breach of this Agreement and shall entitle the Executive to compensation from
the Corporation in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate his employment for
Good Reason immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the date on
which any succession becomes effective shall be deemed the Payment Trigger
occasioned by the foregoing deemed termination of employment for Good Reason
immediately following a Change in Control. The provisions of this Section 9
shall continue to apply to each subsequent employer of Executive bound by this
Agreement in the event of any merger, consolidation, or transfer of all or
substantially all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive shall die while any amount would be payable to the Executive hereunder
(other than amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, the amount, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives, or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
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To the Corporation:
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
Attention: Chairman of the Board
To the Executive:
Dennis J. Ferra
16 Portland
Little Rock, Arkansas 72202
11. Miscellaneous. No provision of this Agreement may
be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing and signed by the Executive and an officer of
the Corporation specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state, or local law and any additional withholding to which the
Executive has agreed.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed
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to be an original but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Francis X. Frantz By /s/ Joe T. Ford
Name: Francis X. Frantz Name: Joe T. Ford
Title: Secretary Title: Chairman & CEO
Witness:
/s/ John L. Comparin /s/ Dennis J. Ferra
Dennis J. Ferra
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EXHIBIT (10)(c)(4)
AGREEMENT
This Agreement, dated October 24, 1994, is made by and between ALLTEL
Corporation, a Delaware corporation (as hereinafter defined, the "Corporation"),
and Francis X. Frantz (as hereinafter defined, the "Executive").
WHEREAS, the Board of Directors of the Corporation (as hereinafter
defined, the "Board") recognizes that the possibility of a Change in Control (as
hereinafter defined) of the Corporation exists and that such possibility, and
the uncertainty it may cause, may result in the departure or distraction of key
management employees of the Corporation or of a Subsidiary to the detriment of
the Corporation and its stockholders; and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Board has determined that the Corporation should encourage
the continued employment of the Executive by the Corporation or a Subsidiary and
the continued dedication of the Executive to his assigned duties without
distraction as a result of the circumstances arising from the possibility of a
Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Board" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(B) "Cause" for termination by the Corporation of the
Executive's employment shall mean (i) the willful failure by the Executive
substantially to perform the Executive's duties with the Corporation or a
Subsidiary, other than any failure resulting from the Executive's incapacity due
to physical or mental illness or any actual or anticipated failure after the
issuance of a Notice of Termination for Good
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Reason by the Executive in accordance with paragraph (A) of Section 6, that
continues for at least 30 days after the Board delivers to the Executive a
written demand for performance that identifies specifically and in detail the
manner in which the Board believes that the Executive willfully has failed
substantially to perform the Executive's duties or (ii) the willful engaging by
the Executive in misconduct that is demonstrably and materially injurious to the
Corporation or any Subsidiary, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's act, or failure to act, was
in the best interest of the Corporation and its Subsidiaries:
(C) A "Change in Control" shall mean, if subsequent
to the date of this Agreement:
(i) Any "person," as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Corporation, any of its subsidiaries, or any
employee benefit plan maintained by the Corporation or any of its
subsidiaries, becomes the "beneficial owner" (as defined in Rule l3d-3
under the Exchange Act) of (A) l5% or more, but no greater than 50%, of
the outstanding voting capital stock of the Corporation, unless prior
thereto, the Continuing Directors approve the transaction that results
in the person becoming the beneficial owner of 15% or more, but no
greater than 50%, of the outstanding voting capital stock of the
Corporation or (B) more than 50% of the outstanding voting capital
stock of the Corporation, regardless whether the transaction or event
by which the foregoing 50% level is exceeded is approved by the
Continuing Directors;
(ii) At any time Continuing Directors no longer
constitute a majority of the directors of the Corporation; or
(iii) A record date is fixed for determining
stockholders entitled to vote upon (A) a merger or
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consolidation of the Corporation, statutory share exchange, or other
similar transaction with another corporation, partnership, or other
entity or enterprise in which either the Corporation is not the
surviving or continuing corporation or shares of common stock of the
Corporation are to be converted into or exchanged for cash, securities
other than common stock of the Corporation, or other property, (B) a
sale or disposition of all or substantially all of the assets of the
Corporation, or (C) the dissolution of the Corporation; or
(iv) The Corporation enters into an agreement with any
Person, the consummation of which would result in the occurrence of an
event described in clause (i), (ii) or (iii) above of this paragraph
(C).
(D) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(E) "Continuing Directors" means directors who were
directors of the Corporation at the beginning of the 24-month period
ending on the date the determination is made or whose election, or
nomination for election by the Corporation's stockholders, was approved
by at least a majority of the directors who are in office at the time
of the election or nomination and who either (i) were directors at the
beginning of the period, or (ii) were elected, or nominated for
election, by at least a majority of the directors who were in office at
the time of the election or nomination and were directors at the
beginning of the period.
(F) "Corporation" shall mean ALLTEL Corporation and
any successor to its business or assets, by operation of law or
otherwise.
(G) "Date of Termination" shall have the meaning
stated in paragraph (B) of Section 6 hereof.
(H) "Disability" shall be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been
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absent from the full-time performance of the Executive's duties with the
Corporation or a Subsidiary for a period of six consecutive months, the
Corporation shall have given the Executive a Notice of Termination for
Disability, and, within 20 business days after the Notice of Termination is
given, the Executive shall not have returned to the full-time performance of the
Executive's duties.
(I) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(J) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence, without the Executive's
express written consent, of any one of the following:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of the
Corporation or of a Subsidiary or a substantial adverse alteration in
the nature or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(ii) a reduction by the Corporation in the Executive's
annual base salary to any amount less than the Executive's annual base
salary as in effect immediately prior to the Change in Control;
(iii) the relocation of the principal executive
offices of the Corporation or of a Subsidiary, as the case may be, to a
location more than 35 miles from the location of such offices
immediately prior to the Change in Control or the Corporation's
requiring the Executive to be based anywhere other than the principal
executive offices of the Corporation or of a Subsidiary as the case may
be, except for required business travel to an extent substantially
consistent with the Executive's business travel obligations immediately
prior to the Change in Control;
(iv) the failure by the Corporation to pay to the
Executive any portion of the Executive's current compensation, or to
pay to the Executive any deferred
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compensation under any deferred compensation program of the
Corporation, within five days after the date the compensation is due or
to pay or reimburse the Executive for any expenses incurred by him for
required business travel;
(v) the failure by the Corporation to continue in
effect any compensation plan in which the Executive participates
immediately prior to the Change in Control that is material to the
Executive's total compensation, including but not limited to, stock
option, restricted stock, stock appreciation right, incentive
compensation, bonus, and other plans, unless an equitable alternative
arrangement embodied in an ongoing substitute or alternative plan has
been made, or the failure by the Corporation to continue the
Executive's participation therein (or in a substitute or alternative
plan) on a basis not materially less favorable, both in terms of the
amount of compensation provided and the level of the Executive's
participation relative to other participants, than existed immediately
prior to the Change in Control;
(vi) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Corporation's pension,
profit-sharing, life insurance, medical, health and accident,
disability, or other employee benefit plans in which the Executive was
participating immediately prior to the Change in Control; the failure
by the Corporation to continue to provide the Executive any material
fringe benefit or perquisite enjoyed by the Executive immediately prior
to the Change in Control; or the failure by the Corporation to provide
the Executive with the number of paid vacation days to which the
Executive is entitled in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in Control;
or
(vii) any purported termination by the Corporation of
the Executive's employment that is not effected in accordance with a
Notice of Termination
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satisfying the requirements of paragraph (A) of Section 6 hereof.
(K) "Notice of Termination" shall have the meaning
stated in paragraph (A) of Section 6 hereof.
(L) "Payment Trigger" shall mean the occurrence of a
Change in Control during the term of this Agreement coincident with or followed
(i) at any time before the end of the 12th month immediately following the month
in which the Change in Control occurred, by the termination of the Executive's
employment with the Corporation or a Subsidiary for any reason other than (A) by
the Executive without Good Reason, (B) by the Corporation as a result of the
Disability of the Executive or with Cause or, (C) as a result of the death of
the Executive or (ii) in the event the Executive remains continuously employed
by the Corporation or a Subsidiary until the end of the 12th month immediately
following the month in which the Change in Control occurred, the termination of
the Executive's employment with the Corporation or a Subsidiary, at any time
during the three month period immediately following the expiration of such
12-month period, for any reason other than (A) by the Corporation as a result of
the Disability of the Executive or (B) as a result of the death of the
Executive.
(M) "Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as
modified and used in Sections 13(d) and 14(d) thereof; except that, a Person
shall not include (i) the Corporation or any Subsidiary, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation
or any Subsidiary, or (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(N) "Subsidiary" shall mean any corporation or other
entity or enterprise, whether incorporated or unincorporated, of which at least
a majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others serving
similar functions with respect to such corporation or other entity or enterprise
is owned by the Corporation or other
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entity or enterprise of which the Corporation directly or indirectly owns
securities or other interests having all the voting power.
2. Term of Agreement. This Agreement shall become
effective on the date hereof and, subject to the second sentence of this Section
2, shall continue in effect until the earliest of (i) a Date of Termination in
accordance with Section 6 or the death of the Executive shall have occurred
prior to a Change in Control, (ii) if a Payment Trigger shall have occurred
during the term of this Agreement, the performance by the Corporation of all its
obligations, and the satisfaction by the Corporation of all its obligations and
liabilities, under this Agreement, (iii) the ten year anniversary of the date of
this Agreement if, as of that ten year anniversary, a Change in Control shall
not have occurred and be continuing, or (iv) in the event, as of the ten year
anniversary of the date of this Agreement, a Change in Control shall have
occurred and be continuing, either the expiration of such period thereafter
within which a Payment Trigger does not or can not occur or the ensuing
occurrence of a Payment Trigger and the performance by the Corporation of all of
its obligations and liabilities under this Agreement. Any Change in Control
during the term of this Agreement that for any reason ceases to constitute a
Change in Control or is not followed by a Payment Trigger shall not effect a
termination or lapse of this Agreement. Any transfer of the Executive's
employment from the Corporation to a Subsidiary, from a Subsidiary to the
Corporation, or from one Subsidiary to another Subsidiary shall not constitute a
termination of the Executive's employment for purposes of this Agreement.
3. General Provisions.
(A) The Corporation hereby represents and warrants to
the Executive as follows: The execution and delivery of this Agreement and the
performance by the Corporation of the actions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Corporation.
This Agreement is a legal, valid and legally binding obligation of the
Corporation enforceable in accordance with its terms. Neither the execution or
delivery of this
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Agreement nor the consummation by the Corporation of the actions contemplated
hereby (i) will violate any provision of the certificate of incorporation or
bylaws (or other charter documents) of the Corporation, (ii) will violate or be
in conflict with any applicable law or any judgment, decree, injunction or order
of any court or governmental agency or authority, or (iii) will violate or
conflict with or constitute a default (or an event of which, with notice or
lapse of time or both, would constitute a default) under or will result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or properties of the Corporation under, any term or provision of the
certificate of incorporation or bylaws (or other charter documents) of the
Corporation or of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Corporation is a
party or by which the Corporation or any of its properties or assets may be
bound or affected.
(B) No amount or benefit shall be payable under this
Agreement unless there shall have occurred a Payment Trigger during the term of
this Agreement. In no event shall payments in accordance with this Agreement be
made in respect of more than one Payment Trigger.
(C) This Agreement shall not be construed as creating
an express or implied contract of employment and, except as otherwise agreed in
writing between the Executive and the Corporation, the Executive shall not have
any right to be retained in the employ of the Corporation or of a Subsidiary.
Notwithstanding the immediately preceding sentence or any other provision of
this Agreement, no purported termination of the Executive's employment that is
not effected in accordance with a Notice of Termination satisfying paragraph (A)
of Section 6 shall be effective for purposes of this Agreement. The Executive's
right, following the occurrence of a Change in Control, to terminate his
employment under this Agreement for Good Reason shall not be affected by the
Executive's Disability or incapacity. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason under this Agreement.
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4. Payments Due Upon a Payment Trigger.
(A) The Corporation shall pay to the Executive the
payments described in this Section 4 upon the occurrence of a Payment Trigger
during the term of this Agreement.
(B) Upon the occurrence of a Payment Trigger during
the term of this Agreement, the Corporation shall pay to the Executive a lump
sum payment, in cash, equal to the product of:
(i) three multiplied by
(ii) the sum of --
(a) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the Change in
Control or the Executive's annual base salary in effect
immediately prior to the Payment Trigger, plus
(b) the higher of the aggregate maximum amounts
payable to the Executive pursuant to all incentive
compensation plans for the fiscal year or other measuring
period commencing coincident with or most recently prior to
the date on which the Change in Control occurs or the
aggregate maximum amounts payable to the Executive pursuant to
all incentive compensation plans for the fiscal year or other
measuring period commencing coincident with or most recently
prior to the date on which the Payment Trigger occurs, in each
case, assuming that the Executive were continuously employed
by the Corporation or a Subsidiary on the terms and
conditions, including, without limitation, the terms of the
incentive plans, in effect immediately prior to the Change in
Control or Payment Trigger, whichever applies, until the last
day of that fiscal year or other measuring period.
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The amount determined under the foregoing provisions of this paragraph (B) shall
be reduced by any cash severance benefit otherwise paid to the Executive under
any applicable severance plan or other severance arrangement. For purposes of
this paragraph (B), amounts payable to the Executive pursuant to an incentive
compensation plan for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which the Change of
Control or Payment Trigger, as applicable, occurs (the "applicable year/period")
shall not include amounts attributable to a fiscal year or other measuring
period that commenced prior to the applicable year/period and that become
payable during the applicable year/period. For purposes of this paragraph (B),
incentive compensation plans shall include, without limitation, the ALLTEL
Corporation Performance Incentive Compensation Plan as in effect from time to
time, the ALLTEL Corporation Long-Term Performance Incentive Compensation Plan
as in effect from time to time, and any incentive bonus plan or arrangement that
provides for payment of cash compensation, and shall exclude, without
limitation, the ALLTEL Corporation Executive Deferred Compensation Plan as in
effect from time to time, any plan qualified or intended to be qualified under
Section 401(a) of the Code and any plan supplementary thereto, executive fringe
benefits, and any plan or arrangement under which stock, stock options, stock
appreciation rights, restricted stock or similar options, stock, or rights are
issued.
(C) Notwithstanding any provision of any incentive
compensation plan, including, without limitation, any provision of any incentive
plan requiring continued employment after the completed fiscal year or other
measuring period, the Corporation shall pay to the Executive a lump sum amount,
in cash, equal to the amount of any incentive compensation that has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the occurrence of a Payment Trigger under any
incentive compensation plan but has not yet been paid to the Executive.
(D) The payments provided for in paragraphs (B) and
(C) of this Section 4 shall be made not later than the fifth day following the
occurrence of a Payment Trigger, unless the amounts of such payments cannot be
finally determined on or
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before that day, in which case, the Corporation shall pay to the Executive on
that day an estimate, as reasonably determined in good faith by the Corporation,
of the minimum amount of the payments to which the Executive is clearly entitled
and shall pay the remainder of the payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the occurrence
of a Payment Trigger. In the event the amount of the estimated payments exceeds
the amount subsequently determined to have been due, the excess shall constitute
a loan by the Corporation to the Executive, payable on the fifth business day
after demand by the Corporation (together with interest at the rate provided in
Section l274(b)(2)(B) of the Code). At the time that payments are made under
this Section 4, the Corporation shall provide the Executive with a written
statement setting forth the manner in which the payments were calculated and the
basis for the calculations including, without limitation, any opinions or other
advice the Corporation has received from outside counsel, auditors or
consultants (and any opinions or advice that are in writing shall be attached to
the statement).
5. Gross-Up Payments.
(A) This Section 5 shall apply if a Payment Trigger
shall have occurred during the term of this Agreement.
(B) In the event it shall be determined that any
payment or distribution by the Corporation or other amount with respect to the
Corporation to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5 (a "Payment"), is (or will be) subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are (or will
be) incurred by the Executive with respect to the excise tax imposed by Section
4999 of the Code with respect to the Corporation (the excise tax, together with
any interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Executive shall be entitled to receive an additional cash
payment (a "Gross-Up Payment") from the Corporation in an
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amount equal to the sum of the Excise Tax and an amount sufficient to pay the
cumulative Excise Tax and all cumulative income taxes (including any interest
and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by the Executive is equal to all
payments received pursuant to the terms of this Agreement or otherwise less
income taxes (but not reduced by the Excise Tax).
(C) Subject to the provisions of paragraph (D) of
this Section 5, all determinations required to be made under this Section 5,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Corporation and the
Executive within 30 days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the
Corporation. In the event that at any time relevant to this Agreement the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group or Person effecting the Change in Control, the Executive shall appoint
another nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Corporation. Any Gross-Up Payment, as
determined in accordance with this Section 5, shall be paid by the Corporation
to the Executive within five days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall so indicate to the Executive in writing. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive. As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Corporation should have made will not
have been made (an "Underpayment"), consistent with the calculations required to
be made hereunder. In the event the Corporation exhausts its remedies in
accordance with
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paragraph (D) of this Section 5 and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
Underpayment that has occurred and the Underpayment shall be promptly paid by
the Corporation to or for the benefit of the Executive.
(D) The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment (that has not already been paid by the Corporation).
The notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of the claim and shall
apprise the Corporation of the nature of the claim and the date on which the
claim is requested to be paid. The Executive shall not pay the claim prior to
the expiration of the 30-day period following the date on which the Executive
gives notice to the Corporation or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Corporation
notifies the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting
the claim as the Corporation shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to the claim by an attorney reasonably
selected by the Corporation;
(iii) cooperate with the Corporation in good faith in
order effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the
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Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
the representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 5, the Corporation shall control all
proceedings taken in connection with the contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings, and
conferences with the taxing authority in respect of the claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute the contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine. If the Corporation directs the Executive to pay the
claim and sue for a refund, the Corporation shall advance the amount of the
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to the advance or with respect to any imputed income with respect to the
advance; and any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which the contested
amount is claimed to be due shall be limited solely to the contested amount. The
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(E) If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this Section 5,
the Executive becomes entitled to receive any refund with respect to the claim,
the Executive shall, subject to the Corporation's compliance with the
requirements of paragraph (D) of this Section 5, promptly pay to the Corporation
the amount of the refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this
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Section 5, a determination is made that the Executive shall not be entitled to
any refund with respect to the claim and the Corporation does not notify the
Executive in writing of its intent to contest the denial of refund prior to the
expiration of 30 days after the determination, then the advance shall be
forgiven and shall not be required to be repaid and the amount of the advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6. Termination Procedures.
(A) During the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice that indicates
the specific termination provision in this Agreement relied upon, and, if
applicable, the notice shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board that was called and held for the purpose of considering the
termination finding that, in the informed, reasonable, good faith judgment of
the Board, the Executive was guilty of conduct set forth in the definition of
Cause in Section 1(B), and specifying the particulars thereof in detail.
(B) "Date of Termination" with respect to any
purported termination of the Executive's employment during the term of this
Agreement (other than by reason of death) shall mean (i) if the Executive's
employment is terminated for Disability, 20 business days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during that 20 business day
period) and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination, which, in the case of a
termination by the Corporation, shall not be less than ten business days
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except in the case of a termination for Cause, and, in the case of a termination
by the Executive, shall not be less than ten business days nor more than 20
business days, respectively, after the date such Notice of Termination is given.
7. No Mitigation. The Executive shall not be required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Corporation pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Corporation or a Subsidiary, or
otherwise.
8. Disputes.
(A) If a dispute or controversy arises out of or in
connection with this Agreement, the parties shall first attempt in good faith to
settle the dispute or controversy by mediation under the Commercial Mediation
Rules of the American Arbitration Association before resorting to arbitration or
litigation. Thereafter, any remaining unresolved dispute or controversy arising
out of or in connection with this Agreement shall, upon a written notice from
the Executive to the Corporation either before suit thereupon is filed or within
20 business days thereafter, be settled exclusively by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association in
a city located within the continental United States designated by the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Executive shall, however, be entitled to seek specific
performance of the Corporation's obligations hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other
than a mediation or an arbitration described in paragraph (A) of this Section 8,
whether instituted by the Corporation or the Executive, shall be brought and
resolved only in a state court of competent jurisdiction located in the
territory that encompasses the city, county, or parish in which
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the Executive's principal residence is located at the time such action is
commenced. The Corporation hereby irrevocably consents and submits to and shall
take any action necessary to subject itself to the personal jurisdiction of that
court and hereby irrevocably agrees that all claims in respect of the action
shall be instituted, heard, and determined in that court. The Corporation agrees
that such court is a convenient forum, and hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of the action. Any final judgment in the action may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.
(C) The Corporation shall pay all costs and expenses,
including attorneys' fees and disbursements, of the Corporation and, at least
monthly, the Executive in connection with any legal proceeding (including
arbitration), whether or not instituted by the Corporation or the Executive,
relating to the interpretation or enforcement of any provision of this
Agreement, provided that if the Executive instituted the proceeding and the
judge, arbitrator, or other individual presiding over the proceeding
affirmatively finds that the Executive instituted the proceeding in bad faith,
the Executive shall pay all costs and expenses, including attorney's fees and
disbursements, of Executive and the Corporation. The Corporation shall pay
prejudgment interest on any money judgment obtained by Executive as a result of
such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the
Code.
9. Successors; Binding Agreement.
(A) In addition to any obligations imposed by law
upon any successor to the Corporation, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the
Corporation expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
the assumption and agreement prior to the effectiveness of any succession shall
be
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a breach of this Agreement and shall entitle the Executive to compensation from
the Corporation in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate his employment for
Good Reason immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the date on
which any succession becomes effective shall be deemed the Payment Trigger
occasioned by the foregoing deemed termination of employment for Good Reason
immediately following a Change in Control. The provisions of this Section 9
shall continue to apply to each subsequent employer of Executive bound by this
Agreement in the event of any merger, consolidation, or transfer of all or
substantially all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive shall die while any amount would be payable to the Executive hereunder
(other than amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, the amount, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives, or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
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To the Corporation:
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
Attention: Chairman of the Board
To the Executive:
Francis X. Frantz
12127 Fairway Drive
Little Rock, Arkansas 72212
11. Miscellaneous. No provision of this Agreement may
be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing and signed by the Executive and an officer of
the Corporation specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state, or local law and any additional withholding to which the
Executive has agreed.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed
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to be an original but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Francis X. Frantz By /s/ Joe T. Ford
Name: Francis X. Frantz Name: Joe T. Ford
Title: Secretary Title: Chairman & CEO
Witness:
/s/ John L. Comparin /s/ Francis X. Frantz
Francis X. Frantz
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EXHIBIT (10)(c)(5)
AGREEMENT
This Agreement, dated October 24, 1994, is made by and between ALLTEL
Corporation, a Delaware corporation (as hereinafter defined, the "Corporation"),
and Tom T. Orsini (as hereinafter defined, the "Executive").
WHEREAS, the Board of Directors of the Corporation (as hereinafter
defined, the "Board") recognizes that the possibility of a Change in Control (as
hereinafter defined) of the Corporation exists and that such possibility, and
the uncertainty it may cause, may result in the departure or distraction of key
management employees of the Corporation or of a Subsidiary to the detriment of
the Corporation and its stockholders; and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Board has determined that the Corporation should encourage
the continued employment of the Executive by the Corporation or a Subsidiary and
the continued dedication of the Executive to his assigned duties without
distraction as a result of the circumstances arising from the possibility of a
Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Board" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(B) "Cause" for termination by the Corporation of the
Executive's employment shall mean (i) the willful failure by the Executive
substantially to perform the Executive's duties with the Corporation or a
Subsidiary, other than any failure resulting from the Executive's incapacity due
to physical or mental illness or any actual or anticipated failure after the
issuance of a Notice of Termination for Good
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Reason by the Executive in accordance with paragraph (A) of Section 6, that
continues for at least 30 days after the Board delivers to the Executive a
written demand for performance that identifies specifically and in detail the
manner in which the Board believes that the Executive willfully has failed
substantially to perform the Executive's duties or (ii) the willful engaging by
the Executive in misconduct that is demonstrably and materially injurious to the
Corporation or any Subsidiary, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's act, or failure to act, was
in the best interest of the Corporation and its Subsidiaries:
(C) A "Change in Control" shall mean, if subsequent
to the date of this Agreement:
(i) Any "person," as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Corporation, any of its subsidiaries, or any
employee benefit plan maintained by the Corporation or any of its
subsidiaries, becomes the "beneficial owner" (as defined in Rule l3d-3
under the Exchange Act) of (A) l5% or more, but no greater than 50%, of
the outstanding voting capital stock of the Corporation, unless prior
thereto, the Continuing Directors approve the transaction that results
in the person becoming the beneficial owner of 15% or more, but no
greater than 50%, of the outstanding voting capital stock of the
Corporation or (B) more than 50% of the outstanding voting capital
stock of the Corporation, regardless whether the transaction or event
by which the foregoing 50% level is exceeded is approved by the
Continuing Directors;
(ii) At any time Continuing Directors no longer
constitute a majority of the directors of the Corporation; or
(iii) A record date is fixed for determining
stockholders entitled to vote upon (A) a merger or
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consolidation of the Corporation, statutory share exchange, or other
similar transaction with another corporation, partnership, or other
entity or enterprise in which either the Corporation is not the
surviving or continuing corporation or shares of common stock of the
Corporation are to be converted into or exchanged for cash, securities
other than common stock of the Corporation, or other property, (B) a
sale or disposition of all or substantially all of the assets of the
Corporation, or (C) the dissolution of the Corporation; or
(iv) The Corporation enters into an agreement with any
Person, the consummation of which would result in the occurrence of an
event described in clause (i), (ii) or (iii) above of this paragraph
(C).
(D) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(E) "Continuing Directors" means directors who were
directors of the Corporation at the beginning of the 24-month period
ending on the date the determination is made or whose election, or
nomination for election by the Corporation's stockholders, was approved
by at least a majority of the directors who are in office at the time
of the election or nomination and who either (i) were directors at the
beginning of the period, or (ii) were elected, or nominated for
election, by at least a majority of the directors who were in office at
the time of the election or nomination and were directors at the
beginning of the period.
(F) "Corporation" shall mean ALLTEL Corporation and
any successor to its business or assets, by operation of law or
otherwise.
(G) "Date of Termination" shall have the meaning
stated in paragraph (B) of Section 6 hereof.
(H) "Disability" shall be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been
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absent from the full-time performance of the Executive's duties with the
Corporation or a Subsidiary for a period of six consecutive months, the
Corporation shall have given the Executive a Notice of Termination for
Disability, and, within 20 business days after the Notice of Termination is
given, the Executive shall not have returned to the full-time performance of the
Executive's duties.
(I) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(J) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence, without the Executive's
express written consent, of any one of the following:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of the
Corporation or of a Subsidiary or a substantial adverse alteration in
the nature or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(ii) a reduction by the Corporation in the Executive's
annual base salary to any amount less than the Executive's annual base
salary as in effect immediately prior to the Change in Control;
(iii) the relocation of the principal executive
offices of the Corporation or of a Subsidiary, as the case may be, to a
location more than 35 miles from the location of such offices
immediately prior to the Change in Control or the Corporation's
requiring the Executive to be based anywhere other than the principal
executive offices of the Corporation or of a Subsidiary as the case may
be, except for required business travel to an extent substantially
consistent with the Executive's business travel obligations immediately
prior to the Change in Control;
(iv) the failure by the Corporation to pay to the
Executive any portion of the Executive's current compensation, or to
pay to the Executive any deferred
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compensation under any deferred compensation program of the
Corporation, within five days after the date the compensation is due or
to pay or reimburse the Executive for any expenses incurred by him for
required business travel;
(v) the failure by the Corporation to continue in
effect any compensation plan in which the Executive participates
immediately prior to the Change in Control that is material to the
Executive's total compensation, including but not limited to, stock
option, restricted stock, stock appreciation right, incentive
compensation, bonus, and other plans, unless an equitable alternative
arrangement embodied in an ongoing substitute or alternative plan has
been made, or the failure by the Corporation to continue the
Executive's participation therein (or in a substitute or alternative
plan) on a basis not materially less favorable, both in terms of the
amount of compensation provided and the level of the Executive's
participation relative to other participants, than existed immediately
prior to the Change in Control;
(vi) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Corporation's pension,
profit-sharing, life insurance, medical, health and accident,
disability, or other employee benefit plans in which the Executive was
participating immediately prior to the Change in Control; the failure
by the Corporation to continue to provide the Executive any material
fringe benefit or perquisite enjoyed by the Executive immediately prior
to the Change in Control; or the failure by the Corporation to provide
the Executive with the number of paid vacation days to which the
Executive is entitled in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in Control;
or
(vii) any purported termination by the Corporation of
the Executive's employment that is not effected in accordance with a
Notice of Termination
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satisfying the requirements of paragraph (A) of Section 6 hereof.
(K) "Notice of Termination" shall have the meaning
stated in paragraph (A) of Section 6 hereof.
(L) "Payment Trigger" shall mean the occurrence of a
Change in Control during the term of this Agreement coincident with or followed
(i) at any time before the end of the 12th month immediately following the month
in which the Change in Control occurred, by the termination of the Executive's
employment with the Corporation or a Subsidiary for any reason other than (A) by
the Executive without Good Reason, (B) by the Corporation as a result of the
Disability of the Executive or with Cause or, (C) as a result of the death of
the Executive or (ii) in the event the Executive remains continuously employed
by the Corporation or a Subsidiary until the end of the 12th month immediately
following the month in which the Change in Control occurred, the termination of
the Executive's employment with the Corporation or a Subsidiary, at any time
during the three month period immediately following the expiration of such
12-month period, for any reason other than (A) by the Corporation as a result of
the Disability of the Executive or (B) as a result of the death of the
Executive.
(M) "Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as
modified and used in Sections 13(d) and 14(d) thereof; except that, a Person
shall not include (i) the Corporation or any Subsidiary, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation
or any Subsidiary, or (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(N) "Subsidiary" shall mean any corporation or other
entity or enterprise, whether incorporated or unincorporated, of which at least
a majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others serving
similar functions with respect to such corporation or other entity or enterprise
is owned by the Corporation or other
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entity or enterprise of which the Corporation directly or indirectly owns
securities or other interests having all the voting power.
2. Term of Agreement. This Agreement shall become
effective on the date hereof and, subject to the second sentence of this Section
2, shall continue in effect until the earliest of (i) a Date of Termination in
accordance with Section 6 or the death of the Executive shall have occurred
prior to a Change in Control, (ii) if a Payment Trigger shall have occurred
during the term of this Agreement, the performance by the Corporation of all its
obligations, and the satisfaction by the Corporation of all its obligations and
liabilities, under this Agreement, (iii) the ten year anniversary of the date of
this Agreement if, as of that ten year anniversary, a Change in Control shall
not have occurred and be continuing, or (iv) in the event, as of the ten year
anniversary of the date of this Agreement, a Change in Control shall have
occurred and be continuing, either the expiration of such period thereafter
within which a Payment Trigger does not or can not occur or the ensuing
occurrence of a Payment Trigger and the performance by the Corporation of all of
its obligations and liabilities under this Agreement. Any Change in Control
during the term of this Agreement that for any reason ceases to constitute a
Change in Control or is not followed by a Payment Trigger shall not effect a
termination or lapse of this Agreement. Any transfer of the Executive's
employment from the Corporation to a Subsidiary, from a Subsidiary to the
Corporation, or from one Subsidiary to another Subsidiary shall not constitute a
termination of the Executive's employment for purposes of this Agreement.
3. General Provisions.
(A) The Corporation hereby represents and warrants to
the Executive as follows: The execution and delivery of this Agreement and the
performance by the Corporation of the actions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Corporation.
This Agreement is a legal, valid and legally binding obligation of the
Corporation enforceable in accordance with its terms. Neither the execution or
delivery of this
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Agreement nor the consummation by the Corporation of the actions contemplated
hereby (i) will violate any provision of the certificate of incorporation or
bylaws (or other charter documents) of the Corporation, (ii) will violate or be
in conflict with any applicable law or any judgment, decree, injunction or order
of any court or governmental agency or authority, or (iii) will violate or
conflict with or constitute a default (or an event of which, with notice or
lapse of time or both, would constitute a default) under or will result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or properties of the Corporation under, any term or provision of the
certificate of incorporation or bylaws (or other charter documents) of the
Corporation or of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Corporation is a
party or by which the Corporation or any of its properties or assets may be
bound or affected.
(B) No amount or benefit shall be payable under this
Agreement unless there shall have occurred a Payment Trigger during the term of
this Agreement. In no event shall payments in accordance with this Agreement be
made in respect of more than one Payment Trigger.
(C) This Agreement shall not be construed as creating
an express or implied contract of employment and, except as otherwise agreed in
writing between the Executive and the Corporation, the Executive shall not have
any right to be retained in the employ of the Corporation or of a Subsidiary.
Notwithstanding the immediately preceding sentence or any other provision of
this Agreement, no purported termination of the Executive's employment that is
not effected in accordance with a Notice of Termination satisfying paragraph (A)
of Section 6 shall be effective for purposes of this Agreement. The Executive's
right, following the occurrence of a Change in Control, to terminate his
employment under this Agreement for Good Reason shall not be affected by the
Executive's Disability or incapacity. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason under this Agreement.
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4. Payments Due Upon a Payment Trigger.
(A) The Corporation shall pay to the Executive the
payments described in this Section 4 upon the occurrence of a Payment Trigger
during the term of this Agreement.
(B) Upon the occurrence of a Payment Trigger during
the term of this Agreement, the Corporation shall pay to the Executive a lump
sum payment, in cash, equal to the product of:
(i) three multiplied by
(ii) the sum of --
(a) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the Change in
Control or the Executive's annual base salary in effect
immediately prior to the Payment Trigger, plus
(b) the higher of the aggregate maximum amounts
payable to the Executive pursuant to all incentive
compensation plans for the fiscal year or other measuring
period commencing coincident with or most recently prior to
the date on which the Change in Control occurs or the
aggregate maximum amounts payable to the Executive pursuant to
all incentive compensation plans for the fiscal year or other
measuring period commencing coincident with or most recently
prior to the date on which the Payment Trigger occurs, in each
case, assuming that the Executive were continuously employed
by the Corporation or a Subsidiary on the terms and
conditions, including, without limitation, the terms of the
incentive plans, in effect immediately prior to the Change in
Control or Payment Trigger, whichever applies, until the last
day of that fiscal year or other measuring period.
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The amount determined under the foregoing provisions of this paragraph (B) shall
be reduced by any cash severance benefit otherwise paid to the Executive under
any applicable severance plan or other severance arrangement. For purposes of
this paragraph (B), amounts payable to the Executive pursuant to an incentive
compensation plan for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which the Change of
Control or Payment Trigger, as applicable, occurs (the "applicable year/period")
shall not include amounts attributable to a fiscal year or other measuring
period that commenced prior to the applicable year/period and that become
payable during the applicable year/period. For purposes of this paragraph (B),
incentive compensation plans shall include, without limitation, the ALLTEL
Corporation Performance Incentive Compensation Plan as in effect from time to
time, the ALLTEL Corporation Long-Term Performance Incentive Compensation Plan
as in effect from time to time, and any incentive bonus plan or arrangement that
provides for payment of cash compensation, and shall exclude, without
limitation, the ALLTEL Corporation Executive Deferred Compensation Plan as in
effect from time to time, any plan qualified or intended to be qualified under
Section 401(a) of the Code and any plan supplementary thereto, executive fringe
benefits, and any plan or arrangement under which stock, stock options, stock
appreciation rights, restricted stock or similar options, stock, or rights are
issued.
(C) Notwithstanding any provision of any incentive
compensation plan, including, without limitation, any provision of any incentive
plan requiring continued employment after the completed fiscal year or other
measuring period, the Corporation shall pay to the Executive a lump sum amount,
in cash, equal to the amount of any incentive compensation that has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the occurrence of a Payment Trigger under any
incentive compensation plan but has not yet been paid to the Executive.
(D) The payments provided for in paragraphs (B) and
(C) of this Section 4 shall be made not later than the fifth day following the
occurrence of a Payment Trigger, unless the amounts of such payments cannot be
finally determined on or
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before that day, in which case, the Corporation shall pay to the Executive on
that day an estimate, as reasonably determined in good faith by the Corporation,
of the minimum amount of the payments to which the Executive is clearly entitled
and shall pay the remainder of the payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the occurrence
of a Payment Trigger. In the event the amount of the estimated payments exceeds
the amount subsequently determined to have been due, the excess shall constitute
a loan by the Corporation to the Executive, payable on the fifth business day
after demand by the Corporation (together with interest at the rate provided in
Section l274(b)(2)(B) of the Code). At the time that payments are made under
this Section 4, the Corporation shall provide the Executive with a written
statement setting forth the manner in which the payments were calculated and the
basis for the calculations including, without limitation, any opinions or other
advice the Corporation has received from outside counsel, auditors or
consultants (and any opinions or advice that are in writing shall be attached to
the statement).
5. Gross-Up Payments.
(A) This Section 5 shall apply if a Payment Trigger
shall have occurred during the term of this Agreement.
(B) In the event it shall be determined that any
payment or distribution by the Corporation or other amount with respect to the
Corporation to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5 (a "Payment"), is (or will be) subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are (or will
be) incurred by the Executive with respect to the excise tax imposed by Section
4999 of the Code with respect to the Corporation (the excise tax, together with
any interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Executive shall be entitled to receive an additional cash
payment (a "Gross-Up Payment") from the Corporation in an
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amount equal to the sum of the Excise Tax and an amount sufficient to pay the
cumulative Excise Tax and all cumulative income taxes (including any interest
and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by the Executive is equal to all
payments received pursuant to the terms of this Agreement or otherwise less
income taxes (but not reduced by the Excise Tax).
(C) Subject to the provisions of paragraph (D) of
this Section 5, all determinations required to be made under this Section 5,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Corporation and the
Executive within 30 days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the
Corporation. In the event that at any time relevant to this Agreement the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group or Person effecting the Change in Control, the Executive shall appoint
another nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Corporation. Any Gross-Up Payment, as
determined in accordance with this Section 5, shall be paid by the Corporation
to the Executive within five days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall so indicate to the Executive in writing. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive. As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Corporation should have made will not
have been made (an "Underpayment"), consistent with the calculations required to
be made hereunder. In the event the Corporation exhausts its remedies in
accordance with
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paragraph (D) of this Section 5 and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
Underpayment that has occurred and the Underpayment shall be promptly paid by
the Corporation to or for the benefit of the Executive.
(D) The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment (that has not already been paid by the Corporation).
The notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of the claim and shall
apprise the Corporation of the nature of the claim and the date on which the
claim is requested to be paid. The Executive shall not pay the claim prior to
the expiration of the 30-day period following the date on which the Executive
gives notice to the Corporation or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Corporation
notifies the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting
the claim as the Corporation shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to the claim by an attorney reasonably
selected by the Corporation;
(iii) cooperate with the Corporation in good faith in
order effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the
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Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
the representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 5, the Corporation shall control all
proceedings taken in connection with the contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings, and
conferences with the taxing authority in respect of the claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute the contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine. If the Corporation directs the Executive to pay the
claim and sue for a refund, the Corporation shall advance the amount of the
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to the advance or with respect to any imputed income with respect to the
advance; and any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which the contested
amount is claimed to be due shall be limited solely to the contested amount. The
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(E) If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this Section 5,
the Executive becomes entitled to receive any refund with respect to the claim,
the Executive shall, subject to the Corporation's compliance with the
requirements of paragraph (D) of this Section 5, promptly pay to the Corporation
the amount of the refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this
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Section 5, a determination is made that the Executive shall not be entitled to
any refund with respect to the claim and the Corporation does not notify the
Executive in writing of its intent to contest the denial of refund prior to the
expiration of 30 days after the determination, then the advance shall be
forgiven and shall not be required to be repaid and the amount of the advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6. Termination Procedures.
(A) During the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice that indicates
the specific termination provision in this Agreement relied upon, and, if
applicable, the notice shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board that was called and held for the purpose of considering the
termination finding that, in the informed, reasonable, good faith judgment of
the Board, the Executive was guilty of conduct set forth in the definition of
Cause in Section 1(B), and specifying the particulars thereof in detail.
(B) "Date of Termination" with respect to any
purported termination of the Executive's employment during the term of this
Agreement (other than by reason of death) shall mean (i) if the Executive's
employment is terminated for Disability, 20 business days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during that 20 business day
period) and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination, which, in the case of a
termination by the Corporation, shall not be less than ten business days
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except in the case of a termination for Cause, and, in the case of a termination
by the Executive, shall not be less than ten business days nor more than 20
business days, respectively, after the date such Notice of Termination is given.
7. No Mitigation. The Executive shall not be required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Corporation pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Corporation or a Subsidiary, or
otherwise.
8. Disputes.
(A) If a dispute or controversy arises out of or in
connection with this Agreement, the parties shall first attempt in good faith to
settle the dispute or controversy by mediation under the Commercial Mediation
Rules of the American Arbitration Association before resorting to arbitration or
litigation. Thereafter, any remaining unresolved dispute or controversy arising
out of or in connection with this Agreement shall, upon a written notice from
the Executive to the Corporation either before suit thereupon is filed or within
20 business days thereafter, be settled exclusively by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association in
a city located within the continental United States designated by the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Executive shall, however, be entitled to seek specific
performance of the Corporation's obligations hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other
than a mediation or an arbitration described in paragraph (A) of this Section 8,
whether instituted by the Corporation or the Executive, shall be brought and
resolved only in a state court of competent jurisdiction located in the
territory that encompasses the city, county, or parish in which
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the Executive's principal residence is located at the time such action is
commenced. The Corporation hereby irrevocably consents and submits to and shall
take any action necessary to subject itself to the personal jurisdiction of that
court and hereby irrevocably agrees that all claims in respect of the action
shall be instituted, heard, and determined in that court. The Corporation agrees
that such court is a convenient forum, and hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of the action. Any final judgment in the action may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.
(C) The Corporation shall pay all costs and expenses,
including attorneys' fees and disbursements, of the Corporation and, at least
monthly, the Executive in connection with any legal proceeding (including
arbitration), whether or not instituted by the Corporation or the Executive,
relating to the interpretation or enforcement of any provision of this
Agreement, provided that if the Executive instituted the proceeding and the
judge, arbitrator, or other individual presiding over the proceeding
affirmatively finds that the Executive instituted the proceeding in bad faith,
the Executive shall pay all costs and expenses, including attorney's fees and
disbursements, of Executive and the Corporation. The Corporation shall pay
prejudgment interest on any money judgment obtained by Executive as a result of
such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the
Code.
9. Successors; Binding Agreement.
(A) In addition to any obligations imposed by law
upon any successor to the Corporation, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the
Corporation expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
the assumption and agreement prior to the effectiveness of any succession shall
be
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a breach of this Agreement and shall entitle the Executive to compensation from
the Corporation in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate his employment for
Good Reason immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the date on
which any succession becomes effective shall be deemed the Payment Trigger
occasioned by the foregoing deemed termination of employment for Good Reason
immediately following a Change in Control. The provisions of this Section 9
shall continue to apply to each subsequent employer of Executive bound by this
Agreement in the event of any merger, consolidation, or transfer of all or
substantially all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive shall die while any amount would be payable to the Executive hereunder
(other than amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, the amount, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives, or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
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To the Corporation:
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
Attention: Chairman of the Board
To the Executive:
Tom T. Orsini
3809 Ridge Road
North Little Rock, Arkansas 72216
11. Miscellaneous. No provision of this Agreement may
be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing and signed by the Executive and an officer of
the Corporation specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state, or local law and any additional withholding to which the
Executive has agreed.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed
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to be an original but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Francis X. Frantz By /s/ Joe T. Ford
Name: Francis X. Frantz Name: Joe T. Ford
Title: Secretary Title: Chairman & CEO
Witness:
/s/ John L. Comparin /s/ Tom T. Orsini
Tom T. Orsini
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EXHIBIT (10)(c)(6)
AGREEMENT
This Agreement, dated October 24, 1994, is made by and between ALLTEL
Corporation, a Delaware corporation (as hereinafter defined, the "Corporation"),
and Ronald D. Payne (as hereinafter defined, the "Executive").
WHEREAS, the Board of Directors of the Corporation (as hereinafter
defined, the "Board") recognizes that the possibility of a Change in Control (as
hereinafter defined) of the Corporation exists and that such possibility, and
the uncertainty it may cause, may result in the departure or distraction of key
management employees of the Corporation or of a Subsidiary to the detriment of
the Corporation and its stockholders; and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Board has determined that the Corporation should encourage
the continued employment of the Executive by the Corporation or a Subsidiary and
the continued dedication of the Executive to his assigned duties without
distraction as a result of the circumstances arising from the possibility of a
Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Board" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(B) "Cause" for termination by the Corporation of the
Executive's employment shall mean (i) the willful failure by the Executive
substantially to perform the Executive's duties with the Corporation or a
Subsidiary, other than any failure resulting from the Executive's incapacity due
to physical or mental illness or any actual or anticipated failure after the
issuance of a Notice of Termination for Good
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Reason by the Executive in accordance with paragraph (A) of Section 6, that
continues for at least 30 days after the Board delivers to the Executive a
written demand for performance that identifies specifically and in detail the
manner in which the Board believes that the Executive willfully has failed
substantially to perform the Executive's duties or (ii) the willful engaging by
the Executive in misconduct that is demonstrably and materially injurious to the
Corporation or any Subsidiary, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the Executive's act, or failure to act, was
in the best interest of the Corporation and its Subsidiaries:
(C) A "Change in Control" shall mean, if subsequent
to the date of this Agreement:
(i) Any "person," as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Corporation, any of its subsidiaries, or any
employee benefit plan maintained by the Corporation or any of its
subsidiaries, becomes the "beneficial owner" (as defined in Rule l3d-3
under the Exchange Act) of (A) l5% or more, but no greater than 50%, of
the outstanding voting capital stock of the Corporation, unless prior
thereto, the Continuing Directors approve the transaction that results
in the person becoming the beneficial owner of 15% or more, but no
greater than 50%, of the outstanding voting capital stock of the
Corporation or (B) more than 50% of the outstanding voting capital
stock of the Corporation, regardless whether the transaction or event
by which the foregoing 50% level is exceeded is approved by the
Continuing Directors;
(ii) At any time Continuing Directors no longer
constitute a majority of the directors of the Corporation; or
(iii) A record date is fixed for determining
stockholders entitled to vote upon (A) a merger or
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consolidation of the Corporation, statutory share exchange, or other
similar transaction with another corporation, partnership, or other
entity or enterprise in which either the Corporation is not the
surviving or continuing corporation or shares of common stock of the
Corporation are to be converted into or exchanged for cash, securities
other than common stock of the Corporation, or other property, (B) a
sale or disposition of all or substantially all of the assets of the
Corporation, or (C) the dissolution of the Corporation; or
(iv) The Corporation enters into an agreement with any
Person, the consummation of which would result in the occurrence of an
event described in clause (i), (ii) or (iii) above of this paragraph
(C).
(D) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(E) "Continuing Directors" means directors who were
directors of the Corporation at the beginning of the 24-month period
ending on the date the determination is made or whose election, or
nomination for election by the Corporation's stockholders, was approved
by at least a majority of the directors who are in office at the time
of the election or nomination and who either (i) were directors at the
beginning of the period, or (ii) were elected, or nominated for
election, by at least a majority of the directors who were in office at
the time of the election or nomination and were directors at the
beginning of the period.
(F) "Corporation" shall mean ALLTEL Corporation and
any successor to its business or assets, by operation of law or
otherwise.
(G) "Date of Termination" shall have the meaning
stated in paragraph (B) of Section 6 hereof.
(H) "Disability" shall be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been
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absent from the full-time performance of the Executive's duties with the
Corporation or a Subsidiary for a period of six consecutive months, the
Corporation shall have given the Executive a Notice of Termination for
Disability, and, within 20 business days after the Notice of Termination is
given, the Executive shall not have returned to the full-time performance of the
Executive's duties.
(I) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(J) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence, without the Executive's
express written consent, of any one of the following:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of the
Corporation or of a Subsidiary or a substantial adverse alteration in
the nature or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(ii) a reduction by the Corporation in the Executive's
annual base salary to any amount less than the Executive's annual base
salary as in effect immediately prior to the Change in Control;
(iii) the relocation of the principal executive
offices of the Corporation or of a Subsidiary, as the case may be, to a
location more than 35 miles from the location of such offices
immediately prior to the Change in Control or the Corporation's
requiring the Executive to be based anywhere other than the principal
executive offices of the Corporation or of a Subsidiary as the case may
be, except for required business travel to an extent substantially
consistent with the Executive's business travel obligations immediately
prior to the Change in Control;
(iv) the failure by the Corporation to pay to the
Executive any portion of the Executive's current compensation, or to
pay to the Executive any deferred
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compensation under any deferred compensation program of the
Corporation, within five days after the date the compensation is due or
to pay or reimburse the Executive for any expenses incurred by him for
required business travel;
(v) the failure by the Corporation to continue in
effect any compensation plan in which the Executive participates
immediately prior to the Change in Control that is material to the
Executive's total compensation, including but not limited to, stock
option, restricted stock, stock appreciation right, incentive
compensation, bonus, and other plans, unless an equitable alternative
arrangement embodied in an ongoing substitute or alternative plan has
been made, or the failure by the Corporation to continue the
Executive's participation therein (or in a substitute or alternative
plan) on a basis not materially less favorable, both in terms of the
amount of compensation provided and the level of the Executive's
participation relative to other participants, than existed immediately
prior to the Change in Control;
(vi) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Corporation's pension,
profit-sharing, life insurance, medical, health and accident,
disability, or other employee benefit plans in which the Executive was
participating immediately prior to the Change in Control; the failure
by the Corporation to continue to provide the Executive any material
fringe benefit or perquisite enjoyed by the Executive immediately prior
to the Change in Control; or the failure by the Corporation to provide
the Executive with the number of paid vacation days to which the
Executive is entitled in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in Control;
or
(vii) any purported termination by the Corporation of
the Executive's employment that is not effected in accordance with a
Notice of Termination
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satisfying the requirements of paragraph (A) of Section 6 hereof.
(K) "Notice of Termination" shall have the meaning
stated in paragraph (A) of Section 6 hereof.
(L) "Payment Trigger" shall mean the occurrence of a
Change in Control during the term of this Agreement coincident with or followed
(i) at any time before the end of the 12th month immediately following the month
in which the Change in Control occurred, by the termination of the Executive's
employment with the Corporation or a Subsidiary for any reason other than (A) by
the Executive without Good Reason, (B) by the Corporation as a result of the
Disability of the Executive or with Cause or, (C) as a result of the death of
the Executive or (ii) in the event the Executive remains continuously employed
by the Corporation or a Subsidiary until the end of the 12th month immediately
following the month in which the Change in Control occurred, the termination of
the Executive's employment with the Corporation or a Subsidiary, at any time
during the three month period immediately following the expiration of such
12-month period, for any reason other than (A) by the Corporation as a result of
the Disability of the Executive or (B) as a result of the death of the
Executive.
(M) "Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as
modified and used in Sections 13(d) and 14(d) thereof; except that, a Person
shall not include (i) the Corporation or any Subsidiary, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation
or any Subsidiary, or (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities.
(N) "Subsidiary" shall mean any corporation or other
entity or enterprise, whether incorporated or unincorporated, of which at least
a majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others serving
similar functions with respect to such corporation or other entity or enterprise
is owned by the Corporation or other
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entity or enterprise of which the Corporation directly or indirectly owns
securities or other interests having all the voting power.
2. Term of Agreement. This Agreement shall become
effective on the date hereof and, subject to the second sentence of this Section
2, shall continue in effect until the earliest of (i) a Date of Termination in
accordance with Section 6 or the death of the Executive shall have occurred
prior to a Change in Control, (ii) if a Payment Trigger shall have occurred
during the term of this Agreement, the performance by the Corporation of all its
obligations, and the satisfaction by the Corporation of all its obligations and
liabilities, under this Agreement, (iii) the ten year anniversary of the date of
this Agreement if, as of that ten year anniversary, a Change in Control shall
not have occurred and be continuing, or (iv) in the event, as of the ten year
anniversary of the date of this Agreement, a Change in Control shall have
occurred and be continuing, either the expiration of such period thereafter
within which a Payment Trigger does not or can not occur or the ensuing
occurrence of a Payment Trigger and the performance by the Corporation of all of
its obligations and liabilities under this Agreement. Any Change in Control
during the term of this Agreement that for any reason ceases to constitute a
Change in Control or is not followed by a Payment Trigger shall not effect a
termination or lapse of this Agreement. Any transfer of the Executive's
employment from the Corporation to a Subsidiary, from a Subsidiary to the
Corporation, or from one Subsidiary to another Subsidiary shall not constitute a
termination of the Executive's employment for purposes of this Agreement.
3. General Provisions.
(A) The Corporation hereby represents and warrants to
the Executive as follows: The execution and delivery of this Agreement and the
performance by the Corporation of the actions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Corporation.
This Agreement is a legal, valid and legally binding obligation of the
Corporation enforceable in accordance with its terms. Neither the execution or
delivery of this
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Agreement nor the consummation by the Corporation of the actions contemplated
hereby (i) will violate any provision of the certificate of incorporation or
bylaws (or other charter documents) of the Corporation, (ii) will violate or be
in conflict with any applicable law or any judgment, decree, injunction or order
of any court or governmental agency or authority, or (iii) will violate or
conflict with or constitute a default (or an event of which, with notice or
lapse of time or both, would constitute a default) under or will result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or properties of the Corporation under, any term or provision of the
certificate of incorporation or bylaws (or other charter documents) of the
Corporation or of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Corporation is a
party or by which the Corporation or any of its properties or assets may be
bound or affected.
(B) No amount or benefit shall be payable under this
Agreement unless there shall have occurred a Payment Trigger during the term of
this Agreement. In no event shall payments in accordance with this Agreement be
made in respect of more than one Payment Trigger.
(C) This Agreement shall not be construed as creating
an express or implied contract of employment and, except as otherwise agreed in
writing between the Executive and the Corporation, the Executive shall not have
any right to be retained in the employ of the Corporation or of a Subsidiary.
Notwithstanding the immediately preceding sentence or any other provision of
this Agreement, no purported termination of the Executive's employment that is
not effected in accordance with a Notice of Termination satisfying paragraph (A)
of Section 6 shall be effective for purposes of this Agreement. The Executive's
right, following the occurrence of a Change in Control, to terminate his
employment under this Agreement for Good Reason shall not be affected by the
Executive's Disability or incapacity. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason under this Agreement.
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4. Payments Due Upon a Payment Trigger.
(A) The Corporation shall pay to the Executive the
payments described in this Section 4 upon the occurrence of a Payment Trigger
during the term of this Agreement.
(B) Upon the occurrence of a Payment Trigger during
the term of this Agreement, the Corporation shall pay to the Executive a lump
sum payment, in cash, equal to the product of:
(i) three multiplied by
(ii) the sum of --
(a) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the Change in
Control or the Executive's annual base salary in effect
immediately prior to the Payment Trigger, plus
(b) the higher of the aggregate maximum amounts
payable to the Executive pursuant to all incentive
compensation plans for the fiscal year or other measuring
period commencing coincident with or most recently prior to
the date on which the Change in Control occurs or the
aggregate maximum amounts payable to the Executive pursuant to
all incentive compensation plans for the fiscal year or other
measuring period commencing coincident with or most recently
prior to the date on which the Payment Trigger occurs, in each
case, assuming that the Executive were continuously employed
by the Corporation or a Subsidiary on the terms and
conditions, including, without limitation, the terms of the
incentive plans, in effect immediately prior to the Change in
Control or Payment Trigger, whichever applies, until the last
day of that fiscal year or other measuring period.
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The amount determined under the foregoing provisions of this paragraph (B) shall
be reduced by any cash severance benefit otherwise paid to the Executive under
any applicable severance plan or other severance arrangement. For purposes of
this paragraph (B), amounts payable to the Executive pursuant to an incentive
compensation plan for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which the Change of
Control or Payment Trigger, as applicable, occurs (the "applicable year/period")
shall not include amounts attributable to a fiscal year or other measuring
period that commenced prior to the applicable year/period and that become
payable during the applicable year/period. For purposes of this paragraph (B),
incentive compensation plans shall include, without limitation, the ALLTEL
Corporation Performance Incentive Compensation Plan as in effect from time to
time, the ALLTEL Corporation Long-Term Performance Incentive Compensation Plan
as in effect from time to time, and any incentive bonus plan or arrangement that
provides for payment of cash compensation, and shall exclude, without
limitation, the ALLTEL Corporation Executive Deferred Compensation Plan as in
effect from time to time, any plan qualified or intended to be qualified under
Section 401(a) of the Code and any plan supplementary thereto, executive fringe
benefits, and any plan or arrangement under which stock, stock options, stock
appreciation rights, restricted stock or similar options, stock, or rights are
issued.
(C) Notwithstanding any provision of any incentive
compensation plan, including, without limitation, any provision of any incentive
plan requiring continued employment after the completed fiscal year or other
measuring period, the Corporation shall pay to the Executive a lump sum amount,
in cash, equal to the amount of any incentive compensation that has been
allocated or awarded to the Executive for a completed fiscal year or other
measuring period preceding the occurrence of a Payment Trigger under any
incentive compensation plan but has not yet been paid to the Executive.
(D) The payments provided for in paragraphs (B) and
(C) of this Section 4 shall be made not later than the fifth day following the
occurrence of a Payment Trigger, unless the amounts of such payments cannot be
finally determined on or
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before that day, in which case, the Corporation shall pay to the Executive on
that day an estimate, as reasonably determined in good faith by the Corporation,
of the minimum amount of the payments to which the Executive is clearly entitled
and shall pay the remainder of the payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the occurrence
of a Payment Trigger. In the event the amount of the estimated payments exceeds
the amount subsequently determined to have been due, the excess shall constitute
a loan by the Corporation to the Executive, payable on the fifth business day
after demand by the Corporation (together with interest at the rate provided in
Section l274(b)(2)(B) of the Code). At the time that payments are made under
this Section 4, the Corporation shall provide the Executive with a written
statement setting forth the manner in which the payments were calculated and the
basis for the calculations including, without limitation, any opinions or other
advice the Corporation has received from outside counsel, auditors or
consultants (and any opinions or advice that are in writing shall be attached to
the statement).
5. Gross-Up Payments.
(A) This Section 5 shall apply if a Payment Trigger
shall have occurred during the term of this Agreement.
(B) In the event it shall be determined that any
payment or distribution by the Corporation or other amount with respect to the
Corporation to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5 (a "Payment"), is (or will be) subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are (or will
be) incurred by the Executive with respect to the excise tax imposed by Section
4999 of the Code with respect to the Corporation (the excise tax, together with
any interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), the Executive shall be entitled to receive an additional cash
payment (a "Gross-Up Payment") from the Corporation in an
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amount equal to the sum of the Excise Tax and an amount sufficient to pay the
cumulative Excise Tax and all cumulative income taxes (including any interest
and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by the Executive is equal to all
payments received pursuant to the terms of this Agreement or otherwise less
income taxes (but not reduced by the Excise Tax).
(C) Subject to the provisions of paragraph (D) of
this Section 5, all determinations required to be made under this Section 5,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Corporation and the
Executive within 30 days after the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the
Corporation. In the event that at any time relevant to this Agreement the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group or Person effecting the Change in Control, the Executive shall appoint
another nationally recognized certified public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Corporation. Any Gross-Up Payment, as
determined in accordance with this Section 5, shall be paid by the Corporation
to the Executive within five days after the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall so indicate to the Executive in writing. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive. As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Corporation should have made will not
have been made (an "Underpayment"), consistent with the calculations required to
be made hereunder. In the event the Corporation exhausts its remedies in
accordance with
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paragraph (D) of this Section 5 and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
Underpayment that has occurred and the Underpayment shall be promptly paid by
the Corporation to or for the benefit of the Executive.
(D) The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment (that has not already been paid by the Corporation).
The notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of the claim and shall
apprise the Corporation of the nature of the claim and the date on which the
claim is requested to be paid. The Executive shall not pay the claim prior to
the expiration of the 30-day period following the date on which the Executive
gives notice to the Corporation or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Corporation
notifies the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting
the claim as the Corporation shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to the claim by an attorney reasonably
selected by the Corporation;
(iii) cooperate with the Corporation in good faith in
order effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the
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Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
the representation and payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 5, the Corporation shall control all
proceedings taken in connection with the contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings, and
conferences with the taxing authority in respect of the claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute the contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine. If the Corporation directs the Executive to pay the
claim and sue for a refund, the Corporation shall advance the amount of the
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to the advance or with respect to any imputed income with respect to the
advance; and any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which the contested
amount is claimed to be due shall be limited solely to the contested amount. The
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(E) If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this Section 5,
the Executive becomes entitled to receive any refund with respect to the claim,
the Executive shall, subject to the Corporation's compliance with the
requirements of paragraph (D) of this Section 5, promptly pay to the Corporation
the amount of the refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to paragraph (D) of this
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Section 5, a determination is made that the Executive shall not be entitled to
any refund with respect to the claim and the Corporation does not notify the
Executive in writing of its intent to contest the denial of refund prior to the
expiration of 30 days after the determination, then the advance shall be
forgiven and shall not be required to be repaid and the amount of the advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
6. Termination Procedures.
(A) During the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice that indicates
the specific termination provision in this Agreement relied upon, and, if
applicable, the notice shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause shall include a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board that was called and held for the purpose of considering the
termination finding that, in the informed, reasonable, good faith judgment of
the Board, the Executive was guilty of conduct set forth in the definition of
Cause in Section 1(B), and specifying the particulars thereof in detail.
(B) "Date of Termination" with respect to any
purported termination of the Executive's employment during the term of this
Agreement (other than by reason of death) shall mean (i) if the Executive's
employment is terminated for Disability, 20 business days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during that 20 business day
period) and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination, which, in the case of a
termination by the Corporation, shall not be less than ten business days
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except in the case of a termination for Cause, and, in the case of a termination
by the Executive, shall not be less than ten business days nor more than 20
business days, respectively, after the date such Notice of Termination is given.
7. No Mitigation. The Executive shall not be required
to seek other employment or to attempt in any way to reduce any amounts payable
to the Executive by the Corporation pursuant to this Agreement. Further, the
amount of any payment or benefit provided for in this Agreement shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Corporation or a Subsidiary, or
otherwise.
8. Disputes.
(A) If a dispute or controversy arises out of or in
connection with this Agreement, the parties shall first attempt in good faith to
settle the dispute or controversy by mediation under the Commercial Mediation
Rules of the American Arbitration Association before resorting to arbitration or
litigation. Thereafter, any remaining unresolved dispute or controversy arising
out of or in connection with this Agreement shall, upon a written notice from
the Executive to the Corporation either before suit thereupon is filed or within
20 business days thereafter, be settled exclusively by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association in
a city located within the continental United States designated by the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Executive shall, however, be entitled to seek specific
performance of the Corporation's obligations hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other
than a mediation or an arbitration described in paragraph (A) of this Section 8,
whether instituted by the Corporation or the Executive, shall be brought and
resolved only in a state court of competent jurisdiction located in the
territory that encompasses the city, county, or parish in which
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the Executive's principal residence is located at the time such action is
commenced. The Corporation hereby irrevocably consents and submits to and shall
take any action necessary to subject itself to the personal jurisdiction of that
court and hereby irrevocably agrees that all claims in respect of the action
shall be instituted, heard, and determined in that court. The Corporation agrees
that such court is a convenient forum, and hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of the action. Any final judgment in the action may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.
(C) The Corporation shall pay all costs and expenses,
including attorneys' fees and disbursements, of the Corporation and, at least
monthly, the Executive in connection with any legal proceeding (including
arbitration), whether or not instituted by the Corporation or the Executive,
relating to the interpretation or enforcement of any provision of this
Agreement, provided that if the Executive instituted the proceeding and the
judge, arbitrator, or other individual presiding over the proceeding
affirmatively finds that the Executive instituted the proceeding in bad faith,
the Executive shall pay all costs and expenses, including attorney's fees and
disbursements, of Executive and the Corporation. The Corporation shall pay
prejudgment interest on any money judgment obtained by Executive as a result of
such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the
Code.
9. Successors; Binding Agreement.
(A) In addition to any obligations imposed by law
upon any successor to the Corporation, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of the
Corporation expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no such succession had taken place. Failure of the Corporation to obtain
the assumption and agreement prior to the effectiveness of any succession shall
be
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a breach of this Agreement and shall entitle the Executive to compensation from
the Corporation in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate his employment for
Good Reason immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the date on
which any succession becomes effective shall be deemed the Payment Trigger
occasioned by the foregoing deemed termination of employment for Good Reason
immediately following a Change in Control. The provisions of this Section 9
shall continue to apply to each subsequent employer of Executive bound by this
Agreement in the event of any merger, consolidation, or transfer of all or
substantially all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive shall die while any amount would be payable to the Executive hereunder
(other than amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, the amount, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives, or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
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To the Corporation:
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
Attention: Chairman of the Board
To the Executive:
Ronald D. Payne
13525 Saddle Hill Drive
Little Rock, Arkansas 72212
11. Miscellaneous. No provision of this Agreement may
be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing and signed by the Executive and an officer of
the Corporation specifically designated by the Board. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state, or local law and any additional withholding to which the
Executive has agreed.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed
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to be an original but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have signed this
Agreement as of the date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Francis X. Frantz By /s/ Joe T. Ford
Name: Francis X. Frantz Name: Joe T. Ford
Title: Secretary Title: Chairman & CEO
Witness:
/s/ John L. Comparin /s/ Ronald D. Payne
Ronald D. Payne
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EXHIBIT (10)(d)(1)
SPLIT DOLLAR INSURANCE AGREEMENT
THIS SPLIT DOLLAR INSURANCE AGREEMENT ("Agreement") is made
as of March 1, 1994, by and between ALLTEL Corporation, a
Delaware corporation (the "Company"), and the undersigned
employee of the Company (the "Employee").
In consideration of the services rendered and to be rendered
by the Employee to the Company or any of its subsidiaries or
affiliates (employment or duties with the Company shall include
employment or duties with any subsidiary or affiliate of the
Company) and of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Purchase of Insurance. The Company shall maintain the
life insurance policy or policies (individually, a "policy" and,
collectively, the "policies") on the life of the Employee from
the insurance company or companies (individually, an "Insurance
Company" and, collectively, the "Insurance Companies") specified
on the Policy Specification attached hereto as Exhibit A), shall
pay all premiums on the policies when due, and shall be
designated as sole owner of the policies subject to the
conditions hereafter set forth.
2. Payment of Proceeds. Upon the death of the Employee
while this Agreement remains in effect, the proceeds of the
policies shall be paid as follows:
(a) To the Employee's beneficiary or beneficiaries
designated in accordance with Paragraph 3, an amount
calculated in the manner set forth on the schedule attached
hereto as Exhibit B, for the Plan Year of the Employee's
death.
(b) To the Company, an amount equal to the balance, if
any, of the proceeds of the policy, and of any additional
insurance purchased in accordance with Paragraph 3, after
payment of the applicable amount to the Employee's
beneficiary or beneficiaries in accordance with clause (a)
of this Paragraph 2.
3. Rights Under Policy. Each and every right of ownership
of each policy is reserved to the Company. Each policy shall
provide that the dividends payable with respect to the policy may
be applied as determined by the Company in its sole discretion.
The Company shall be entitled to any premiums paid on the
policies that are refunded by the Insurance Companies. The
Company shall make no loan against the policies that would
prevent payment of the proceeds of the policies in accordance
with the provisions of clause (a) of Paragraph 2. Payment of
the proceeds of the policies in accordance with the provisions of
clause (a) of Paragraph 2 shall be made in accordance with the
Employee's written designation of beneficiary or beneficiaries
specified to the Company from time to time (which, as of the date
hereof, are as set forth on the schedule attached hereto as
Exhibit B).
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4. Liability of Insurance Company. In issuing any policy
of insurance covered by this Agreement, an Insurance Company
shall have no liability except as set forth in the policy. The
Insurance Company shall not be bound to inquire into or take
notice of any of the provisions of this Agreement as to the
policy or as to the application of the proceeds of the policy.
Rights under the policy may be exercised during the life of the
Employee in accordance with the provisions of the policy. Upon
the death of the Employee, the Insurance Company shall be
discharged from all liability on payment of the proceeds in
accordance with the policy provisions without regard to this
Agreement or any amendment thereof.
5. Termination.
(a) This Agreement may be terminated by either the
Company or the Employee by written notice to the other
specifying the effective date of termination.
(b) This Agreement automatically shall terminate at
the end of the first month in which:
(1) the Company fails to make the premium payments
required under Paragraph 1; or
(2) the Employee's service with the Company is
terminated for any reason other than death or total
and permanent disability.
6. Non-Payment of Benefits. If the Employee dies by
suicide, while sane or insane, within two years after the date of
issue or reissue of the policy, or if for any reason an Insurance
Company does not pay benefits under the policy during the
contestable period (not to exceed two years after the date of
issue or reissue of the policy) because of fraud,
misrepresentation, or other action by the Employee falling within
the applicable provisions of the policy, the Company shall have
no liability under this Agreement.
7. Plan Year. For purposes of this Agreement, the first
Plan year shall begin on the effective date of this Agreement and
extend through the next December 31. Each subsequent Plan year
shall begin on January 1 of the succeeding year and end on
December 31 of such year.
8. Miscellaneous. Nothing contained in this Agreement
shall be construed as giving the Employee the right to be
retained in the service of the Company or shall in any way affect
the right of the Company to control the Employee or to terminate
the employment of the Employee at any time.
9. Amendment. This Agreement may be amended by a writing
signed by the Company and the Employee and attached hereto.
10. Notices. Notices under this Agreement shall be
effective if delivered, in the case of the Company, to One Allied
Drive, Little Rock, Arkansas 72202, attn: Vice President-
2
190
<PAGE>
Human Resources, and, in the case of the Employee, to the
address set forth on the schedule attached hereto as Exhibit B.
The Company and the Employee each may change the address to which
notices should be sent by written notice to the other.
11. Applicable Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company and the Employee have signed
this Agreement, in the case of the Company, by its duly
authorized officers, effective as of the date first above
written.
ALLTEL Corporation
By: /s/ Joe Ford
Title: Chairman and CEO
the "Company"
/s/ Dennis J. Ferra
Signature
Dennis J. Ferra
Name (Typed or Printed)
the "Employee"
3
191
<PAGE>
Exhibit A
THE CINCINNATI LIFE INSURANCE COMPANY
POLICY SPECIFICATIONS
SPECIFIED AMOUNT $ 1,000,000
MINIMUM SPECIFIED AMOUNT $ 50,000
PREMIUMS PAYABLE FOR 55 YEARS
DEATH BENEFIT OPTION B (INCREASING)
LOAN INTEREST RATE 8% PER ANNUM IN ARREARS
MINIMUM PREMIUM $519.00 PER MONTH
MINIMUM GUARANTEED INTEREST RATE .4167% MONTHLY FACTOR
(5.0% PER ANNUM)
PLANNED PERIODIC PREMIUMS $10,476.00
(ANNUAL)
ADMINISTRATIVE CHARGE FOR PARTIAL
WITHDRAWALS $25.00
PREMIUM EXPENSE CHARGE PERCENTAGE 7.5%
START UP PERIOD 48 MONTHS
AT SOME FUTURE TIME, IT IS POSSIBLE THAT COVERAGE WILL EXPIRE
IF NO PREMIUMS ARE PAID AFTER THE FIRST PREMIUM OR IF
SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE.
CHANGES IN CURRENT INTEREST OR MORTALITY RATES WILL AFFECT
COVERAGE.
NUMBER U2429665 AGE 40 POLICY DATE 03-01-1994
MATURITY DATE 03-01-2049
INSURED DENNIS J FERRA SEX MALE MONTHLY ANNIVERSARY DATE 01
OWNER - AS STATED IN ATTACHED APPLICATION
BENEFICIARY - AS STATED IN ATTACHED APPLICATION UNLESS
SUBSEQUENTLY CHANGED
FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE POLICY
STANDARD PREMIUM CLASS
FORM 9502 (6/88) NS
4
192
<PAGE>
THE CINCINNATI LIFE INSURANCE COMPANY
POLICY SPECIFICATIONS
ADDITIONAL RIDER BENEFITS
PREMIUM
MONTHLY
BENEFIT AMOUNT EXPIRY* COST
ACCIDENTAL DEATH BENEFIT $200,000 03-2024 $17.50
* PREMIUM EXPIRY REPRESENTS THE DATE ON WHICH THIS BENEFIT
IS PAID UP.
** THIS MONTHLY COST CHANGES ON EACH POLICY ANNIVERSARY BASED
UPON THE AGE AND THE AMOUNT OF COVERAGE IN FORCE.
NUMBER U2429665 AGE 40 POLICY DATE 03-01-1994
INSURED DENNIS J FERRA SEX MALE MONTHLY ANNIVERSARY
DAY 01
FORM 9502 (6/88) 3A NS
5
193
<PAGE>
Exhibit B
Proceeds Payable to the Employee's Beneficiary(ies)
The amount of insurance proceeds payable to the Employee's
beneficiary or beneficiaries under Paragraph 2(a) of this
Agreement in the event of the Employee's death shall be
determined as follows:
"The Employee's annual earnings (as determined by the
Company for purposes of calculating amounts payable under
the Company's group life insurance plan), minus the sum of
the amount paid under the Company's "basic" portion of its
group life insurance plan and the total amount paid or that
would be payable under the Company's "supplemental" portion
of its group life insurance plan (assuming the Employee were
a participant thereunder), excluding any amount paid or
payable under any "accidental death" portion thereof."
Beneficiary(ies) of the Employee
The beneficiary or beneficiaries of the Employee as
designated by the Employee under Paragraph 3 of this Agreement
are as follows:
Karen Sue Ferra
The Employee's Notice Address
The address to which notices to the Employee under this
Agreement should be sent is as follows:
Dennis J. Ferra
16 Portland
Little Rock, AR 72212
5
194
<PAGE>
EXHIBIT (10)(d)(2)
SPLIT DOLLAR INSURANCE AGREEMENT
THIS SPLIT DOLLAR INSURANCE AGREEMENT ("Agreement") is made
as of March 1, 1994, by and between ALLTEL Corporation, a
Delaware corporation (the "Company"), and the undersigned
employee of the Company (the "Employee").
In consideration of the services rendered and to be rendered
by the Employee to the Company or any of its subsidiaries or
affiliates (employment or duties with the Company shall include
employment or duties with any subsidiary or affiliate of the
Company) and of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Purchase of Insurance. The Company shall maintain the life insurance
policy or policies (individually, a "policy" and, collectively, the "policies")
on the life of the Employee from the insurance company or companies
(individually, an "Insurance Company" and, collectively, the "Insurance
Companies") specified on the Policy Specification attached hereto as Exhibit A),
shall pay all premiums on the policies when due, and shall be designated as sole
owner of the policies subject to the conditions hereafter set forth.
2. Payment of Proceeds. Upon the death of the Employee
while this Agreement remains in effect, the proceeds of the
policies shall be paid as follows:
(a) To the Employee's beneficiary or beneficiaries designated in
accordance with Paragraph 3, an amount calculated in the manner set forth
on the schedule attached hereto as Exhibit B, for the Plan Year of the
Employee's death.
(b) To the Company, an amount equal to the balance, if any, of the
proceeds of the policy, and of any additional insurance purchased in
accordance with Paragraph 3, after payment of the applicable amount to the
Employee's beneficiary or beneficiaries in accordance with clause (a) of
this Paragraph 2.
3. Rights Under Policy. Each and every right of ownership of each policy is
reserved to the Company. Each policy shall provide that the dividends payable
with respect to the policy may be applied as determined by the Company in its
sole discretion. The Company shall be entitled to any premiums paid on the
policies that are refunded by the Insurance Companies. The Company shall make no
loan against the policies that would prevent payment of the proceeds of the
policies in accordance with the provisions of clause (a) of Paragraph 2. Payment
of the proceeds of the policies in accordance with the provisions of clause (a)
of Paragraph 2 shall be made in accordance with the Employee's written
designation of beneficiary or beneficiaries specified to the Company from time
to time (which, as of the date hereof, are as set forth on the schedule attached
hereto as Exhibit B).
195
<PAGE>
4. Liability of Insurance Company. In issuing any policy of insurance
covered by this Agreement, an Insurance Company shall have no liability except
as set forth in the policy. The Insurance Company shall not be bound to inquire
into or take notice of any of the provisions of this Agreement as to the policy
or as to the application of the proceeds of the policy. Rights under the policy
may be exercised during the life of the Employee in accordance with the
provisions of the policy. Upon the death of the Employee, the Insurance Company
shall be discharged from all liability on payment of the proceeds in accordance
with the policy provisions without regard to this Agreement or any amendment
thereof.
5. Termination.
(a) This Agreement may be terminated by either the Company or the
Employee by written notice to the other specifying the effective date of
termination.
(b) This Agreement automatically shall terminate at
the end of the first month in which:
(1) the Company fails to make the premium payments
required under Paragraph 1; or
(2) the Employee's service with the Company is terminated for any
reason other than death or total and permanent disability.
6. Non-Payment of Benefits. If the Employee dies by suicide, while sane or
insane, within two years after the date of issue or reissue of the policy, or if
for any reason an Insurance Company does not pay benefits under the policy
during the contestable period (not to exceed two years after the date of issue
or reissue of the policy) because of fraud, misrepresentation, or other action
by the Employee falling within the applicable provisions of the policy, the
Company shall have no liability under this Agreement.
7. Plan Year. For purposes of this Agreement, the first Plan year shall
begin on the effective date of this Agreement and extend through the next
December 31. Each subsequent Plan year shall begin on January 1 of the
succeeding year and end on December 31 of such year.
8. Miscellaneous. Nothing contained in this Agreement
shall be construed as giving the Employee the right to be
retained in the service of the Company or shall in any way affect
the right of the Company to control the Employee or to terminate
the employment of the Employee at any time.
9. Amendment. This Agreement may be amended by a writing
signed by the Company and the Employee and attached hereto.
10. Notices. Notices under this Agreement shall be
effective if delivered, in the case of the Company, to One Allied
Drive, Little Rock, Arkansas 72202, attn: Vice President-
2
196
<PAGE>
Human Resources, and, in the case of the Employee, to the address set forth on
the schedule attached hereto as Exhibit B. The Company and the Employee each may
change the address to which notices should be sent by written notice to the
other.
11. Applicable Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company and the Employee have signed this
Agreement, in the case of the Company, by its duly authorized officers,
effective as of the date first above written.
ALLTEL Corporation
By: /s/ Joe Ford
Title: Chairman and Chief Executive Officer
the "Company"
/s/ Francis X. Frantz
Signature
Francis X. Frantz
Name (Typed or Printed)
the "Employee"
3
197
<PAGE>
Exhibit A
THE CINCINNATI LIFE INSURANCE COMPANY
POLICY SPECIFICATIONS
SPECIFIED AMOUNT $ 1,000,000
MINIMUM SPECIFIED AMOUNT $ 50,000
PREMIUMS PAYABLE FOR 55 YEARS
DEATH BENEFIT OPTION B (INCREASING)
LOAN INTEREST RATE 8% PER ANNUM IN ARREARS
MINIMUM PREMIUM $519.00 PER MONTH
MINIMUM GUARANTEED INTEREST RATE .4167% MONTHLY
(5.0% PER ANNUM) FACTOR
PLANNED PERIODIC PREMIUMS $10,476.00
(ANNUAL)
ADMINISTRATIVE CHARGE FOR PARTIAL
WITHDRAWALS $25.00
PREMIUM EXPENSE CHARGE PERCENTAGE 7.5%
START UP PERIOD 48 MONTHS
AT SOME FUTURE TIME, IT IS POSSIBLE THAT COVERAGE WILL EXPIRE IF NO PREMIUMS ARE
PAID AFTER THE FIRST PREMIUM OR IF SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO
CONTINUE COVERAGE. CHANGES IN CURRENT INTEREST OR MORTALITY RATES WILL AFFECT
COVERAGE.
NUMBER U2429668 AGE 40 POLICY DATE 03-01-1994
MATURITY DATE 03-01-2049
INSURED FRANCIS X FRANTZ SEX MALE MONTHLY ANNIVERSARY DATE 01
OWNER - AS STATED IN ATTACHED APPLICATION
BENEFICIARY - AS STATED IN ATTACHED APPLICATION UNLESS
SUBSEQUENTLY CHANGED
FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE POLICY
STANDARD PREMIUM CLASS
FORM 9502 (6/88) NS
4
198
<PAGE>
THE CINCINNATI LIFE INSURANCE COMPANY
POLICY SPECIFICATIONS
ADDITIONAL RIDER BENEFITS
PREMIUM
MONTHLY
BENEFIT AMOUNT EXPIRY* COST
ACCIDENTAL DEATH BENEFIT $200,000 03-2024 $17.50
* PREMIUM EXPIRY REPRESENTS THE DATE ON WHICH THIS BENEFIT
IS PAID UP.
** THIS MONTHLY COST CHANGES ON EACH POLICY ANNIVERSARY BASED UPON THE AGE AND
THE AMOUNT OF COVERAGE IN FORCE.
NUMBER U2429668 AGE 40 POLICY DATE 03-01-1994
INSURED Francis X. Frantz SEX MALE MONTHLY ANNIVERSARY DAY 01
FORM 9502 (6/88) 3A NS
5
199
<PAGE>
Exhibit B
Proceeds Payable to the Employee's Beneficiary(ies)
The amount of insurance proceeds payable to the Employee's beneficiary or
beneficiaries under Paragraph 2(a) of this Agreement in the event of the
Employee's death shall be determined as follows:
"The Employee's annual earnings (as determined by the Company for purposes
of calculating amounts payable under the Company's group life insurance
plan), minus the sum of the amount paid under the Company's "basic" portion
of its group life insurance plan and the total amount paid or that would be
payable under the Company's "supplemental" portion of its group life
insurance plan (assuming the Employee were a participant thereunder),
excluding any amount paid or payable under any "accidental death" portion
thereof."
Beneficiary(ies) of the Employee
The beneficiary or beneficiaries of the Employee as designated by the
Employee under Paragraph 3 of this Agreement are as follows:
Antoinette F. Gideon, Trustee Under Trust Agreement, dated October 14, 1991, or
successor trustee thereunder.
The Employee's Notice Address
The address to which notices to the Employee under this Agreement should be
sent is as follows:
Francis X. Frantz
12127 Fairway Drive
Little Rock, AR 72212
6
200
<PAGE>
EXHIBIT (10)(d)(3)
SPLIT DOLLAR INSURANCE AGREEMENT
THIS SPLIT DOLLAR INSURANCE AGREEMENT ("Agreement") is
made as of March 1, 1994, by and between ALLTEL Corporation, a
Delaware corporation (the "Company"), and the undersigned
employee of the Company (the "Employee").
In consideration of the services rendered and to be
rendered by the Employee to the Company or any of its
subsidiaries or affiliates (employment or duties with the
Company shall include employment or duties with any subsidiary
or affiliate of the Company) and of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Purchase of Insurance. The Company shall maintain the life insurance
policy or policies (individually, a "policy" and, collectively, the "policies")
on the life of the Employee from the insurance company or companies
(individually, an "Insurance Company" and, collectively, the "Insurance
Companies") specified on the Policy Specification attached hereto as Exhibit A),
shall pay all premiums on the policies when due, and shall be designated as sole
owner of the policies subject to the conditions hereafter set forth.
2. Payment of Proceeds. Upon the death of the Employee
while this Agreement remains in effect, the proceeds of the
policies shall be paid as follows:
(a) To the Employee's beneficiary or beneficiaries designated in
accordance with Paragraph 3, an amount calculated in the manner set forth
on the schedule attached hereto as Exhibit B, for the Plan Year of the
Employee's death.
(b) To the Company, an amount equal to the balance, if any, of the
proceeds of the policy, and of any additional insurance purchased in
accordance with Paragraph 3, after payment of the applicable amount to the
Employee's beneficiary or beneficiaries in accordance with clause (a) of
this Paragraph 2.
3. Rights Under Policy. Each and every right of ownership of each policy
is reserved to the Company. Each policy shall provide that the dividends payable
with respect to the policy may be applied as determined by the Company in its
sole discretion. The Company shall be entitled to any premiums paid on the
policies that are refunded by the Insurance Companies. The Company shall make no
loan against the policies that would prevent payment of the proceeds of the
policies in accordance with the provisions of clause (a) of Paragraph 2. Payment
of the proceeds of the policies in accordance with the provisions of clause (a)
of Paragraph 2 shall be made in accordance with the Employee's written
designation of beneficiary or beneficiaries specified to the Company from time
to time (which, as of the date hereof, are as set forth on the schedule attached
hereto as Exhibit B).
201
<PAGE>
4. Liability of Insurance Company. In issuing any policy of insurance
covered by this Agreement, an Insurance Company shall have no liability except
as set forth in the policy. The Insurance Company shall not be bound to inquire
into or take notice of any of the provisions of this Agreement as to the policy
or as to the application of the proceeds of the policy. Rights under the policy
may be exercised during the life of the Employee in accordance with the
provisions of the policy. Upon the death of the Employee, the Insurance Company
shall be discharged from all liability on payment of the proceeds in accordance
with the policy provisions without regard to this Agreement or any amendment
thereof.
5. Termination.
(a) This Agreement may be terminated by either the Company or the
Employee by written notice to the other specifying the effective date of
termination.
(b) This Agreement automatically shall terminate at
the end of the first month in which:
(1) the Company fails to make the premium payments
required under Paragraph 1; or
(2) the Employee's service with the Company is
terminated for any reason other than death or
total and permanent disability.
6. Non-Payment of Benefits. If the Employee dies by suicide, while sane or
insane, within two years after the date of issue or reissue of the policy, or if
for any reason an Insurance Company does not pay benefits under the policy
during the contestable period (not to exceed two years after the date of issue
or reissue of the policy) because of fraud, misrepresentation, or other action
by the Employee falling within the applicable provisions of the policy, the
Company shall have no liability under this Agreement.
7. Plan Year. For purposes of this Agreement, the first Plan year shall
begin on the effective date of this Agreement and extend through the next
December 31. Each subsequent Plan year shall begin on January 1 of the
succeeding year and end on December 31 of such year.
8. Miscellaneous. Nothing contained in this Agreement
shall be construed as giving the Employee the right to be
retained in the service of the Company or shall in any way
affect the right of the Company to control the Employee or to
terminate the employment of the Employee at any time.
9. Amendment. This Agreement may be amended by a
writing signed by the Company and the Employee and attached
hereto.
10. Notices. Notices under this Agreement shall be
effective if delivered, in the case of the Company, to One
Allied Drive, Little Rock, Arkansas 72202, attn: Vice
President-
2
202
<PAGE>
Human Resources, and, in the case of the Employee, to the address set forth on
the schedule attached hereto as Exhibit B. The Company and the Employee each may
change the address to which notices should be sent by written notice to the
other.
11. Applicable Law. This Agreement shall be construed
and interpreted in accordance with the laws of the State of
Delaware.
IN WITNESS WHEREOF, the Company and the Employee have signed this
Agreement, in the case of the Company, by its duly authorized officers,
effective as of the date first above written.
ALLTEL Corporation
By: /s/ Joe Ford
Title: Chairman and CEO
the "Company"
/s/ Tom T. Orsini
Signature
Tom T. Orsini
Name (Typed or Printed)
the "Employee"
3
203
<PAGE>
Exhibit A
THE CINCINNATI LIFE INSURANCE COMPANY
POLICY SPECIFICATIONS
SPECIFIED AMOUNT $ 1,000,000
MINIMUM SPECIFIED AMOUNT $ 50,000
PREMIUMS PAYABLE FOR 52 YEARS
DEATH BENEFIT OPTION B (INCREASING)
LOAN INTEREST RATE 8% PER ANNUM IN ARREARS
MINIMUM PREMIUM $613.83 PER MONTH
MINIMUM GUARANTEED INTEREST RATE .4167% MONTHLY FACTOR
(5.0% PER ANNUM)
PLANNED PERIODIC PREMIUMS $11,446.00
(ANNUAL)
ADMINISTRATIVE CHARGE FOR PARTIAL
WITHDRAWALS $25.00
PREMIUM EXPENSE CHARGE PERCENTAGE 7.5%
START UP PERIOD 48 MONTHS
AT SOME FUTURE TIME, IT IS POSSIBLE THAT COVERAGE WILL EXPIRE IF NO PREMIUMS ARE
PAID AFTER THE FIRST PREMIUM OR IF SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO
CONTINUE COVERAGE. CHANGES IN CURRENT INTEREST OR MORTALITY RATES WILL AFFECT
COVERAGE.
NUMBER U2429667 AGE 40 POLICY DATE 03-01-1994
MATURITY DATE 03-01-2046
INSURED THOMAS T ORSINI SEX MALE MONTHLY ANNIVERSARY DATE 01
OWNER - AS STATED IN ATTACHED APPLICATION
BENEFICIARY - AS STATED IN ATTACHED APPLICATION UNLESS
SUBSEQUENTLY CHANGED
FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE POLICY
STANDARD PREMIUM CLASS
FORM 9502 (6/88) NS
4
204
<PAGE>
THE CINCINNATI LIFE INSURANCE COMPANY
POLICY SPECIFICATIONS
ADDITIONAL RIDER BENEFITS
PREMIUM MONTHLY
BENEFIT AMOUNT EXPIRY* COST
ACCIDENTAL DEATH BENEFIT $200,000 03-2021 $18.17
* PREMIUM EXPIRY REPRESENTS THE DATE ON WHICH THIS BENEFIT IS
PAID UP.
** THIS MONTHLY COST CHANGES ON EACH POLICY ANNIVERSARY BASED UPON THE AGE AND
THE AMOUNT OF COVERAGE IN FORCE.
NUMBER U2429667 AGE 43 POLICY DATE 03-01-1994
INSURED THOMAS T ORSINI SEX MALE MONTHLY ANNIVERSARY DAY 01
FORM 9502 (6/88) 3A NS
5
205
<PAGE>
Exhibit B
Proceeds Payable to the Employee's Beneficiary(ies)
The amount of insurance proceeds payable to the Employee's beneficiary or
beneficiaries under Paragraph 2(a) of this Agreement in the event of the
Employee's death shall be determined as follows:
"The Employee's annual earnings (as determined by the Company for purposes
of calculating amounts payable under the Company's group life insurance
plan), minus the sum of the amount paid under the Company's "basic" portion
of its group life insurance plan and the total amount paid or that would be
payable under the Company's "supplemental" portion of its group life
insurance plan (assuming the Employee were a participant thereunder),
excluding any amount paid or payable under any "accidental death" portion
thereof."
Beneficiary(ies) of the Employee
The beneficiary or beneficiaries of the Employee as designated by the
Employee under Paragraph 3 of this Agreement are as follows:
Mary M Orsini
The Employee's Notice Address
The address to which notices to the Employee under this Agreement should
be sent is as follows:
Tom T. Orsini
3809 Ridge Road
Little Rock, AR 72216
6
206
<PAGE>
EXHIBIT (10)(e)(1)
ALLTEL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
207
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
I PREAMBLE 1
1.01. Establishment 1
1.02. Purpose 1
1.03. Funding 1
II DEFINITIONS AND INTERPRETATION 1
2.01. Definitions 1
(a) Actuarial Equivalent 1
(b) Benefit Percentage 1
(c) Board 2
(d) Change in Control 2
(e) Code 2
(f) Company 2
(g) Compensation 2
(h) Controlled Group 2
(i) Defined Benefit Plan 3
(j) Defined Contribution Plan 3
(k) Early Retirement Date 3
(l) Employee Amounts 3
(m) ERISA 4
(n) Excess Plan 4
(o) Non-Qualified Defined
Benefit Plan 4
(p) Non-Qualified Defined
Contribution Plan 4
(q) Normal Retirement Date 5
(r) Offset Defined Benefit Amounts 5
(s) Offset Defined Contribution
Amounts 5
(t) Participant 6
(u) Payment Trigger 6
(v) Payment Trigger Compensation 6
(w) Pension Plan 7
(x) Profit-Sharing Plan 7
(y) Retirement 7
(z) SERP Compensation 7
(aa) Spouse 8
(bb) Thrift Plan 8
(cc) Vesting Year of Service 8
2.02. Construction and Governing Law 8(i)
(i)
208
<PAGE>
III RETIREMENT AND SPOUSAL DEATH BENEFITS 9
3.01. Eligibility 9
3.02. Amount of Retirement Benefit 9
3.03. Amount of Pre-Retirement Spouse
Death Benefit 9
3.04. Form and Timing of Payment 9
3.05. Health and Dental Benefits 10
IV ADMINISTRATION 13
4.01. Plan Administrator 13
4.02. Expenses 14
4.03. Records 14
4.04. Legal Incompetency 14
4.05. Claims Procedure 14
V MISCELLANEOUS 14
5.01. Amendments 14
5.02. No Employment Rights 15
5.03. Nonalienation 15
5.04. Limitation of Liability 15
5.05. Acceleration of Payment 15
5.06. Representative of Board;
Compensation Committee 15
5.07. Other Benefits 16
5.08. Reemployment of a Participant 16
(ii)
209
<PAGE>
ARTICLE I
Preamble
Section 1.01. Establishment. ALLTEL Corporation
hereby establishes the ALLTEL Corporation Supplemental
Executive Retirement Plan, effective as of October 24, 1994.
Section 1.02. Purpose. The purpose of the Plan is
solely to provide benefits to a select group of management or
highly compensated employees.
Section 1.03. Funding. The Plan is unfunded, and the rights, if any,
of any person to any benefits hereunder shall be the same as any unsecured
general creditor of the Company. The benefits payable under the Plan shall be
paid by the Company from its general assets.
ARTICLE II Definitions and Interpretation
Section 2.01. Definitions. When the initial letter
of a word or phrase is capitalized herein, such word or phrase
shall have the meaning hereinafter set forth:
(a) "Actuarial Equivalent" means a benefit of equivalent actuarial
value determined on the basis of the 1983 GAM Mortality Table
projected to 1992 by Scale C and interest at 8% per annum, or, if
less, at one and two-tenths (1.2) times the PBGC Interest Rate. For
purposes of this definition, "PBGC Interest Rate" shall mean the
effective annual interest rate used by the Pension Benefit Guaranty
Corporation to value immediate annuities for plans terminating as of
the first day of the calendar year containing the date as of which the
Actuarial Equivalent value is being determined.
(b) "Benefit Percentage" means: (1) with respect to a Participant
whose Normal Retirement Date has occurred, sixty percent (60%); or (2)
with respect to a Participant whose Normal Retirement Date has not
occurred but whose Early Retirement Date has occurred, forty-five
percent (45%), increased, but not to in excess of sixty percent (60%),
by a percentage equal to the product of fifteen percent(15%)
and a fraction, the numerator of which is the number of completed
calendar months of service of the Participant with the Controlled
Group occurring in and after the calendar month in which his Early
Retirement Date occurred and prior to his Normal Retirement Date, and
the denominator of which is the number of completed calendar months of
service with the Controlled Group the Participant would have if he
remained continuously employed with the Controlled Group in and after
the
210
<PAGE>
calendar month in which the Participant's Early Retirement Date
occurred until the last day of the calendar month immediately
preceding the date on which his Normal Retirement Date would occur if
he remained continuously employed by the Controlled Group.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" means, with respect to a Participant
designated by the Board as being a Participant to whom this definition
applies, an event defined as such in a certain written agreement
between the Company and the Participant that occurs during the term of
that agreement. The Participants as of the effective date of the Plan
to whom this definition applies and the dates on which the applicable
written agreement between the Company and the Participant was executed
are as follows: John C. Comparin - October 24, 1994; Dennis J. Ferra -
October 24, 1994; Francis X. Frantz - October 24, 1994; Carroll D.
McHenry - October 24, 1994; James W. Milligan - October 24, 1994; Tom
T. Orsini - October 24, 1994; and Ronald D. Payne - October 24, 1994.
(e) "Code" means the Internal Revenue Code of 1986, as amended, or
corresponding provisions of any subsequent federal tax laws.
(f) "Company" means ALLTEL Corporation, a Delaware corporation, its
successors and survivors resulting from any merger or acquisition of
ALLTEL Corporation with or by any other corporation or other entity or
enterprise.
(g) "Compensation" means the total salary, wages, cash bonuses,
overtime compensation, shift differentials, in-charge premiums, or
other earnings payable to a Participant during a calendar year, and
any amount the payment of which is deferred under any cash-or-deferred
arrangement under Section 401(k) of the Code or non-qualified
arrangement, but excluding non-wage taxable fringe benefits.
Compensation that a Participant elects to defer under the
above-specified arrangements shall, for purposes of the Plan, be
credited to the Participant as Compensation during the period when
such deferred amounts would have been paid (in the absence of the
deferral election) rather than during the period when such deferred
amounts are earned or actually paid. Compensation shall not be
affected by any compensation reduction pursuant to a "cafeteria plan"
as defined in Section 125 of the Code.
(h) "Controlled Group" means the Company and any and all other
corporations, trades and/or businesses or
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organizations, the employees of which together with the employees of
the Company are required, pursuant to the applicable provisions of
Section 414 of the Internal Revenue Code of 1986 as in effect on
January 1, 1994, to be treated as if they were employed by a single
employer, but with respect only to periods during which the controlled
group status described in Section 414 of the Internal Revenue Code of
1986 as in effect on January 1, 1994 exists.
(i) "Defined Benefit Plan" means the Pension Plan and any portion (or
all) of any plan that is a defined benefit plan, as defined in ERISA,
maintained at any time by any member of the Controlled Group that is
intended at any time by the sponsor thereof to be a plan qualified
under Section 401(a) of the Code.
(j) "Defined Contribution Plan" means the Profit- Sharing Plan, the
Thrift Plan, and any portion (or all) of any plan that is a defined
contribution plan, as defined in ERISA, maintained at any time by any
member of the Controlled Group that is intended at any time by the
sponsor thereof to be a plan qualified under Section 401(a) of the
Code, excluding, however, the Allied Telephone Company Profit Sharing
Plan, as amended from time to time, and any portion of any other plan
attributable to any merger with or transfer of assets and liabilities
from the Allied Telephone Company Profit Sharing Plan, as amended from
time to time.
(k) "Early Retirement Date" means the date on which the earliest of
the following has occurred with respect to the Participant: (1) the
Participant is alive, the Participant is an employee of the Controlled
Group, the Participant has 20 or more Vesting Years of Service, and
the last day of the calendar month in which the Participant's
fifty-fifth (55th) birthday occurs has ended; (2) the Participant is
alive, the Participant is an employee of the Controlled Group, the
Participant has 15 or more Vesting Years of Service, and the last day
of the calendar month in which the Participant's sixtieth (60th)
birthday occurs has ended; or (3) the Participant is alive and a
Payment Trigger with respect to the Participant has occurred.
(l) "Employee Amounts" means any accrued benefit under any Defined
Benefit Plan, any Defined Contribution Plan, any Non-Qualified Defined
Benefit Plan, and any Non-Qualified Defined Contribution Plan
attributable to employee after-tax contributions, elective
contributions under Section 401(k) of the Code, rollover contributions
under Section 402 of the Code to the extent attributable to a
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distribution from a plan not at any time maintained by any member of
the Controlled Group or to elective contributions under Section 401(k)
of the Code, or employee elective compensation reductions or deferrals
under any non- qualified arrangement (including earnings on such
contributions), but excluding any amounts attributable to matching
contributions described in Section 401(m) of the Code of a member of
the Controlled Group or amounts under any non-qualified arrangement
that would be matching contributions described in Section 401(m) of
the Code if the non- qualified arrangement were part of a Defined
Contribution Plan.
(m) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or corresponding provisions of any subsequent federal
laws.
(n) "Excess Plan" means the ALLTEL Corporation Excess Benefit Plan or
any successor thereto, as amended from time to time, the Systematics
Information Services, Inc. Excess Benefit Plan or any successor
thereto, as amended from time to time, and/or the Computer Power, Inc.
Excess Benefit Plan or any successor thereto, as amended from time to
time.
(o) "Non-Qualified Defined Benefit Plan" means the portion of the
Excess Plan that provides a defined benefit and the portion (or all)
of any plan that is a defined benefit plan, as defined in ERISA,
maintained at any time by any member of the Controlled Group that is
not intended at any time by the sponsor thereof to be a plan qualified
under Section 401(a) of the Code. For purposes of this definition,
whether an arrangement is a defined benefit plan as defined in ERISA
shall be determined without regard to Section 3(36) of ERISA, Section
4 of ERISA, or any other provision of ERISA that provides a partial or
total exclusion from coverage under or applicability of ERISA, without
regard to whether the arrangement covers more than one employee, and
without regard to whether the arrangement meets any formality
requirements to be considered a plan.
(p) "Non-Qualified Defined Contribution Plan" means those portions of
the Excess Plan, the ALLTEL Corporation Executive Deferred
Compensation Plan or any successor thereto, as amended from time to
time, the ALLTEL Corporation Performance Incentive Plan or any
successor thereto, as amended from time to time, and the ALLTEL
Corporation Long-Term Performance Incentive Compensation Plan or any
successor thereto, as amended from time to time, that provides
deferred compensation based on a hypothetical defined contribution,
and the portion (or
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all) of any plan that is a defined contribution plan, as defined in
ERISA, maintained at any time by any member of the Controlled Group
that is not intended at any time by the sponsor thereof to be a plan
qualified under Section 401(a) of the Code. For purposes of this
definition, whether an arrangement is a defined contribution plan as
defined in ERISA shall be determined without regard to Section 3(36)
of ERISA, Section 4 of ERISA, or any other provision of ERISA that
provides a partial or total exclusion from coverage under or
applicability of ERISA, without regard to whether the arrangement
covers more than one employee, and without regard to whether the
arrangement meets any formality requirements to be considered a plan.
(q) "Normal Retirement Date" means the date on which the earliest of
the following has occurred with respect to the Participant: (1) the
Participant is alive, the Participant is an employee of the Controlled
Group, and the last day of the calendar month in which the
Participant's sixty-fifth (65th) birthday occurs has ended; or (2) the
Participant is alive, the Participant's Early Retirement Date has
occurred other than by reason of a Payment Trigger, and a Payment
Trigger with respect to the Participant has occurred.
(r) "Offset Defined Benefit Amounts" means the Actuarial Equivalent of
any accrued benefits under any Defined Benefit Plan and/or any
Non-Qualified Defined Benefit Plan that have been distributed or paid
to, with respect to, or on behalf of the Participant or that are
currently payable to, with respect to, or on behalf of the Participant
determined without regard to any requirement that the Participant
elect to receive such benefits, but excluding any Employee Amounts.
(s) "Offset Defined Contribution Amounts" means the sum of: (1) the
Actuarial Equivalent of any accrued benefits under any Defined
Contribution Plan and/or any Non-Qualified Defined Contribution Plan
determined as of the most recent valuation date for determining
accrued benefits thereunder immediately preceding the date as of which
the retirement or Spouse pre-retirement death benefit hereunder
commences, but excluding any Employee Amounts; (2) the Actuarial
Equivalent of any accrued benefits under any Defined Contribution Plan
and/or any Non- Qualified Defined Contribution Plan distributed or
paid to, with respect to, or on behalf of the Participant prior to the
valuation date referred to in (1) above, but excluding any Employee
Amounts. For purposes of this definition, amounts described in clause
(2) transferred in a rollover under Section 402 of the Code to a plan
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maintained by a member of the Controlled Group and not again
distributed or paid to, with respect to, or on behalf of the
Participant, shall be taken into account under clause (1) of this
definition and not under clause (2) of this definition.
(t) "Participant" means a person (1) who is designated by the Board as
a participant in the Plan, and (2) who agrees to be bound by the
provisions of the Plan on a form provided by the Company.
(u) "Payment Trigger" means, with respect to a Participant designated
by the Board as being a Participant to whom this definition applies,
an event defined as such in a certain written agreement between the
Company and the Participant that occurs during the term of that
agreement. The Participants as of the effective date of the Plan to
whom this definition applies and the dates on which the applicable
written agreement between the Company and the Participant was executed
are as follows: John C. Comparin - October 24, 1994; Dennis J. Ferra -
October 24, 1994; Francis X. Frantz - October 24, 1994; Carroll D.
McHenry - October 24, 1994; James W. Milligan - October 24, 1994; Tom
T. Orsini - October 24, 1994; and Ronald D. Payne - October 24, 1994.
(v) "Payment Trigger Compensation" means, with respect to the
Controlled Group, the sum of: (a) the highest of (1) the Participant's
annual base salary in effect immediately prior to the occurrence of a
Change in Control, (2) the Participant's annual base salary in effect
immediately prior to the occurrence of a Payment Trigger, or (3) the
Participant's annual base salary in effect on the day immediately
preceding the Participant's Retirement; and (b) the highest of (1) the
aggregate maximum amounts payable to the Participant pursuant to all
incentive compensation plans for the fiscal year or other measuring
period commencing coincident with or most recently prior to the date
on which a Change in Control occurs, (2) the aggregate maximum amounts
payable to the Participant pursuant to all incentive compensation
plans for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which a Payment
Trigger occurs, or (3) the aggregate maximum amounts payable to the
Participant pursuant to all incentive compensation plans for the
fiscal year or other measuring period commencing coincident with or
most recently prior to the date of the Participant's Retirement, in
each case assuming that the Participant were continuously employed by
the Controlled Group on the terms and conditions, including, without
limitation, the terms of the incentive plans, in effect immediately
prior
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to the Change in Control, Payment Trigger, or Retirement whichever
applies, until the last day of that fiscal year or other measuring
period. For purposes of this definition, amounts payable to the
Participant pursuant to an incentive compensation plan for the fiscal
year or other measuring period commencing coincident with or most
recently prior to the date on which the Change of Control, Payment
Trigger, or Retirement, as applicable, occurs (the "applicable
year/period") shall not include amounts attributable to a fiscal year
or other measuring period that commenced prior to the applicable
year/period and that become payable during the applicable year/period.
For purposes of this definition, incentive compensation plans shall
include, without limitation, the ALLTEL Corporation Performance
Incentive Compensation Plan as in effect from time to time, the ALLTEL
Corporation Long-Term Performance Incentive Compensation Plan as in
effect from time to time, and any incentive bonus plan or arrangement
that provides for payment of cash compensation, and shall exclude,
without limitation, the ALLTEL Corporation Executive Deferred
Compensation Plan as in effect from time to time, any plan qualified
or intended to be qualified under Section 401(a) of the Code and any
plan supplementary thereto, executive fringe benefits, and any plan or
arrangement under which stock, stock options, stock appreciation
rights, restricted stock or similar options, stock, or rights are
issued. This definition shall apply only if a Payment Trigger has
occurred with respect to the Participant.
(w) "Pension Plan" means the ALLTEL Corporation Pension Plan or any
successor thereto, as amended from time to time.
(x) "Profit-Sharing Plan" means the ALLTEL Corporation Profit-Sharing
Plan or any successor thereto, as amended from time to time, the
Profit Sharing Plan for Employees of Systematics Information Services,
Inc. and Participating Affiliates or any successor thereto, as amended
from time to time, and/or the TDS Healthcare Systems Corporation
Profit Sharing Plan or any successor thereto, as amended from time to
time.
(y) "Retirement" means that the Participant is alive and is no longer
an employee of any member of the Controlled Group on a date occurring
after the Participant's Normal Retirement Date or after the
Participant's Early Retirement Date.
(z) "SERP Compensation" means, with respect to a Participant, the
highest of: (1) the Participant's Payment Trigger Compensation (if a
Payment Trigger has occurred with respect to the Participant); (2) the
Participant's
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Compensation for the calendar year immediately preceding the calendar
year in which the Participant's Retirement occurs; or (3) the
Participant's average annual Compensation for the three calendar years
preceding the calendar year in which the Participant's Retirement
occurs.
(aa) "Spouse" means the person (if any) to whom the Participant is
legally married at the time of the Participant's death.
(bb) "Thrift Plan" means the Thrift Plan for Employees of Systematics
Information Services, Inc. and Participating Affiliates or any
successor thereto, as amended from time to time, the CP National
Incentive Thrift Savings Plan or any successor thereto, as amended
from time to time, the Computer Power, Inc. Retirement Savings Plan or
any successor thereto, as amended from time to time, and/or the
Houston Wire & Cable Company Combination Profit Sharing and Salary
Deferral Plan or any successor thereto, as amended from time to time.
(cc) "Vesting Year of Service" means, with respect to a Participant,
(1) for periods prior to January 1, 1989, each "Vesting Year of
Service" with which he was credited on December 31, 1988, if any,
under the ALLTEL Corporation Pension Plan (January 1, 1985
Restatement), as in effect on December 31, 1988, and (2) for periods
after December 31, 1988, each calendar year in which the Participant
completes at least 1,000 hours of service with an employer that is a
member of the Controlled Group (including only hours of service
completed while the employer was a member of the Controlled Group).
For the purpose of this definition, hours of service shall be
determined in accordance with Department of Labor Regulations Sections
2530.200b-2(a) and 2530.200b-3(e)(1)(iv) as in effect on January 1,
1994.
Section 2.02. Construction and Governing Law.
(a) The Plan shall be construed, enforced, and administered and the
validity thereof determined in accordance with the laws of the State
of Delaware, to the extent that applicable federal law does not apply
to the Plan.
(b) Words used herein in the masculine gender shall be construed to
include the feminine gender where appropriate and the words used
herein in the singular or plural shall be construed as being in the
plural or singular where appropriate.
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ARTICLE III
Retirement and Spousal Death Benefits
Section 3.01. Eligibility. A Participant whose Retirement has occurred
shall receive a retirement benefit as provided in Section 3.02. The surviving
Spouse of a Participant whose death occurs on or after the date of the
Participant's Retirement shall receive a post-retirement death benefit as
provided in Section 3.02. The surviving Spouse of a Participant whose death
occurs while he is an employee of the Controlled Group shall receive a
pre-retirement death benefit as provided in Section 3.03.
Section 3.02. Amount of Retirement Benefit. The amount of annual
retirement benefit payable to a Participant who is eligible therefor shall be
equal to: (1) the product of the Participant's Benefit Percentage and the
Participant's SERP Compensation; less (2) any Offset Defined Contribution
Amounts, and (if already paid or when currently payable) any Offset Defined
Benefit Amounts. The amount of annual post-retirement death benefit payable to
the surviving Spouse (if any) of a Participant described in the immediately
preceding sentence shall be an amount equal to fifty percent (50%) of the annual
retirement benefit the Participant was entitled to receive immediately prior to
his death.
Section 3.03. Amount of Pre-Retirement Spouse Death Benefit. The
pre-retirement death benefit payable under this Section 3.03 to a surviving
Spouse who is eligible therefor shall be determined as follows: The annual death
benefit payable to the surviving Spouse shall be equal to fifty percent (50%) of
the annual retirement benefit the Participant would have received if his
employment with the Controlled Group had terminated on the day immediately
preceding the date of his death, except that if the Participant's Early
Retirement Date or Normal Retirement Date has not occurred prior to his death,
the first day of the calendar month in which the Participant's death occurs
shall be considered the Participant's Early Retirement Date (for purposes only
of computing the benefit under this Section 3.03).
Section 3.04. Form and Timing of Payment. The form of payment of the
applicable benefit as determined under this Article III shall be a monthly
amount equal to one-twelfth (1/12th) of the annual benefit amount, payable
monthly as of the first day of each calendar month for the life only of the
retired Participant or Spouse, as applicable. Payment of a Participant's
retirement benefit under the Plan shall commence as of the first day of the
calendar month next following the calendar month in which the Participant's
Retirement occurs, and the last monthly payment of the retirement benefit shall
be for the calendar month in which the retired Participant's death occurs. Any
Spouse death benefit under the Plan shall commence as of the first day of the
calendar month next following the calendar month in which the Participant's
death
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occurs, and the last monthly payment of the Spouse death benefit shall be
for the calendar month in which the Spouse's death occurs.
Section 3.05. Health and Dental Benefits.
(a) The Company shall provide to a retired Participant who receives a
retirement benefit under Section 3.02, a spouse to whom the retired Participant
is legally married, and the retired Participant's eligible dependents, and/or to
a Spouse of a Participant who receives a post-retirement death benefit under
Section 3.02 or a pre-retirement death benefit under Section 3.03, health and
dental benefits equivalent to the health and dental benefits provided to active
employees of the Company, spouses of active employees of the Company, and their
eligible dependents under the health and dental plans of the Company (or in the
event the Company does not maintain such a plan or plans, another comparable
plan or plans of the Controlled Group), as in effect from time to time, and
under any additional and/or supplemental plans provided to executives of the
Company and their spouses and eligible dependents (or in the event the Company
does not maintain such a plan or plans, another comparable plan or plans of the
Controlled Group), as in effect from time to time (the "equivalent coverage").
Notwithstanding the foregoing, subject to any applicable legal requirements, the
equivalent coverage may coordinate with any government provided coverage (with
the government provided coverage as primary) to the extent that the government
provided coverage is provided to the recipient without any requirement that the
recipient pay any premium or make any contribution as a condition of receiving
the government provided coverage and to the extent that the equivalent coverage
(with coordination) and the government provided coverage provide coverage at
least equal to the equivalent coverage (without coordination). Eligible
dependents shall be those dependents of the retired Participant or Spouse, as
applicable, that meet the requirements of the applicable coverage to be eligible
for dependent coverage. The equivalent coverage shall be provided by the Company
for the lifetime of the retired Participant or Spouse, as applicable, and
without regard to any acceleration of payment of benefits under Section 5.05.
The equivalent coverage shall be provided by the Company without any requirement
for the recipient thereof to pay any premium or contribution as a condition of
receiving the coverage. The Company shall provide the equivalent coverage
through its established plans in effect from time to time or through any other
means, at the Company's option. The Participant, spouse, Spouse, and/or
dependents shall provide reasonable cooperation to the Company in obtaining any
insurance for the equivalent coverage that the Company desires to purchase.
(b) If taxes are imposed on the retired Participant, spouse, Spouse, or
dependents with respect to the equivalent coverage and/or benefits received
under the equivalent coverage that are greater than the amount of taxes (if any)
that would be imposed
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with respect to the equivalent coverage and/or benefits received under the
equivalent coverage if it were received by an active employee (and/or spouses
and dependents) of the Controlled Group through a generally applicable plan or
plans, the Company shall make additional cash payments to the retired
Participant, spouse, Spouse, and/or dependents (a "Gross-Up Payment") in an
amount equal to the additional taxes imposed on the retired Participant, spouse,
Spouse and/or dependents and an amount sufficient to pay the cumulative taxes
(including any interest and penalties imposed with respect to such taxes)
relating to the Gross-Up Payment so that the equivalent coverage and/or benefits
received under the equivalent coverage received by the retired Participant,
spouse, Spouse and/or dependents pursuant to this Section 3.05 after reduction
for taxes is an amount equal to the equivalent coverage and/or benefits if it
were received by an active employee (and/or spouses and dependents) of the
Controlled Group through a generally applicable plan or plans after reduction
for taxes (if any). Notwithstanding the foregoing or the other provisions of
this Section 3.05, to the extent that the Gross-Up Payment recipient would be
entitled to a tax gross-up payment from the Company with respect to the
equivalent coverage and/or benefits and/or Gross-Up Payment provided under this
Section 3.05 under any other agreement, the Gross-Up Payment provisions of this
Section 3.05 shall not apply.
(c) Subject to the provisions of paragraph (d) of this Section 3.05,
all determinations required to be made under this Section 3.05, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at the determination,
shall be made by a nationally recognized certified public accounting firm
designated by the Gross-Up Payment recipient (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Gross-Up
Payment recipient within 30 days after the receipt of notice from the Gross-Up
Payment recipient, or such earlier time as is requested by the Company. All fees
and expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined in accordance with this Section 3.05, shall be
paid by the Company to the Gross-Up Payment recipient within five days after the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no amount is payable by the Company to the Gross-Up Payment
recipient, it shall so indicate to the Gross- Up Payment recipient in writing.
Any determination by the Accounting Firm shall be binding upon the Company and
the Gross-Up Payment recipient. As a result of uncertainty in the application of
the Code at the time of the initial determination by the Accounting Firm, it is
possible that Gross-Up Payments that the Company should have made will not have
been made (an "Underpayment"), consistent with the calculations required to be
made hereunder. In the event the Company exhausts its remedies in accordance
with paragraph (d) of this Section 3.05 and the Gross-Up Payment recipient
thereafter is required to make a payment of any tax in respect of the claim, the
Accounting Firm
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shall determine the amount of Underpayment that has occurred and the
Underpayment shall be promptly paid by the Company to or for the benefit of the
Gross-Up Payment recipient.
(d) The Gross-Up Payment recipient shall notify the Company in writing
of any claim by the Internal Revenue Service that, if successful, would require
a Gross-Up Payment (that has not already been paid by the Company). The
notification shall be given as soon as practicable but no later than ten
business days after the Gross-Up Payment recipient is informed in writing of the
claim and shall apprise the Company of the nature of the claim and the date on
which the claim is requested to be paid. The Gross-Up Payment recipient shall
not pay the claim prior to the expiration of the 30-day period following the
date on which the Gross-Up Payment recipient gives notice to the Company or any
shorter period ending on the date that any payment of taxes with respect to the
claim is due. If the Company notifies the Gross-Up Payment recipient in writing
prior to the expiration of the 30-day period that it desires to contest the
claim, the Gross-Up Payment recipient shall:
(i) give the Company any information reasonably requested by the
Company relating to the claim;
(ii) take any action in connection with contesting the claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to the
claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively
to contest the claim; and
(iv) permit the Company to participate in any proceedings relating to
the claim.
The Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the contest and
shall indemnify and hold the Gross-Up Payment recipient harmless, on an
after-tax basis, for any tax (including interest and penalties with respect
thereto) imposed as a result of the representation and payment of costs and
expenses. Without limitation of the foregoing provisions of this Section 3.05,
the Company shall control all proceedings taken in connection with the contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with the taxing authority in
respect of the claim and may, at its sole option either direct the Gross-Up
Payment recipient to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Gross-Up Payment recipient agrees to
prosecute the contest to a determination before
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any administrative tribunal, in a court of initial jurisdiction, and in one or
more appellate courts, as the Company shall determine. If the Company directs
the Gross-Up Payment recipient to pay the claim and sue for a refund, the
Company shall advance the amount of the payment to the Gross-Up Payment
recipient, on an interest-free basis, and shall indemnify and hold the Gross-Up
Payment recipient harmless, on an after-tax basis from any tax (including
interest or penalties with respect thereto) imposed with respect to the advance
or with respect to any imputed income with respect to the advance; and any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Gross- Up Payment recipient with respect to which the
contested amount is claimed to be due shall be limited solely to the contested
amount. The Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Gross-Up
Payment recipient shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.
(e) If, after the receipt by the Gross-Up Payment recipient of an
amount advanced by the Company pursuant to paragraph (d) of this Section 3.05,
the Gross-Up Payment recipient becomes entitled to receive any refund with
respect to the claim, the Gross-Up Payment recipient shall, subject to the
Company's compliance with the provisions of paragraph (d) of this Section 3.05,
promptly pay to the Company the amount of the refund (together with any interest
paid or credited thereon after taxes applicable thereto). If, after the receipt
by the Gross-Up Payment recipient of an amount advanced by the Company pursuant
to paragraph (d) of this Section 3.05, a determination is made that the Gross-Up
Payment recipient shall not be entitled to any refund with respect to the claim
and theCompany does not notify the Gross-Up Payment recipient in writing of its
intent to contest the denial of refund prior to the expiration of 30 days after
the determination, then the advance shall be forgiven and shall not be required
to be repaid and the amount of the advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
ARTICLE IV
Administration
Section 4.01. Plan Administrator. The Plan Administrator shall be the
Company, except that, any discretionary determination provided for in the Plan
with respect to the timing, amount, or form of a Participant's benefit under the
Plan shall be made by the Compensation Committee of the Board. The Plan
Administrator may retain auditors, accountants, legal counsel and actuarial
counsel selected by it. Any person authorized to act on behalf of the Plan
Administrator may act in any such capacity, and any such auditors, accountants,
legal counsel and actuarial counsel may be persons acting in a similar capacity
for one or more members of the
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Controlled Group and may be employees of one or more members of the Controlled
Group. The opinion of any such auditor, accountant, legal counsel or actuarial
counsel shall be full and complete authority and protection in respect to any
action taken, suffered or omitted by any person authorized to act on behalf of
the Plan Administrator in good faith and in accordance with such opinion.
Notwithstanding the foregoing, no person shall vote or take action on a matter
solely with respect to his own Plan benefit.
Section 4.02. Expenses. The Company shall pay all expenses incurred in
the administration of the Plan.
Section 4.03. Records. The Company shall keep such records as shall be
proper, necessary or desirable to effectuate the purposes of the Plan,
including, without in any manner limiting the generality of the foregoing,
records and information with respect to the benefits granted to Participants,
dates of employment and determinations made hereunder. Section 4.04. Legal
Incompetency. The Plan Administrator may, in its discretion, make or cause to be
made payment either directly to an incompetent or disabled person, or to the
guardian of such person, or to the person having custody of such person, without
further liability on the part of the Company, any member of the Controlled
Group, the Plan Administrator, or any person, for the amounts of such payment to
the person on whose account such payment is made.
Section 4.05. Claims Procedure. The claims procedures provisions of
the ALLTEL Corporation Pension Plan (January 1, 1989 restatement), as in effect
on January 1, 1994, are incorporated herein by reference and shall apply to
benefits under Article III of the Plan.
ARTICLE V
Miscellaneous
Section 5.01. Amendments. The Board from time to time may amend,
suspend, or terminate, in whole or in part, any or all of the provisions of the
Plan, effective as of any date specified in the action by the Board, except that
no such action, other than an action that increases benefits provided by the
Plan, taken by the Board on or after the date a Change in Control or Payment
Trigger has occurred with respect to a Participant or on or after the date on
which a Participant's Early Retirement Date, Normal Retirement Date, or death,
as applicable, has occurred shall be effective with respect to the Participant
(or the Participant's Spouse, spouse, dependents or other person claiming
through the Participant or Spouse), unless the Participant, spouse, or Spouse
consents in writing thereto. Any action of the Board amending, suspending, or
terminating the Plan shall be set forth in a written resolution of the Board.
The Plan Administrator shall furnish a copy of the
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written resolution to each Participant affected thereby or person claiming
benefits under the Plan through a Participant affected thereby as soon as
practicable after the adoption of the resolution.
Section 5.02. No Employment Rights. Neither the establishment or
maintenance of the Plan nor the status of an employee as a Participant shall
give any Participant any right to be retained in the employ of any member of the
Controlled Group; and no Participant and no person claiming under or through
such Participant shall have any right or interest in any benefit under the Plan
unless and until the terms, conditions and provisions of the Plan affecting such
Participant shall have been satisfied.
Section 5.03. Nonalienation. The right of any Participant or any
person claiming under or through such Participant to any benefit or any payment
hereunder shall not be subject in any manner to attachment or other legal
process for the debts of such Participant or person; and the same shall not be
subject to anticipation, alienation, sale, transfer, assignment or encumbrance.
Section 5.04. Limitation of Liability. No member of the Board and no
officer or employee of any member of the Controlled Group shall be liable to any
person for any action taken or omitted in connection with this Plan, nor shall
any member of the Controlled Group be liable to any person for any such action
or omission. No person shall, because of the Plan, acquire any right to an
accounting or to examine the books or the affairs of any member of a Controlled
Group. Nothing in the Plan shall be construed to create any trust or fiduciary
relationship between any member of the Controlled Group and any Participant or
any other person.
Section 5.05. Acceleration of Payment. The Compensation Committee of
the Board in its sole discretion may accelerate the time of payment of any
benefit under the Plan the date for commencement of which has occurred as
determined under Section 3.04, to the extent that it deems it equitable or
desirable under the circumstances. Any accelerated payment of a benefit (or
portion of a benefit) under the Plan shall be in a single sum payment that is
the Actuarial Equivalent of the benefit (or portion of a benefit) the payment of
which is being accelerated.
Section 5.06. Representative of Board; Compensation Committee. The
Board may from time to time designate an individual or committee to carry out
any duties or responsibilities of the Board hereunder (not including any duty or
responsibility specifically charged to the Compensation Committee of the Board
hereunder). If at any time there is no Compensation Committee of the Board, the
Board shall have any duty or responsibility charged specifically to the
Compensation Committee of the Board hereunder.
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Section 5.07. Other Benefits. Nothing in this Plan shall be construed
to affect an employee's right to participate in any benefit plan, qualified or
unqualified, of the Controlled Group, according to the terms of that plan.
Section 5.08. Reemployment of a Participant. In the event of the
reemployment as an employee in any capacity by the Company or a member of the
Controlled Group of a Participant whose employment covered under the Plan has
terminated, payment of his benefits under the Plan shall be suspended during his
period of reemployment to the same extent as payment of his benefits under the
Pension Plan are suspended. The Participant shall accrue additional benefits
under the Plan with respect to his reemployment period only if he again becomes
a Participant as provided in Section 2.01.
IN WITNESS WHEREOF, ALLTEL CORPORATION has caused this Plan to be
executed as of this 24 day of October, 1994.
ALLTEL CORPORATION
By \s\ Joe Ford
Title: Vice Chairman and Chief Executive Officer
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EXHIBIT (10)(k)
ALLTEL CORPORATION
PENSION PLAN
(January 1, 1994 Restatement)
VOLUME I
226
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 2
1.01 Accrued Pension 2
1.02 Act 8
1.03 Actuarial Equivalent 8
1.04 Actuary 9
1.05 Authorized Leave of Absence 9
1.06 Average Monthly Compensation 9
1.07 Basic Compensation 9
1.08 Beneficiary 10
1.09 Benefit Percentage 10
1.10 Board of Directors 20
1.11 Code 20
1.12 Committee 20
1.13 Company 20
1.14 Compensation 20
1.15 Controlled Group 22
1.16 Effective Date 23
1.17 Eligible Employee 23
1.18 Employee 23
1.19 Employer 24
1.20 Employment Commencement Date 24
1.21 Fiscal Year 24
1.22 Highly Compensated Employee 24
1.23 Nonhighly Compensated Employee 26
1.24 Normal Retirement Age 26
1.25 Normal Retirement Date 26
1.26 Participant 26
1.27 PBGC Interest Rate 26
1.28 Plan 27
1.29 Plan Administrator 27
1.30 Plan Year 27
1.31 Pension 27
1.32 Prior Plan 27
1.33 Qualified Joint and Survivor Annuity 27
1.34 Qualified Preretirement Survivor Annuity 27
1.35 Reemployment Commencement Date 28
1.36 Retirement 28
1.37 Service Definitions 28
(a) Hour of Service 28
(b) Year of Service 30
(I)
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(c) Break in Service 30
(d) Benefit Service 30
(e) Detached Service 32
(f) Eligibility Year of Service 32
(g) Vesting Year of Service 32
(h) Bridging 33
(i) Special Provisions 33
1.38 Social Security Covered Compensation 33
1.39 Social Security Retirement Age 34
1.40 Social Security Taxable Wage Base 34
1.41 Spouse 34
1.42 Termination of Employment 34
1.43 Total and Permanent Disability 34
1.44 Trust Agreement and Trust 34
1.45 Trustee 34
1.46 Trust Fund 35
1.47 Vested Pension 35
ARTICLE II ADMINISTRATION 36
2.01 Plan Administrator 36
2.02 Allocation of Authority and Responsibility Among
Named Fiduciaries 36
2.03 Rights, Powers and Duties of the Plan Administrator 36
2.04 Discharge of Duties 37
2.05 Indemnification 37
2.06 Compensation and Expenses 38
2.07 Committee 38
2.08 Administrative Expenses 39
ARTICLE III GENERAL PROVISIONS 40
3.01 Adoption of the Plan by Other Employers 40
3.02 No Contract of Employment 40
3.03 Restrictions Upon Assignments and Creditor's Claims 40
3.04 Facility of Payment 41
3.05 Restriction of Claims Against Trust 41
3.06 Benefits Payable from Trust 41
3.07 Merger and Transfer of Assets or Liabilities 41
3.08 Applicable Law 41
3.09 Reversion of Employer Contributions 42
ARTICLE IV CLAIMS PROCEDURES 43
4.01 Claim for Benefits 43
4.02 Review 43
(ii)
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ARTICLE V AMENDMENT AND TERMINATION 45
5.01 Amendment and Termination of the Plan 45
5.02 Procedure Upon Termination 45
5.03 Non-Forfeitability Upon Termination of Plan 47
5.04 Internal Revenue Service Requirements 47
ARTICLE VI TRUST AGREEMENT, TRUST FUND, AND CONTRIBUTIONS 49
6.01 Trust Agreement and Trust Fund 49
6.02 Irrevocability 49
6.03 Employer Contributions 49
6.04 Employee Contributions 49
6.05 Benefits Payable Only from Trust Fund 50
6.06 Optional Provision for Benefits 50
6.07 Commingling Authorized 50
ARTICLE VII MAXIMUM LIMITATION ON PENSION 51
7.01 Maximum Limitation on Pensions 51
ARTICLE VIII TOP-HEAVY PROVISIONS 55
8.01 Definitions 55
8.02 Top-Heavy Plan Requirements 60
8.03 Minimum Vesting Requirement 60
8.04 Minimum Benefit Requirement 60
8.05 Adjustments to Maximum Benefits and Contributions 61
8.06 Coordination With Other Plans 61
ARTICLE IX ELIGIBILITY AND PARTICIPATION 63
9.01 Eligibility 63
9.02 Termination and Rehiring 63
9.03 Duration of Participation 63
ARTICLE X DETERMINATION OF BENEFITS 64
10.01 Normal Retirement Pension 64
10.02 Early Retirement Pension 64
10.03 Disability Retirement Pension 65
10.04 Deferred Vested Pension Upon Termination of Employment 65
10.05 Transfers 67
(iii)
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10.06 Minimum Pensions 67
10.07 Effect of Prior Plans 68
ARTICLE XI PAYMENT OF BENEFITS 70
11.01 Normal and Early Retirement Pensions 70
11.02 Disability Retirement Pensions 70
11.03 Deferred Vested Pension 71
11.04 Automatic Election of Qualified Joint and Survivor Annuity 72
11.05 Optional Forms of Pension 73
11.06 Payment of Small Pensions 74
11.07 Prohibition on Distribution 75
11.08 Non-Divestment 75
11.09 Suspension of Benefits Upon Reemployment 75
11.10 Limitations on Distributions 76
11.11 Employment After Normal Retirement Age 77
11.12 Benefit Accruals While Receiving Benefit Payments 77
11.13 Rollover Requirements 78
ARTICLE XII DEATH BENEFITS 80
12.01 Death Prior to Pension Commencement 80
ARTICLE XIII EFFECT OF PRIOR PLANS 82
ARTICLE XIV 1993 SPECIAL EARLY RETIREMENT PROVISIONS 83
14.01 General 83
14.02 Eligibility 83
14.03 Termination of Employment 83
14.04 Increased Benefits 83
ARTICLE XV TRANSFER OF BENEFITS WITH RESPECT TO CERTAIN
EMPLOYEES WHOSE EMPLOYMENT TRANSFERS TO GTE SOUTH INCORPORATED
OR CONTEL OF THE SOUTH, INC. 91
15.01 Definitions 91
15.02 Transfer of Assets and Liabilities 92
15.03 Benefit Payments After the Closing Date but Prior to
the Transfer of Assets and Liabilities 92
15.04 Cessation of Participation 92
15.05 Vested Interest of Transfer Employees 92
15.06 Provisions Regarding LTD Recipients and WC Recipients 92
(iv)
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15.07 Plan Continuing 93
15.08 Overriding Provisions 93
ARTICLE XVI SPECIAL PROVISIONS AND EFFECTIVE DATES 94
16.01 Effective Date 94
16.02 Termination or Retirement Prior to January 1, 1994 94
16.03 Tax Reform Act of 1986 Effective Dates 94
(v)
231
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ALLTEL CORPORATION
PENSION PLAN
(January 1, 1994 Restatement)
PREAMBLE TO VOLUME I
The ALLTEL Corporation Pension Plan is hereby amended and restated, effective as
of January 1, 1994. The amended and restated Plan is intended to be a
continuation of the pension plan originally effective as of January 1, 1972, as
amended and restated January 1, 1976, January 1, 1982, January 1, 1985 and
January 1, 1989. The Plan and its corresponding Trust Agreement are intended to
be qualified under Section 401(a) and Section 501(a) of the Code. The Plan is
maintained for the exclusive benefit of eligible employees and their
beneficiaries.
This Volume I of the Plan contains all Articles of the Plan other than Article
XIII, which is contained in Volume II.
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ARTICLE I
DEFINITIONS
Whenever used herein with the initial letter capitalized, the following words
and phrases shall have the following meanings unless a different meaning is
plainly required by the context. For purposes of construction of the Plan, the
masculine term shall include the feminine and the singular shall include the
plural in all cases in which they could thus be applied.
1.01 Accrued Pension
(a) For a Participant who is covered by a collective bargaining
agreement, an amount equal to the greater of (A) or (B) below:
(A) His Benefit Percentage
multiplied by his Average Monthly
Compensation at date of determination; or
(B) $10.00 multiplied by the number
of years (and fraction) of Benefit Service;
(b) For a Participant who is not covered by a collective bargaining
agreement and who is not compensated on an hourly basis, an amount
equal to the sum of (1), (2), as applicable, and (3):
(1) The greater of (A) or (B)
below:
(A) His Benefit Percentage
as of December 31, 1987 multiplied by
his Average Monthly Compensation as
of December 31, 1987; or
(B) $10.00 multiplied by the number of years
(and fraction) of Benefit Service as of December 31,
1987; plus
Either (A) or (B) below, whichever applies:
(2) (A) For a Participant who was not compensated
on an hourly basis as of January 1, 1988, four- tenths
of one percent (0.4%) of the Participant's Average
Monthly Compensation as of December 31, 1987 in excess
of one twelfth (1/12) of his Social Security Covered
Compensation, multiplied by the number of years (and
fraction) of Benefit Service prior to January 1, 1988.
For purposes of this subsection 1.01(b)(2), Average
Monthly Compensation means one-thirty- sixth (1/36th)
of the sum of the Basic Compensation payable to a
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Participant from the Employer for each
of the thirty-six (36) consecutive calendar months
which produce the highest average out of the period of
service beginning January 1, 1966 and ending December
31, 1987, plus
(B) For a Participant who is not covered by a
collective bargaining agreement as of January 1, 1989
but who was compensated on an hourly basis as of
January 1, 1988, four-tenths of one percent (0.4%) of
the Participant's Average Monthly Compensation as of
December 31, 1988 in excess of one-twelfth (1/12) of
his Social Security Covered Compensation, multiplied by
the number of years (and fraction) of Benefit Service
prior to January 1, 1989. For purposes of this
subsection 1.01(b)(2)(B), Average Monthly Compensation
means one-thirty- sixth (1/36th) of the sum of the
Basic Compensation payable to a Participant from the
Employer for each of the thirty-six (36) consecutive
calendar months which produce the highest average out
of the period of service beginning January 1, 1966 and
ending December 31, 1988, plus
(3) For each year of Benefit Service (or fraction
thereof) after December 31, 1987, one-twelfth (1/12) of
(A) One percent (1%) of
the Participant's Compensation
(during such year), plus
(B) Four-tenths of one percent (0.4%) of the
Participant's Compensation (during such year) in excess
of the Social Security Taxable Wage Base (for such
year).
(c) For a Participant who is not covered by a collective bargaining
agreement but who is compensated on an hourly basis, an amount
equal to the sum of (1), (2), as applicable, and (3):
(1) The greater of (A) or (B)
below:
(A) His Benefit Percentage
as of December 31, 1988 multiplied by
his Average Monthly Compensation as
of December 31, 1988; or
(B) $10.00 multiplied by the number of years
(and fraction) of Benefit Service as of December 31,
1988; plus
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(2) For a Participant who is not covered by a
collective bargaining agreement as of January 1, 1989 but who
was compensated on an hourly basis as of January 1, 1988,
four tenths of one percent (0.4%) of the Participant's
Average Monthly Compensation as of December 31, 1988 in
excess of one-twelfth (1/12) of his Social Security Covered
Compensation, multiplied by the number of years (and
fraction) of Benefit Service prior to January 1, 1989;
provided, however, that a Participant shall not be entitled
to a benefit under this subsection (c)(2) if he is entitled
to a benefit under subsection (b)(2) of this Section 1.01.
For purposes of this subsection 1.01(c)(2), Average Monthly
Compensation means one-thirty-sixth (1/36th) of the sum of
the Basic Compensation payable to a Participant from the
Employer for each of the thirty-six (36) consecutive calendar
months which produce the highest average out of the period of
service beginning January 1, 1966 and ending December 31,
1988; plus
(3) For each year of Benefit Service (or fraction
thereof) after December 31, 1988, one-twelfth (1/12) of
(A) One percent (1%) of
the Participant's Compensation
(during such year), plus
(B) Four-tenths of one percent (0.4%) of the
Participant's Compensation (during such year) in excess
of the Social Security Taxable Wage Base (for such
year).
(d) For Participants who have a Change in Employment Status, as
defined herein, the following additional rules shall apply:
(1) Prior to January 1, 1989, a "Change in Employment
Status" shall occur when an Employee who was compensated on
an hourly basis begins to receive compensation on other than
an hourly basis and, conversely, when an Employee compensated
on other than an hourly basis, begins to receive compensation
on an hourly basis. On and after January 1, 1989 but prior to
January 1, 1990, a "Change in Employment Status" shall occur
when an Employee who is covered by a collective bargaining
agreement ceases to be covered by such collective bargaining
agreement and, conversely, when an Employee not covered by a
collective bargaining agreement becomes subject to a
collective bargaining agreement. On and after January 1, 1990
but prior to the Closing Date (as Closing Date is defined in
Appendix T to Section 13.19), a "Change in Employment Status"
shall occur when an Employee who is covered by
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a collective bargaining agreement that provides
for benefits under the Plan ("ALLTEL collective bargaining
agreement") or provides for benefits under the Retirement
Plan for Employees of CP National Corporation or Appendix I
to Section 13.09 ("CP National collective bargaining
agreement") ceases to be covered by a collective bargaining
agreement, when an Employee not covered by a collective
bargaining agreement becomes subject to an ALLTEL or CP
National collective bargaining agreement, or when an Employee
covered by an ALLTEL (CP National) collective bargaining
agreement becomes subject to a CP National (ALLTEL)
collective bargaining agreement. On and after the Closing
Date (as Closing Date is defined in Appendices S and T to
Section 13.19), a "Change in Employment Status" shall occur
when an Employee who is covered by a collective bargaining
agreement that provides for benefits under the Plan ("ALLTEL
collective bargaining agreement"), provides for benefits
under the Retirement Plan for Employees of CP National
Corporation or Appendix I to Section 13.09 ("CP National
collective bargaining agreement"), or provides for benefits
under Appendix T to Section 13.19 ("GTE collective bargaining
agreement") ceases to be covered by a collective bargaining
agreement, when an Employee not covered by a collective
bargaining agreement becomes subject to an ALLTEL, CP
National, or GTE collective bargaining agreement, or when an
Employee covered by an ALLTEL (CP National) (GTE) collective
bargaining agreement becomes subject to a CP National
(ALLTEL) (GTE) collective bargaining agreement.
(2) A Participant who has a Change in Employment Status
shall accrue a pension up to the date of his Change in
Employment Status pursuant to the benefit formula under
subsection (a), (b), (c) above, Appendix I to Section 13.09,
or Appendix T to Section 13.19 whichever applies considering
the basis upon which he was covered under the Plan and
compensated immediately prior to such date. For purposes of
applying subsection (a) above to a Participant who has had a
Change in Employment Status, Benefit Service shall only
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include those years (and fraction thereof) while
the Participant was covered by an ALLTEL collective
bargaining agreement. For purposes of applying subsection (b)
above to a Participant who has had a Change in Employment
Status, Benefit Service shall only include those years (and
fraction thereof) while the Participant was compensated on
other than an hourly basis. For purposes of applying
subsection (c) above to a Participant who has had a Change in
Employment Status, Benefit Service shall only include those
years (and fraction thereof) while the Participant was not
covered by an ALLTEL, CP National, or GTE collective
bargaining agreement. For purposes of applying Appendix I to
Section 13.09 to a Participant who has had a Change in Employ
ment Status, Years of Participation shall only include those
years (and fraction thereof) while the Participant was
covered by a CP National collective bargaining agreement. For
purposes of applying Appendix T to Section 13.19 to a
Participant who has had a Change in Employment Status,
Accredited Service shall only include those years (and
fraction thereof) while the Participant was covered by a GTE
collective bargaining agreement. The benefit under the Plan
of a Participant who has had a Change in Employment Status
from Appendix I to Section 13.09 to non- Appendix I to
Section 13.09 status shall be determined in the same manner
as a Participant who is subject to Appendix H to Section
13.09 applying the rules of Appendix H to Section 13.09 based
on the date of his Change in Employment Status. The benefit
under the Plan of a Participant who has had a Change in
Employment Status from Appendix T to Section 13.19 to
non-Appendix T to Section 13.19 status shall be determined in
the same manner as a Participant who is subject to Appendix S
to Section 13.19 applying the rules of Appendix S to Section
13.19 based on the date of his Change in Employment Status.
A Participant who has had a Change in Employment
Status from non- Appendix I to Section 13.09 status to
Appendix I to Section 13.09 status shall have his service
taken into account under Appendix I to Section 13.09
determined according to applicable laws and regulations
regarding transfers from the hours method to the elapsed time
method of crediting service.
Notwithstanding the foregoing, a Participant who
had a Termination of Employment with deferred Pension rights,
or retired prior to January 1, 1989, or his Beneficiary,
shall receive or continue to receive a Pension in accordance
with the provisions of the Plan as in effect at the date of
the Participant's Termination of Employment or Retirement.
(e) Notwithstanding any other provision of the Plan to the
contrary, in calculating the accrued benefit (including the right
to any optional benefit provided under the plan) of any
participant, such participant shall accrue no additional benefit
under the Plan on or after March 3, 1989 to the extent that such
additional benefit accrual exceeds the benefit which would
otherwise accrue in accordance with the terms of the Plan
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as subsequently amended to comply with those qualification
requirements described in Income Tax Regulations section 1.401(b)-
1(b)(2)(ii) (TRA '86).
This provision shall be effective until the last day of the
first plan year commencing in 1989 and shall be effective for such
period if and only if the subsequent TRA '86 amendment is made on
or before the last day of the first plan year commencing in 1989.
In addition the benefit accrued by any participant during the
1989 plan year shall in no event exceed the benefit accrual
provided during the 1989 plan year with respect to such participant
under the terms of the plan as subsequently amended to comply with
TRA '86. However, such participant's accrued benefit shall not be
less than what the participant had accrued as of the last day of
the plan year beginning before January 1, 1989.
This subsection became ineffective in the manner provided in
IRS Notice 89-92 upon the adoption of Model Amendment 2 as set
forth in subsection (f) below.
(f) Notwithstanding any other provision of the Plan to the
contrary, in calculating the accrued benefit (including the right
to any optional benefit provided under the Plan) of any plan
participant who is a highly compensated employee within the meaning
of section 414(q) of the Internal Revenue Code, such highly
compensated employee shall accrue no additional benefit under the
Plan on or after March 3, 1989 to the extent that such additional
benefit accrual exceeds the benefit which would otherwise accrue in
accordance with the terms of the Plan as subsequently amended to
comply with those qualification requirements described in Income
Tax Regulations section 1.401(b)-1(b)(2)(ii) (TRA '86).
This provision shall be effective until the last day by which
the plan may be amended retroactively to comply with TRA '86 for
its first plan year beginning in 1989 in order to remain qualified
under the Code and shall be effective for such period if and only
if the subsequent plan amendment to comply with TRA '86 is made on
or before the last day by which the plan may be amended
retroactively to comply with TRA '86 for its first plan year
commencing in 1989 in order to remain qualified under the Code.
In addition, the benefit accrued by any highly compensated
employee, within the meaning of section 414(q) of the Code, shall
in no event exceed the benefit accrual provided during the 1989
plan year with respect to such participant under the terms of the
Plan as subsequently
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amended to comply with the terms of TRA '86. However, such
highly compensated employee's benefit shall not be less than what
that participant had accrued as of the last day of the last plan
year beginning before January 1, 1989.
Notwithstanding the foregoing provisions under this
subsection (f), the provisions of this subsection (f) became
ineffective in the manner provided in IRS Notice 88-131 and any
subsequent IRS Notices, Revenue Procedures, or other guidance,
effective as of the close of business on August 31, 1993, as though
the Plan had been amended to comply with the terms of TRA '86 as
contemplated by the second paragraph of this subsection (f).
1.02 Act
The Employee Retirement Income Security Act of 1974 as the same has been
and may be amended from time to time.
1.03 Actuarial Equivalent
(a) Any determination of actuarial equivalence required by the
provisions of the Plan involving a Retirement, termination or death
shall be made on the basis of tables prescribed from time to time
by the Plan's Actuary; provided, however, that with respect to any
such determination on or after December 1, 1981--
(i) Actuarial equivalence of single sums and annuities
shall be determined on the basis of the GA-1951 Mortality
Table projected to 1975 by Scale C with interest at 8% per
annum, or, if less, the PBGC Interest Rate, provided,
however, that if a resultant single sum is at least
$25,000.00, it shall be recalculated with interest at 120%
times the PBGC Interest Rate, or, if less, 8%, except that
the recalculated single sum shall not be less than
$25,000.00; and
(ii) Unless otherwise specified, any other actuarial
equivalence shall be determined on the basis of the 1951
Basic Annuity Table projected to 1965 by Scale C with
interest at 5% per annum.
In making a determination under paragraph (i) above with
respect to an annuity with a deferred commencement date,
consideration shall not be given to any benefits provided by
Article XII hereof.
(b) For the purpose of Section 8.01, the present value of an
Employee's accrued pension shall be based on the GA-1951 Mortality
Table projected to 1975 by Scale C with interest at 8% per annum.
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(c) Effective with respect to distributions made on or after
January 1, 1988, actuarial equivalence of any single sum
distribution payable prior to a Participant's Normal Retirement Age
shall be determined as the present value of the single life annuity
normal retirement form of benefit.
1.04 Actuary
An individual actuary who is an enrolled actuary under the provisions of
Section 3042 of the Act, or a firm of actuaries, at least one of whose
members is such an enrolled actuary, which individual or firm is selected
from time to time by the Company.
1.05 Authorized Leave of Absence
Any absence from regular employment authorized or excused by the Employer
under its standard personnel practices, provided that all persons under
similar circumstances shall be treated alike in the granting of such
Authorized Leaves of Absence, and provided further, that the Participant
returns within the period specified in the Authorized Leave of Absence.
1.06 Average Monthly Compensation
One-sixtieth (1/60th) of the sum of the rates of the Basic Compensation
payable to a Participant from the Employer for each of the sixty (60)
consecutive calendar months which produce the highest average out of the
period of service beginning January 1, 1966 and ending with the month
which includes the date as of which he retires or terminates employment
as an Employee.
1.07 Basic Compensation
The total wages or earnings payable to the Participant by the Employer
during the Plan Year, including any amounts the payment of which is
deferred under the ALLTEL Corporation Executive Deferred Compensation
Plan and commissions, but excluding bonuses, overtime compensation, shift
differentials, in charge premiums, and similar forms of additional
compensation. Compensation which a Participant elects to defer under the
above-specified plan shall, for purposes of the Plan, be credited to the
Participant as compensation during the period when such deferred amounts
would have been paid (in the absence of the deferral election) rather
than during the period when such deferred amounts are earned or actually
paid. A Participant's rate of Basic Compensation on the last day of a
calendar month shall be his rate for that month, and his rate for any
month in which no compensation was payable or during which he was
rendering Detached Service shall be the rate for the immediately
preceding month, provided, however, that in the case of a Participant who
renders Detached Service, said rate for the immediately
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preceding month shall be increased by the periodic longevity, merit and
general compensation adjustments, if any, granted during the period of
such Detached Service to Employees in job classifications similar to that
of the Participant immediately prior to his commencement of Detached
Service. Rates of compensation paid other than monthly shall be converted
to monthly on the basis of 173.33 hours per month, 4.3333 weeks per month
and 12.0 months per year. Basic Compensation shall not be affected by any
compensation reduction pursuant to a "cafeteria plan" as defined in
Section 125 of the Code. For Plan Years beginning on and after January 1,
1989 and prior to January 1, 1994, Basic Compensation (after aggregation
of "family members") shall be limited to $200,000 and for Plan Years
beginning on and after January 1, 1994, Basic Compensation (after
aggregation of "family members") shall be limited to $150,000, both as
adjusted annually for changes in the cost of living in accordance with
Sections 401(a)(17) and 415(d) of the Code, (or such other maximum amount
hereafter approved by the Secretary of the Treasury from time to time
under Section 401(a)(17) of the Code) for purposes of the Plan. For the
purposes of the preceding sentence, a "family member" shall mean an
employee of the Controlled Group who is, on any one day of the year, a
spouse or a lineal descendant who has not attained age 19 before the last
day of the year, of an individual who during the year was (i) an active
or former employee of the Controlled Group and a 5% owner within the
meaning of Section 414(q)(3) of the Code and regulations thereunder, or
(ii) one of the ten most highly-paid Highly Compensated Employees;
provided, however, that any compensation paid to such spouse or lineal
descendant shall be treated as if it were paid to the individual
described in (i) or (ii) above. If, as a result of the family aggregation
rules, the dollar limitation under Section 401(a)(17) of the Code (as
adjusted from time to time) would be exceeded, the limitation shall be
prorated among the Participant and his or her family members in
proportion to each one's Basic Compensation as determined prior to the
application of this limitation. Basic Compensation shall be subject to
the provisions of subsection (b) of Section 1.14.
1.08 Beneficiary
The person (or persons) who is (are) entitled to receive any death
benefits that may be payable from the Plan upon a Participant's death.
1.09 Benefit Percentage
(a) The provisions of this paragraph (a) are
applicable to Participants with respect to whom
the provisions of paragraphs (b), (c), or (d) are
not applicable. For such a Participant, a
percentage determined as the sum of --
(i) One percent (1.00%) multiplied by the
number of years (and fraction) of his Benefit Service; plus
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(ii) One-quarter of one percent (0.25%) multiplied by
the number of years (and fraction) of his Benefit Service,
not to exceed ten (10) years, accrued after the month in
which his fifty-fifth (55th) birthday occurs; plus
(iii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1981; plus
(iv) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1982; plus
(v) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1983; plus
(vi) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1984; plus
(vii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1985; plus
(viii) Five-hundredths of one percent (0.05%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1986; plus
(ix) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1987.
(b) The provisions of this paragraph (b) are effective with respect
only to Employees who on or after January 1, 1990 are covered by an
ALLTEL collective bargaining agreement (as defined in Section
1.01(d) of the Plan). For such a Participant, a percentage
determined as the sum of A and B, where A is a percentage
determined as the sum of --
(i) One percent (1.00%) multiplied
by the number of years (and fraction) of
his Benefit Service; plus
(ii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1981; plus
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(iii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1982; plus
(iv) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1983; plus
(v) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1984; plus
(vi) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1985; plus
(vii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1986; plus
(viii) Five-hundredths of one percent (0.05%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1987; plus
(ix) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1989,
and where B is a percentage equal to one-quarter of one percent (0.25%)
multiplied by the number of years (and fraction) of his Benefit Service,
not to exceed ten (10) years, accrued after the month in which his
fifty-fifth (55th) birthday occurs.
(c) The provisions of this paragraph (c) are effective with respect
only to Employees who on or after January 1, 1991 are covered by an
ALLTEL collective bargaining agreement (as defined in Section
1.01(d) of the Plan), and who were Participants on or before
December 31, 1990. For such a Participant, a percentage determined
as the sum of A and B, where A is the sum of --
(i) One percent (1.00%) multiplied
by the number of years (and fraction) of
his Benefit Service plus
(ii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1981; plus
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(iii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1982; plus
(iv) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1983; plus
(v) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1984; plus
(vi) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1985; plus
(vii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1986; plus
(viii) Five-hundredths of one percent (0.05%)
multiplied by the number of years (and fraction) of his
Benefit service accrued after 1987; plus
(ix) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1989; plus
(x) Twenty-five-thousandths of one percent (0.025%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1990; plus
(xi) Twenty-five-thousandths of one percent (0.025%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1991; plus
(xii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1992,
and where B is a percentage equal to the
sum of --
(i) One-quarter of one percent (0.25%) multiplied by
the number of years (and fraction) of his Benefit Service,
not to exceed ten (10) years, accrued after the month in
which his fifty-fifth (55th) birthday occurs and prior to
January 1, 1991; plus
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(ii) Twenty-four-hundredths of one percent (0.24%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1991 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clause of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(iii) Twenty-three-hundredths of one percent (0.23%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1992 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(iv) Twenty-two hundredths of one percent (0.22%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1993 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(v) Twenty-one-hundredths of one percent (0.21%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1994 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(vi) Two-tenths of one percent (0.20%) multiplied by
the year (or fraction) of his Benefit Service accrued during
calendar year 1995 (if any), but only to the extent such
Benefit Service accrued after the month in which his
fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous
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clauses of this formula used to determine the
percentage "B" for such Participant does not exceed ten (10)
years; plus
(vii) Nineteen-hundredths of one percent (0.19%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1996 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(viii) Eighteen-hundredths of one percent (0.18%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1997 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(ix) Seventeen-hundredths of one percent (0.17%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1998 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(x) Sixteen-hundredths of one percent (0.16%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 1999 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xi) Fifteen-hundredths of one percent (0.15%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2000 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous
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clauses of this formula used to determine the
percentage "B" for such Participant does not exceed ten (10)
years; plus
(xii) Fourteen-hundredths of one percent (0.14%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2001 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xiii) Thirteen-hundredths of one percent (0.13%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2002 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xiv) Twelve-hundredths of one percent (0.12%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2003 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xv) Eleven-hundredths of one percent (0.11%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2004 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xvi) One-tenth of one percent (0.10%) multiplied by
the year (or fraction) of his Benefit Service accrued during
calendar year 2005 (if any), but only to the extent such
Benefit Service accrued after the month in which his
fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous
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clauses of this formula used to determine the
percentage "B" for such Participant does not exceed ten (10)
years; plus
(xvii) Nine-hundredths of one percent (0.09%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2006 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xviii) Eight-hundredths of one percent (0.08%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2007 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xix) Seven-hundredths of one percent (0.07%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2008 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xx) Six-hundredths of one percent (0.06%) multiplied
by the year (or fraction) of his Benefit Service accrued
during calendar year 2009 (if any), but only to the extent
such Benefit Service accrued after the month in which his
fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xxi) Five-hundredths of one percent (0.05%) multiplied
by the year (or fraction) of his Benefit Service accrued
during calendar year 2010 (if any), but only to the extent
such Benefit Service accrued after the month in which his
fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous
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clauses of this formula used to determine the
percentage "B" for such Participant does not exceed ten (10)
years; plus
(xxii) Four-hundredths of one percent (0.04%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2011 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xxiii)Three-hundredths of one percent (0.03%)
multiplied by the year (or fraction) of his Benefit Service
accrued during calendar year 2012 (if any), but only to the
extent such Benefit Service accrued after the month in which
his fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xxiv) Two-hundredths of one percent (0.02%) multiplied
by the year (or fraction) of his Benefit Service accrued
during calendar year 2013 (if any), but only to the extent
such Benefit Service accrued after the month in which his
fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years; plus
(xxv) One-hundredth of one percent (0.01%) multiplied
by the year (or fraction) of his Benefit Service accrued
during calendar year 2014 (if any), but only to the extent
such Benefit Service accrued after the month in which his
fifty-fifth (55th) birthday occurs and only to the extent
that the total amount of Benefit Service taken into account
under this clause and the previous clauses of this formula
used to determine the percentage "B" for such Participant
does not exceed ten (10) years.
(d) The provisions of this paragraph (d) are effective with respect
only to Employees who on or after January 1, 1991 are covered by an
ALLTEL collective bargaining agreement (as defined in Section
1.01(d) of the
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Plan), and who first become Participants on
or after January 1, 1991. For such a
Participant, a percentage determined as the sum
of --
(i) One percent (1.00%) multiplied
by the number of years (and fraction) of
his Benefit Service; plus
(ii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1981; plus
(iii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1982; plus
(iv) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1983; plus
(v) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1984; plus
(vi) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1985; plus
(vii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1986; plus
(viii) Five-hundredths of one percent (0.05%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1987; plus
(ix) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1989; plus
(x) Twenty-five-thousandths of one percent (0.025%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1990; plus
(xi) Twenty-five-thousandths of one percent (0.025%)
multiplied by the number of years (and fraction) of his
Benefit Service accrued after 1991; plus
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(xii) Five-hundredths of one percent (0.05%) multiplied
by the number of years (and fraction) of his Benefit Service
accrued after 1992.
1.10 Board of Directors
The Board of Directors of the Company.
1.11 Code
The Internal Revenue Code of 1986, as amended from time to time.
Reference to a section of the Code shall include such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
1.12 Committee
The persons to whom the Company has delegated any or all of its authority
as Plan Administrator pursuant to Article II.
1.13 Company
ALLTEL Corporation, its corporate successors, and the surviving
corporation resulting from any merger (or consolidation) of ALLTEL
Corporation with any other corporation or corporations.
1.14 Compensation
(a) The total wages or earnings payable to a Participant during a
Plan Year by the Employer consisting of his Basic Compensation,
together with cash bonuses, overtime compensation, shift
differentials, in-charge premiums, and any amount the payment of
which is deferred under the ALLTEL Corporation Performance
Incentive Compensation Plan or the ALLTEL Corporation Long-Term
Performance Incentive Plan, but excluding non- wage taxable fringe
benefits. Compensation which a Participant elects to defer under
the above- specified plans shall, for purposes of the Plan, be
credited to the Participant as compensation during the period when
such deferred amounts would have been paid (in the absence of the
deferral election) rather than during the period when such deferred
amounts are earned or actually paid. Compensation shall not be
affected by any compensation reduction pursuant to a "cafeteria
plan" as defined in Section 125 of the Code. For Plan Years
beginning on or after January 1, 1989 and prior to January 1, 1994,
Compensation (after aggregation of "family members") shall be
limited to $200,000, and for Plan Years beginning on and after
January 1, 1994, Compensation (after aggregation of "family
members") shall be
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limited to $150,000, both as adjusted annually for changes in
the cost of living in accordance with Sections 401(a)(17) and
415(d) of the Code (or such other maximum amount hereinafter
approved by the Secretary of the Treasury from time to time under
Section 401(a)(17) of the Code) for purposes of the Plan. For the
purposes of the preceding sentence, a "family member" shall mean an
employee of the Controlled Group who is, on any one day of the
year, a spouse or a lineal descendant who has not attained age 19
before the last day of the year, of an individual who during the
year was (i) an active or former employee of the Controlled Group
and a 5% owner within the meaning of Section 414(q)(3) of the Code
and regulations thereunder, or (ii) one of the ten most highly-paid
Highly Compensated Employees; provided, however, that any
compensation paid to such spouse or lineal descendant shall be
treated as if it were paid to the individual described in (i) or
(ii) above. If, as a result of the family aggregation rules, the
dollar limitation under Section 401(a)(17) of the Code (as adjusted
from time to time) would be exceeded, the limitation shall be
prorated among the Participant and his or her family members in
proportion to each one's Compensation as determined prior to the
application of this limitation.
(b) If compensation for any prior determination period is taken
into account in determining a Participant's benefits accruing in
the current Plan Year, the compensation for that prior
determination period is limited to the applicable dollar limit.
Notwithstanding the foregoing, each 1989 Section 401(a)(17)
Participant's accrued benefit under the Plan will be the greater of
the accrued benefit determined for such Participant under (1) or
(2) below:
(1) The Participant's accrued benefit determined with
respect to the benefit formula applicable for the Plan Year
beginning on or after January 1, 1989, as applied to the
Participant's total years of service taken into account under
the Plan for the purposes of benefit accruals, or
(2) The sum of:
(i) the Participant's accrued benefit as of
the last day of the last Plan Year beginning before
January 1, 1989, frozen in accordance with Section
1.401(a)(4)-13 of the Treasury Regulations, and
(ii) the Participant's accrued benefit
determined under the benefit formula applicable for the
Plan Year beginning on or after January 1, 1989, as
applied to the Participant's years of service credited
to the Participant for
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Plan Years beginning on or after January
1, 1989, for purposes of benefit accruals.
A "1989 Section 401(a)(17) Participant" means a Participant
whose current accrued benefit as of a date on or after the first
day of the first Plan Year beginning on or after January 1, 1989,
is based on Compensation for a year beginning prior to the first
day of the first Plan Year beginning on or after January 1, 1989,
that exceeded $200,000.
Notwithstanding any other provision of the Plan to the
contrary, each 1994 Section 401(a)(17) Participant's accrued
benefit under the Plan will be the greater of the accrued benefit
determined for such Participant under
(1) or (2) below:
(1) The Participant's accrued benefit determined with
respect to the benefit formula applicable for the Plan Year
beginning on or after January 1, 1994, as applied to the
Participant's total years of service taken into account under
the Plan for the purposes of benefit accruals, or
(2) The sum of:
(i) the Participant's accrued benefit as of
the last day of the last Plan Year beginning before
January 1, 1994, frozen in accordance with Section
1.401(a)(4)-13 of the Treasury Regulations, and
(ii) the Participant's accrued benefit
determined under the benefit formula applicable for the
Plan Year beginning on or after January 1, 1994, as
applied to the Participant's years of service credited
to the Participant for Plan Years beginning on or after
January 1, 1994, for purposes of benefit accruals.
A "1994 Section 401(a)(17) Participant" means a Participant
whose current accrued benefit as of a date on or after the first
day of the first Plan Year beginning on or after January 1, 1994,
is based on Compensation for a year beginning prior to the first
day of the first Plan Year beginning on or after January 1, 1994,
that exceeded $150,000.
1.15 Controlled Group
An Employer and any and all other corporations, trades and/or businesses
or organizations, the employees of which together with employees of the
Employer are required, pursuant to the applicable provisions of Section
414 of the Code, to be treated as if they were employed by a single
employer.
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1.16 Effective Date
January 1, 1972.
1.17 Eligible Employee
Each Employee of the Employer, except
(1) Employees whose period of service prior to January 1, 1988
otherwise would have commenced after the first day of the calendar
month immediately following his 60th birthday and who did not
perform one Hour of Service on or after January 1, 1988,
(2) Employees covered by a collective bargaining agreement between
an Employer and a representative of such Employees where retirement
benefits were the subject of good faith bargaining between the
parties, unless it is agreed that such Employees would be eligible
to participate in the Plan,
(3) Employees who are covered by an agreement
with the Company which prohibits inclusion in the
Plan,
(4) leased employees,
(5) on and after May 1, 1993, employees of
ALLTEL Publishing Corporation, or
(6) on and after May 1, 1993, employees of
Sygnis, Inc.
1.18 Employee
A person employed by an Employer and being compensated by the Employer
through the payroll mechanism, under such terms and conditions that his
relationship to the Employer conforms with the usual and accepted
relationship of employee and employer.
"Employee" shall include any "leased employee" (as herein defined);
provided, however, contributions or benefits provided leasing
organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer. For purposes of
this paragraph, the term "leased employee" means any person who, pursuant
to an agreement between the Employer and any other person ("leasing
organization"), has performed services for the Employer (or for the
Employer and related persons determined in accordance with Section
414(n)(6) of the Internal Revenue Code) on a substantially full-time
basis for a period of at least one year, if such services are a type
historically performed by employees in the business field of the
Employer.
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Notwithstanding the foregoing, a leased employee shall not be considered
an Employee for any Plan Year if such leased employees constitute less
than twenty percent (20%) of the number of the Employer's Nonhighly
Compensated Employees within the meaning of Section 414(n)(5)(C)(ii) of
the Code and if during such Plan Year the leased employee is covered by a
plan described in Section 414(n)(5)(B) of the Code. A leased employee is
not eligible to participate in the Plan unless he actually becomes an
Employee without regard to this paragraph.
1.19 Employer
The Company, and any other member of the Controlled Group adopting the
plan pursuant to Section 3.01.
1.20 Employment Commencement Date
The date on which an Employee first performs an Hour of Service for the
Employer or other member of the Controlled Group.
1.21 Fiscal Year
The twelve-month period which begins on the first day of January and ends
on the last day of December.
1.22 Highly Compensated Employee
(a) An Employee is a Highly Compensated Employee under this
provision if (a) the Employee is a 5-percent owner; (b) the
Employee's compensation for the Plan Year exceeds the Section
414(q)(1)(B) of the Code amount; (c) the Employee's compensation
exceeds the Section 414(q)(1)(C) of the Code amount for the Plan
Year and the Employee is in the top-paid group of employees within
the meaning of Section 414(q)(4) of the Code, or (d) the Employee
is an officer described in Section 414(q)(1)(D) of the Code.
(b) The lookback provisions of Section 414(q) of the Code shall not
apply to determining Highly Compensated Employees under this
provision.
This simplified method for determining Highly Compensated Employees shall
apply on the basis of a snapshot day. In applying this simplified method
on a snapshot basis:
(a) Who is a Highly Compensated Employee is determined on the basis
of the data as of the snapshot day, except as provided below in
(c).
(b) If the determination of who is a Highly
Compensated Employee is made earlier than the
last day of the Plan Year, the Employee's
compensation
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that is used to determine an Employee's status must be
projected for the Plan Year under a reasonable method established
by the Company.
(c) Employees not employed on the snapshot day that are taken into
account in testing must be categorized as either Highly Compensated
Employees or Non-Highly Compensated Employees. In that case, the
method described in this section shall be subject to the following
modifications. In addition to those Employees who are determined to
be Highly Compensated Employees on the Plan's snapshot day, as
described above, the Plan shall treat as a Highly Compensated
Employee an eligible Employee for the Plan Year who:
(1) terminated prior to the
snapshot day and was a Highly Compensated
Employee in the prior year;
(2) terminated prior to the snapshot day and (i) was a
5-percent owner, (ii) has compensation for the Plan Year
greater than or equal to the projected compensation of any
Employee who is treated as a Highly Compensated Employee on
the snapshot day (except for Employees who are Highly
Compensated Employees solely because they are 5-percent
owners or officers), or (iii) was an officer and has
compensation greater than or equal to the projected
compensation of any other officer who is a Highly Compensated
Employee on the snapshot day solely because that person is an
officer; or
(3) becomes employed subsequent to the snapshot day and
(i) is a 5-percent owner, (ii) has compensation for the Plan
Year greater than or equal to the projected compensation of
any Employee who is treated as a Highly Compensated Employee
on the snapshot day (except for Employees who are Highly
Compensated Employees solely because they are 5-percent
owners or officers), or (iii) is an officer and has
compensation greater than or equal to the projected
compensation of any other officer who is a Highly Compensated
Employee on the snapshot day solely because that person is an
officer.
In applying this provision, Section 1.414(q)-1T of the Temporary Income
Tax Regulations applies to the extent that it is not inconsistent with
the methods specifically provided above.
"Highly Compensated Employee" shall include a former Employee of the
Company whose employment with the Controlled Group terminated prior to
the Plan Year and who was a Highly Compensated Employee for the Plan Year
in which his employment terminated or for any Plan Year ending on or
after his 55th birthday.
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If an Employee is a member of the family of a 5-percent owner or one of
the 10 Highly Compensated Employees paid the greatest compensation for a
Plan Year, then the Employee shall not be considered a separate Employee
and any compensation paid to such Employee (and any contribution on
behalf of such Employee) shall be treated as if it were paid to (or on
behalf of) the 5-percent owner or the Highly Compensated Employee.
For the purposes of this definition of "Highly
Compensated Employee",
(a) the term "compensation" shall mean an Employee's compensation
(within the meaning of Section 415(c)(3) of the Code determined
without regard to Sections 125, 402(a)(8) and 402(h)(1)(B) of the
Code),
(b) the term "top-paid group of Employees" shall mean that group of
Employees of the Controlled Group consisting of the top 20 percent
of such Employees when ranked on the basis of compensation paid by
the Controlled Group during the Plan Year and
(c) the term "family" shall mean an Employee's spouse and lineal
ascendants and descendants and the spouses of such lineal
ascendants or descendants.
1.23 Nonhighly Compensated Employee
Any Employee who is not a Highly Compensated Employee.
1.24 Normal Retirement Age
The later of the date an Employee attains age 65 or the fifth anniversary
of the date he commenced participation in the Plan.
1.25 Normal Retirement Date
The last day of the month in which an Employee attains his Normal
Retirement Age.
1.26 Participant
An Eligible Employee who fulfills the eligibility requirements provided
in Article IX and who continues to qualify as a Participant.
1.27 PBGC Interest Rate
Effective on and after January 1, 1987, with respect to a proposed
distribution date, the effective annual interest rate or rates used by
the Pension Benefit
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Guaranty Corporation to value annuities for plans terminating as of the
first day of the Plan Year containing such distribution date.
1.28 Plan
The ALLTEL Corporation Pension Plan, as set forth herein and as may be
amended from time to time. Where the context requires, Plan and
provisions herein shall refer to the provisions of the Plan as in effect
as of the relevant time.
1.29 Plan Administrator
The Company, which shall serve pursuant to the terms of Article II. The
Company may allocate or delegate any or all of its authority under the
Plan to a Committee of no less than three persons.
1.30 Plan Year
The twelve-month period which begins on the first day of January and
which ends on the last day of December. The limitation year for the Plan
shall be the same as the Plan Year unless the Company elects otherwise as
provided under the Act.
1.31 Pension
A series of monthly amounts which are payable to a person who is entitled
to receive benefits under the Plan.
1.32 Prior Plan
Any other pension plan or profit-sharing plan which has been merged or is
merged into the Plan.
1.33 Qualified Joint and Survivor Annuity
An annuity for the life of the Participant with a survivor annuity for
the life of the Spouse that is equal to 50% of the amount of the annuity
which is payable during the joint lives of the Participant and the Spouse
and which is the Actuarial Equivalent of a single life annuity for the
life of the Participant.
1.34 Qualified Preretirement Survivor Annuity
An annuity payable to the surviving Spouse of a Participant who dies
prior to commencement of a Pension, determined in accordance with the
provisions of Article XII.
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1.35 Reemployment Commencement Date
The date on which an Employee first performs an Hour of Service following
a Termination of Employment.
1.36 Retirement
Termination of employment for reasons other than death after a
Participant has fulfilled all requirements for a Normal or Early
Retirement Pension hereunder. Retirement shall be considered as
commencing on the last day of the month in which occurs a Participant's
last day of employment (or Authorized Leave of Absence, if later).
1.37 Service Definitions
(a) Hour of Service
(1) Each hour (i) for which an Employee is directly or
indirectly compensated or entitled to compensation by the
Employer or other member of the Controlled Group for the
performance of duties during the applicable computation
period; (ii) for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer or
other member of the Controlled Group (irrespective of whether
the employment relationship has terminated) for reasons other
than performance of duties (such as vacation, holidays
sickness, jury duty, disability, lay-off, military duty or
leave of absence) during the applicable computation period;
and (iii) for which back pay is awarded or agreed to by the
Employer or other member of the Controlled Group without
regard to mitigation of damages (provided that the same Hours
of Service shall not be credited under both this clause (iii)
and clause (i) or (ii) above).
Notwithstanding the above, (i) no more than 501
Hours of Service are required to be credited to an Employee
on account of any single continuous period during which the
Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for
which an Employee is directly or indirectly paid, or entitled
to payment, on account of a period during which no duties are
performed, is not required to be credited to the Employee if
such payment is made or due under a plan maintained solely
for the purpose of complying with applicable worker's
compensation, unemployment compensation, or disability
insurance laws; and (iii) Hours of Service are not required
to be credited for a
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payment which solely reimburses an Employee for
medical or medically related expenses incurred by the
Employee.
For purposes of this Section, a payment shall be
deemed to be made by or due from the Employer or other member
of the Controlled Group regardless of whether such payment is
made by or due from the Employer or other member of the
Controlled Group directly or indirectly through, among
others, a trust fund, or insurer, to which the Employer or
other member of the Controlled Group contributes or pays
premiums and regardless of whether contributions made or due
to the trust fund, insurer, or other entity are for the
benefit of particular Employees or are on behalf of a group
of Employees in the aggregate.
The provisions of Department of Labor regulations
Section 2530.200b-2(b) and (c) are incorporated herein by
reference.
Notwithstanding the above, an Employee for whom
records of his actual number of Hours of Service are not
normally maintained shall be credited with 10 Hours of
Service for each day he would be required to be credited with
at least one Hour of Service as defined herein.
(2) Solely for the purpose of determining whether a
Participant has incurred a Break in Service, Hours of Service
shall be recognized for a "maternity or paternity leave of
absence" as specified herein. A "maternity or paternity leave
of absence" shall mean an absence from work for any period by
reason of the Participant's pregnancy, birth of the
Participant's child, placement of a child with the
Participant in connection with the adoption of such child, or
any absence for the purpose of caring for such child for a
period immediately following such birth or placement. For
this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins,
only if credit therefor is necessary to prevent the
Participant from incurring a one-year Break in Service, or,
in any other case, in the immediately following computation
period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would
normally have been credited but for such absence, or, in any
case in which the Plan Administrator is unable to determine
such hours normally credited, 8 Hours of Service per day. The
total Hours of Service required to be credited for a
"maternity or paternity leave of absence" shall not exceed
501.
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(3) If an Employee has been granted an Authorized Leave
of Absence or renders Detached Service, he shall be credited
with Hours of Service as if he had been compensated by the
Employer for what would have been his regularly scheduled
hours of work during the period of such Authorized Leave of
Absence or Detached Service. If the Authorized Leave of
Absence is due to service in the Armed Forces of the United
States, in order to be credited with Hours of Service under
this subsection (3), the Employee's absence must be caused by
war or other emergency or the Employee must be required to
serve under the law of conscription in time of place and the
Employee must return to employment with the Employer within
the period provided by law. An Employee for whom records of
his actual numbers of Hours of Service are not normally
maintained shall be credited with ten (10) Hours of Service
for each day of his Authorized Leave of Absence.
(b) Year of Service
A twelve-month computation period during which an Employee
completes at least 1,000 Hours of Service.
(c) Break in Service
A Plan Year or Eligibility Computation Period during which an
Employee fails to complete at least 501 Hours of Service.
(d) Benefit Service
(1) The amount of the benefit payable to or on behalf
of a Participant shall be determined on the basis of his
Benefit Service, in accordance with the following:
(i) Benefit Service Prior to January 1, 1976:
For a Participant as of January 1, 1976, if and only if
he had been covered under the prior provisions of the
Plan (or if he would have been covered under such
provisions except by reason of his having attained his
55th birthday prior to the date he was employed), the
Participant's last period of continuous employment with
the Employer prior to January 1, 1976 to completed
months shall be counted as Benefit Service, including
such periods of Authorized Absence or prior employment
that were credited under the provisions of the Plan in
effect prior to January 1, 1976.
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(ii) Benefit Service From and After January
1, 1976: Subject to the Break in Service provisions, a
Participant shall accrue one year of Benefit Service
for each calendar year in which he has 2,000 or more
Hours of Service, with fractional credit granted in
units of 1/12th year for each 166-2/3 Hours of Service
completed. No Benefit Service shall be granted for any
calendar year in which less than 1,000 Hours of Service
were completed except for the calendar year next
preceding the date of the Participant's initial
participation (or calendar year of return to employment
after a Break in Service) and the calendar year of the
Participant's Retirement (or other Termination of
Employment).
(2) Benefits under the Plan shall not be accrued during
employment which would exclude an Employee from participation
in the Plan because he was not or is not an Eligible
Employee; provided, however, that this exclusion from benefit
accrual shall not apply to an Employee in a collective
bargaining unit not included in the Plan who becomes covered
by the Plan by reason of his transfer to an employment
classification included in the Plan, whether or not he is
affected by the provisions of Section 10.05, and provided
further that the exclusion shall again apply if the Employee
is transferred back to such collective bargaining unit, but
only as to his benefit accruals subsequent to the date of
such latter transfer. In the event a Participant ceases to be
an Eligible Employee (eligible to accrue benefits under the
Plan) but remains an Employee, he shall receive no Benefit
Service until he is again in eligible employment.
(3) If a Participant is reemployed as an Employee by
the Employer after having qualified for a deferred Vested
Pension in accordance with Section 10.04, such Participant
shall, in lieu thereof, have reinstated the Benefit Service
in effect when such deferred Vested Pension was acquired.
Notwithstanding any other provision of the Plan to the
contrary, no Benefit Service shall be counted with respect to
any participation hereunder for which full settlement of the
Accrued Pension in the form of an Actuarially Equivalent lump
sum had been made; provided, however, that if (i) a lump sum
settlement was less than the present value of the
Participant's Accrued Pension, and (ii) the former
Participant to whom the lump sum settlement had been made
repays said sum with interest at the rate of 5% (effective
January 1, 1988, at the rate of 120 percent of the Federal
mid-term
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rate as in effect for the first month of each
Plan Year) from date of distribution to date of repayment,
his years of Benefit Service shall be restored. Such
repayment must be made by the Participant before the earlier
of 5 years after the Participant's Reemployment Commencement
Date, or the close of the period in which the Participant
incurs five consecutive one-year Breaks in Service following
the date of distribution.
(4) If a former Participant who had a Break in Service
and who did not have a vested right in his Accrued Pension is
reemployed on or after January 1, 1985, he shall be credited
with his pre-Break Benefit Service only if his consecutive
one-year Breaks in Service are less than the greater of 5
years or the aggregate number of his pre-Break years of
Benefit Service.
(5) There shall be no duplication of Benefit Service
under the Plan or any Prior Plan by reason of any restoration
or granting of Benefit Service nor shall more than one year
of Benefit Service be granted for any one calendar year.
(e) Detached Service
Service rendered by an Employee on an Authorized Leave of
Absence pursuant to his detachment by and from his Employer for the
purpose of engaging in other employment deemed by his Employer to
be in its interest.
(f) Eligibility Year of Service
Each Eligibility Computation Period during which an Employee
has completed a Year of Service. An Employee's initial Eligibility
Computation Period is the twelve-month period beginning with his
Employment Commencement Date. His subsequent Eligibility
Computation Periods shall be the Plan Years, including as the first
such subsequent Eligibility Computation Period the Plan Year in
which the first Eligibility Computation Period ends.
(g) Vesting Year of Service
(1) Service Prior to January 1, 1976: The Employee's
last period of continuous employment with the Employer prior
to January 1, 1976 stated as years and completed months,
including any periods of Authorized Leaves of Absence or
prior employment that was credited under the provisions of
the Plan in effect prior to January 1, 1976.
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(2) Service On and After January 1, 1976: Each Plan
Year during which an Employee has completed a Year of
Service. A Participant's Vesting Years of Service are counted
from his Employment Commencement Date.
(3) There shall be no duplication of service under the
Plan or any Prior Plan by reason of any restoration or
granting of service, nor shall more than one Vesting Year of
Service be granted in respect of any one calendar year.
(h) Bridging
Notwithstanding any other provision of the Plan to the
contrary, any former Participant who, irrespective of the date of
his Termination of Employment, had not fulfilled the requirements
for vested benefits under Section 11.04 of the Plan including any
prior provision hereof, and who again was or is employed, shall
have pre-termination Vesting Years of Service and Benefit Service
restored if the number of consecutive years of post-termination
employment is at least 5.
(i) Special Provisions
Each Employee who is a Former GTE Directories Employee, as
defined in paragraph (e) of Section 13.03 of the ALLTEL Corporation
Profit- Sharing Plan, shall be credited with Eligibility Years of
Service and Vesting Years of Service with respect to periods prior
to October 15, 1993, subject to the provisions of paragraph (d) of
Section 10.04, equal to the years of eligibility service and years
of vesting service with which he is credited with respect to such
periods under Sections 9.04 and 9.05 of the ALLTEL Corporation
Profit-Sharing Plan. Notwithstanding any other provision of the
Plan to the contrary, there shall be no duplication of Eligibility
Years of Service or Vesting Years of Service by reason of service
(or hours of service) in respect of any single period or otherwise.
1.38 Social Security Covered Compensation
The amount of annual compensation with respect to which social security
benefits would be provided for an employee, computed as though, for each
year up to age 65, his annual compensation is at least equal to the
Social Security Taxable Wage Base under the Social Security Act as of
December 31, 1987 and as expressed in revised Table I of Revenue Ruling
71-446 for that year.
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1.39 Social Security Retirement Age
The age used as the retirement age for the Participant under Section
216(1) of the Social Security Act, except that such section shall be
applied without regard to the age increase factor, and as if the
retirement age under Section 216(1)(2) of such Act were 62.
1.40 Social Security Taxable Wage Base
The contribution and benefit base under Section 230 of the Social
Security Act in effect at the beginning of the Plan Year.
1.41 Spouse
The person to whom a Participant is legally married at the time in
question.
1.42 Termination of Employment
A termination of employment with the Employer or other member of the
Controlled Group following which the person is no longer employed by any
member of the Controlled Group.
1.43 Total and Permanent Disability
Permanent incapacity resulting in the Participant's being unable to
engage in gainful employment at his usual occupation, or any other
occupation for which he is reasonably suited by education, training and
experience, by reason of any medically demonstrable physical or mental
condition, excluding, however, (i) incapacity contracted, suffered or
incurred while the Participant was engaged in, or which resulted from
having engaged in, a felonious enterprise; (ii) incapacity resulting from
or consisting of chronic alcoholism or addition to drugs of abuse; (iii)
incapacity resulting from an intentionally inflicted injury or illness;
(iv) incapacity contracted, suffered or incurred in the employment of
other than the Employer, including self-employment; (v) incapacity
resulting from injury or disease incurred while serving in the armed
forces of any country and for which a government disability benefit is
payable.
1.44 Trust Agreement and Trust
The Agreement between the Company and the Trustee establishing the ALLTEL
Corporation Pension Trust, as amended from time to time.
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1.45 Trustee
The entity or individual or individuals designated under the Trust
Agreement and includes and denotes any successor or successor in trust
under the Trust Agreement, unless the context clearly indicates a
contrary intention.
1.46 Trust Fund
All cash, securities, real estate, or any other property held by the
Trustee pursuant to the terms of the Trust Agreement, together with the
income therefrom.
1.47 Vested Pension
The Accrued Pension as of any date multiplied by the appropriate vesting
percentage as of said date under the provisions of Section 10.04.
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ARTICLE II
ADMINISTRATION
2.01 Plan Administrator
The Company shall be the Plan Administrator and shall be the
administrator for purposes of the Act and the plan administrator for
purposes of the Code.
2.02 Allocation of Authority and Responsibility Among Named
Fiduciaries
The Company, the Plan Administrator, and the Trustee shall be "named
fiduciaries" as defined in Section 402(a)(2) of the Act. The Employers
shall have the sole responsibility for making contributions under the
Plan, as determined by the Company. The Company shall have the sole
responsibility for appointing one or more trustees as the Trustee. The
Plan Administrator shall have the sole responsibility for the
administration of the Plan as provided herein. Except to the extent that
an investment manager has been appointed, the Trustee shall have the
responsibility for the administration and management of the Trust Fund,
in accordance with the provisions of the Trust Agreement. Each named
fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the
Plan, unless inconsistent with applicable law. Each named fiduciary may
rely on any direction, information or action of another named fiduciary.
It is intended under the Plan that each named fiduciary shall be
responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan and shall not be
responsible for any act or failure to act of another fiduciary (including
named fiduciaries) if the responsibility or authority of the act or
failure to act was not within the scope of the named fiduciary's
authority or delegated responsibility. No fiduciary guarantees the Trust
Fund in any manner against investment loss or depreciation in asset
values.
2.03 Rights, Powers and Duties of the Plan Administrator
The Plan Administrator shall have all such powers and authority as may be
necessary to discharge its responsibilities under the Plan, including the
following rights, powers, and responsibilities:
(1) The Plan Administrator shall administer the plan uniformly and
consistently with respect to persons who are similarly situated.
(2) The Plan Administrator shall direct the Trustee in writing to
make payments from the Trust Fund to persons who qualify for such
payments hereunder. Such written order to the Trustee shall specify
the name of the person, his address, and the amount and frequency
of such payments.
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(3) The Plan Administrator shall have the sole responsibility for
the administration of the Plan; and, except as herein expressly
provided, the Plan Administrator shall have the exclusive
discretionary power and authority to interpret and construe the
provisions of the Plan and to determine any question arising
hereunder or in connection with the administration of the Plan,
including the remedying of any omission, inconsistency or
ambiguity, and its decision or action in respect thereof shall be
conclusive and binding upon any and all Participants,
Beneficiaries, and their heirs, distributees, executors,
administrators and assigns.
(4) The Plan Administrator shall resolve all questions relating to
participation in the Plan and determine the amount, manner, and
timing of the payment of benefits under the Plan.
(5) The Plan Administrator shall maintain such records as it
determines are necessary, appropriate, or convenient to properly
administer the Plan.
(6) The Plan Administrator may adopt rules and procedures for the
administration of the Plan that are not inconsistent with the terms
of the Plan.
(7) The Plan Administrator may employ such counsel and agents for
administrative, clerical, legal, medical, accounting, or other
services as it may require in carrying out the provisions of the
Plan.
(8) The Plan Administrator shall prepare and distribute to
Participants or their Beneficiaries all information required under
federal law or by the other provisions of the Plan.
(9) The Plan Administrator shall prepare and file all reports or
other information required by applicable law.
2.04 Discharge of Duties
Each fiduciary under the Plan shall discharge its duties solely in the
interest of Participants and their Beneficiaries in accordance with the
applicable provisions of Section 404 of the Act.
2.05 Indemnification
The Company shall indemnify any officer, director, or employee of a
member of the Controlled Group to whom any power, authority, or
responsibility under the Plan is allocated or delegated for any liability
actually and reasonably incurred with respect to the exercise or failure
to exercise such power, authority, or
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responsibility, unless such liability results from such person's own
gross negligence or willful misconduct.
2.06 Compensation and Expenses
No person who already receives full-time pay from a member of the
Controlled Group shall receive compensation from the Plan, except for
reimbursement of expenses properly and actually incurred.
2.07 Committee
(a) The Company, by action of its Board of Directors, may allocate
or delegate any or all of its powers, authority, or
responsibilities as Plan Administrator to a Committee of no less
than three persons. Nothing contained herein shall be construed to
prevent any Participant or any director, officer, or employee of a
member of the Controlled Group from serving as a member of the
Committee.
(b) Any action authorized, permitted, or required to be taken by
the Committee may be taken by a majority of its members at the time
acting hereunder, except that no member of the Committee who is a
Participant shall take any part in any action relating solely to
his participation. The decision of the majority may be expressed by
a vote at a meeting of the Committee, or in writing without a
meeting. Any direction or certification required or authorized to
be given by the Committee shall be in writing and signed by a
majority of the members of the Committee, or by such member as may
be designated by an instrument in writing signed by all of the
members thereof. The Committee shall keep a permanent record of its
meetings and actions.
(c) The Committee may from time to time allocate to one or more of
its members and may delegate to any other persons or organizations
any of its rights, powers, duties and responsi bilities with
respect to the operation and administration of the Plan that are
permitted to be delegated under the Act unless delegation is
expressly prohibited by the terms of the Plan or the Trust
Agreement. Any such allocation or delegation will be made in
writing, will be reviewed periodically by the Committee, and will
be terminable upon such notice as the Committee in its discretion
deems reasonable and proper under the circumstances. Whenever a
person or organization has the power and authority under the Plan
to delegate discretionary authority respecting the administration
of the Plan to another person or organization, the delegating
party's responsibility with respect to such delegation is limited
to the selection of the person to whom authority is delegated and
the periodic review of such person's performance and compliance
with applicable law and regulations. Any breach of fiduciary
responsibility by the person to
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whom authority has been delegated which is not proximately
caused by the delegating party's failure to properly select or
supervise, and in which breach the delegating party does not
otherwise participate, will not be considered a breach by the
delegating party, to the extent permitted by law.
(c) The Company, by action of its Board of Directors, may from time
to time remove members of the Committee and add members thereto. A
member of the Committee may, at any time, notify the Company in
writing of his intent to resign from the Committee, and such
resignation shall be effective as of the date such written
notification is received by the Company, unless a later date is
specified therein. Vacancies occurring in the Committee whether by
reason of resignation, removal, death or otherwise, shall be filled
by the Board of Directors.
(d) The Committee may from time to time formulate such rules and
regulations for its organization and the transaction of its
business as it deems suitable and as are consistent with the
provisions of the Plan and the Trust Agreement.
2.08 Administrative Expenses
The Plan Administrator may, in its discretion, direct the Trustee to pay
from the Trust Fund all administrative expenses of the Plan and Trust,
including the compensation of all persons employed by the Plan
Administrator. To the extent such expenses are not paid from the Trust
Fund, they shall be paid directly by the Company and/or the other
Employers. Any expenses to be paid by the Trustee out of the Trust Fund
shall be approved by the Plan Administrator before payment by the
Trustee.
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ARTICLE III
GENERAL PROVISIONS
3.01 Adoption of the Plan by Other Employers
Any member of the Controlled Group may, with the consent of the Company,
adopt the Plan and thereby become an Employer hereunder by executing an
instrument evidencing such adoption on the order of its board of
directors. Such instrument shall specify the effective date of the
adoption.
3.02 No Contract of Employment
Nothing herein contained shall be construed to constitute a contract of
employment between the Employer and any Employee nor shall the
maintenance of the Plan affect the Employer's right to discharge or
otherwise discipline Employees. The employment records of the Employer
and the Trustee's records shall be final and binding upon all Employees
as to eligibility and participation.
3.03 Restrictions Upon Assignments and Creditor's Claims
(a) Except as may be otherwise provided in the Plan, no Participant
or Beneficiary shall have any power to assign, pledge, encumber or
transfer any interest in the Trust Fund while the same shall be in
the possession of the Trustee. Any such attempt at alienation shall
be void. No such interest shall be subject to attachment,
garnishment, execution, levy or any other legal or equitable
proceeding or process and any attempt to so subject such interest
shall be void. The foregoing provisions of this paragraph (a),
however, shall not preclude (i) the enforcement of a Federal tax
levy made pursuant to Section 6331 of the Code or (ii) the
collection by the United States on a judgment resulting from an
unpaid tax assessment.
(b) Notwithstanding the foregoing, this Section 3.03 shall not
apply to a qualified domestic relations order, as defined in
Section 414(p) of the Code. The Plan Administrator shall establish
a procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders.
The Plan Administrator shall promptly notify the Participant and
each alternate payee of the receipt of any State domestic relations
order and the procedure which the Plan Administrator will follow in
determining whether the order constitutes a qualified domestic
relations order, as defined in Section 414(p) of the Code.
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3.04 Facility of Payment
If any person to whom a benefit under the Plan is payable is unable to
care for his affairs because of illness or accident, any payment due may
be paid, in the discretion of the Plan Administrator, to the Spouse,
child, brother or sister of such person, or to any other persons deemed
by the Plan Administrator to be maintaining or responsible for the
maintenance of such person (unless prior claim therefor shall have been
made by a duly qualified guardian or other legal representative). Any
payment made in accordance with the provisions of this Section 3.04 shall
be a complete discharge of any liabilities of the Plan with respect to
the benefit so paid.
3.05 Restriction of Claims Against Trust
The Trust and the corpus and income thereof shall not be subject to the
rights or claims of any creditor of the Employer or Controlled Group.
Neither the establishment of the Trust, the modification of the Trust
Agreement, the creation of any fund or account, nor the payment of any
benefits shall be construed as giving any Participant or any other person
any legal or equitable rights against the Controlled Group or any of its
officers, employees, directors, or shareholders, or the Trustee unless
the same shall be specifically provided for in the Plan.
3.06 Benefits Payable from Trust
All benefits payable under the Plan shall be paid or provided for solely
from the Trust.
3.07 Merger and Transfer of Assets or Liabilities
The Plan shall not be merged or consolidated with any other plan, nor
shall any assets or liabilities of the Plan be transferred to another
plan, unless, immediately after such merger, consolidation, or transfer
of assets, each Participant would receive a benefit equal to or greater
than the benefit he would have received if the Plan had terminated
immediately prior to the merger, consolidation or transfer.
3.08 Applicable Law
To the extent not preempted by federal law, the provisions of the Plan
shall be construed, regulated, and administered in accordance with the
laws of the State of Delaware. The invalidity or illegality of any
provision of the Plan shall not affect the legality or validity of any
other part thereof.
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3.09 Reversion of Employer Contributions
At no time shall any part of the corpus or income of the Trust Fund be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries. Notwithstanding the foregoing, if a
contribution to the Trust is made by the Employer by a mistake in fact,
such contribution shall be returned to the Employer within one year after
the payment of the contribution to the Trust if the Employer so directs.
If a contribution by the Employer is conditioned on initial qualification
of the Plan under Section 401 of the Code, and if the Plan does not
qualify, then such contribution shall be returned to the Employer within
one year after the date of denial of qualification of the Plan. If a
contribution to the Trust is not fully deductible by the Employer under
Section 404 of the Code, then, to the extent the deduction is disallowed,
such a contribution shall be returned to the Employer within one year
after the disallowance of the deduction. Unless otherwise specified in
writing, contributions made by the Employer to the Trust shall be deemed
to be conditioned upon the initial qualification of the Plan and upon the
deductibility of the contribution under Section 404 of the Code.
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ARTICLE IV
CLAIMS PROCEDURES
4.01 Claim for Benefits
If any claim for benefits filed by any person under the Plan (the
"claimant") is denied in whole or in part, the Plan Administrator shall
issue a written notice of such decision to the claimant. The notice shall
be issued to the claimant as soon as possible but in no event later than
90 days from the date the claim for benefits was filed. The notice issued
by the Plan Administrator shall be written in a manner calculated to be
understood by the claimant, and shall include the following:
(1) the specific reason or reasons for any
denial of benefits;
(2) the specific Plan provisions on which any
denial is based;
(3) a description of any further material or information which is
necessary for the claimant to perfect his claim and an explanation
of why the material or information is needed; and
(4) an explanation of the Plan's claim review
procedure.
If the Plan Administrator fails to respond to a claim for benefits, such
claim shall be deemed to have been denied.
4.02 Review
If the Plan Administrator denies a claim for benefits in whole or in
part, or the claim is otherwise deemed to have been denied, the claimant
or his duly authorized representative may submit to the Plan
Administrator a written request for review of the claim denial within 60
days of the mailing of the notice or deemed denial of his claim. The
claimant or his duly authorized representative may:
(1) review pertinent documents; and
(2) submit issues and comments in writing to which the Plan
Administrator shall respond.
The Plan Administrator shall furnish a written decision on review not
later than sixty days after receipt of the written request for review of
the claim denial, unless special circumstances require an extension of
the time for processing the appeal. If an extension of time for review is
required because of special circumstances, written notice of the
extension shall be furnished to the claimant
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prior to the commencement of the extension, and the Plan Administrator
shall furnish a written decision on review not later than one hundred and
twenty days after receipt of the written request for review of the claim
denial. If a written decision on review is not furnished within sixty
days (or one hundred twenty days, if applicable) after receipt of the
written request for review of the claim denial, the claim shall be deemed
denied on review. The decision on review shall be in writing and shall
include specific reasons for the decision, shall be written in a manner
calculated to be understood by the claimant, and shall contain specific
references to the pertinent Plan provisions on which the decision is
based.
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ARTICLE V
AMENDMENT AND TERMINATION
5.01 Amendment and Termination of the Plan
The Company expressly reserves the right, at any time and from time to
time, by action of or pursuant to authority of its Board of Directors:
(1) to terminate the Plan in whole or in part;
and/or
(2) to amend the Plan in any respect.
A Participant's accrued benefit shall not be decreased by an amendment to
the Plan, except as may be permitted under Section 411 of the Code.
Any termination or amendment shall be evidenced by an instrument executed
on behalf of the Company by an authorized officer. No termination or
amendment shall increase the duties or responsibilities of a Trustee
without its consent thereto in writing.
Promptly after any amendment of the Plan has become effective, the
Company shall cause a copy of such amendment to be filed with the Plan
Administrator and with the Trustee.
5.02 Procedure Upon Termination
(a) In the event of termination or partial termination of the Plan
in accordance with this Article V or otherwise, or upon a complete
discontinuance of contributions under the Plan within the meaning
of Section 401(a)(7) of the Code, the Trust Fund shall be
allocated, subject to provisions for expenses of administration or
liquidation, for the following purposes and in the following manner
and order to the extent of the sufficiency of such assets:
(1) First, to provide Pensions with respect to that
portion of a Participant's Accrued Pension that is derived
from the Participant's contributions to a Prior Plan, as
specified in Article XII, that were not mandatory
contributions, if any;
(2) Second, to provide Pensions with respect to that
portion of a Participant's Accrued Pension that is derived
from the Participant's mandatory contributions to a Prior
Plan, as specified in Article XII, if any;
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(3) Third, to provide Pensions to retired Participants,
surviving Spouses, or Beneficiaries, whose retirement
benefits commenced three or more years prior to the date of
the termination of the Plan, based on the Plan provisions in
effect during the five-year period prior to the date of
termination of the Plan under which such benefits would be
the least;
(4) Fourth, to provide retirement benefits to other
Participants, surviving Spouses, or Beneficiaries, with
vested interests that would have been in pay status as of the
beginning of the three year period ending on the date of the
termination of the Plan if the Participant had retired prior
to the beginning of such three year period and his Pension
had commenced in the normal form of annuity under the Plan as
of the beginning of such period, based on Plan provisions in
effect during the five-year period prior to the date of the
termination of the Plan under which the benefit would be the
least;
(5) Fifth, to provide retirement benefits to all
retired Participants, surviving Spouses, or Beneficiaries,
active Participants and former Participants with vested
interests based on the retirement benefits guaranteed on
their behalf by the Pension Benefit Guaranty Corporation
under the provisions of the Employee Retirement Income
Security Act of 1974, less any amounts set forth in
paragraphs (1) and (2) of this subsection (a).
(6) Sixth, to provide retirement benefits to all
retired Participants, surviving Spouses, active Participants,
and former Participants with vested interests based on their
non-forfeitable retirement benefits in excess of the amounts
payable under paragraph (3) of this subsection (a) as of the
date of the termination of the Plan;
(7) Seventh, to provide all other
benefits under the Plan.
(b) To the extent that the available funds are insufficient to
provide in full the Pensions specified under subsection (a) of this
Section 5.02, the Pensions to be provided for the classes of
persons specified by the respective paragraphs shall be reduced as
follows:
(1) If the insufficiency of funds pertains to paragraph
(1), (2), (3), (4), or (5) of subsection (a), the available
funds shall be allocated pro rata among all such persons on
the basis of the present value (as of the termination date)
of their respective Pensions to be provided under such
paragraphs;
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(2) If the insufficiency of funds pertains to paragraph
(6) or (7) of subsection (a), the available funds shall first
be applied to provide for the persons specified in such
paragraph the Pensions to which they would have been entitled
under such paragraph if the provisions of the Plan as in
effect at the beginning of the 5-year period ending on the
date of Plan termination had remained in effect until the
date of Plan termination. If the funds are insufficient to
provide such Pensions in full, the Pensions to be provided
shall be proportionately reduced. If the funds are more than
sufficient to provide such Pensions, they shall be applied to
provide Pensions for such persons determined on the basis of
the provisions of the Plan as amended by the most recent
amendment effective during such 5-year period under which the
funds available for allocation are sufficient to provide such
Pensions in full, and any funds remaining to be allocated
under such paragraph shall be allocated pro rata on the basis
of the provisions of the Plan as amended by the next
succeeding Plan amendment effective during such period.
(c) Notwithstanding any other provisions of the Plan with respect
to reversion, any funds remaining in the Trust Fund after funding
in full the Pensions provided for in subsection (a) above shall
revert to the Employers, as determined by the Company.
(d) All Pensions to be provided pursuant to the foregoing
provisions of this Section 5.02 shall be subject to the provisions
of Section 5.03 and to Section 16.02 and may be implemented through
the continuance of the Trust Fund existing on the date of
termination of the Plan, through the creation of one or more new
Trust Funds for that purpose, through the purchase of insurance
company annuity contracts, or through a combination of the
foregoing media as determined by the Plan Administrator.
5.03 Non-Forfeitability Upon Termination of Plan
Upon termination or partial termination of the Plan, the rights of all
affected Participants to the benefits accrued to the date of such
termination or partial termination, to the extent funded as of such date,
shall be nonforfeitable.
5.04 Internal Revenue Service Requirements
Notwithstanding any other provision of the Plan to the contrary, to
conform to the requirements of U.S. Treasury Regulations, the benefit
payable under the Plan shall be subject to the following limitations:
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(a) If the Plan is terminated, the benefit of any "highly
compensated employee" or "highly compensated former employee," as
defined in Section 414(q) of the Code, shall be limited to a
benefit that is nondiscriminatory under Section 401(a)(4) of the
Code.
(b) The annual payments in any one year to any of the 25 highly
compensated employees or highly compensated former employees with
the greatest compensation (hereinafter referred to as a "restricted
employee") in the current or any prior year shall not exceed an
amount equal to the payments that would be made on behalf of the
restricted employee under (1) a straight life annuity that is the
actuarial equivalent of the restricted employee's accrued portion
and other benefits to which the restricted employee is entitled
under the Plan (other than a Social Security supplement), and (2)
the amount of the payments the restricted employee is entitled to
receive under a Social Security supplement. For purposes of this
paragraph (b) "benefit" includes, among other benefits, loans in
excess of the amounts set forth in Section 72(p)(2)(A) of the Code,
any periodic income, any withdrawal values payable to a living
employee, and any death benefits not provided for by insurance on
the restricted employee's life. The foregoing provisions of this
paragraph (b) shall not apply, however, if:
(i) After payment to a restricted employee of all
benefits payable to the restricted employee under the Plan,
the value of Plan assets equals or exceeds 110 percent of the
value of "current liabilities," as defined in Section
412(b)(7) of the Code, (each value being determined as of the
same date in accordance with applicable Treasury
regulations);
(ii) The value of the benefits payable under the Plan
to or for a restricted employee is less than one percent of
the value of current liabilities before distribution; or
(iii) The value of benefits payable under the Plan to
or for a restricted employee does not exceed the amount
described in Section 411(a)(11)(A) of the Code.
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ARTICLE VI
TRUST AGREEMENT, TRUST FUND, AND CONTRIBUTIONS
6.01 Trust Agreement and Trust Fund
The Company shall execute one or more Trust Agreements (collectively
referred to as the "Trust Agreement") with a trustee or trustees selected
by the Company under the terms of which a Trust Fund will be established
for the purpose of receiving or holding contributions made to the Plan,
as well as interest and other income on investments of such funds, and
for the purpose of paying benefits provided by the Plan. The Company may
modify the Trust Agreement from time to time to accomplish the purposes
of the Plan, may remove any Trustee, and may select any successor
trustee. The Trust Agreement and the Trust maintained thereunder shall be
deemed to be a part of the Plan as if fully set forth herein and the
provisions of the Trust Agreement are hereby incorporated by reference
into the Plan.
6.02 Irrevocability
The Trust Fund shall be used to pay benefits as provided in the Plan. No
part of the principal or income of the Fund shall be used for, or
diverted to, purposes other than those provided in the Plan, and no part
of the Trust Fund shall revert to the Company or any member of the
Controlled Group except as may be otherwise specifically provided under
the Plan and/or Trust Agreement.
6.03 Employer Contributions
The Employer will make such contributions to the Trust Fund as is
necessary to maintain the Plan on a sound actuarial basis; provided that,
as a minimum contribution, the Employer intends to pay to the Trustee
such amounts as may be necessary to meet the minimum funding standards
established under the Employee Retirement Income Security Act of 1974.
Any forfeitures arising from the Termination of Employment or death of a
Participant, or for any other reason, shall be used to reduce the
Employer contributions under the Plan and shall not be applied to
increase the benefits any Participant would otherwise receive under the
Plan at any time prior to the termination of the Plan or prior to the
complete discontinuance of Employer contributions under the Plan.
6.04 Employee Contributions
No Participant shall be required or allowed to make any contribution to
the Trust Fund established under the Plan.
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6.05 Benefits Payable Only from Trust Fund
All benefits paid under the Plan shall be paid from the Trust Fund or
from any insurance contract established under Section 6.06, and the
Employer shall not be otherwise liable for benefits payable under the
Plan.
6.06 Optional Provision for Benefits
The Company reserves the right to change at any time the means through
which the benefits under the Plan shall be provided, including the
substitution of a contract or contracts with an insurance company or
companies, and may thereupon make suitable provision for the use of
assets of the Trust Fund to provide for the payment of benefits under
such insurance contract or contracts. No such change shall constitute a
termination of the Plan or result in the diversion to the Employer of any
funds previously contributed hereunder.
6.07 Commingling Authorized
As permitted in the Trust Agreement, the Trust Fund held under the Plan
may be commingled for investment purposes with any trust funds held under
other employee benefit plans of the Controlled Group, provided such other
funds qualify as tax exempt under the applicable provisions of the Code.
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ARTICLE VII
MAXIMUM LIMITATION ON PENSION
7.01 Maximum Limitation on Pensions
(a) Notwithstanding any other provision of the Plan to the
contrary, in no event shall the annual amount of a Pension
attributable to Employer contributions payable to a Participant in
the mode of a single-life annuity commencing on his Social Security
Retirement Age, exceed the lesser of --
(1) $90,000, automatically adjusted effective as of
January 1st of each calendar year after 1987 for increases in
the cost of living, if any, in accordance with regulations or
other pronouncements issued by the Secretary of the Treasury
or Commissioner of Internal Revenue, for such calendar year,
under the authority granted by Section 415(d) of the Internal
Revenue Code of 1986, as amended from time to time; and
(2) 100% of the Participant's average annual
compensation for the 3 consecutive calendar years during
which he received his greatest aggregate compensation from
the Employer and during which he was a Participant in the
Plan. For purposes of this Section 7.01, compensation shall
mean compensation as defined in Treasury Regulation Section
1.415-2(d), but limited as to dollar amount as provided in
the last two sentences of Section 1.14(a). (This limitation
shall also apply to benefits commencing on a Participant's
retirement date other than his Normal Retirement Date.)
In the event that the annual Pension otherwise
payable to a Participant who has retired or otherwise had a
Termination of Employment has been limited by the dollar
limitation in clause (1) above, such limited annual Pension
shall be increased in accordance with any automatic
cost-of-living adjustments in such dollar limitations made
pursuant to said clause (1).
(b) For purposes of this Section 7.01, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not)
ever maintained by the Employer shall be treated as one defined
contribution plan.
(c) In the event that the annual Pension payable to the Participant
under the Plan and all other defined benefit plans of the Employer
does not exceed
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$10,000 for the Plan Year or any prior Plan Year, and the
Employer has not at anytime maintained a separate defined
contribution plan in which the Participant participated, the
limitation otherwise imposed by this Section 7.01 shall not apply.
(d) In the event that a Participant has less than 10 years of
participation, the limitations referred to in subsection (a)(1) of
this Section 7.01 shall be multiplied by a fraction, the numerator
of which is the Participant's number of years of participation (or
part thereof) and the denominator of which is 10.
(e) In the event that a Participant has less than 10 Vesting Years
of Service, the limitations referred to in subsections (a)(2) and
(c) of this Section 7.01 shall be multiplied by a fraction, the
numerator of which is the Participant's number of Vesting Years of
Service (or part thereof) and the denominator of which is 10.
(f) To the extent provided by regulations promulgated by the
Secretary of the Treasury, the foregoing subsections (d) and (e)
shall be applied separately with respect to each change in the
benefit structure of the Plan.
(g) If the mode of Pension payment is other than a single-life
annuity or a qualified joint and survivor annuity, the amount of
Pension under such other mode of payment shall not exceed the
actuarial equivalent of the maximum annual pension payable under
this Section 7.01 and based on the greater of the interest rate
assumption under Section 1.03 of the Plan or 5% per year.
(h) If the annual Pension commences prior to the Participant's
attainment of Social Security Retirement Age, such Pension shall
not exceed an amount which is adjusted so that it is the actuarial
equivalent of the limitation set forth in clause (1) of subsection
(a) above (determined as of the date the annual Pension commences).
The adjustment provided for in the preceding sentence shall be made
in such manner as the Secretary of the Treasury may prescribe which
is consistent with the reduction for old-age insurance benefits
commencing before the Social Security Retirement Age under the
Social Security Act and based on the greater of the interest rate
assumption under Section 1.03 of the Plan or 5% per year.
(i) If the annual Pension commences after the Participant's
attainment of Social Security Retirement Age, such Pension shall
not exceed an amount which is adjusted so that it is the actuarial
equivalent of the limitation set forth in clause (1) of subsection
(a) above (determined as of the date the annual Pension commences).
The adjustment provided
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for in the preceding sentence shall be made in such manner as
the Secretary of the Treasury may prescribe based on the lesser of
the interest rate assumption under Section 1.03 of the Plan or on
an assumption of 5% per year.
(j) In no event shall a Participant be entitled to receive a
Pension in an amount which would cause the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction
(as hereafter defined) to exceed 1.0 for any Limitation Year (as
hereafter defined). In the event said sum of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction would
otherwise exceed 1.0 for any Limitation Year beginning before
January 1, 1995, the annual addition under the Defined Contribution
Plan Fraction shall be limited so that the sum of the two fractions
hereunder does not exceed the foregoing 1.0 limitation. For
Limitation Years beginning after December 31, 1994, in the event
said sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction would exceed 1.0, the numerator (i.e.
the pension) of the Defined Benefit Plan Fraction shall be limited
so that the sum of the two fractions does not exceed the foregoing
1.0 limitation. The Plan Administrator shall advise any affected
Participant of any additional limitation on his annual benefit
required by this paragraph.
For purposes of the foregoing paragraph:
(1) The "Defined Benefit Plan Fraction" for any
Limitation Year is a fraction, the numerator of which is the
Participant's projected pension under such plan subject to
Section 415 of the Code, determined as of the end of the
Limitation Year, and the denominator of which is the lesser
of --
(A) the product of 1.25
multiplied by the limitation of
clause (i) of subsection (a) of this
Section 4.05; or
(B) the product of 1.4
multiplied by the limitation of
clause (ii) of subsection (a) of this
Section 4.05.
The limitations under this clause (i) shall be
adjusted in accordance with subsections (d) and (e), if
applicable.
(2) The "Defined Contribution Plan Fraction" for any
Limitation Year is a fraction, the numerator of which is the
sum of the annual additions (as defined in the applicable
defined contribution plans) to the Participant's account
under all the defined contribution plans maintained by the
Employer regardless of whether any such plans are terminated
for the current and all prior Limitation Years (including the
annual additions
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attributable to the Participant's non-deductible
employee contributions to this and all other defined benefit
plans maintained by the Employer, regardless of whether any
such plans are terminated), and the denominator of which is
the sum of the Maximum Aggregate Amounts for the current and
all prior Limitation Years of service with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer). The Maximum Aggregate Amount in
any Limitation Year is the lesser of 125% of the dollar limit
on contributions under defined contribution plans contained
in Internal Revenue Code Section 415(c)(1)(A), as amended, or
25% of the Participant's compensation for such year, as
defined in Treasury Regulation Section 1.415-2(d).
If an Employee was a Participant in one or more
defined contribution plans maintained by the Employer which
were in existence on July 1, 1982, the numerator of this
fraction will be adjusted if the sum of this fraction and the
Defined Benefit Plan Fraction would otherwise exceed 1.0
under the terms of the Plan. Under the adjustment, an amount
equal to the product of (A) the excess of the sum of the
fractions over 1.0 multiplied by (B) the denominator of this
fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the later of the
end of the last Limitation Year beginning before January 1,
1983 or June 30, 1983. This adjustment also will be made if,
at the end of the last Limitation Year beginning before
January 1, 1984, the sum of the fractions exceeds 1.0 because
of accruals or additions that were made before the
limitations of this Section 4.05 became effective to any plan
of the Employer in existence on July 1, 1982.
(3) "Limitation Year" shall, for the purposes of
Section 415 of the Internal Revenue Code of 1986, as amended
from time to time, mean the 12-month period beginning on the
first day of each calendar year.
(k) This Section 7.01 of the Plan shall apply to Plan Years
beginning on and after January 1, 1987.
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ARTICLE VIII
TOP-HEAVY PROVISIONS
8.01 Definitions
For purposes of this Article, the following terms, when used with initial
capital letters, shall have the following respective meanings:
(a) Aggregation Group
Permissive Aggregation Group or Required Aggregation Group,
as the context shall require.
(b) Average Compensation
The Participant's Compensation within the meaning of Treasury
Regulation Section 1.415-2(d) averaged over the 5 consecutive Plan
Years (excluding Plan Years before January 1, 1984 or Plan Years
after the last Plan Year during which the Plan is a Top Heavy Plan)
in which the Participant earned a Vesting Year of Service (if such
Vesting Year of Service is not disregarded pursuant to Section
10.04) and in which the Participant's aggregate compensation was
the greatest. If the Participant did not receive compensation in 5
such Plan Years, his compensation shall be averaged over the lesser
number of such Plan Years.
(c) Compensation
Compensation as defined in Treasury regulation Section
1.415-2(d) and including wages, salaries, fees for professional
services, commissions, bonuses, tips, compensation based on a
percentage of profits, earned income in the case of a self-employed
Participant, disability payments under Section 105(d) of the Code,
paid or reimbursed moving expenses to the extent not deductible by
the Participant, medical reimbursement items and the value of a
non-qualified stock option to the extent includible in the
Participant's gross income and the amount includible in an
Employee's gross income upon making the election under Section
83(b) of the Code. Specifically excluded are salary-deferral
contributions, contributions to and distributions from most
deferred compensation plans, amounts realized from the sale of a
non-qualified stock option plan or from the sale, exchange or other
disposition of stock acquired under a qualified stock option plan
and most amounts which receive special tax benefits.
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(d) Determination Date
For any Plan Year, the last day of the immediately preceding
Plan Year. In the event that more than one plan is to be aggregated
for purposes of this Article VIII, the Determination Date for each
such plan which falls within the same calendar year shall be used.
(e) Super Top-Heavy Group
An Aggregation Group if, as of a Determination Date, the sum
of the present value of the aggregate accrued benefits for Key
Employees under all defined benefit plans included in the
Aggregation Group and the aggregate of the accounts of Key
Employees under all defined contribution plans included in the
Aggregation Group is more than 90% of a similar sum determined for
all employees in such plans. For purposes of determining such sums,
aggregate distributions made to any employee during the 5
consecutive Plan Years ending with the Plan Year that includes the
Determination Date shall be included. The aggregate accrued
benefits and/or the aggregate of accounts of former employees who
have not performed any service for the employer maintaining the
Plan at any time during the 5-year period ending on the
Determination Date shall be excluded from the foregoing
calculation.
(f) Super Top-Heavy Plan
(1) Except as provided by paragraph (2) of this
subsection, the Plan shall be an Super Top-Heavy Plan, if as
of a Determination Date:
(A) the present value of the aggregate
Accrued Pensions under the Plan for Key Employees
(excluding for this purpose the aggregate Accrued
Pension under the Plan for Former Key Employees) is
more than 90% of the present value of the aggregate
Accrued Pensions under the Plan for all Employees; or
(B) the Plan is included in a Required
Aggregation Group which is an Super Top-Heavy Group.
(2) For purposes of paragraph (1), the aggregate
Accrued Benefit of any Employee shall include the aggregate
distributions made to such Employee under the Plan during the
5 consecutive Plan Years ending with the Plan Year that
includes the Determination Date. For Plan Years beginning
after December 31, 1984, the aggregate Accrued Benefit of any
former Employee who has not performed any service with the
Employer during the 5-year
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period ending on the Determination Date shall be
excluded from the calculation under item (1).
(3) If the Plan is included in a Permissive Aggregation
Group which is not an Super Top-Heavy Group, the Plan shall
not be an Super Top-Heavy Plan notwithstanding the fact that
the Plan would otherwise be an Super Top-Heavy Plan under
paragraph (1) of this subsection.
(g) Former Key Employee
A Non-Key Employee with respect to a Plan Year who was a Key
Employee in a prior Plan Year. Such term shall also include his
Beneficiary in the event of his death.
(h) Key Employee
An Employee or former Employee who, at any time during the
current Plan Year or any of the four preceding Plan Years, is:
(1) an officer of an employer having an annual
Compensation greater than 150% of the amount in effect under
Section 415(c)(1)(A) of the Code for any such Plan Year
(limited to no more than 50 Employees or, if lesser, the
greater of three (3) or 10% of the Employees);
(2) one of the 10 Employees who, (A) own (or are
considered as owning within the meaning of Section 318 of the
Code) during the Plan Year containing the Determination Date
or any of the four preceding Plan Years both more than
one-half percent (0.5%) ownership interests in value and the
largest percentage ownership interests in value of any of the
employees required to be aggregated under Section 414(b),
(c), or (m) of the Code and (B) have during the Plan Year of
ownership annual Compensation from the employer of more than
the limitation in effect under Section 415(c)(1)(A) of the
Code for the calendar year in which such Plan Year ends;
(3) a five percent owner (as such
term is defined in Section 416(i)(1)(B)(i)
of the Code); or
(4) a one percent owner (as such term is defined in
Section 416(i)(1)(B)(ii) of the Code) having an annual
Compensation of more than $150,000.
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The term "Key Employee" shall also include such Employee's
Beneficiary in the event of his death.
(i) Non-Key Employee
An Employee or former Employee who is not a Key Employee.
Such term shall also include his Beneficiary in the event of his
death.
(j) Permissive Aggregation Group
The group of qualified plans of an employer consisting of:
(1) the plans in the Required
Aggregation Group; plus
(2) one or more plans designated from time to time by
the Employer that are not part of the Required Aggregation
Group but that satisfy the requirements of Sections 401(a)(4)
and 410 of the Code when considered with the Required
Aggregation Group.
(k) Required Aggregation Group
The group of qualified plans of an employer consisting of:
(1) each plan in which a Key Employee participates (or
participated, if such Plan is terminated) in the Plan Year
containing the Determination Date, or any of the four
preceding Plan Years; plus
(2) each other plan which enables a plan in which a Key
Employee participates to meet the requirements of Section
401(a)(4) or 410 of the Code.
(l) Top-Heavy Group
An Aggregation Group if, as of the Determination Date, the
sum of the present value of the aggregate accrued benefits for Key
Employees under all defined benefit plans included in the
Aggregation Group and the aggregate of the accounts of Key
Employees under all defined contribution plans included in the
Aggregation Group is more than 60% of a similar sum determined for
all employees in such plans. For purposes of determining such sums,
aggregate distributions made to any employee during the 5
consecutive Plan Years ending with the plan year that includes that
Determination Date shall be included. The aggregate accrued
benefits and/or the aggregate of accounts of former employees who
have not performed any service for the employer
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maintaining the plan at any time during the 5-year period
ending on the Determination Date shall be excluded from the
foregoing calculation.
(m) Top-Heavy Plan
The Plan shall be a "Top-Heavy Plan" if, as of the
Determination Date, the present value of the cumulative accrued
benefits of Key Employees exceeds 60% of the present value of the
cumulative accrued benefits under the Plan of all Employees.
Excluded from this determination shall be the accrued benefits of
any Employee who did not perform services for the Employer during
the 5-year period ending on the Determination Date.
In determining whether the Plan is a Top- Heavy Plan, all
employers that are aggregated under Sections 414(b), (c) and (m) of
the Code shall be treated as a single employer. In addition, all
plans that are part of the Required Aggregation Group shall be
treated as a single plan.
For this purpose, the present value of an Employee's accrued
benefit is equal to the sum of (1) and (2) below:
(1) The sum of (i) the present value of an Employee's
accrued pension in each defined benefit plan which is
included in the Required Aggregation Group determined as of
the most recent Valuation Date within the 12-month period
ending on the Determination Date and as if the Employee had a
Termination of Employment as of such Valuation Date and (ii)
the aggregate distributions made with respect to such
Employee during the 5-year period ending on the Determination
Date from all defined benefit plans included in the Required
Aggregation Group and not reflected in the value of his
accrued pension as of the most recent Valuation Date.
(2) The sum of (i) the aggregate balance of his
accounts in all defined contribution plans which are part of
the Required Aggregation Group as of the most recent
Valuation Date within the 12-month period ending on the
Determination Date, (ii) any contributions allocated to such
an account after the Valuation Date and on or before the
Determination Date and (iii) the aggregate distributions made
with respect to such Employee during the 5-year period ending
on the Determination Date from all defined contribution plans
which are part of the Required Aggregation Group and not
reflected in the value of his account(s) as of the most
recent Valuation Date.
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8.02 Top-Heavy Plan Requirements
Notwithstanding any other provisions of the Plan to the contrary, if the
Plan is a Top-Heavy Plan for any Plan Year, the Plan shall then satisfy
the following requirements for such Plan Year:
(1) the minimum vesting requirement as set
forth in Section 8.03;
(2) the minimum benefit requirement as set
forth in Section 8.04; and
(3) the adjustments to maximum benefits and
allocations as set forth in Section 8.05.
8.03 Minimum Vesting Requirement
If the Plan is a Top-Heavy Plan for any Plan Year, each Employee who has
been credited with an Hour of Service after the Plan becomes a Top-Heavy
Plan shall have a non-forfeitable (vested) right to a percentage of his
Accrued Pension determined under the following table:
Vesting Years Vested
of Service Percentage
less than 3 0%
3 or more 100%
The vesting schedule described in the immediately preceding sentence
shall cease to be applicable when the Plan ceases to be a Top-Heavy Plan,
provided that the percentage of an Employee's Accrued Pension that
becomes non-forfeitable pursuant thereto before the Plan ceases to be a
Top-Heavy Plan shall remain non- forfeitable, and the change in the
vesting schedule which occurs when the Plan ceases to be a Top-Heavy Plan
shall be subject to the provisions of subsection (e) of Section 10.04.
8.04 Minimum Benefit Requirement
If the Plan is a Top-Heavy Plan for any Plan Year, a Participant who is
employed in such Plan Year or who is on an Authorized Leave of Absence
shall have an Accrued Pension as of the last day of such Plan Year not
less than the lesser of (i) 2% of the Participant's Average Compensation
multiplied by his number of Vesting Years (and fraction) of Service and
(ii) 20% of the Participant's Average Compensation.
For purposes of this Section 8.04, there shall be disregarded any Vesting
Years of Service if the Plan was not a Top-Heavy Plan for the Plan Year
in which such
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Vesting Years of Service were earned, or if such Vesting Years of Service
were earned before January 1, 1984.
A Participant's Accrued Pension as of any subsequent date shall not be
less than that determined as of the last day of the last Plan Year in
which the Plan was a Top-Heavy Plan.
Notwithstanding the foregoing, a Non-Key Employee may not fail to accrue
a minimum benefit merely because:
(i) the Employee declined to make mandatory
contributions to the Plan;
(ii) the Employee was not employed on a
specified date; or
(iii) the Employee is excluded from participation (or accrues no
benefit) merely because such Employee's compensation is less than a
stated amount.
8.05 Adjustments to Maximum Benefits and Contributions
If the Plan is a Top-Heavy Plan for any Plan Year, and if the Employer
maintains a top-heavy defined contribution plan which could or does
provide benefits to Participants in the Plan, then:
(a) Each Non-Key Employee shall receive the minimum benefit
provided under Section 8.04 of the Plan.
(b) If the Plan is not an Super Top-Heavy Plan (but is a Top Heavy
Plan), and if the employer desires to use a factor of 1.25 in
computing the denominators of the defined benefit fraction and the
defined contribution fraction under Section 415(e) of the Code,
then the minimum benefit required under Section 8.04 of the Plan
for a Participant who is a Non-Key Employee shall be the lesser of
(1) 3% of the Participant's Average Compensation multiplied by his
number of years (and fraction) of Vesting Service, and (2) 30% of
the Participant's Average Compensation.
(c) If the Plan is an Super Top-Heavy Plan, then calculations under
Sections 415(e)(2)(B) and 415(e)(3)(B) of the Code shall be made by
substituting "1.0" for "1.25" for each place such "1.25" figure
appears.
8.06 Coordination With Other Plans
(a) In applying this Article, any employer required to be combined
under Section 414(b), (c), or (m) of the Code shall be treated as a
single
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employer, and the qualified plans maintained by such single
employer shall be taken into account.
(b) In the event that another defined contribution plan or defined
benefit plan maintained by any Employer required to be combined
under Section 414(b), (c), or (m) of the Code provides
contributions or benefits on behalf of Participants in the Plan,
such other plan(s) shall be taken into account in determining
whether the Plan satisfies Section 8.02; and the minimum benefit
required for a Non-Key Employee in the Plan under Section 8.04 will
be reduced or eliminated, in accordance with the requirements of
Section 416 of the Code and the regulations thereunder, if a
minimum contribution or benefit is made or accrued in whole or in
part in respect to such other plan(s).
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ARTICLE IX
ELIGIBILITY AND PARTICIPATION
9.01 Eligibility
Each Eligible Employee shall become a Participant on the day following
his completion of one Eligibility Year of Service, provided that he has
not had a Termination of Employment prior to such date (and he remains an
Eligible Employee on such date).
9.02 Termination and Rehiring
A Participant who has a Termination of Employment and is subsequently
rehired by the Employer or an Eligible Employee who has a Termination of
Employment after meeting the eligibility requirements of Section 9.01 but
before becoming a Participant and who is subsequently rehired by the
Employer as an Eligible Employee shall be eligible to participate in the
Plan on his Reemployment Commencement Date.
An Eligible Employee who has a Termination of Employment before meeting
the eligibility requirements of Section 9.01 and who is subsequently
rehired as an Eligible Employee shall be eligible to participate in the
Plan on the day following his completion of one Eligibility Year of
Service.
9.03 Duration of Participation
A former Employee entitled to receive or receiving a Pension under the
Plan shall continue as a Participant until the date of his death and
shall retain his rights to Vesting Years of Service and Benefit Service
irrespective of whether such entitlement is based on the Plan or any
prior provisions of the Plan.
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ARTICLE X
DETERMINATION OF BENEFITS
10.01 Normal Retirement Pension
A Participant whose Retirement occurs on or after his Normal Retirement
Date shall be eligible for a Normal Retirement Pension in an amount equal
to his Accrued Pension, as determined under Section 1.01, at Retirement.
10.02 Early Retirement Pension
(a) A Participant with 20 or more Vesting Years of Service whose
Retirement occurs on or after the date he reaches the age of 55 but
prior to his attainment of age 65 shall be eligible for an Early
Retirement Pension. The monthly Pension of a Participant eligible
for an Early Retirement Pension as provided under this subsection
(a) shall be, at the option of the Participant, either (1) or (2)
as set forth below:
(1) A deferred pension commencing with the month
following the month in which such Participant attains his
Normal Retirement Date in an amount equal to his Accrued
Pension at the time of Early
Retirement.
(2) An immediate pension determined as provided in (1)
above, commencing with any month following the month in which
such Participant retired early and subsequent to his having
made written application therefor, but reduced by one-fourth
of one percent for each complete calendar month, if any, by
which his Early Retirement Pension commencement date precedes
the month following the month in which such Participant
attains his 60th birthday.
(b) A Participant with 15 or more Vesting Years of Service but less
than 20 Vesting Years of Service whose Retirement occurs on or
after the date he reaches the age of 60 but prior to his attainment
of age 65 shall be eligible for an Early Retirement Pension. The
monthly Pension of a Participant eligible for an Early Retirement
Pension as provided under this subsection (b) shall be, at the
option of the Participant, either (1) or (2) as set forth below:
(1) A deferred pension commencing with the month
following the month in which such Participant attains his
Normal Retirement Date in an amount equal to his Accrued
Pension at the time of Early
Retirement.
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(2) An immediate pension determined as provided in (1)
above, commencing with any month following the month in which
such Participant retired early and subsequent to his having
made written application therefor, but if his Early
Retirement Pension commencement date occurs before the
Participant attains his 62nd birthday, reduced by one-fourth
of one percent for each complete calendar month by which his
Early Retirement Pension commencement date precedes the month
following the month in which such Participant attains his
65th birthday.
10.03 Disability Retirement Pension
A Participant with 10 or more Vesting Years of Service who has a
Termination of Employment due to his Total and Permanent Disability prior
to the attainment of age 65 shall be eligible for a Disability Retirement
Pension until the earlier of (1) the earlier of (i) the death of such
retired Participant or (ii) the retired Participant's recovery from his
Total and Permanent Disability, or (2) the retired Participant begins to
receive an Early Retirement Pension or Normal Retirement Pension. This
Section 10.03 shall not apply to any Participant who, at the time of his
Termination of Employment due to Total and Permanent Disability, is
eligible for a benefit from an Employer-sponsored welfare benefit plan of
the type commonly known as "long term disability." The monthly Pension of
a Participant eligible for a Disability Retirement Pension shall be his
Accrued Pension at the time of Disability Retirement. The monthly Pension
so calculated payable prior to a Participant's Normal Retirement Age
shall be reduced by that portion of all amounts (other than payments
under Title II of the Social Security Act) which such Participant
receives or is eligible to receive under any federal, state or local
legislation which provides for disability benefits, excepting payments
specifically allocated as reimbursement for hospital or medical expense,
the loss or 100% loss of use of any bodily member, or the loss of
industrial vision, which is allocable to any taxes, premiums or other
payments therefor made by the Employer, either now or in the future.
10.04 Deferred Vested Pension Upon Termination of Employment
(a) A Participant who has a Termination of Employment for any
reason other than Retirement, Total and Permanent Disability, or
death shall be entitled to the percentage of his Accrued Pension in
which he is vested as determined by the following schedule:
Vesting Years of Vesting
Service Percentage
Less than 5 0%
5 or more 100%
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Such Participant shall be entitled to receive a benefit
payable at his Normal Retirement Date equal to his Accrued Pension
multiplied by the applicable vesting percentage determined in
accordance with the above schedule.
(b) Such deferred Vested Pension shall commence with the month
following the month in which such former Participant attains his
Normal Retirement
Date.
(c) A former Participant with 20 or more Vesting Years of Service
may elect (by written application) to commence his deferred vested
Pension in a reduced amount at any time between the ages of 55 and
65, or a former Participant with 15 or more Vesting Years of
Service but less than 20 Vesting Years of Service at any time
between the ages of 60 and 65, and subsequent, in either instance,
to his having made said application, in which case the monthly
Pension amount as determined in subsection (a) or (b) above shall
be reduced by five-tenths of one percent (0.5%) for each complete
calendar month by which such earlier commencement date precedes the
month following the month in which such Participant attains his
Normal Retirement Age.
(d) If a Participant who had vested rights in his Accrued Pension
is reemployed after a Break in Service, he shall be credited for
purposes of vesting, with his pre-Break Vesting Years of Service.
If a former Employee or former Participant who had a Break in
Service and who did not have a vested right to an Accrued Pension
is reemployed on or after January 1, 1985, he shall be credited,
for purposes of vesting, with his pre-Break Vesting Years of
Service only if his consecutive one-year Breaks in Service are less
than the greater of 5 years or the aggregate number of his
pre-Break Vesting Years of Service; provided, however, that any
such former Employee or Participant who is reemployed on or after
January 1, 1995, who had less than 3 pre-Break Vesting Years of
Service, and who is not covered by a collective bargaining
agreement, is credited with a Vesting Year of Service after his
Break in Service. Notwithstanding the above, this subsection shall
not operate to restore any Vesting Years of Service that would not
have been restored if reemployment had occurred on or before
December 31, 1984.
(e) If any amendment to the Plan directly or indirectly changes the
vesting schedule, a Participant with 3 or more Vesting Years of
Service may elect to have his vested percentage computed under the
vesting schedule in effect prior to the amendment by filing a
written request with the Plan Administrator within sixty days after
the latest of (1) the date he received notice of such amendment,
(2) the date such amendment was adopted, and (3) the date such
amendment became effective.
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10.05 Transfers
(a) If a Participant in the Plan was, is, or becomes a participant
in an Other Plan, and was, is, or becomes entitled to benefits
under such Other Plan based on service for which Benefit Service is
granted under the Plan, then such benefits shall serve as a whole
or partial offset, on an actuarially equivalent basis, to any
benefits payable under the Plan.
(b) "Other Plan" means any pension plan or profit-sharing plan,
other than a Prior Plan or the ALLTEL Corporation Profit-Sharing
Plan, from time to time qualified under Section 401(a) of the
Internal Revenue Code, or provisions of law having like effect,
maintained by the Employer or any affiliated corporation,
subsidiary, or related business entity.
10.06 Minimum Pensions
(a) Any Participant who, as of January 1, 1988, (i) was not
compensated on an hourly basis and (ii) had attained age 55 shall
receive a retirement Pension of not less than the sum of (1) and
(2):
(1) His Benefit Percentage as of December 31, 1987
multiplied by his Average Monthly Compensation at date of
determination.
(2) Eight-tenths of one percent (0.8%) multiplied by
the Participant's years of Benefit Service, not to exceed ten
(10) years, after December 31, 1987 and further multiplied by
his Average Monthly Compensation at date of determination.
(b) Any Participant who, as of January 1, 1989, (i) was not subject
to a collective bargaining agreement and was compensated on an
hourly basis and (ii) had attained age 55 shall receive a
retirement Pension of not less than the sum of (1) and (2):
(1) His Benefit Percentage as of December 31, 1988
multiplied by his Average Monthly Compensation at date of
determination.
(2) Eight-tenths of one percent (0.8%) multiplied by
the Participant's years of Benefit Service, not to exceed ten
(10) years, after December 31, 1988 and further multiplied by
his Average Monthly Compensation at date of determination.
(c) The monthly Pension so determined payable prior to Normal
Retirement Date shall be reduced as described in Section 10.02,
10.03, or 10.04, as applicable.
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(d) For purposes of this Section 10.06, Average Monthly
Compensation means 1/60th of the sum of the compensation payable to
a Participant from the Employer for each of the 60 consecutive
calendar months which produce the highest average out of the period
of service beginning January 1, 1966 and ending with the month
which includes the date as of which he retires or terminates
employment as an Employee. In determining Average Monthly
Compensation for purposes of this Section 10.06, compensation shall
be computed using the definition of Basic Compensation for Plan
Years prior to January 1, 1988 and using the definition of
Compensation for Plan Years after December 31, 1987.
10.07 Effect of Prior Plans
(a) A Participant who was covered by a Prior Plan immediately prior
to his participation hereunder may be entitled to a minimum benefit
as provided in Article XIII. Alternatively, benefits may be payable
under the Prior Plan subsequent to the merger into the Plan; such
benefits shall serve as a whole or partial offset, on an
actuarially equivalent basis, to any benefits payable under the
Plan.
(b) Effective for Plan Years beginning after December 31, 1987,
there were and are no further benefit accruals pursuant to Article
XIII of the Plan (as and to the extent in effect on and after
December 31, 1987) for a Participant who is not compensated on an
hourly basis. Effective for Plan Years beginning after December 31,
1988, there shall be no further benefit accruals pursuant to
Article XIII of the Plan (as and to the extent in effect on and
after December 31, 1988) for a Participant who is compensated on an
hourly basis but is not covered by a collective bargaining
agreement. Such Participants shall be entitled to the Minimum
Normal Retirement Pension, the Minimum Early Retirement Pension,
the Minimum Disability Retirement Pension, the Minimum Deferred
Vested Pension and the Minimum Death Benefit, as such terms are
defined in Section 13.01, which accrued as of December 31, 1987 or
December 31, 1988, respectively, and to the benefits which accrued
as of December 31, 1987 or December 31, 1988, respectively,
pursuant to any Appendix to Article XIII (as and to the extent in
effect on said date). Thereafter benefits shall continue to accrue
for such Participant in accordance with applicable provisions of
the Plan. The provisions of Article XIII and any Appendix thereto
were and are hereby superseded accordingly. Provided, however, that
any early retirement subsidy or optional form of benefit provided
under Article XIII which, pursuant to the applicable provisions of
the Code or regulations thereunder, is deemed to constitute an
accrued benefit of a Participant, shall be retained with respect to
benefits which accrued to such Participant in respect of Article
XIII (as and to the extent in effect on the
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relevant dates) as of December 31, 1987 or
December 31, 1988, respectively.
(c) A Participant who is entitled to a Minimum Normal Retirement
Pension, a Minimum Early Retirement Pension, a Minimum Disability
Retirement Pension, a Minimum Deferred Vested Pension or a Minimum
Death Benefit, as such terms are defined in Section 13.01, under
Article XIII as in effect prior to January 1, 1989 shall continue
to be entitled to such minimum benefits. The provisions of Article
XIII of the Plan as and to the extent in effect immediately prior
to the January 1, 1989 Restatement of the Plan are hereby
incorporated by reference as and to the extent necessary to
maintain such accrued minimum benefits.
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ARTICLE XI
PAYMENT OF BENEFITS
11.01 Normal and Early Retirement Pensions
(a) Any Normal or Early Retirement Pension shall be payable to a
retired Participant who has applied therefor in accordance with the
rules established by the Plan Administrator, commencing with the
first day of the month next following the date as of which he
becomes eligible for such retirement Pension, and shall be payable
monthly thereafter during the life of such retired Participant.
(b) The normal form of benefit for a married Participant is a
Qualified Joint and Survivor Annuity with the Spouse as Beneficiary
as provided in Section 11.04. The normal form of benefit for all
other Participants shall be a single life annuity. An optional form
of benefit payment may be elected pursuant to Section 11.05.
(c) The last payment to a retired Participant shall be that made at
the beginning of the month in which the death of such retired
Participant occurs, except that if the retired Participant is
receiving a Qualified Joint and Survivor Annuity or had elected a
survivor's Pension as set forth in Section 11.05 and is receiving
his Pension, then any payment to him and any other person shall be
as set forth in Sections 11.04 and 11.05.
11.02 Disability Retirement Pensions
(a) A Disability Retirement Pension shall be payable to a retired
Participant who has applied therefor, and whose application is
approved in accordance with the rules established by the Plan
Administrator, commencing with the first day of the month following
his Disability Retirement. The last payment to the retired
Participant shall be that made at (1) the beginning of the month in
which occurs the earlier of (i) the death of such retired
Participant or (ii) the retired Participant's recovery from his
Total and Permanent Disability, or (2) the beginning of the month
preceding the month in which the retired Participant begins to
receive an Early Retirement Pension or Normal Retirement Pension.
(b) Any Participant receiving a Disability Retirement Pension under
the Plan may be required to submit to medical examination by a
physician or physicians selected by the Plan Administrator at any
time during his Disability Retirement prior to his Normal
Retirement Date to determine whether he is eligible for continuance
of the Disability Retirement Pension. If, on the basis of such
examination, it is found that he is no
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longer totally and permanently disabled, his right to any
Disability Retirement Pension shall cease immediately. In the event
a Participant who is receiving a Disability Retirement Pension
under the Plan refuses to submit to such medical examination, he
shall not be entitled to any Disability Retirement Pension for any
period during which he continues to refuse to submit to such
examination.
(c) Any Participant who recovers from Total and Permanent
Disability and returns to active employment with the Employer prior
to attainment of age 65 shall have Vesting Years of Service and
Benefit Service to the date of his Disability Retirement reinstated
for all purposes of the Plan. If any such Participant does not
return to active employment with the Employer upon such recovery,
he shall be treated as a Participant who had a Termination of
Employment at the date of his recovery, and his Vesting Years of
Service and Benefit Service at the date of his Disability
Retirement shall be used at such time to determine his eligibility
for, and the amount of, any other Pension under the Plan.
(d) A retired Participant receiving a Disability Pension who meets
the eligibility requirements for an Early Retirement Pension under
Section 10.02 may elect to receive such Early Retirement Pension in
lieu of a Disability Pension beginning in any month after he
becomes eligible therefor.
(e) Upon attaining his Normal Retirement Age, a retired Participant
whose Disability Retirement Pension has not been terminated, shall,
in lieu of any further Disability Retirement Pension, be entitled
to a Normal Retirement Pension under Section 10.02. Such Normal
Retirement Pension shall commence with the month following the
month in which he attains his Normal Retirement Age, and shall be
subject to the applicable provisions of this Article XI other than
this Section 11.02.
11.03 Deferred Vested Pension
A deferred Vested Pension shall be payable to an eligible Participant
commencing with the first day of the month following his 65th birthday,
or, if later, following the month proper application is made therefor
(but with payments retroactive to the first day of the month following
his 65th birthday), or, in the case of an eligible Participant with 20 or
more Vesting Years of Service, following any month between the ages of 55
and 65, or in the case of an eligible Participant with 15 or more but
less than 20 Vesting Years of Service following any month between the
ages of 60 and 65, in accordance with his election to receive a reduced
amount under the provisions of Section 10.04, and shall be payable each
month thereafter during the life of such Participant. The last payment to
the Participant shall be that made at the beginning of the month in which
the death of such Participant occurs, except that if the Participant is
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receiving a Qualified Joint and Survivor Annuity as set forth in Section
11.04, then any payments to him and his Surviving Spouse shall be as set
forth in Section 11.04.
11.04 Automatic Election of Qualified Joint and Survivor
Annuity
(a) Notwithstanding the above provisions of this Article XI, a
married Participant who retires on or after January 1, 1976
pursuant to the Normal or Early Retirement provisions of the Plan,
or who has a Termination of Employment on or after September 1,
1974 and is eligible for a deferred Vested Pension pursuant to the
provisions of the Plan, automatically shall be deemed to have
elected the Qualified Joint and Survivor Annuity designated as
Option B in paragraph (2) of subsection (a) of Section 11.05. The
automatic election of the Qualified Joint and Survivor Annuity
shall become effective upon the date as of which a Participant's
Pension is to commence, unless he has waived the Qualified Joint
and Survivor Annuity in accordance with the procedure specified in
subsection (b) of this Section 11.04.
(b) Notwithstanding any other provision of this Article IX to the
contrary, within the 60-day period ending 30 days before the date a
Participant's Pension is to commence, the Plan Administrator shall
furnish the Participant with a written description of (i) the terms
and conditions of the Qualified Joint and Survivor Annuity form of
payment described in this Article IX or, if he is not married, the
normal form of payment otherwise applicable to him, (ii) the terms,
conditions and relative value of any other available form of
payment, (iii) the Participant's right to waive the Qualified Joint
and Survivor Annuity form of payment or to elect an optional form
of payment and the effect thereof, (iv) the rights of the
Participant's Spouse with respect to the Qualified Joint and
Survivor Annuity form of payment, and (v) the Participant's right
to revoke a waiver of the Qualified Joint and Survivor Annuity form
of payment and the effect thereof. At any time during the 90-day
period ending on the date of which a Participant's Pension is to
commence, provided he has received the notice described in the
preceding sentence, a Participant may reject the Qualified Joint
and Survivor Annuity option, or withdraw such a rejection, by
delivery of notice to such effect in writing to the Plan
Administrator, to which rejection his Spouse consents in writing,
unless a Plan representative finds that such consent cannot be
obtained because the spouse cannot be located or because of other
circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. Such spousal consent shall
acknowledge the effect of such rejection and, if applicable, the
designation of a specific non- spouse Beneficiary and shall be
witnessed by a Plan representative or a notary public.
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(c) For purposes of this Section 11.04, the Spouse of a Participant
shall mean and be limited to the person who is the Participant's
Spouse on the date as of which his Pension is to commence. If,
however, the Participant has not been married to such Spouse for at
least one year prior to the date his Pension is to commence and he
does not remain married to such Spouse for at least one year
(including by reason of his own death), no survivor benefit shall
be payable to such Spouse hereunder. Moreover, the Participant
shall, as of the date he ceases to be married to such Spouse, be
treated as if he had not been married at the time his Pension
commenced, but no retroactive correction of the amount paid the
Participant during the marriage shall be made.
11.05 Optional Forms of Pension
(a) A Participant who is eligible for Normal or Early Retirement
may elect to receive, commencing at his Pension commencement date,
any of the following optional forms of retirement income which
shall be in lieu of (and the Actuarial Equivalent of) the Pension
to which he would otherwise have been entitled as calculated under
Section 10.01 or Section 10.02:
(1) Option A: A reduced level Pension payable for the
life of the Participant, and continuing thereafter in the
same reduced amount for the life of the Participant's Spouse.
(2) Option B: A reduced level Pension payable for the
life of the Participant, and continuing thereafter in an
amount which is 50% of that reduced amount for the life of
the Participant's Spouse.
(3) Option C: A reduced level Pension payable for the
life of the Participant. In the event the Participant dies
before receiving 120 monthly payments, the said monthly
payments remaining unpaid at his death shall be payable to
his designated Beneficiary for the remainder of the 120 month
period.
(4) Option D: A reduced Pension payable during the
joint lifetime of the Participant and the Participant's
Spouse, and continuing thereafter in the same reduced amount
for the life of the Spouse, or in the original unreduced
amount for the life of the Participant.
(5) Option E: A reduced Pension
Payable during the joint lifetime of the
Participant and the Participant's Spouse,
and continuing thereafter in an amount
which is 50% of that reduced amount
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for the life of the Spouse, or
in the original unreduced amount for the
life of the Participant.
(b) Optional forms of Pension under this Section 11.05 shall not be
applicable to amounts calculated under Section 10.03 or Section
10.04 except as provided in Section 11.04.
(c) The optional form of Pension selected must satisfy the
requirements of Section 401(a)(9) of the Code.
(d) The election by a Participant of an optional form of Pension
and designation of a Beneficiary must be made in writing to the
Plan Administrator on or before the date as of which his Pension is
to commence.
(e) A Participant who has elected an optional form of Pension may
rescind such election at any time prior to his retirement date. The
rescission of an election of Option B and the designation of a
specific non-Spouse beneficiary by a married Participant (or a
change in a previous designation of a specific non-Spouse
Beneficiary by such Participant made on or after January 1, 1987)
may be made only with the written consent of the Participant's
Spouse, in the manner specified in subsection (b) of Section 11.04.
An election of Option B shall be automatically rescinded in the
event of the death of the Participant or his Spouse prior to his
Retirement, except as otherwise provided in Section 12.01, but no
such election may be changed after commencement of benefit
payments.
(f) If a Participant dies after having elected Option C under
Section 11.05(a) or Option F under Section 11.05F(a) and his estate
is his Beneficiary, the estate of the Participant may elect on a
form prescribed by the Plan Administrator to receive in lieu of any
unpaid guaranteed monthly payments a single sum payment of the
commuted value of such monthly payments determined by discounting
future payments for interest at the rate that would be used to
determine an Actuarial Equivalent in accordance with Section 1.03
and Section 1.27.
11.06 Payment of Small Pensions
If the present value of a Participant's vested Accrued Pension does not
exceed $3,500 (or such other amount as is established by the Secretary of
the Treasury pursuant to Section 411(a)(7)(B)(i) of the Code) and did not
exceed $3,500 at the time of any prior distribution, the Pension shall be
paid in an actuarially equivalent single sum, provided, however, that any
such single sum payment may be made only with respect to a Pension the
payment of which has not
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commenced. For purposes of determining the amount of a Participant's
vested Accrued Pension, the interest rate used shall not exceed:
(1) The PBGC Interest Rate, if the present value of the
benefit (using such rate or rates) does not exceed $25,000;
or
(2) One hundred twenty percent (120%) of the PBGC
Interest Rate, if the present value of the benefit exceeds
$25,000 (as determined pursuant to subparagraph (i) above).
In no event shall the present value determined under this
subparagraph (ii) be less than $25,000.
In no event shall the single sum payment be less than the greater of the
Participant's vested Accrued Pension, pursuant to Section 1.03 of the
Plan, or the amount of such single sum computed using the PBGC Interest
Rate as outlined above.
11.07 Prohibition on Distribution
Benefits shall not be payable hereunder except in the event of the
Retirement, Total and Permanent Disability, Termination of Employment, or
death of a Participant.
11.08 Non-Divestment
There shall be no divestiture of any Pension payable hereunder except
that (i) Pension payments shall be suspended during any reemployment with
the Employer as provided in Section 11.09 of the Plan and (ii) Pension
payments shall cease upon their expiration by reason of the terms and
conditions hereof having been fully satisfied.
11.09 Suspension of Benefits Upon Reemployment
Retirement benefits in pay status will be suspended for each calendar
month during which the Participant completes at least 40 Hours of Service
with the Employer or receives payment for Hours of Service performed on
each of 8 or more days in "Section 203(a)(3)(B) Service" as defined in
Department of Labor Regulations Section 2530.203-3(c). If the Participant
had received any Pension payments or distributions in lieu of a Pension
under the Plan or any Prior Plan, the Pension payable upon his subsequent
Retirement shall be reduced by the Actuarial Equivalent of any such
payments or distributions he had received prior to his Normal Retirement
Date, other than Disability Pension payments.
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11.10 Limitations on Distributions
(a) Unless the Participant otherwise elects by a written statement
signed by him and submitted to the Plan Administrator, the payment
of benefits under the Plan to the Participant shall begin not later
than the 60th day after the close of the Plan Year in which occurs
the later of (i) the date on which the Participant attains age 65,
(ii) the tenth anniversary of the year the Participant commenced
participation in the Plan, and (iii) the date on which the
Participant has a Termination of Employment.
(b) A Pension to a Participant must commence no later than the
April 1 following the later of the calendar year in which the
Employee (i) attains age 70-1/2, or (ii) retires; provided,
however, that clause (ii) shall not be applicable in the case of an
Employee who is a five-percent owner (as defined in Section 416 of
the Code) at any time during the five-Plan-year period ending with
or within the calendar year in which such Employee attains age
70-1/2, nor shall it be applicable in the case of any Employee who
attains age 70-1/2 on or after January 1, 1988.
(c) Any distribution hereunder must be made over a period not to
exceed the greatest of (i) the life of the Participant, (ii) the
life expectancy of the Participant, (iii) the lives of the
participant and a designated Beneficiary, or (iv) the
joint-and-survivor life expectancy of the Participant and his
designated Beneficiary.
(d) If the Participant dies after distribution of his or her
interest has commenced, the remaining portion of such interest will
continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
(e) If the Participant dies after distribution of his interest has
begun but prior to distribution of his entire interest, the
remaining portion of such interest shall be distributed to his
beneficiary in a method which is at least as rapid as the method
being used at the date of his death. If the Participant dies prior
to commencement of the distribution of his interest, the entire
interest attributable to such Participant shall be distributed no
later than the last day of the Plan Year that contains the fifth
anniversary of the date of his death, unless such interest is
payable to a designated beneficiary (as defined in Section
401(a)(9) of the Code) for a period which does not exceed the life
or life expectancy of such designated beneficiary, in which event
distribution of such interest shall commence no later than the last
day of the Plan year immediately following the Plan Year in which
such Participant retired or died, provided that if the designated
beneficiary is the surviving Spouse of such Participant,
distribution shall not be required to begin earlier than the date
the Participant Employee would have attained age 70-1/2.
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Payments will be calculated by use of the return multiples
specified in Section 1.72-9 of the regulations. Life expectancy of
a surviving Spouse may be recalculated annually, however, in the
case of any other designated Beneficiary, such life expectancy will
be calculated at the time payment first commences without further
recalculation.
(f) Death and any other nonretirement benefits payable under the
Plan shall be incidental to the primary purpose of the Plan, which
is to provide retirement benefits, and accordingly shall be limited
in accordance with the minimum distribution incidental benefit
requirements under Section 401(a)(9) of the Code. The provisions of
this Section 11.10 reflecting Section 401(a)(9) of the Code, shall
override any distribution options in the Plan inconsistent with
such Section 401(a)(9).
(g) The payment of a Pension in accordance with one section of the
Plan shall preclude the payment of a Pension in accordance with
another section, and the qualification for a Surviving Spouse's
Pension under Section 12.01 shall preclude the qualification for a
Pension under Article X.
11.11 Employment After Normal Retirement Age
Notwithstanding any other provision of the Plan to the contrary, a
Participant who continues in employment or who is reemployed after his
Normal Retirement Date shall be eligible for his Pension for any month in
which he is employed for less than 40 hours (or such other amount of time
that does not constitute Section 203(a)(3)(B) service under the Act and
regulations issued thereunder). Any monthly payments made to an Employee
pursuant to this Section 11.11 shall be paid in accordance with the
provisions of the Plan otherwise applicable to determining the amount of
his retirement benefit, the duration of benefit payments, and the method
of payment. If payment of a Participant's Pension will be delayed or
suspended as a result of such employment or reemployment, the Plan
Administrator shall notify the Participant of such suspension or delay by
personal delivery or first class mail during the first calendar month in
which the Pension is to be suspended or delayed, shall afford him a
review of such suspension or delay under the procedure specified in
Article IV and shall otherwise administer such suspension or delay and
any subsequent resumption or commencement of Pension payments in a manner
consistent with Section 2530.203-3 of Title 29 of the Code of Federal
Regulations, as amended from time to time.
11.12 Benefit Accruals While Receiving Benefit Payments
Notwithstanding any other provision of the Plan to the contrary, in the
case of a Participant whose monthly Pension commences in accordance with
subsection (b) of Section 11.10 by reason of his having attained age
70-1/2, any increase
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in the monthly amount of his Normal Retirement Benefit determined as
provided in Section 10.01 with respect to any Plan Year which would
otherwise occur shall be reduced (but not below zero) by the Actuarial
Equivalent of total Plan benefit payments made to such Participant during
such Plan Year.
11.13 Rollover Requirements
(a) This Section 11.13 applies to distributions made on or after
January 1, 1993. Notwithstanding any other provision of the Plan to
the contrary that would otherwise limit a distributee's election
under this Section 11.13, a distributee may elect, at the time and
in the manner prescribed by the Plan Administrator to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section 11.13, the
following definitions shall apply:
(i) Eligible rollover distribution: An eligible
rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).
(ii) 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.
(iii) 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
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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.
(iv) 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 XII
DEATH BENEFITS
12.01 Death Prior to Pension Commencement
(a) The surviving Spouse, if any, of a Participant who dies prior
to the commencement of his Pension (other than a Disability
Pension) but after August 23, 1984, and after having become
entitled to a vested interest hereunder, whether immediate or
deferred, shall be entitled to receive a monthly Qualified
Preretirement Survivor Annuity commencing on the Participant's
Earliest Retirement Date.
(b) The surviving Spouse, if any, of a former Participant who has a
Termination of Employment on or after January 1, 1976, and who dies
prior to the commencement of his Pension (other than a Disability
Pension) but after August 23, 1984, and after having become
entitled to a vested interest hereunder, whether immediate or
deferred, shall be entitled to receive a monthly Qualified
Preretirement Survivor Annuity commencing on the Participant's
Earliest Retirement Date.
(c) For purposes of this Section 12.01, the surviving Spouse of a
Participant shall mean and be limited to the person who is the
Participant's spouse at the time of his death and who has been his
spouse for at least one year immediately prior to the date of his
death.
(d) For purposes of this Section 12.01, the "Earliest Retirement
Date" of a Participant who dies is the later of the month following
the month in which the Participant dies or the month in which the
Participant would have first become eligible for commencement of a
Pension under the Plan if he had survived.
(e) For purposes of this Section 12.01, a Qualified Preretirement
Survivor Annuity means a survivor annuity for the life of the
surviving Spouse of the Participant in an amount equal to:
(1) If a Participant who is an employee of a member of
the Controlled Group dies after meeting the age and service
requirements for an Early Retirement Pension under Section
10.02, the amount of such monthly survivor benefit shall be
equal to the amount of the monthly payment his spouse would
have received if the Participant's Retirement had occurred
under the provisions of Section 10.02 on the day before the
date of his death and had the automatic form of payment under
Section 11.04 been applicable to him, based upon his Accrued
Pension on the date of his death.
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(2) If a Participant who is an employee of a member of
the Controlled Group dies prior to meeting the age and
service requirements for an Early Retirement Pension under
Section 10.02, the amount of such monthly survivor benefit
shall be equal to the amount of the monthly payment his
Spouse would have received if such Employee had a Termination
of Employ ment on the date of his death but had survived to
the date he attained his Earliest Retirement Date, had
commenced his Pension on such date, and had the automatic
form of payment under Section 11.04 been applicable to him,
based upon his Accrued Pension on the date of his death.
(3) If a Participant who had a Termination of
Employment dies after meeting the age and service
requirements for an Early Retirement Pension under Section
10.02, the amount of such monthly survivor benefit shall be
equal to the amount of the monthly payment his Spouse would
have received if the Participant had begun to receive a
Pension in the automatic form of payment under the provisions
of Section 11.04 on the day before the date of his death,
based upon his Accrued Benefit on the date of his Termination
of Employment.
(4) If a Participant who had a Termination of
Employment dies prior to meeting the age and service
requirements for an Early Retirement Pension under Section
10.02, the amount of such monthly survivor benefit shall be
equal to the amount of the monthly payment his Spouse would
have received if the Participant had survived to the date he
attained his Earliest Retirement Date and had then begun to
receive a Pension in the automatic form of payment under the
provisions of Section 11.04, based upon his Accrued Pension
on the date of his Termination of Employment.
(f) Notwithstanding the foregoing provisions of this Section 12.01,
a surviving Spouse may elect to defer commencement of a Qualified
Preretirement Survivor Annuity from the Earliest Retirement Date to
a date not later than the first day of the month next following the
date the Participant would have attained age 65.
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ARTICLE XIII
EFFECT OF PRIOR PLANS
The provisions of Article XIII with respect to (i) certain pension and
profit-sharing plans that have been or will be merged into the Plan and (ii)
special provisions in cases where no prior plan existed and with regard to
transfers of employment to and from members of the Controlled Group that are not
Employers are contained in Volume II of the Plan.
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ARTICLE XIV
1993 SPECIAL EARLY RETIREMENT PROVISIONS
14.01 General
This Article XIV provides for certain increased benefits with respect to
certain Participants (or former Participants in the case of a deceased
former employee) who satisfy the requirements specified in this Article
XIV for such increased benefits. Except as otherwise provided in this
Article XIV, the provisions of this Article XIV shall apply
notwithstanding any other provision of the Plan to the contrary and shall
control in the case of any conflict with any other provision of the Plan.
14.02 Eligibility
In order to be eligible for increased benefits pursuant to this Article
XIV, a Participant must be listed on Schedule A to the Plan.
14.03 Termination of Employment
In order to receive the increased benefits provided under this Article
XIV, a Participant who meets the eligibility requirements of Section
14.02 of this Article XIV must voluntarily terminate his employment with
the Employer (and any other member(s) of the Controlled Group) as of the
Retirement Date applicable to such Participant as specified on Schedule A
to the Plan; provided, however, that such retirement shall be deemed
satisfied by any such Participant who has a Termination of Employment on
or prior to his Retirement Date as specified on Schedule A to the Plan by
reason of his death.
14.04 Increased Benefits
Benefits under the Plan of a Participant who both meets the eligibility
requirements of Section 14.02 of this Article XIV and satisfies the
requirements and conditions of Section 14.03 of this Article XIV shall be
increased, beginning as of the latest of March 1, 1993, the first day of
the month following the month in which such Participant's Retirement Date
as specified on Schedule A to the Plan occurs, or as specified below in
this Section 14.04, in accordance with the following:
(a) The amount of such Participant's Accrued Pension shall be
increased by an amount equal to the Participant's "Special Early
Retirement Compensation" (as hereinafter defined) multiplied by
five-twelfths (5/12) of one percent. A Participant's "Special Early
Retirement Compensation" shall mean the Participant's annualized
base salary in effect on the day preceding the Participant's
Termination of Employment.
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(b) The Pension of any such Participant whose Pension commences
prior to his Normal Retirement Date shall not be reduced for
commencement prior to the month following the month in which such
Participant would (if he survived) attain age 65.
(c) If such Participant is less than age 62 on his Pension
commencement date, he shall receive a supplemental monthly benefit
in the amount of $200 per month payable beginning as of his Pension
commencement date and continuing through the earlier of the month
in which he attains age 62 or the month in which his death occurs.
If such Participant dies prior to his Pension commencement date or
the first day of the month in which he would have attained age 62
and is survived by his Spouse to whom he had been continuously
married for at least one year ending on his date of death, such
Spouse shall receive a supplemental monthly benefit in the amount
of $200 per month payable beginning as of the later of the month
following the month in which occurs the Retirement Date applicable
to such Participant as specified on Schedule A to the Plan or the
month following the month in which the Participant's death occurred
and continuing through the end of the month in which the
Participant would have attained age 62.
(d) For purposes of computing the amount of the Qualified
Preretirement Survivor Annuity (if any) (as of the date such
Qualified Preretirement Survivor Annuity otherwise commences under
the Plan) with respect to such a Participant who dies prior to his
Pension commencement date and prior to the month following the
month in which such Participant would (if he survived) attain age
65, the Pension that would have been payable to the Participant
shall not be reduced for commencement prior to the month following
the month in which such Participant would (if he survived) attain
age 65.
(e) Notwithstanding any other provision of this Article XIV to the
contrary, Sections 1.33 and 1.34 and Article V and the
corresponding provisions of any applicable Appendix to the Plan
shall be applied based upon such Participant's actual age.
(f) The increased benefits payable pursuant to this Article XIV
shall be subject to all generally applicable provisions regarding
payment or benefits and conditions and limitations thereon of the
Plan and of applicable law, including, without limitation,
subsection (f) of Section 1.01.
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SCHEDULE A
TO
ARTICLE XIV OF
ALLTEL CORPORATION PENSION PLAN
(January 1, 1994 Restatement)
PARTICIPANT'S PARTICIPANT'S
PARTICIPANT'S SOCIAL SECURITY RETIREMENT
NAME NUMBER DATE
Faris, Carroll ###-##-#### 01/31/93
Sherman, Lloyd ###-##-#### 01/31/93
Blackwelder, John ###-##-#### 02/28/93
Lillie, Roberta ###-##-#### 02/28/93
Merritt, Donald ###-##-#### 02/28/93
Ryan, John ###-##-#### 02/28/93
Smith, Calvin ###-##-#### 02/28/93
Stradley, Ronald ###-##-#### 02/28/93
Baker, Virginia (spouse) ###-##-#### 03/08/93**
Forney, Joan (spouse) ###-##-#### 03/14/93**
Hamrick, Philip ###-##-#### 03/31/93
Calkins, Lincoln ###-##-#### 04/30/93
Sadlon, Earl ###-##-#### 04/30/93
Bradshaw, James ###-##-#### 05/31/93
Downing, Howard ###-##-#### 05/31/93
Krebs, Irvin ###-##-#### 05/31/93
Lindberg, James ###-##-#### 05/31/93
Marshall, Eugene ###-##-#### 05/31/93
Drysdale, Floyd ###-##-#### 06/30/93
Neal, Howard ###-##-#### 06/30/93
Phillips, Leo ###-##-#### 06/30/93
Wood, Richard ###-##-#### 06/30/93
Bomar, Hale ###-##-#### 07/31/93
Adams, Ellen ###-##-#### 08/31/93
Adkins, Charles ###-##-#### 08/31/93
Allen, Ronald ###-##-#### 08/31/93
Angelis, Thomas ###-##-#### 08/31/93
Armstrong, Janet ###-##-#### 08/31/93
Arnold, Glenn ###-##-#### 08/31/93
Artz, Helen ###-##-#### 08/31/93
Avery, Lavelle ###-##-#### 08/31/93
Ayers, Nolan ###-##-#### 08/31/93
Bailor, Mary ###-##-#### 08/31/93
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Baker, Bernadine ###-##-#### 08/31/93
Ballard, Sylvia ###-##-#### 08/31/93
Ball, Barbara ###-##-#### 08/31/93
Barlow, Walter ###-##-#### 08/31/93
Barrett, Rose ###-##-#### 08/31/93
Bender, Edward ###-##-#### 08/31/93
Biggs, Joyce ###-##-#### 08/31/93
Blair, Robert ###-##-#### 08/31/93
Blakey, John ###-##-#### 08/31/93
Blake, William ###-##-#### 08/31/93
Bouchard, Mildred ###-##-#### 08/31/93
Bowser, Stanley ###-##-#### 08/31/93
Brake, Ralph ###-##-#### 08/31/93
Brent, Constance ###-##-#### 08/31/93
Brindley, Charles ###-##-#### 08/31/93
Brown, Mary ###-##-#### 08/31/93
Brown, Willis ###-##-#### 08/31/93
Calanni, Nellie ###-##-#### 08/31/93
Calvert, Albert ###-##-#### 08/31/93
Carruthers, Robert ###-##-#### 08/31/93
Carson, Clara ###-##-#### 08/31/93
Caskey, James ###-##-#### 08/31/93
Chemelli, Bessie ###-##-#### 08/31/93
Clark, Bobby ###-##-#### 08/31/93
Clark, Lois ###-##-#### 08/31/93
Clark, Robert ###-##-#### 08/31/93
Clark, Shirley ###-##-#### 08/31/93
Coffer, Charles ###-##-#### 08/31/93
Cosma, Paul ###-##-#### 08/31/93
Couick, Bobby ###-##-#### 08/31/93
Croft, Larry ###-##-#### 08/31/93
Daniels, Allen ###-##-#### 08/31/93
Darnell, Nancy ###-##-#### 08/31/93
Day, Happy ###-##-#### 08/31/93
DeForest, William ###-##-#### 08/31/93
Dewey, Robert ###-##-#### 08/31/93
Dragoo, Paul ###-##-#### 08/31/93
Drury, Walter ###-##-#### 08/31/93
Duce, Kenneth ###-##-#### 08/31/93
Dulaney, Thomas ###-##-#### 08/31/93
Dunasky, Henry ###-##-#### 08/31/93
Dunlap, Kenneth ###-##-#### 08/31/93
Eason, Elizabeth ###-##-#### 08/31/93
Eckard, Robert ###-##-#### 08/31/93
Edwards, June ###-##-#### 08/31/93
Edwards, Mark ###-##-#### 08/31/93
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Fahl, Max ###-##-#### 08/31/93
Farrell, James ###-##-#### 08/31/93
Faso, Mary ###-##-#### 08/31/93
Fortescue, James ###-##-#### 08/31/93
Funke, John ###-##-#### 08/31/93
Gaddy, Albert ###-##-#### 08/31/93
Gaster, Andrew ###-##-#### 08/31/93
George, Virginia ###-##-#### 08/31/93
Gilbert, Gene ###-##-#### 08/31/93
Grafton, Donald ###-##-#### 08/31/93
Graham, Alice ###-##-#### 08/31/93
Greene, John ###-##-#### 08/31/93
Green, John ###-##-#### 08/31/93
Green, Lynette ###-##-#### 08/31/93
Griffith, Jack ###-##-#### 08/31/93
Haag, William ###-##-#### 08/31/93
Hans, Maureen ###-##-#### 08/31/93
Hardee, Robert ###-##-#### 08/31/93
Hardwick, Phillip ###-##-#### 08/31/93
Harmon-Rost, Evelyn ###-##-#### 08/31/93
Hartmann, Richard ###-##-#### 08/31/93
Haynie, Fletcher ###-##-#### 08/31/93
Hensley, Charles ###-##-#### 08/31/93
Hensley, William ###-##-#### 08/31/93
Hetrick, Boyd ###-##-#### 08/31/93
Hirth, Richard ###-##-#### 08/31/93
Hollingsworth, Perry ###-##-#### 08/31/93
Holobaugh, Grover ###-##-#### 08/31/93
Horning, Glenn ###-##-#### 08/31/93
Howard, Walter ###-##-#### 08/31/93
Hudock, Margaret ###-##-#### 08/31/93
Hudson, Mary ###-##-#### 08/31/93
Ilse, Carroll ###-##-#### 08/31/93
Inman, Doyle ###-##-#### 08/31/93
Javorsky, Donald ###-##-#### 08/31/93
Johnson, Willard ###-##-#### 08/31/93
Jones, Gayle ###-##-#### 08/31/93
Kale, Arthur ###-##-#### 08/31/93
Kemp, Lois ###-##-#### 08/31/93
Kesslar, Melvin ###-##-#### 08/31/93
Kiger, Duane ###-##-#### 08/31/93
Kiger, Joann ###-##-#### 08/31/93
Kilgus, Oscar ###-##-#### 08/31/93
Kimmy, Ronald ###-##-#### 08/31/93
King, Virginia ###-##-#### 08/31/93
Kirby, Hazel ###-##-#### 08/31/93
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<PAGE>
Koehler, Mary ###-##-#### 08/31/93
Kohut, John ###-##-#### 08/31/93
Kozak, John ###-##-#### 08/31/93
Krejci, Richard ###-##-#### 08/31/93
Kruse, Harlan ###-##-#### 08/31/93
Lambert, Carl ###-##-#### 08/31/93
Lasher, Estalene ###-##-#### 08/31/93
Lawson, Jack ###-##-#### 08/31/93
Lentz, Charles ###-##-#### 08/31/93
Lindquist, Marylee ###-##-#### 08/31/93
Malone, Dale ###-##-#### 08/31/93
Manders, James ###-##-#### 08/31/93
Manley, Howard ###-##-#### 08/31/93
Mansfield, William ###-##-#### 08/31/93
Marraccini, Robert ###-##-#### 08/31/93
Mathis, Fredah ###-##-#### 08/31/93
Mattox, Kenneth ###-##-#### 08/31/93
McConnell, James ###-##-#### 08/31/93
McGaughey, Herbert ###-##-#### 08/31/93
McKinley, Donald ###-##-#### 08/31/93
Miller, Bertha ###-##-#### 08/31/93
Miller, Joyce ###-##-#### 08/31/93
Mize, Woodrow ###-##-#### 08/31/93
Muir, Dorothy ###-##-#### 08/31/93
Nance, Sara ###-##-#### 08/31/93
Neeley, Sandra ###-##-#### 08/31/93
Neely, Charles ###-##-#### 08/31/93
Nelson, Kenneth ###-##-#### 08/31/93
Noonan, Bobbie ###-##-#### 08/31/93
O'Kelley, Bettye ###-##-#### 08/31/93
Oste, George ###-##-#### 08/31/93
Palmer, William ###-##-#### 08/31/93
Panebianco, Joseph ###-##-#### 08/31/93
Patton, John ###-##-#### 08/31/93
Payne, Franklin ###-##-#### 08/31/93
Pearson, George ###-##-#### 08/31/93
Pearson, Roland ###-##-#### 08/31/93
Perry, Emily ###-##-#### 08/31/93
Phillips, Charlotte ###-##-#### 08/31/93
Poorbaugh, Earl ###-##-#### 08/31/93
Povhe, Albert ###-##-#### 08/31/93
Powell, Edna ###-##-#### 08/31/93
Presson, William ###-##-#### 08/31/93
Priest, Mary ###-##-#### 08/31/93
Prutsman, Everett ###-##-#### 08/31/93
Quinlan, Willard ###-##-#### 08/31/93
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Randolph, George ###-##-#### 08/31/93
Rice, June ###-##-#### 08/31/93
Rine, Mary ###-##-#### 08/31/93
Rising, Willard ###-##-#### 08/31/93
Roberts, Edward ###-##-#### 08/31/93
Roberts, Patricia ###-##-#### 08/31/93
Rodgers, John ###-##-#### 08/31/93
Roney, Robert ###-##-#### 08/31/93
Roth, Elaine ###-##-#### 08/31/93
Routh, John ###-##-#### 08/31/93
Schachter, Dorothy ###-##-#### 08/31/93
Schrecengost, Lloyd ###-##-#### 08/31/93
Scott, Thomas ###-##-#### 08/31/93
Sears, Robert ###-##-#### 08/31/93
Seay, Richard ###-##-#### 08/31/93
Shaffer, George ###-##-#### 08/31/93
Shank, David ###-##-#### 08/31/93
Simpson, Bobbie ###-##-#### 08/31/93
Smiley, Jack ###-##-#### 08/31/93
Snoderly, Catherine ###-##-#### 08/31/93
Southworth, Merle ###-##-#### 08/31/93
Stalnaker, Harold ###-##-#### 08/31/93
Stemple, William ###-##-#### 08/31/93
Stewart, Dorothy ###-##-#### 08/31/93
Stivason, Hubert ###-##-#### 08/31/93
Stout, James ###-##-#### 08/31/93
Stout, Ronald ###-##-#### 08/31/93
Stover, Robert ###-##-#### 08/31/93
St. Onge, Elizabeth ###-##-#### 08/31/93
Suter, John ###-##-#### 08/31/93
Swaile, William ###-##-#### 08/31/93
Swan, Earl ###-##-#### 08/31/93
Thomas, Shirley ###-##-#### 08/31/93
Thompson, James ###-##-#### 08/31/93
Trainor, Robert ###-##-#### 08/31/93
Valesky, Donald ###-##-#### 08/31/93
Vendetti, Jean ###-##-#### 08/31/93
Venhuizen, Fred ###-##-#### 08/31/93
Volpe, Joseph ###-##-#### 08/31/93
Walter, Harold ###-##-#### 08/31/93
Ward, Albert ###-##-#### 08/31/93
Wasson, James ###-##-#### 08/31/93
White, Carolyn ###-##-#### 08/31/93
White, Charles ###-##-#### 08/31/93
Wickline, Irene ###-##-#### 08/31/93
Williams, Ann ###-##-#### 08/31/93
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Williams, Dan ###-##-#### 08/31/93
Wilson, Mary ###-##-#### 08/31/93
Wink, Janette ###-##-#### 08/31/93
Winters, Kenneth ###-##-#### 08/31/93
Woodring, Phillip ###-##-#### 08/31/93
Wright, Sherwood ###-##-#### 08/31/93
Yancey, John ###-##-#### 08/31/93
Yankasky, John ###-##-#### 08/31/93
Yeany, Richard ###-##-#### 08/31/93
Zaleski, Robert ###-##-#### 08/31/93
Zang, Raymond ###-##-#### 08/31/93
Zwald, Wayne ###-##-#### 08/31/93
Reeser, Richard ###-##-#### 10/31/93
** Employee's date of death
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<PAGE>
ARTICLE XV
TRANSFER OF BENEFITS WITH RESPECT TO
CERTAIN EMPLOYEES WHOSE EMPLOYMENT TRANSFERS TO GTE SOUTH INCORPORATED
OR CONTEL OF THE SOUTH, INC.
15.01 Definitions
For purposes of this Article XV, the following definitions shall apply:
(a) The "Closing Date" shall mean Closing Date
as defined in the Employee Transfer Agreements.
(b) An "Employee Transfer Agreement" shall mean
an Employee Transfer Agreement between ALLTEL
Illinois, Inc. and GTE South Incorporated, ALLTEL
Indiana, Inc. and Contel of the South, Inc., or
ALLTEL Michigan, Inc. and Contel of the South,
Inc., each dated April 5, 1993, (collectively,
the "Employee Transfer Agreements").
(c) An "LTD Recipient" shall mean an Employee or former Employee of
a Transferring Employer as defined in the Employee Transfer
Agreements.
(d) The "Transfer Assets" shall mean the amount or amounts directed
by the Company to be transferred to the Transfer Plans in
accordance with the provisions of the Transfer Agreements.
(e) A "Transfer Employee" shall mean an active Employee (including
an Employee on military leave, maternity leave, or other approved
leaves of absence, short-term disability, and an Employee on layoff
with recall rights) whose employment transfers from ALLTEL
Illinois, Inc. to GTE South Incorporated, from ALLTEL Indiana, Inc.
to Contel of the South, Inc., or from ALLTEL Michigan, Inc. to
Contel of the South, Inc., as of the Closing Date.
(f) A "Transfer Plan" shall mean the GTE Telephone Operations
Salaried Pension Plan or the GTE South Incorporated (Southeast)
Plan for Hourly-Paid Employees' Pensions or such other qualified
plan as may be designated by GTE (as GTE is defined in the Employee
Transfer Agreements) (collectively, the "Transfer Plans"),
(g) A "Transferring Employer" shall mean ALLTEL Illinois, Inc.,
ALLTEL Indiana, Inc., or ALLTEL Michigan, Inc., (collectively, the
"Transferring
Employers").
(h) A "WC Recipient" shall mean an Employee or former Employee of a
Transferring Employer as defined in the Employee Transfer
Agreements.
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<PAGE>
15.02 Transfer of Assets and Liabilities
All liabilities for benefits of the Plan existing as of the Closing Date
with respect to Transfer Employees shall be transferred from the Plan to
one or more of the Transfer Plans, as designated by GTE (as GTE is
defined in the Employee Transfer Agreements).
The Company shall direct the Trustee to transfer the Transfer Assets to
the trustee(s) or funding agent(s) for the Transfer Plans, in accordance
with the provisions of the Employee Transfer Agreements.
15.03 Benefit Payments After the Closing Date but Prior to
the Transfer of Assets and Liabilities
If, on or after the Closing Date and before the actual transfer of assets
and liabilities for benefits, bene fits become payable under the Plan
with respect to a Transfer Employee, the benefits shall be paid from the
Plan and the assets and liabilities for benefits to be transferred
pursuant to Section 15.02 shall be adjusted as provided in the Employee
Transfer Agreements.
15.04 Cessation of Participation
Effective as of the Closing Date, each Transfer Employee shall cease to
be a Participant in the Plan, and no Transfer Employee or any person
claiming under or through any Transfer Employee shall have any benefits
or rights under the Plan after the Closing Date (except as provided in
Section 15.03).
15.05 Vested Interest of Transfer Employees
The entire benefit of each Transfer Employee shall be transferred to one
or more of the Transfer Plans, as designated by GTE (as GTE is defined in
the Employee Transfer Agreements), including any benefits in which the
Transfer Employee does not have a nonforfeitable interest. The vested
interest of each Transfer Employee in the Transfer Plan applicable to him
shall be determined under the provisions of the Transfer Plan, but in no
event shall such vested interest be less than the Transfer Employee's
vested interest under the Plan as of the Closing Date.
15.06 Provisions Regarding LTD Recipients and WC Recipients
An LTD Recipient or WC Recipient shall not be a Transfer Employee on the
Closing Date. An LTD Recipient or WC Recipient may, however, become a
Transfer Employee, as provided in the Employee Transfer Agreements, and
the provisions of this Article XV shall apply to such former LTD
Recipient or WC Recipient with the last day of the calendar year that
includes the date of the former LTD Recipient's or WC Recipient's
commencement of active service with
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GTE South Incorporated or Contel of the South, Inc.
substituted for Closing Date.
15.07 Plan Continuing
The applicable Transfer Plan shall be deemed to be a continuation of the
Plan with respect to the Transfer Employees, and the transfer of assets
and liabilities to the Transfer Plans shall not be deemed a termination
or partial termination of the Plan with respect to the Transfer Employees
or otherwise.
15.08 Overriding Provisions
The provisions of this Article XV shall apply notwithstanding any other
provisions of the Plan, except Section 12.07, and shall override any
conflicting Plan provisions.
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<PAGE>
ARTICLE XVI
SPECIAL PROVISIONS AND EFFECTIVE DATES
16.01 Effective Date
This amended and restated Plan is effective as of January 1, 1994, but
with respect only to Participants who have a Termination of Employment on
or after January 1, 1994, except as may otherwise be provided herein.
16.02 Termination or Retirement Prior to January 1, 1994
Except as provided in Sections 11.04 and 12.01 or as required by law,
including applicable provisions of the Code, a Participant who has a
Termination of Employment under conditions of eligibility for a deferred
Pension, who retired, or who attained his normal retirement age (whether
or not he retired) prior to January 1, 1994 and who is not credited with
one Hour of Service on or after January 1, 1994, or his Beneficiary,
shall receive or continue to receive a Pension in accordance with the
provisions of the Plan in effect at the date of the Participant's
Termination of Employment, retirement or normal retirement age, whichever
first occurred.
16.03 Tax Reform Act of 1986 Effective Dates
With respect to any change made to the Plan to satisfy the provisions of
the Tax Reform Act of 1986 and any subsequent legislation, including any
regulations, rulings, or other published guidance, such change shall be
effective on the first day of the first period (which may or may not be
the first day of a Plan Year) with respect to which such change became
required because of such provisions.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has executed
this Plan on this 29th day of December, 1994.
ALLTEL CORPORATION
By: /s/ John L. Comparin
-----------------------------------
Title: Vice President - Human Resources
325
<PAGE>
ALLTEL CORPORATION
PENSION PLAN
(January 1, 1994 Restatement)
VOLUME II
326
<PAGE>
ARTICLE II. TABLE OF CONTENTS
Page
ARTICLE XIII EFFECT OF PRIOR PLANS 2
13.01 General 2
13.02 Effect of Telephone Utilities of Pennsylvania, Inc.
Group Pension Plan (Group Annuity Contract No. 778) 5
13.03 Effect of Pension Plan of The Newark Telephone
Company 14
13.04 Effect of Tygart Valley Telephone Company Pension
Plan 18
13.05 Effect of The Old Town Telephone System,
Incorporated Pension Plan 22
13.06 Effect of Leeds Telephone Company Pension Plan 26
13.07 Effect of Allied Telephone Company Profit Sharing
Plan 32
13.08 Effect of the Heins Retirement Plan 38
13.09 Effect of Retirement Plan for Employees of CP
National Corporation 44
13.10 Employees of St. Matthews Telephone Company. 93
13.11 Employees of Area Marketing/Research
Associates, Inc. 96
13.12 Employees of Cellular Phone of Aiken-Augusta, Inc. 99
13.13 Employees of Systematics, Inc. and its Subsidiaries 102
13.14 Employees of HWC Distribution Corp. and its
Subsidiaries 105
13.15 Employees of Missouri Telephone Company and
Eastern Missouri Telephone Company 108
13.16 Employees of Savannah MSA Cellular Partnership 111
13.17 Employees of Sugar Land Telephone Company,
Perco Telephone Company, SLT Cable TV, Inc., and
Metropolitan Houston Paging Services, Inc. 114
13.18 Employees of Contel Cellular of Arkansas, Inc. 117
13.19 Employees of GTE South Incorporated and Contel
of the South, Inc. 120
13.20 Employees of CPI Acquisition, Inc. d/b/a
Computer Power, Inc. 200
13.21 Employees of TDS Healthcare Systems Corporation 203
327
<PAGE>
ALLTEL CORPORATION
PENSION PLAN
(January 1, 1994 Restatement)
PREAMBLE TO VOLUME II
This Volume II of the Plan contains the provisions of Article XIII of the Plan
with respect to (i) certain pension and profit-sharing plans that have been or
will be merged into the Plan and (ii) special provisions in cases where no prior
plan existed and with regard to transfers of employment to and from members of
the Controlled Group that are not Employers.
The provisions of all other Articles of the Plan are contained
in Volume I.
328
<PAGE>
EFFECT OF PRIOR PLANS
13.01 General
(a) Certain pension and profit-sharing plans have been or will be
merged into this Plan. This Article also may provide special
provisions in cases where no prior plan existed and with regard to
transfers of employment to and from members of the Controlled Group
that are not Employers.
(b) As used in this Article XIII, the following words and phrases
shall have the following meanings:
(i) "Prior Plan" means the respective Prior Plan.
(ii) "Effective Date" means the effective date of the
merger of the Prior Plan into this Plan.
(iii) "Account" means, for a Prior Plan participant,
all or some of the following items, in whole or in part, as
applicable:
(A) his "Cash Surrender Values", which means
the cash surrender values immediately prior to the
Effective Date of any individual life insurance
policies in effect on his life;
(B) his "Side Fund", which means his share
immediately prior to the Effective Date in any
auxiliary or conversion fund or allocated reserve
account maintained under the
Prior Plan;
(C) his "Account Balance", which means his
share immediately prior to the Effective Date in a
defined contribution plan;
reduced in any event by any employee contributions
refunded as of the Effective Date.
(iv) "Minimum Normal Retirement Pension" means the
minimum amount of monthly Pension payable upon his Normal
Retirement to a Participant who was covered by the Prior Plan
immediately prior to the Effective Date, who has remained in
continuous employment with the Employer since the Effective
Date, and
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<PAGE>
who is eligible for a Normal Retirement Pension under
Section 10.01.
(v) "Minimum Early Retirement Pension" means the
minimum amount of monthly Pension payable upon his Early
Retirement to a Participant who was covered by the Prior Plan
immediately prior to the Effective Date, who has remained in
continuous employment with the Employer since the Effective
Date, and who meets the requirements specified in this
Article XIII.
(vi) "Minimum Disability Retirement Pension" means the
minimum amount of monthly Pension payable upon his Disability
Retirement to a Participant who was covered by the Prior Plan
immediately prior to the Effective Date, who has remained in
continuous employment with the Employer since the Effective
Date, who is eligible for a Disability Retirement Pension
under Section 10.03, and who meets any other requirements
specified in this Article XIII.
(vii) "Minimum Deferred Vested Pension" means the
minimum amount of monthly Pension payable at his Normal
Retirement Age to a Participant who was covered by the Prior
Plan immediately prior to the Effective Date, who has a
Termination of Employment subsequent to the Effective Date,
and who meets any other requirements specified in this
Article XIII.
(viii) "Minimum Death Benefit" means the lump sum
amount payable to the beneficiary of a Participant who was
covered by the Prior Plan immediately prior to the Effective
Date, who has remained in continuous employment with the
Employer since the Effective Date, and who dies while an
Employee subsequent to the Effective Date.
(c) Upon Retirement or other Termination of Employment, a
Participant who has a vested interest in all or a portion of an
Account may elect to take such interest in a lump sum in lieu of
any Pension under this Article XIII. Any Pension determined under
Article X shall be reduced by the Actuarial Equivalent of such lump
sum.
(d) If, upon the death of an Employee, a Qualified Preretirement
Survivor Annuity is payable under Article XII, such Qualified
Preretirement Surviving Annuity shall be in lieu of any Minimum
Death Benefit; provided, however, that, if the Minimum Death
Benefit is an Account and not a Pension, the Surviving Spouse may
elect to take the Minimum Death Benefit in a lump sum, in which
case the amount of the Qualified Preretirement Survivor Annuity
will be reduced to the amount that
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<PAGE>
would have been payable under the assumptions of Article XII,
with the further assumption that the Participant had, upon his
Retirement, taken an amount equal to said Minimum Death Benefit as
a lump sum with actuarially equivalent reduction in his Pension as
under subsection (c) above.
(e) If a Participant eligible for any Pension under this Plan is
entitled to any benefit under a continuing Prior Plan, such Pension
shall be reduced by the Actuarial Equivalent of such Prior Plan
benefit.
(f) The amount of any Pension determined under any of Section
10.01, 10.02, 10.03, or 10.04 shall be reduced by the life annuity
actuarial equivalent of any Employer-purchased Pension payable
concurrently, or which would he so paid if proper application were
made therefor, under the Prior Plan.
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<PAGE>
13.02 Effect of Telephone Utilities of Pennsylvania, Inc. Group Pension Plan
(Group Annuity Contract No. 778)
(a) Effective Date - July 12, 1979.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the Code -
Notwithstanding any other provision of this Plan, in the event of
the termination of the Plan, each participant of the Prior Plan
shall receive a benefit which is equal to or greater than the
benefit he would have been entitled to receive if the Prior Plan
had terminated immediately prior to the Effective Date.
(j) Miscellaneous - See APPENDIX A - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF TELEPHONE UTILITIES OF PENNSYLVANIA, INC.
AND ITS SUBSIDIARY AND AFFILIATED COMPANIES, which follows
immediately hereafter.
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<PAGE>
APPENDIX A
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
TELEPHONE UTILITIES OF PENNSYLVANIA, INC.
AND
ITS SUBSIDIARY AND AFFILIATED COMPANIES
Effective at the close of business on July 11, 1979, the Telephone Utilities of
Pennsylvania, Inc. Group Pension Plan (the "Former Plan") was frozen as to
contributions and benefit accruals, but continued by amendment and merger into
the Mid- Continent Telephone Corporation Pension Plan (the "Plan"). Commencing
July 12, 1979, the benefit accruals to employees of Telephone Utilities of
Pennsylvania, Inc. and its Subsidiary and Affiliated Companies ("TUP") who
became eligible for the Plan as of that date and requirements as to their
benefit eligibility and payment rights with respect to accruals under the Plan
and the Former Plan shall be governed by the Plan as modified by this Appendix
A.
Notwithstanding any other provision of the Plan, effective January 1, 1982, the
following Sections of the Plan are hereby modified as follows with respect to
active employees of TUP on July 11, 1979, who were active Participants in the
Plan on December 31, 1980:
A. Definition 1.01 is modified as follows:
1.01A "Accrued Pension" means, for a Participant, an amount
equal to the sum of (1) and (2) below:
(1) The greater of (A) or (B) below:
(A) His Benefit Percentage multiplied
by his Average Monthly Compensation at
date of determination; or
(B) $10.00 multiplied by the number of
years (and fraction) of Credited
Service.
plus
(2) An amount equal to the Participant's "Accrued
Benefit" as of July 11, 1979, if any, under the Former
Plan, actuarially increased from the modified cash refund
form of payment to the life annuity form of payment.
Notwithstanding the preceding sentence, a Participant who
had a Termination of Employment with deferred Pension rights,
retired, or attained his normal retirement age (whether or not
he retired) prior to January 1, 1994 and who is not credited
with one Hour of
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Service on or after January 1, 1994, or his Beneficiary,
shall receive Or continue to receive a Pension in
accordance with the provisions of the Plan in effect
at the date of the Participant's Termination of Employment,
retirement, or normal retirement age, whichever first occurred.
B. Definition 1.48A is added as follows:
1.48A "Former Plan" means the Telephone Utilities of
Pennsylvania, Inc. Group Pension Plan, as amended through July
11, 1979.
C. Section 1.37(g) is modified as follows:
1.37(g)A Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to July 12, 1979: For
a Participant as of July 12, 1979 the Participant's
period(s) of employment with the Employer prior to
July 12, 1979 shall be counted as Vesting Service to
the extent that such period(s) were similarly
credited under the provisions of the Former Plan.
(ii) Service From and After July 12,
1979: Subject to the Break in Service provisions, an
Employee, whether or not a Participant, shall accrue
one year of Vesting Service for each calendar year
in which he has 1,000 or more Hours of Service.
D. Section 1.37(d) is modified as follows:
1.37(d)A Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to July 12,
1979: None.
(ii) Benefit Service From and After
July 12, 1979: Subject to the Break in Service
provisions, a Participant shall accrue one year of
Benefit Service for each calendar year in which he
has 2,000 or
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<PAGE>
more Hours of Service, with fractional credit
granted in units of 1/12th year for each 166- 2/3
Hours of Service completed. No Benefit Service
shall be granted for any calendar year in which
employment is less than 1,000 Hours of Service
except for the calendar year next preceding the
date of the Participant's initial participation (or
calendar year of return to employment after a Break
in Service) and the calendar year of the
Participant's Retirement (or other Termination of
Employment). The maximum Benefit Service to be
accrued for the period July 12, 1979 through
December 31, 1979 shall be 0.4694 year.
(b) Benefits under the Plan shall not be accrued
during employment which would have excluded an Employee
from participation in the Plan because he was not an
Eligible Employee; provided, however, that this exclusion
from benefit accrual shall not apply to an Employee in a
collective bargaining unit not included in this Plan who
becomes covered by this Plan, whether or not he is
affected by the provisions of Section 10.05 and provided
further that the exclusion shall again apply if the
Employee is transferred back to such collective bargaining
unit, but only as to his benefit accruals subsequent to
the date of such latter transfer. In the event a
Participant ceases to be an Employee eligible to accrue
benefits under the Plan but remains in the employ of the
Employer, he shall receive no Benefit Service until he is
again in eligible employment.
E. Section 1.37(h) is modified as follows:
1.37(h)A Bridging
Notwithstanding any other provision of this Plan, any
former Participant who, irrespective of the date of his
Termination of Employment, had not fulfilled the requirements
for vested benefits under this Plan including any prior
provision hereof, and who again was or is employed, shall have
years of pre-termination Vesting Service and Benefit Service
restored, unless otherwise restored in accordance with Section
1.37 or Section 10.04, if the number of consecutive years of
post- termination employment is at least 5, provided, however,
that this Section 1.37(h)A shall not result in the restoration
of pre-termination Vesting Years of Service or Benefit Service
with respect to any termination which occurred prior to July 12,
1979.
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F. Section 10.04-I-A is added as follows:
10.04-I-A Vesting
A Participant with 10 years or more Vesting Years of
Service and/or who has attained age 62 who has a Termination of
Employment at a time when he is ineligible for any other Pension
under the Plan shall be eligible for a Deferred Vested Pension.
If a Participant is reemployed as an Employee by the Employer
after having qualified for a Deferred Vested Pension in
accordance with this Section 10.04-I-A, such Participant shall,
in lieu thereof, have reinstated the Benefit Service in effect
when such Deferred Vested Pension was acquired.
G. Section 10.02 is modified as follows:
10.02A Early Retirement Pension
The monthly Pension of a Participant eligible for an Early
Retirement Pension shall be, at the option of the Participant,
either (i) or (ii) as set forth below:
(i) A deferred pension commencing with the month
following the month in which such Participant attains his
Normal Retirement Age in an amount equal to his Accrued
Pension at the time of Early Retirement.
(ii) An immediate pension commencing with any
month following the month in which such Participant retired
early determined as provided in (i) above, but, with
respect to that portion of his Accrued Pension determined
in accordance with clause (1) of Definition 1.01A, reduced
as provided in Section 10.02, and, with respect to that
portion determined in accordance with clause (2) of
Definition 1.01A, reduced by five-tenths of one percent
(0.5%) for each complete calendar month by which such
earlier commencement date precedes the month following the
month in which such Participant attains his 65th birthday.
H. Section 10.03 is modified as follows:
10.03A Disability Retirement Pension
The monthly Pension of a Participant eligible for a
Disability Retirement Pension under the provisions of Section
10.03 shall be
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his Accrued Pension at the time of Disability Retirement,
provided, however, that the portion of such amount determined in
accordance with clause (2) of Definition 1.01A shall be reduced
by one-quarter of one percent (0.25%) for each complete calendar
month by which his Disability Retirement Pension commencement
date precedes the month following the month in which such
Participant attains his 65th birthday. The monthly Pension so
calculated payable prior to a Participant's Normal Retirement
Age shall be reduced by all amounts (other than payments under
Title II of the Social Security Act) which such Participant
receives or is eligible to receive for any disability under any
group insurance contract to which the Employer is a part, and
that portion of all amounts which such Participant receives or
is eligible to receive, under any federal, state or local
legislation which provides for disability benefits, excepting
payments specifically allocated as reimbursement for hospital or
medical expense, the loss or 100% loss of use of any bodily
member, or the loss of industrial vision, which is allocable to
any taxes, premiums or other payments therefor made by the
Employer, either now or in the future.
I. Section 10.04 is modified by substituting the following
(a) and (b) in lieu of (a), (b) and (d) thereof:
10.04A Deferred Pension Upon Termination of Employment
(a) The monthly Pension of a former Participant who
has a Termination of Employment and who becomes eligible
for a Deferred Vested Pension in accordance with Section
10.04-I-A shall be his Accrued Pension multiplied by a
vesting percentage determined in accordance with the table
immediately below:
Years of Service Vesting Percentage
Less than 10
(i) Less than age sixty-two (62) at Termination of
Employment 0%
(ii) Age sixty-two (62) or more at Termination of
Employment 100%
10 or more 100%
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Notwithstanding the above, if a Participant is
not covered by a collective bargaining agreement and the
vesting schedule under Section 10.04(b) would be more
favorable for such Participant, then his Accrued Pension
shall be multiplied by the vesting schedule stated in
Section 10.04(b) in lieu of the vesting schedule set forth
above.
Such Pension shall commence with the month
following the month in which such former Participant
attains his Normal Retirement Age.
(b) A former Participant with 15 or more years of
Service may elect (by written application) to commence his
Deferred Vested Pension in a reduced amount at any time
between the ages of 55 and 65, or a former Participant
with less than 15 years of Service, at any time between
the ages of 62 and 65, in either of which cases the
monthly Pension amount as determined in subsection (a)
above shall be reduced by five-tenths of one percent
(0.5%) for each complete calendar month by which such
earlier commencement date precedes the month following the
month in which such Participant attains his Normal
Retirement Age.
J. Section 11.03 is modified as follows:
11.03A Deferred Vested Pension
A Deferred Vested Pension shall be payable to an eligible
Participant commencing with the first day of the month following
his 65th birthday, or, if later, following the month proper
application is made therefor (but with payments retroactive to
the first day of the month following his 65th birthday), or in
the case of Participant with 15 or more years of Service,
following any month between the ages of 55 and 65, or in the
case of a Participant with less than 15 years of Service,
following any month between the ages of 62 and 65, in accordance
with his election to receive a reduced amount under the
provisions of Section 10.04A, and shall be payable each month
thereafter during the life of such Participant. The last payment
to the Participant shall be that made at the beginning of the
month in which the death of such Participant occurs, except that
if the Participant has taken a Qualified Joint and Survivor
Annuity as set forth in Section 11.04 and is receiving his
Pension, then any payments to him and his surviving spouse shall
be as set forth in said Section 11.04.
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<PAGE>
K. Section 12.01(a) and (b) are modified as follows:
12.01A Death Prior to Pension Commencement
(a) The surviving spouse, if any, of a Participant
who dies prior to the commencement of his Pension but
after August 23, 1984, and after having become entitled to
a vested interest hereunder, whether immediate or
deferred, shall be entitled to receive a monthly Qualified
Preretirement Survivor Annuity commencing on the
Participant's earliest retirement date based on a Pension
determined pursuant to Section 10.01, 10.02A or 10.04A, as
applicable.
(b) The surviving spouse, if any, of a former
Participant who terminated or terminates on or after
January 1, 1976, and who dies prior to the commencement of
his Pension but after August 23, 1984, and after having
become entitled to a vested interest hereunder, whether
immediate or deferred, shall be entitled to receive a
monthly Qualified Preretirement Survivor Annuity
commencing on the Participant's earliest retirement date
based on a Pension determined pursuant to Section 10.01,
10.02A, or 10.04A, as applicable.
L. The following Section 6.08A is added to ARTICLE VII:
6.08A Employee Contributions under Former Plan
(a) Each participant in the Former Plan prior to
July 12, 1979, contributed to the cost thereof. Such
participant's Accumulated Contributions with interest
("ACI") shall be equal to his aggregate contributions with
interest to January 1, 1979, together with interest at the
rate of 5% per annum from that date, plus his
contributions for 1979 (made prior to July 12, 1979),
together with interest at the rate of 5% per annum from
January 1, 1980, in each case compounded annually to the
first of the month of death, termination or retirement,
whichever occurs first. Effective January 1, 1988, the
interest rate shall change from 5% per annum to 120% of
the Federal mid-term rate in effect for the first month of
each Plan Year.
(b) Such participant shall have a 100% vested
interest in the pension providable by his own
contributions. Said pension shall be payable as of his
Normal Retirement Date in an annual amount equal to 10% of
his ACI further accumulated
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<PAGE>
with interest at the rate of 5% per annum from
the date of his Termination of Employment to his Normal
Retirement Date. Effective January 1, 1988, the interest
rate shall change from 5% per annum to 120% of the Federal
mid-term rate in effect for the first month of each Plan
Year.
(c) If, upon the death of such participant prior to
retirement, no other benefits are payable from the Plan,
his ACI shall be paid to his Beneficiary.
(d) Such participant, upon Termination of Employment
for any reason, may withdraw his ACI, in which case any
other pension to which he may be or become entitled under
the Plan shall be reduced by the pension providable by
such contributions, as determined under subsection (b) of
this Section 6.08A. If, upon the death of a participant
prior to retirement, a Qualified Preretirement Survivor
Annuity is payable under Article VI, the surviving spouse
may withdraw the participant's ACI at any time prior to
commencing to receive said Qualified Preretirement
Survivor Annuity. In such case the amount of the Qualified
Preretirement Survivor Annuity shall be reduced to that
amount payable if the participant had withdrawn his ACI on
his date of death. A participant shall have no right to
withdraw his ACI while continuing to be an active
Participant.
(e) If such participant, upon termination other than
by death or retirement, withdraws his ACI, is rehired, and
resumes participation, he shall have the right to
redeposit his ACI with interest at the rate of 5% per
annum from date of withdrawal to date of redeposit. In the
event of such redeposit, the reduction specified in
subsection (d) of this Section 6.08A shall be cancelled.
Effective January 1, 1988, the interest rate shall change
from 5% per annum to 120% of the Federal mid-term rate in
effect for the first month of each Plan Year.
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<PAGE>
13.03 Effect of Pension Plan of The Newark Telephone Company
(a) Effective Date - October 1, 1980.
(b) Account - None.
(c) Minimum Normal Retirement Pension
(i) One percent (1%) of the Participant's Ten-Year
Average Monthly Compensation multiplied by the number of
years (and fraction) of his Benefit Service.
(ii) As used in clause (i) of this subsection (c),
"Ten-Year Average Monthly Compensation" means one
one-hundred- twentieth (1/120th) of the total Current
Compensation paid to a Participant by the Employer for the
ten (10) complete consecutive calendar years which produce
the highest such average, provided, however, that, if a
Participant has less than ten (10) complete calendar years of
employment, Ten-Year Average Monthly Compensation means the
total Current Compensation for all of such calendar years
divided by the product of twelve (12) and the number of such
calendar years. "Current Compensation" means all remuneration
of a Participant from the Employer (or any organization
employment with which is counted as service pursuant to the
Plan) which constitutes "wages" (as defined in the federal
tax law in connection with the withholding of federal income
tax at source on wages) as reported to the Participant
pursuant to the law and regulations in connection with such
income tax withholding (or which would be so reported except
for the provisions of Section 105(d) Code, as the same has
been and may be amended, and regulations relating thereto).
For any period during which such withholding is not required,
and as to any Participant from whose remuneration such
withholding is not required at the time of the payment
thereof, "Current Compensation" shall mean all remuneration
of a Participant from the Employer which constitutes "wages"
as defined in Section 3401 of the Code, assuming in the case
of a Participant not subject to such withholding requirements
that remuneration paid to him was subject to such withholding
requirements.
(iii) For a Participant who, upon his Retirement, has
attained the age of 65 and completed 10 Vesting Years of
Service, the minimum result of the computation made under
clause (i) of this subsection (c) shall be $125.00.
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<PAGE>
(d) Minimum Early Retirement Pension - For a Participant who, upon
his Retirement, has completed 30 Vesting Years of Service, the
amount determined in clause (i) of subsection (c) above.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - For a Participant with 10 or
more Vesting Years of Service who has a Termination of Employment
at a time when he is ineligible for any Pension under the Plan, the
accrued benefit under the Prior Plan as of September 30, 1980.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the Code -
Notwithstanding any other provision of this Plan, in the event of
the termination of the Plan, each participant of the Prior Plan
shall receive a benefit which is equal to or greater than the
benefit he would have been entitled to receive if the Prior Plan
had terminated immediately prior to the Effective Date.
(j) Miscellaneous - See APPENDIX B - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF THE NEWARK TELEPHONE COMPANY, which follows
immediately hereafter.
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<PAGE>
APPENDIX B
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
THE NEWARK TELEPHONE COMPANY
Effective at the close of business on September 30, 1980, the Pension Plan of
The Newark Telephone Company (the "Former Plan") was continued by amendment and
merger into the Mid- Continent Telephone Corporation Pension Plan (the "Plan").
Notwithstanding any other provision of the Plan, effective January 1, 1982, the
following Sections of the Plan are hereby modified as follows with respect to
active Participants of the Former Plan on September 30, 1980, who were active
Participants of the Plan on December 31, 1980:
A. Definition 1.48B is added as follows:
1.48B "Former Plan" means the Pension Plan of The Newark Telephone
Company, as amended through September 30, 1980.
B. Section 9.01 is modified by adding the following paragraph thereto:
9.01B Participation
All Participants of the Former Plan as of September 30,
1980, shall be Participants of the Plan as of October 1, 1980.
C. Section 10.01 is modified by adding the following paragraph thereto:
10.01B Normal Retirement Pension
A Participant who has a Termination of Employment on or
after his Normal Retirement Age shall be eligible for a Normal
Retirement Pension in an amount as provided in Section 10.01;
provided, however, that if such Participant attained the age of
65 prior to January 1, 1976, his Normal Retirement Pension shall
be in an amount as provided in subsection (c) of Section 13.03
without regard to Section 10.01.
D. Section 12.01 is modified by adding the following paragraph thereto:
12.01B Death Prior to Pension Commencement
(e) The surviving spouse, if any, of a Participant
who dies (i) prior to commencing to receive his Pension
and prior to his attainment of age 55, but (ii) after his
completion of 30 or more Vesting Years of Service, shall
be entitled to
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<PAGE>
receive a monthly Qualified Preretirement Survivor Annuity
equal to the greater of (i) a Qualified Preretirement
Survivor Annuity determined in accordance with the
provisions of Section 12.01, and (ii) a Qualified
Preretirement Survivor Annuity based on the assumption
that the Participant retired on the date of his death with
a Pension determined under the provisions of subsection
(d) of Section 13.03.
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<PAGE>
13.04 Effect of Tygart Valley Telephone Company Pension Plan
(a) Effective Date - January 1, 1981.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Miscellaneous - See APPENDIX C - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF TYGART VALLEY TELEPHONE COMPANY, which
follows immediately hereafter.
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<PAGE>
APPENDIX C
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
TYGART VALLEY TELEPHONE COMPANY
Effective at the close of business on December 14, 1980, the Tygart Valley
Telephone Company Pension Plan (the "Former Plan") was terminated and its assets
distributed to the participants therein. Commencing January 1, 1981 the benefit
accruals to employees of Tygart Valley Telephone Company ("Tygart Valley") who
become eligible for the Mid-Continent Telephone Corporation Pension Plan (the
"Plan") as of that date and requirements as to their benefit eligibility and
payment rights with respect to accruals under the Plan shall be governed by the
Plan as modified by this Appendix C.
Notwithstanding any other provision of the Plan, effective January 1, 1982, the
following Sections of the Plan are hereby modified as follows with respect to
active employees of Tygart Valley on December 31, 1980:
A. Definition 1.48C is added as follows:
1.48C "Former Plan" means the Tygart Valley Telephone Company
Pension Plan as in effect from time to time prior to January 1,
1981.
B. Section 1.37(g) is modified as follows:
1.37(g)C Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to January 1, 1981:
For a Participant as of January 1, 1981 the
Participant's period(s) of employment with the
Employer subsequent to December 15, 1970 and prior
to January 1, 1981 shall be counted as Vesting
Service to the extent that such period(s) were
similarly credited under the provision of the Former
Plan or would have been so credited but for the
termination of the Former Plan.
(ii) Service From and After January 1,
1981: Subject to the Break in Service provision, an
Employee, whether or not a Participant, shall accrue
1 year of Vesting Service for each calendar year in
which he has 1,000 or more Hours of Service.
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<PAGE>
C. Section 1.37(d) is modified as follows:
1.37(d)C Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service in accordance with the following:
(i) Benefit Service Prior to January 1,
1981: None.
(ii) Benefit Service From and After
January 1, 1981: Subject to the Break in Service
provisions, a Participant shall accrue 1 year of
Benefit Service for each calendar year in which he
has 2,000 or more Hours of Service, with fractional
credit granted in units of 1/12th year for each
166-2/3 Hours of Service completed. No Benefit
Service shall be granted for any calendar year in
which employment is less than 1,000 hours except for
the calendar year next preceding the date of the
Participant's initial participation (or calendar
year of return to employment after a Break in
Service) and the calendar year of the Participant's
Retirement (or other termination of employment).
(b) Benefits under the Plan shall not be accrued
during employment which would have excluded an Employee
from participation in the Plan in accordance with clause
(2) of Section 1.17; provided, however, that this
exclusion from benefit accrual shall not apply to an
Employee in a collective bargaining unit not included in
this Plan who becomes covered by this Plan by reason of
his transfer to an employment classification included in
this Plan, whether or not he is affected by the provisions
of Section 10.06, and provided further that the exclusion
shall again apply if the Employee is transferred back to
such collective bargaining unit, but only as to his
benefit accruals subsequent to the date of such latter
transfer. In the event a Participant ceases to be an
Employee eligible to accrue benefits under the Plan but
remains in the employ of the Employer, he shall receive no
Benefit Service until he is again in eligible employment.
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<PAGE>
D. Section 1.37(h) is modified as follows:
1.37(h)C Bridging
Notwithstanding any other provision of this Plan, any
former Participant who, irrespective of the date of his
Termination of Employment, had not fulfilled the requirements
for vested benefits under this Plan including any prior
provision hereof, and who again was or is employed, shall have
years of pre-termination Vesting Service and Benefit Service
restored, unless otherwise restored in accordance with Section
1.37 and Section 10.04, if the number of consecutive years of
post-termination employment is at least 5, provided, however,
that this Section 1.37(h)C shall not result in the restoration
of pre-termination Vesting Service or Benefit Service with
respect to any termination which occurred prior to January 1,
1981.
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<PAGE>
13.05 Effect of The Old Town Telephone System, Incorporated Pension Plan
(a) Effective Date - January 1, 1981.
(b) Account - None.
(c) Minimum Normal Retirement Pension - The Minimum Normal
Retirement Pension shall be the Minimum Accrued Pension; namely --
(i) Three-quarters of one percent (0.75%) of the
Participant's Monthly Five- Year Average Compensation plus
three-quarters of one percent (0.75%) of that portion, if
any, of his Monthly Five-Year Average Compensation in excess
of four hundred fifty dollars ($450.00), with the sum
multiplied by the number of years (and fraction) of his
Benefit Service.
(ii) As used in clause (i) of this subsection (c),
"Monthly Five-Year Average Compensation" means one-sixtieth
(1/60th) of the total Current Compensation paid to a
Participant by the Employer for the 5 complete consecutive
calendar years prior to his Normal Retirement Date which
produce the highest such average, provided, however, that, if
a Participant has less than 5 complete calendar years of
employment, Monthly Five-Year Average Compensation means the
total Current Compensation for all complete calendar years
divided by the product of 12 and the number of such calendar
years. "Current Compensation" means all remuneration of a
Participant from the Employer (or any organization employment
with which is counted as service pursuant to the Plan) which
constitutes "wages" (as defined in the federal income tax law
in connection with the withholding of federal income tax at
source on wages) as reported to the Participant pursuant to
the law and regulations in connection with such income tax
withholding (or which would be so reported except for the
provisions of Section 105(d) of the Code, as the same has
been and may be amended, and regulations relating thereto).
For any period during which such withholding is not required,
and as to any Participant from whose remuneration such
withholding is not required at the time of the payment
thereof, "Current Compensation" shall mean all remuneration
of a Participant from the Employer which constitutes "wages"
as defined in Section 3401 of the Code, assuming in the case
of a Participant not subject to such withholding requirements
that remuneration paid to him was subject to such withholding
requirements.
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<PAGE>
For this purpose of this Section 13.05 "Accrued Pension"
shall mean the greater of the Accrued Pension of Section 1.01
and the Minimum Accrued Pension of this subsection (c) each
calculated as of date of determination.
(d) Minimum Early Retirement Pension - For a Participant who,
upon his Retirement, has attained age fifty-five (55) and
completed ten (10) Vesting Years of Service, his Accrued
Pension at date of early retirement reduced by five-ninths of
one percent (5/9%) for each complete calendar month up to
sixty (60) such months, and by five-eighteenths of one
percent (5/18%) for each complete calendar month in excess of
sixty (60) months, by which his Early Retirement Pension
commencement date precedes the month following the month in
which such Participant attains his sixty-fifth (65th)
birthday.
(e) Minimum Disability Retirement Pension - For a Participant
who, upon his Disability Retirement, has attained age 45 and
completed 10 Vesting Years of Service, a monthly amount
calculated in accordance with subsection (d) above.
(f) Minimum Deferred Vested Pension - For a Participant with
10 or more Vesting Years of Service who has a Termination of
Employment at a time when he is ineligible for any Pension
under the Plan, his Accrued Pension at date of termination.
Said Pension shall commence at Normal Retirement Age in the
full amount, or, subject to the Participant's election, at
any time after his attainment of age 55 in a reduced amount
calculated in accordance with subsection (d) above.
(g) Minimum Death Benefit - The surviving spouse, if any, of
a Participant who dies prior to commencing to receive his
Pension but after (i) his Normal Retirement Age, or (ii) his
attainment of age 55 with 10 or more Vesting Years of
Service, shall be entitled to receive a monthly Qualified
Preretirement Survivor Annuity based on the assumption that
the Participant retired on the date of his death with a
Pension determined under the provisions of subsection (c),
(d), or (f) above, as applicable.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the Code -
Notwithstanding any other provision of this Plan, in the
event of the termination of the Plan, each participant of the
Prior Plan shall receive a benefit which is equal to or
greater than the benefit he would have been entitled to
receive if the Prior Plan had terminated immediately prior to
the Effective Date.
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<PAGE>
(j) Miscellaneous - See APPENDIX D - SPECIAL PROVISIONS
APPLICABLE TO FORMER PARTICIPANTS IN THE OLD TOWN TELEPHONE
SYSTEM, INCORPORATED PENSION PLAN, which follows immediately
hereafter.
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<PAGE>
APPENDIX D
SPECIAL PROVISIONS APPLICABLE TO FORMER PARTICIPANTS
IN
THE OLD TOWN TELEPHONE SYSTEM, INCORPORATED
PENSION PLAN
Effective at the close of business on December 31, 1980, The Old Town Telephone
System, Incorporated Pension Plan (the "Former Plan") was continued by amendment
and merger into the Plan.
Notwithstanding any other provision of the Plan, effective January 1, 1982, the
following Sections of the Plan are hereby modified as follows with respect to
active Participants of the former Plan on December 31, 1980:
A. Definition 1.48D is added as follows:
1.48D "Former Plan" means The Old Town Telephone System, Incorporated
Pension Plan, as amended through December 31, 1980.
B. Section 11.05(a) is modified by adding the following (a)(6) thereto:
11.05D Optional Forms of Pension
(a)(6) Option LS: A lump sum settlement, the amount of which
shall not be less than a lump sum settlement determined by
applying the 1951 Basic Annuity Table projected to 1965 by Scale
C, with five-year setback for females and interest at 5% per
annum, to that portion of the Pension accrued as of December 31,
1980, under the Former Plan.
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<PAGE>
13.06 Effect of Leeds Telephone Company Pension Plan
(a) Effective Date - May 31, 1983.
(b) Account - None.
(c) Minimum Normal Retirement Pension - The Minimum Normal
Retirement Pension shall be the Minimum Accrued Pension: namely -
(i) Thirty and eight-tenths percent (30.8%) of the
Participant's Monthly Pension Base Pay multiplied by a
fraction the numerator of which is the actual number of years
(and fraction) of Benefit Service at date of determination
and the denominator of which is said numerator plus the
number of years (and fraction), if any, from date of
determination to the LPNRD.
(ii) As used in clause (i) of this section (c) --
(A) "Participant" means an active employee of
Leeds Telephone Company, Inc. on May 30, 1983, who, on
such date, was covered by a collective bargaining
agreement and had completed at least one (1) year of
employment.
(B) "LPNRD" or "Leeds Plan Normal Retirement
Date" means the May 31st coincident with or next
following a Participant's sixty-fifth
(65th) birthday.
(C) "Monthly Pension Base Pay" means a
Participant's monthly rate of basic compensation in
effect on the earlier of the May 31st five (5) years
prior to the Participant's LPNRD and the May 31st
coincident with or next preceding the date of
determination.
(iii) If a Minimum Accrued Pension commences prior to a
Participant's LPNRD, it shall be reduced by five-tenths of
one percent (0.5%) for each complete calendar month by which
the date of such earlier commencement precedes the month
following the month in which such Participant attains his
LPNRD.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - The Minimum Accrued Pension.
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(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the Code -
Notwithstanding any other provision of this Plan, in the event of
the termination of the Plan, each participant of the Prior Plan
shall receive a benefit which is equal to or greater than the
benefit he would have been entitled to receive if the Prior Plan
had terminated immediately prior to the Effective Date.
(j) Miscellaneous - See APPENDIX E - SPECIAL PROVISIONS APPLICABLE TO
CERTAIN EMPLOYEES OF LEEDS TELEPHONE COMPANY, INC., which follows
immediately hereafter.
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APPENDIX E
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
LEEDS TELEPHONE COMPANY, INC.
Effective at close of business on May 30, 1983, the Leeds Telephone Company
Pension Plan (the "Former Plan") was continued by amendment and merger into the
Plan.
Notwithstanding any other provision of the Plan, effective May 31, 1983, (i)
Section 10.05 of the Plan and (ii) the balance of the following Sections of the
Plan, respectively, are hereby modified as follows (i) with respect to
participants of the Former Plan who transferred, had a Termination of Employment
with deferred Pension rights or retired prior to May 31, 1983, and (ii) with
respect to active employees of Leeds Telephone Company on May 30, 1983, who, on
such date, were covered by a collective bargaining agreement and had completed
at least one (1) year of employment:
A. Definition 1.48E is added as follows:
1.48E "Former Plan" means the Leeds Telephone Company Pension
Plan, as amended through May 30, 1983.
B. Section 1.37(g) is modified as follows:
1.37(g)E Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to June 1, 1983: An
Employee's period(s) of employment with the Employer
prior to June 1, 1983 shall be counted as Vesting
Service to the extent that such period(s) were
similarly credited under the provisions of the
Former Plan, provided, however, that the amount of
such Vesting Service credit shall not be less than
the number of completed years of employment prior to
June 1, 1983, to a maximum of 3 such years, plus the
number of completed months of employment from date
of hire to the next following June 1st:
(ii) Service From and After June 1,
1983: Subject to the Break in Service provisions, an
Employee, whether or not a Participant, shall accrue
one year of Vesting Service for each calendar year
in which he has 1,000 or more Hours of Service.
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C. Section 1.37(d) is modified as follows:
1.37(d)E Benefit Service
(1) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the
following:
(i) Benefit Service Prior to June 1,
1983: An Employee's period(s) of employment with the
Employer prior to June 1, 1983 shall be counted as
Benefit Service to the extent that such period(s)
were similarly credited under the provisions of the
Former Plan, provided, however, that the amount of
such Benefit Service shall not be less than the
number of completed years of employment prior to
June 1, 1983, to a maximum of three (3) such years,
plus the number of completed months of employment
from date of hire to the next following June 1st.
(ii) Benefit Service From and After June
1, 1983: Subject to the Break in Service provisions,
a Participant shall accrue one year of Benefit
Service for each calendar year in which he has 2,000
or more Hours of Service, with fractional credit
granted in units of 1/12th year for each 166-2/3
Hours of Service completed. No Benefit Service shall
be granted for any calendar year in which employment
is less than 1,000 Hours of Service except for the
calendar year next preceding the date of the
Participant's initial participation (or calendar
year of return to employment after a Break in
Service) and the calendar year of the Participant's
Retirement (or other Termination of Employment). The
maximum Benefit Service to be accrued for the period
June 1, 1983 through December 31, 1983 shall be
0.5833 year.
(2) Benefits under the Plan shall not be accrued
during employment which would have excluded an Employee
from participation in the Plan in accordance with clause
(2) of Section 1.17; provided, however, that this
exclusion from benefit accrual shall not apply to an
Employee in a collective bargaining unit not included in
this Plan who becomes covered by this Plan, whether or not
he is
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affected by the provisions of Section 4.07, and provided
further that the exclusion shall again apply if the
employee is transferred back to such collective bargaining
unit, but only as to his benefit accruals subsequent to
the date of such latter transfer. In the event a
Participant ceases to be an Employee eligible to accrue
benefits under the Plan but remains in the employ of the
Employer, he shall receive no Benefit Service until he is
again in eligible employment.
D. Section 16.02 is modified as follows:
16.02E Transfer, Termination or Retirement Prior to May 31, 1983
Except as provided in Sections 11.04 and 12.01, a
participant in the Former Plan who, prior to May 31, 1983,
transferred to an employment classification not covered by the
Former Plan, had a Termination of Employment with deferred
Pension rights, or retired under the provisions of the Former
Plan, or his Beneficiary, shall receive or continue to receive a
Pension in accordance with the provisions of the Former Plan as
in effect at the date of the participant's transfer, Termination
of Employment, or retirement.
E. The following Section 6.08E is added to Article VI:
7.05E Employee Contributions under Former Plan
(a) Each participant in the Former Plan prior to May
31, 1983, who had completed 4 or more years of employment
contributed to the cost thereof. Such participant's
Accumulated Contributions with interest ("ACI") shall be
equal to his aggregate contributions with interest to May
31, 1983, together with interest at the rate of 5% per
annum from that date compounded annually to the first of
the month of death, termination or retirement, whichever
comes first, but not beyond the May 31st coincident with
or next following the participant's 65th birthday.
Effective January 1, 1988, the interest rate shall change
from 5% per annum to 120% of the Federal mid-term rate in
effect for the first month of each Plan Year.
(b) Such participant shall have a 100% vested
interest in the pension providable by his own
contributions. Said pension shall be payable as of the May
31st coincident with or next following the participant's
65th birthday in an annual amount equal to 10% of his ACI
further accumulated with interest at the rate of 5% per
annum from date of
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termination to such May 31st. Effective January 1, 1988,
the interest rate shall change from 5% per annum to 120%
of the Federal mid- term rate in effect for the first
month of each Plan Year.
(c) If, upon the death of such participant prior to
retirement, no other benefits are payable from the Plan,
his ACI shall be paid to his Beneficiary.
(d) Such participant, upon Termination of Employment
for any reason other than death, may withdraw his ACI, in
which case any other pension to which he may be or becomes
entitled under the Plan shall be reduced by the lesser of
(i) the pension providable by such contributions, as
determined under subsection (b) of this Section 6.08E and
(ii) the Minimum Accrued Pension as of May 30, 1983 per
subsection (c) of Section 13.06. If upon the death of a
participant prior to retirement a Qualified Preretirement
Survivor Annuity is payable under Article XII, the
surviving spouse may withdraw the participant's ACI at any
time prior to commencing to receive said Qualified
Preretirement Survivor Annuity. In such case, the amount
of the Qualified Preretirement Survivor Annuity shall be
reduced to that amount payable if the participant had
withdrawn his ACI on his date of death. Such participant
shall have no right to withdraw his ACI while continuing
to be an active Participant.
(e) If such participant, upon termination other than
by death or retirement, withdraws his ACI, is rehired, and
resumes participation, he shall have the right to
redeposit his ACI with interest at the rate of 5% per
annum from date of withdrawal to date of redeposit. In the
event of such redeposit, the reduction specified in
subsection (d) of this Section 6.08E shall be cancelled.
Effective January 1, 1988, the interest rate shall change
from 5% per annum to 120% of the Federal mid-term rate in
effect for the first month of each Plan Year.
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13.07 Effect of Allied Telephone Company Profit Sharing Plan
(a) Effective Date - November 1, 1983.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Miscellaneous - See APPENDIX F - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF ALLIED TELEPHONE COMPANY, which follows
immediately hereafter.
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APPENDIX F
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
ALLIED TELEPHONE COMPANY
Effective at the close of business on October 31, 1983, contributions to the
Allied Telephone Company Profit Sharing Plan (the "Former Plan") ceased although
the Plan is continuing to operate according to its terms. Commencing November 1,
1983, benefits to employees of Allied Telephone Company ("Allied") who become
eligible for the Plan as of that date, and requirements as of their eligibility
and payment rights with respect to benefits under the Plan, shall be governed by
the Plan as modified by this Appendix F.
Notwithstanding any other provision of the Plan, effective November 1, 1983, the
following Sections of the Plan are modified as follows with respect to active
employees of Allied on October 31, 1983:
A. Section 1.09 is modified as follows:
1.09F "Benefit Percentage" means, for a Participant, a
percentage determined as the sum of --
(i) One percent (1.00%) multiplied by the number of years
(and fraction) of his Benefit Service; plus
(ii) One-quarter of one percent (0.25%) multiplied by the
number of years (and fraction) of his Benefit Service, not to
exceed ten (10) years, accrued after the month in which occurred
his fifty-fifth (55th) birthday; plus
(iii) Five-hundredths of one percent (0.05%) multiplied by
the number of years (and fraction) of his Benefit Service
accrued after 1981; plus
(iv) Five-hundredths of one percent (0.05%) multiplied by the
number of years (and fraction) of his Benefit Service accrued
after 1982; plus
(v) Five-hundredths of one percent (0.05%) multiplied by the
number of years (and fraction) of his Benefit Service accrued
after 1983; plus
(vi) Five-hundredths of one percent (0.05%) multiplied by the
number of years (and fraction) of his Benefit Service accrued
after 1984; plus
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(vii) Five-hundredths of one percent (0.05%) multiplied by
the number of years (and fraction) of his Benefit Service
accrued after 1985; plus
(viii) Five-hundredths of one percent (0.05%) multiplied by
the number of years (and fraction) of his Benefit Service
accrued after 1986; plus
(ix) Five-hundredths of one percent (0.05%) multiplied by the
number of years (and fraction) of his Benefit Service accrued
after 1987;
provided, however, that the Benefit Percentage based on
Benefit Service accrued prior to 1984 shall be multiplied by
two-thirds (2/3rds).
B. Definition 1.01 is modified as follows:
1.01F "Accrued Pension" means, for a Participant, an amount equal to the
greater of (i) and (ii) below:
(i) His Benefit Percentage multiplied by his Average Monthly
Compensation at Date of determination; and
(ii) $10.00 multiplied by the sum of --
(A) Two-thirds (2/3rds) of the number of years (and
fraction) of Benefit Service accrued prior to 1984, plus
(B) The number of years (and fraction) of Benefit
Service accrued after 1983.
Notwithstanding the preceding sentence, a Participant who had a
Termination of Employment with deferred Pension rights, retired, or
attained his normal retirement age (whether or not he retired) prior to
January 1, 1994 and who is not credited with one Hour of Service on or
after January 1, 1994, or his Beneficiary, shall receive or continue to
receive a Pension in accordance with the provisions of the Plan as in
effect at the date of the Participant's Termination of Employment,
retirement, or normal retirement age, whichever first occurred.
C. Definition 1.48F is added as follows:
1.48F "Former Plan" means the Allied Telephone Company Profit
Sharing Plan.
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<PAGE>
D. Section 9.01 is modified by adding the following paragraph thereto:
9.01F Participation
Any Employee as of November 1, 1983 who has completed a
12-month period ending prior to said date with not less than
1,000 Hours of Service (and who is otherwise eligible for
participation) shall become a Participant as of November 1,
1983.
E. Section 1.37(g) is modified as follows:
1.37(g)F Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) As applicable, no Vesting Service
shall be accrued with respect to employment prior to
the date of acquisition of Employer by Allied
Telephone Company.
(ii) Subject to the foregoing clause (i)
and the Break in Service provisions, an Employee,
whether or not a Participant, shall accrue one year of
Vesting Service for each calendar year in which he has
1,000 or more Hours of Service.
F. Section 1.37(d) is modified as follows:
1.37(d)F Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) As applicable, no Benefit Service
shall be accrued with respect to employment prior to
the date of acquisition of Employer by Allied
Telephone Company.
(ii) Subject to the foregoing clause (i)
and the Break in Service provisions, a Participant
shall accrue one year of Benefit Service for each
calendar year in which he has 2,000 or more Hours of
Service, with fractional credit granted in units of
1/12th year for
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<PAGE>
each 166-2/3 Hours of Service completed. No Benefit
Service shall be granted for any calendar year in
which less than 1,000 Hours of Service were completed
except for the calendar year next preceding the date
of the Participant's initial participation (or
calendar year of return to employment after a Break in
Service) and the calendar year of the Participant's
Retirement (or other Termination of Employment).
(b) Benefits under the Plan shall not be accrued
during employment which would have excluded an Employee
from participation in the Plan in accordance with clause
(2) of Section 1.17; provided, however, that this
exclusion from benefit accrual shall not apply to an
Employee in a collective bargaining unit not included in
this Plan who becomes covered by this Plan by reason of
his transfer to an employment classification included in
this Plan, whether or not he is affected by the provisions
of Section 10.06, and provided further that the exclusion
shall again apply if the Employee is transferred back to
such collective bargaining unit, but only as to his
benefit accruals subsequent to the date of such latter
transfer. In the event a Participant ceases to be an
Employee eligible to accrue benefits under the Plan but
remains in the employ of the Employer, he shall receive no
Benefit Service until he is again in eligible employment.
G. Section 1.37(h) is modified as follows:
1.37(h)F Bridging
Notwithstanding any other provision of this Plan, any
former Participant who, irrespective of the date of his
Termination of Employment, had not fulfilled the requirements
for vested benefits under this Plan including any prior
provision hereof, and who again was or is employed, shall have
years of pre-termination Vesting Service and Benefit Service
restored, unless otherwise restored in accordance with Section
1.37 or Section 10.04, if the number of consecutive years of
post- termination employment is at least 5, provided, however,
that this subsection 1.37(h)F shall not result in the
restoration of pre-termination Service or Benefit Service with
respect to any termination which occurred prior to November 1,
1983.
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<PAGE>
H. Section 11.05 is modified by adding the following subsections (a)(6), (f)
and (g) thereto:
11.05F Optional Forms of Pension
(a)(6) Option F: A level Pension payable to the
participant for 120 months. In the event the Participant
dies before receiving 120 monthly payments, the said
monthly payments remaining unpaid at his death shall be
payable to his designated beneficiary for the remainder of
the 120 month period.
(f) The surviving spouse of a Participant entitled
to receive a monthly Qualified Preretirement Survivor
Annuity may elect to receive said Qualified Preretirement
Survivor Annuity under the terms of Option F. The election
by a surviving spouse of Option F must be made in writing
to the Plan Administrator on or prior to the commencement
of the Qualified Preretirement Survivor Annuity.
(g) Option F may be elected only by a participant of
the Former Plan or a surviving spouse thereof eligible for
a Pension in accordance with Section 12.01. Actuarial
equivalence for Option F shall be determined on the basis
of the Ga-1951 Mortality Table projected to 1975 by Scale
C with interest at 8% per annum.
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<PAGE>
13.08 Effect of the Heins Retirement Plan
(a) Effective Date - January 1, 1987
(b) Account - None.
(c) Minimum Normal Retirement Pension - The Minimum Normal
Retirement Pension shall be the Minimum Accrued Pension; namely --
(i) Sixty percent (60%) of the Participant's Final
Average Compensation less sixty percent (60%) of his Primary
Social Security Amount, with the difference multiplied by the
ratio, not in excess of one (1), that the number of his years
(and fraction) of Benefit Service bears to fifteen (15)
years.
(ii) As used in clause (i) of this subsection (c),
"Benefit Service" means the sum of (A) and (B), as follows:
(A) For employment prior to January 1, 1987,
a Participant's Benefit Service under the Former Plan
as of December 31, 1986.
(B) For employment on and after January 1,
1987, a Participant's Benefit Service under the Plan
granted after December 31,
1986.
(iii) As used in clause (i) of this subsection (c),
"Final Average Compensation" means one-sixtieth (1/60th) of
the Compensation of a Participant during the 5 consecutive
Plan Years producing the highest such average within the last
10 Plan Years of employment ending with the Plan Year
containing his Normal Retirement Age. If total employment is
less than 5 consecutive Plan Years, the Compensation for the
total number of Plan Years of employment shall be used with
the sum divided by the product of 12 and the number of such
years. For this purpose, if a Participant is not employed for
an entire Plan Year, his Compensation for the Plan Year shall
be annualized for that Plan Year.
(iv) As used in clause (i) of this subsection (c),
"Primary Social Security Amount" means an amount equal to the
monthly Social Security old-age benefit to which a
Participant is or would be entitled at age 65. Such amount
shall be determined under the provisions of the Social
Security Act in effect on the January 1 immediately preceding
his Termination of Employment, Retirement, or Normal
Retirement Age, whichever first
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<PAGE>
occurs. If a Participant has a Termination of Employment or
retires before age 65, the Primary Social Security Amount
shall be estimated as follows: (A) it shall be assumed that
such Participant will have no additional compensation
following the date of his Retirement or other Termination of
Employment, whichever is applicable, until age 65; and (B) it
is assumed that such Participant's past earnings increased by
6% each Plan Year until the Plan Year in which Compensation
from the Employer is used. Compensation from the Employer
shall be used for the 5 Plan Years preceding the
Participant's Termination of Employment, unless the
Participant was not employed by the Employer for all such
years; in which case, only Compensation for years in which
the Participant was employed by the Employer will be used.
The preceding notwithstanding, a Participant shall have the
right to submit proof of his actual past earnings to the Plan
Administrator. If the proof of his actual past earnings is
acceptable to the Plan Administrator, the actual past
earnings shall be used instead of the estimated past earnings
in estimating the Primary Social Security Amount. A
Participant's earnings history, as supplied by the Social
Security Administration to the Participant, shall be
acceptable proof for this purpose; provided that, if a
Participant does not submit acceptable proof of his actual
past earnings to the Plan Administrator within ninety (90)
days of the later of the date the Participant has a
Termination of Employment and the date when the Participant
is notified of his benefits under the Plan, then the
Participant's past earnings will be estimated as specified
above. On Termination of Employment for any reason, a
Participant shall be given a notice explaining the way in
which the Primary Social Security Amount is calculated. The
notice shall also inform the Participant of the circumstances
in which his past earnings will be estimated for this
purpose, of his right to submit his actual past earnings for
this purpose, and of the availability of his actual earnings
history from the Social Security Administration on request.
(v) As used in clauses (iii) and (iv) of this
subsection (c), "Compensation" means the total salary or
wages of a Participant that constitute wages subject to tax
under Section 3101(a) of the Code without applying the dollar
limitation of Section 3121(a) of the Code, but excludes
commissions, automobile allowances, the cost of any term life
insurance provided, Employer contributions to a retirement
plan or similar employee benefit program, and salary and
wages paid after a Participant's Normal Retirement Age;
provided, however,
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<PAGE>
that Compensation for Plan Years after 1986 shall be the
Compensation for 1986.
For the purpose of this Section 13.08 "Accrued Pension" shall mean the
greater of the Accrued Pension of Section 1.01 and the Minimum Accrued
Pension of this subsection (c), each calculated as of date of
determination.
(d) Minimum Early Retirement Pension - For a Participant who, upon
his Retirement, has attained age fifty-five (55) and completed ten
(10) Vesting Years of Service, his accrued Pension at date of early
retirement reduced by five-ninths of one percent (5/9%) for each
complete calendar month up to sixty (60) such months, and by
five-eighteenths of one percent 5/18%) for each complete calendar
month in excess of sixty (60) months, by which his Early Retirement
pension commencement date precedes the month following the month in
which such Participant attains his sixty-fifth (65th) birthday.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - For a Participant with 10 or
more Vesting Years of Service who has a Termination of Employment
at a time when he is ineligible for any Pension under the Plan, his
Accrued Pension at date of termination. Said Pension shall commence
at Normal Retirement Date in the full amount, or, subject to the
Participant's election, at any time after his attainment of age 55
in a reduced amount calculated in accordance with subsection (d)
above.
(g) Minimum Death Benefit - The surviving spouse, if any, of a
Participant who dies prior to the commencement of his Pension but
after having become entitled to a vested interest hereunder,
whether immediate or deferred, shall be entitled to receive a
monthly Qualified Preretirement Survivor Annuity commencing on the
Participant's Earliest Retirement Date (ERD) with the amount of
such Pension based on the assumption that the Participant retired
on his ERD with a Pension determined under the provisions of
subsection (c), (d), or (f) above, as applicable.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the Code -
Notwithstanding any other provision of the Plan, in the event of
the termination of the Plan, each participant of the Prior Plan
shall receive a benefit which is equal to or greater than the
benefit he would have been entitled to receive if the Prior Plan
had terminated immediately prior to the Effective Date.
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<PAGE>
(j) Miscellaneous - See APPENDIX G - SPECIAL PROVISIONS APPLICABLE
TO FORMER PARTICIPANTS IN THE HEINS RETIREMENT PLAN, which follows
immediately hereafter.
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<PAGE>
APPENDIX G
SPECIAL PROVISIONS APPLICABLE TO FORMER PARTICIPANTS
IN THE
HEINS RETIREMENT PLAN
Effective at the close of business on December 31, 1986, the Heins Retirement
Plan (the "Former Plan") was continued by amendment into the Plan.
Notwithstanding any other provision of the Plan, effective January 1, 1987, the
following Sections of the Plan are hereby modified as follows with respect to
Participants of the Former Plan on December 31, 1986:
A. Definition 1.48G is added as follows:
1.48G "Former Plan" means the Heins Retirement Plan, as amended through
December 31, 1996.
B. Section 1.37(h) is modified as follows;
1.37(h)G Bridging
Notwithstanding any other provision of this Plan, any
former Participant who, irrespective of the date of his
termination under this Plan including any prior provision
hereof, and who again was or is employed, shall have
pre-termination Vesting Years of Service and years of Benefit
Service restored, unless otherwise restored in accordance with
Section 1.37 or Section 10.04, if the number of consecutive
years of post-termination employment is at least five (5),
provided, however, that this Section 1.37(h)G shall not result
in the restoration of pre-termination Vesting Years of Vesting
Service or Benefit Service with respect to any termination which
occurred prior to January 1, 1987.
C. Section 16.02 is modified as follows:
16.02G Termination or Retirement Prior to January 1, 1987
A Participant who had a Termination of Employment with
deferred Pension rights or retired prior to January 1, 1987, and
who is not credited with one Hour of Service on or after January
1, 1988, or his Beneficiary, shall receive or continue to
receive a Pension in accordance with the provisions of the
Former Plan as in effect at the date of the Participant's
termination of employment or retirement, whichever first
occurred. Notwithstanding any other provision of this Plan, a
Participant who attained his normal retirement age prior to
January 1, 1987, but who did not retire and
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<PAGE>
who is not credited with one Hour of Service on or after January
1, 1988, shall receive a Pension in accordance with the terms of
the Former Plan as of December 31, 1986, provided that there
shall be no actuarial increase for any delay in retirement
beyond December 31, 1986.
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<PAGE>
13.09 Effect of Retirement Plan for Employees of CP National Corporation
(a) Effective Date - January 1, 1990.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the Code -
Notwithstanding any other provision of this Plan, in the event of
the termination of the Plan, each participant of the Prior Plan
shall receive a benefit which is equal to or greater than the
benefit he would have been entitled to receive if the Prior Plan
had terminated immediately prior to the Effective Date.
(j) Miscellaneous - See APPENDICES H and I - SPECIAL PROVISIONS
APPLICABLE TO CERTAIN EMPLOYEES OF CP NATIONAL CORPORATION AND ITS
SUBSIDIARIES, which appendices follow immediately hereafter.
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<PAGE>
APPENDIX H
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
CP NATIONAL CORPORATION AND ITS SUBSIDIARIES
Effective as of the close of business on December 31, 1989, the Retirement Plan
for Employees of CP National Corporation (the "Former Plan") was continued by
amendment and merger into the Plan. Thereafter, the provisions of the Plan shall
govern the interests of participants, former participants, beneficiaries,
contingent annuitants or any other person or entity claiming any right or
interest under the Former Plan.
Notwithstanding any other provision of the Plan, effective January 1, 1990, the
Plan is modified as set forth below with respect to any employee who is in
employment of the Controlled Group covered under the Plan on or after January 1,
1990 and who prior to January 1, 1990 accrued "Service" under the Former Plan by
reason of employment with CP National Corporation or its subsidiaries ("CP
National"), other than an employee covered by a collective bargaining agreement
providing for coverage under the Former Plan. For a Former Plan participant who
died, became "totally and permanently disabled" or who had a Termination of
Employment prior to January 1, 1990, the provisions of the Former Plan in effect
at the date of the participant's death, the date the participant became totally
and permanently disabled, or when the participant had a Termination of
Employment shall govern the rights and interests of the participant, his
beneficiaries and contingent annuitants and any other person or entity claiming
any right or interest through the participant's participation in the Former
Plan, except as otherwise required by law, or if the Former Plan participant is
reemployed in employment of the Controlled Group on or after January 1, 1990
other than in employment covered by a collective bargaining agreement providing
for coverage under the Former Plan or Appendix I to Section 13.09 of the Plan,
in which case the Plan as modified as set forth below shall apply to such Former
Plan participant and if such Former Plan participant accrued benefits under the
Former Plan provisions subsequent to December 31, 1989 by reason of being
"totally and permanently disabled," the provisions of the Plan as modified as
set forth below shall be applied to such Former Plan participant by substituting
for "December 31, 1989" or "January 1, 1990" (respectively and where relevant)
the date on which such Former Plan participant ceased to accrue such benefits or
the immediately following day, respectively.
For purposes of applying the provisions of this Appendix H, whenever reference
herein is made to Appendix I to this Section 13.09, "Retirement Benefit" shall
be replaced by "CP National Benefit" each place in which it appears and any
other defined terms in Appendix I to this Section 13.09 shall be given the
meaning otherwise given to those terms in Appendix I to this Section 13.09.
For purposes of this Appendix H, a Participant shall be fully vested in his "CP
National Benefit," as defined herein.
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A. Section 1.01 is modified as follows:
1.01H "Accrued Pension" for a Participant means (except as otherwise
provided herein) an amount equal to the sum of (1) and (2) below:
(1) An amount equal to the Participant's Accrued Pension under
Section 1.01 without regard to this subsection 1.01H.
plus
(2) An amount equal to the Participant's "Retirement Benefit"
that has accrued at the close of business on December 31, 1989
under the Former Plan (the "CP National Benefit"), if any.
B. Section 1.03 is modified as follows:
1.03H "Actuarial Equivalent" means with respect to any determination of
actuarial equivalence required by the provisions of the Plan involving
the CP National Benefit shall be made on the basis of (a) the UP-1984
Mortality Table and (b) an interest rate of eight percent (8%) per annum,
except the amount payable under any optional form of payment described in
Section 11.05H shall be calculated using the conversion factors
prescribed by Table A of Appendix I to this Section 13.09; provided,
however, that the portion of the CP National Benefit accrued to November
12, 1984 by any Participant shall in no event be reduced as the result of
the use of such conversion factors.
C. Section 1.25 is modified as follows:
1.25H Normal Retirement Date
(a) For an Employee whose period of Service
commences not later than the first day of the calendar
month immediately following his sixtieth (60th) birthday,
the last day of the month in which occurs such Employee's
sixty-fifth (65th) birthday;
(b) For an Employee who was born on the first day of
the month, the first day of the month that occurs on the
date he attains age 65.
(c) For an Employee who was hired after attaining
age 60, the last day of the month (the first day of the
month for Employees who were born on the first day of the
month) in which occurs such Employee's sixty-fifth (65th)
birthday.
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D. Section 1.48H is added as follows:
1.48H "Former Plan" means the Retirement Plan for Employees of CP
National Corporation, as amended through December 31, 1989.
E. Section 1.37(g) is modified as follows:
1.37(g)H Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to January 1, 1990:
For a Participant as of January 1, 1990, the
Participant's period(s) of employment with the
Employer prior to January 1, 1990, shall be counted
as Vesting Service to the extent of the number of
whole 1- year periods of service that were similarly
credited under the provisions of the Former Plan.
(ii) Service From and After January 1,
1990: Subject to the Break in Service provisions, an
Employee, whether or not a Participant, shall accrue
one year of Vesting Service for each calendar year
in which he has 1,000 or more Hours of Service. For
all purposes except for determining eligibility for
Early Retirement Pension under Section 10.02 or
Disability Retirement Pension under Section 10.03,
in determining such Vesting Service for the
computation period which includes January 1, 1990,
the Participant shall receive credit for a number of
Hours of Service with respect to any fractional part
of a year of service credited to the Participant as
of January 1, 1990, under the provisions of the
Former Plan, determined by crediting the Participant
with 190 Hours of Service for each 1/12th of a
fractional year of service. Only for purposes of
determining eligibility for Early Retirement Pension
under Section 10.02 and Disability Retirement
Pension under Section 10.03, in determining such
Vesting Service for the computation period in which
the Participant has a Termination of Employment, the
Participant shall receive credit, for a number of
Hours of Service with respect to any fractional part
of a year of
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service credited to the Participant
as of January 1, 1990, under the provisions of the
Former Plan, determined by crediting the Participant
with 190 Hours of Service for each 1/12th of a
fractional year of service.
(iii) Notwithstanding the provisions
of part (ii), a Participant shall not be credited
with less years of Vesting Service for service from
and after January 1, 1990 than under the method for
determining vesting service under the Former Plan.
(iv) Notwithstanding any other
provision of the Plan, there shall be no duplication
of Vesting Service or Vesting Years of Service under
the Plan and the Former Plan by reason of any
restoration of, crediting of, or granting of service
in respect of any single period or otherwise.
F. Section 1.37(d) is modified as follows:
1.37(d)H Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to January 1,
1990: None.
(ii) Benefit Service From and After
January 1, 1990: In accordance with the provisions of
Section 1.37(d).
G. Section 1.37(h) is modified as follows:
1.37(h)H Bridging
Notwithstanding any other provision of this Plan, any
former Participant who, irrespective of the date of his
Termination of Employment, had not fulfilled the requirements
for vested benefits under this Plan including any prior
provision hereof, and who again was or is employed, shall have
years of pre-termination Vesting Service and Benefit Service
restored, unless otherwise restored in accordance with Section
1.37 or Section 10.04, if the number of consecutive years of
post- termination employment is at least 5; provided, however,
that this Section 1.37(h)H shall not result in the
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restoration of any pre-termination service with respect to
any termination which occurred prior to January 1, 1990.
H. Section 1.37(f) is modified as follows:
1.37(f)H Eligibility Year of Service
Each Eligibility Computation Period during which an
Employee has completed a Year of Service. An Employee's initial
Eligibility Computation Period is the twelve-month period
beginning with his Employment Commencement Date. His subsequent
Eligibility Computation Periods shall be the Plan Years,
including as the first such subsequent Eligibility Computation
Period the Plan Year in which the first Eligibility Computation
Period ends.
In determining such Eligibility Years of Service for the
Eligibility Computation Period which includes January 1, 1990,
the Employee shall receive credit, for a number of Hours of
Service with respect to any fractional part of a year of service
credited to the Employee as of January 1, 1990, under the
provisions of the Former Plan, determined by crediting the
Employee with 190 Hours of Service for each 1/12th of a
fractional year of service. Notwithstanding any other provision
of this Section 1.37(f)H, an Employee shall not be credited with
less Eligibility Years of Service for service in the Employee's
initial Eligibility Computation Period than under the method for
determining eligibility service under the Former Plan.
I. Section 10.02 is modified as follows:
Section 10.02H Early Retirement Pension
(c) A Participant who retires on an Early Retirement
Date, as defined below, may elect to receive an Early
Retirement Benefit, as defined below, with respect to his
CP National Benefit. A Participant's Early Retirement
Benefit shall be equal to his CP National Benefit,
multiplied by the Early Retirement Factor applicable to
the Participant under paragraph (i) or (ii) below:
(i) If the Participant has 30 or more
Years of Participation, as defined below, on his
Early Retirement Date, as defined below, his Early
Retirement Factor shall be determined under the
following table, using his age at the date as of
which payments of his CP National Benefit commence:
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Early Retirement Factors
Age When CP National Early Retirement EarlyRetirement
Benefits Commence Date Before 1985 Date After 1984
65 1.00 1.00
64 1.00 1.00
63 1.00 1.00
62 1.00 1.00
61 0.98 1.00
60 0.96 1.00
59 0.93 0.98
58 0.90 0.96
57 0.87 0.93
56 0.84 0.90
55 0.81 0.87
(ii) If the Participant has less than 30
Years of Participation, as defined below, on his
Early Retirement Date, as defined below, his Early
Retirement Factor shall be determined under the
following table, using his age at the date as of
which payments of his CP National Benefit commence:
Age When CP National Early Retirement
Benefits Commence Factor
65 1.00
64 0.98
63 0.96
62 0.94
61 0.92
60 0.90
59 0.88
58 0.86
57 0.84
56 0.82
55 0.80
For purposes of this Section, "Early Retirement
Date" is the first day of any month after the Participant
has attained age 55, but not 65, and completed 10 or more
years of service determined in accordance with Section
1.22 of Appendix I to this Section 13.09 and "Years of
Participation" is
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calculated in accordance with Section 1.21 of
Appendix I to this Section 13.09.
If a Participant elects commencement of his CP
National Benefit under this Section 10.02H, the
Participant's Accrued Pension shall be calculated without
regard to his
CP National Benefit.
J. Section 10.04 is modified as follows:
Section 10.04H Deferred Vested Pension Upon Termination
of Employment
(f) A former Participant who has completed 10 years
of service determined in accordance with Section 1.22 of
Appendix I to this Section 13.09 may elect to commence as
of the first day of any month on or after the date he
attains age 55 and before his Normal Retirement Date, his
CP National Benefit calculated as of the early
commencement date using the procedure set forth in Section
10.02H (relating to the calculation of the reduction for
early commencement of a Participant's Early Retirement
Benefit with respect to his CP National Benefit), and in
such case the provisions of the last paragraph of Section
10.02H shall apply.
K. Section 11.05 is modified as follows:
11.05H Optional Forms of Pension
(f) A Participant shall receive his CP National
Benefit in the normal form of payment provided in Section
5.3 of Appendix I to this Section 13.09 but may elect one
of the optional forms of payment provided in Section 5.6
of Appendix I to this Section 13.09 under the conditions
for such elections set forth in Appendix I to this Section
13.09, and in such case the provisions of the last
paragraph of Section 10.02H shall apply. The optional form
of payment shall be the Actuarial Equivalent, as defined
in Section 1.03H, of the CP National Benefit.
Notwithstanding the foregoing, a Participant whose CP
National Benefit commences as of the same time as his
Accrued Pension (other than his CP National Benefit) may
elect to receive his entire benefit in any form permitted
and under the conditions and actuarial equivalence
provisions of the Plan (other than this Appendix H, and
Appendix I to this Section 13.09 (to the extent
applicable).
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L. Section 12.01 is modified as follows:
12.01H Death Prior to Pension Commencement
(e) In determining the monthly Qualified
Preretirement Survivor Annuity under subsections (a)-(d)
of Section 12.01, the Accrued Pension of the Participant
shall be calculated without regard to his CP National
Benefit.
(f) With respect to the Participant's CP National
Benefit, a survivor benefit shall be paid as described in
Section 5.4 of Appendix I to this Section 13.09 to the
surviving spouse of a Participant or former Participant
who is married and dies prior to the commencement of his
CP National Benefit.
M. Section 11.09 is modified as follows:
11.09H Suspension of Benefits Upon Reemployment.
(a) Retirement benefits in pay status other than
those attributable to the Participant's CP National
Benefit, will be suspended for each calendar month during
which the Participant completes at least forty (40) Hours
of Service with the Employer or receives payment for Hours
of Service performed on each of eight (8) or more days in
"Section 203(a)(3)(B) Service" as defined in Department of
Labor Regulations Section 2530.203-3(c). If the
Participant has received any Pension payment or
distributions in lieu of a Pension under the Plan, the
Pension payable upon his subsequent Retirement shall be
reduced by the Actuarial Equivalent of any such payments
or distributions he had received prior to his Normal
Retirement Date, other than Disability Pension payments.
(b) With respect to retirement benefits in pay
status that are attributable to the Participant's CP
National Benefit, such retirement benefits will be
suspended in accordance with Section 5.2 of Appendix I to
this Section 13.09.
N. Section 6.08H is added as follows:
6.08H Employee Contributions
(a) Employee Contributions were required under the
Former Plan as in effect prior to January 1, 1976. No
further
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Employee Contributions were permitted to be made by
any Participant after May 1, 1976.
(b) For purposes of this Section 6.08H, "Employee
Contributions" and "Employee Contributions With Interest"
shall have the meaning given to such terms in Section 1.8
and 1.9 of Appendix I to this Section 13.09, respectively.
(c) At any time before the commencement of payment
of his CP National Benefit, a former Participant who at
the time he has a Termination of Employment has five or
more years of service as calculated under the provisions
of the Former Plan may elect to withdraw his Employee
Contributions With Interest with appropriate spousal
consent. In such event the Participant's Employee
Contributions With Interest shall be distributed to him in
an immediate single lump sum payment, and the CP National
Benefit shall be reduced by an amount equal to the portion
of such CP National Benefit that is derived from the
Participant's Employee Contributions. Such portion is an
annual benefit equal to the Participant's accumulated
contributions multiplied by the appropriate conversion
factor, as determined in accordance with Section 411(c)(2)
of the Code; provided, however, that such portion shall
not exceed the Participant's accrued benefit under the
Plan. No Participant may withdraw or receive a refund of
his Employee Contributions With Interest before he has a
Termination of Employment.
(d) Upon the death of a Participant or former
Participant, or upon the subsequent death of his surviving
spouse or other contingent annuitant who was receiving
payments under the Plan, and in the event that no amount
is otherwise payable under the Plan with respect to the
deceased Participant or former Participant, then an amount
equal to his Employer Contributions With Interest, less
the sum of all benefit payments previously made to the
Participant or former Participant and/or his spouse or
other contingent annuitant, shall be payable to the
Participant's designated beneficiary. The designation by
the Participant of a beneficiary shall be made in
accordance with Section 7 of Appendix I to this Section
13.09.
(e) If a Participant has completed less than five
years of service as calculated under the provisions of the
Former Plan at the time he has a Termination of
Employment, his
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Employee Contributions With Interest shall be
paid to him in a lump sum as soon as practicable after his
Termination of Employment, and he shall be entitled to no
other benefits under the Plan. If the former Participant
is again employed by an Employer, the Participant's Years
of Participation as defined in Section 1.21 of Appendix I
to this Section 13.09 for purposes of calculating his CP
National Benefit shall include Years of Participation both
prior and subsequent to his date of reemployment; provided
that if the Participant's interest in that part of his CP
National Benefit under the Plan which is derived from
Employer Contributions was not at least 50% vested and he
does not repay the full amount of this Employee
Contributions With Interest, within the time required by
Section 1.21.3 of Appendix I to this Section 13.09, then
his Years of Participation for purposes of calculating his
CP National Benefit under the Plan shall include only
Years of Participation subsequent to the earlier of his
date of reemployment or January 1, 1976. For purposes of
the preceding sentence, interest shall be computed on the
amount of the prior distribution from the distribution
date to the repayment date and shall be compounded
annually from the distribution date at the rate of 5% or
greater (or lesser) rate of interest as is determined
pursuant to section 411(c)(2)(C)(iii) and (D) of the Code
at the date of repayment.
(f) If a Participant was an Employee prior to May 1,
1976, but did not earn "Years of Participation" as defined
under the Former Plan (formerly, "Credited Service" as
defined under the Former Plan) for any period prior to May
1, 1976 solely because of his failure to make Employee
Contributions (an "Omitted Period"), then the Omitted
Period shall be counted as Years of Participation, if, but
only if, prior to September 1, 1989 or the expiration of
90 days after the Participant's Termination of Employment,
whichever is later, the Participant pays to the Plan an
amount equal to the Employee Contributions that would have
been required of the Employee as a Participant under the
Former Plan for the Omitted Period, together with
interest, (a) for the period ending December 31, 1987, at
5% and, (b) for the period beginning January 1, 1988, at
the rate of interest determined pursuant to section
411(c)(2)(C)(iii) of the Code, commencing as of the last
day of the Omitted Period and compounded annually.
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(g) If a former Participant is reemployed in
employment covered by the Plan after having received a
lump sum payment of the vested accrued portion of his CP
National Benefit, the CP National Benefit that becomes
payable to the former Participant following his subsequent
Termination of Employment shall be determined on the basis
of all includible periods of his prior and current
Service, but the CP National Benefit as so determined
shall be reduced by the Actuarial Equivalent, as defined
in Section 1.03H, of the amount of the prior lump sum
payment.
O. Section 7.01(e)H is modified as follows:
Section 7.01(e)H Maximum Limitation on Pensions
(e) For purposes of subsection (j) above, the
Defined Contribution Plan Fraction shall be limited only
for Limitations Years beginning after December 31, 1989,
and any adjustment in the Defined Benefit Plan Fraction
required as a result thereof shall be made.
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APPENDIX I
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
CP NATIONAL CORPORATION AND ITS SUBSIDIARIES
Effective as of the close of business on December 31, 1989, the Retirement Plan
for Employees of CP National Corporation (the "Former Plan") was continued by
amendment and merger into the Plan. Thereafter, the provisions of the Plan shall
govern the interests of participants, former participants, contingent annuitants
or any other person or entity claiming any right or interest under the Former
Plan.
Notwithstanding any other provision of the Plan, effective January 1, 1990,
Articles VIII, IX, X, XI, and XII, Section 3.08, Section 6.04, and Article I to
the extent it applies to Articles VIII, IX, X, XI, and XII, Section 3.08 and
Section 6.04 of the Plan are replaced in their entirety (except to the extent
Change in Employment Status provisions apply) by the provisions set forth below
with respect to any employee who is in employment of the Controlled Group
covered under the Plan on or after January 1, 1990 as an employee covered by a
collective bargaining agreement providing for coverage under the Former Plan or
this Appendix I. For a Former Plan participant who died, became "totally and
permanently disabled" or who had a Termination of Employment prior to January 1,
1990, the provisions of the Former Plan in effect at the date of the
participant's death, the date the participant became totally and permanently
disabled, or when the participant had a Termination of Employment shall govern
the rights and interests of the participant, his beneficiaries and contingent
annuitants and any other person or entity claiming any right or interest through
the participant's participation in the Former Plan, except as otherwise required
by law, or if the Former Plan participant is reemployed in employment of the
Controlled Group on or after January 1, 1990 in employment covered by a
collective bargaining agreement providing for coverage under the Former Plan or
this Appendix I.
SECTION 1
DEFINITIONS
The following words and phrases shall have the following meanings for purposes
of this Appendix I unless a different meaning is plainly required by context:
1.1 "Actuarial Equivalent" shall mean a benefit which is equivalent to a
benefit payable as a single life annuity, and effective as of January 1,
1984, which is calculated, except to the extent otherwise provided by
Section 5.6.5 of this Appendix I or Table A to this Appendix I, on the
basis of (a) the UP-1984 Mortality Table and (b) an interest rate of eight
percent (8%) per annum.
1.2 "Administrative Committee" shall mean the "Committee" as defined in
Section 1.12 of the Plan.
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1.3 "Affiliate" shall mean any member of the "Controlled Group" as defined in
Section 1.15 of the Plan.
1.4 "Average Career Pay" shall mean (a) the total amount of an Employee's cash
compensation (excluding such items as Employer contributions to any
employee benefit plan and monthly expense reimbursements) received from
any Employer for all periods included in his Career Service, divided by
(b) the total number of his years of Career Service. An Employee's cash
compensation shall not be affected by any compensation reduction pursuant
to a "cafeteria plan" as defined in Section 125 of the Code. For purposes
of this Section 1.4 of this Appendix I, (1) a Participant's "Career
Service" shall include each period included in his Service (under Section
1.18 of this Appendix I) but shall exclude all periods prior to January 1,
1986, and (2) the Participant's years of Career Service shall be
calculated by aggregating all periods to be included (after disregarding
all periods to be excluded) in his Career Service and rounding any
remaining fractional period of less than 30 days up to the next 1/12th of
a year of Career Service. If a Participant's Career Service terminates on
a day other than the last day of a month, his Average Career Pay shall
include the amount of what would have been his cash compensation for the
remainder of such month, computed at the compensation rate in effect at
the Termination date. A Participant's Average Career Pay shall be
determined without regard to any decrease in the amount of his total cash
compensation for any period resulting from salary reduction elections made
pursuant to section 401(k) of the Code. Notwithstanding the foregoing, for
Plan Years that begin after December 31, 1988, no compensation (after
aggregation of "family members") in excess of $200,000, and for Plan Year
that begins after December 31, 1993, no compensation (after aggregation of
"family members") in excess of $150,000, both as adjusted annually for
cost of living increases in accordance with sections 40l(a)(17) and 415(d)
of the Code, shall be taken into account for purposes of this Section 1.4.
of this Appendix I. For purposes of the preceding sentence, a "family
member" shall mean an employee of the Controlled Group who is, on any one
day of the year, a spouse or a lineal descendant who has not attained age
19 before the last day of the year, of an individual who during the year
was (i) an active or former employee of the Controlled Group and a 5%
owner within the meaning of Section 414(q)(3) of the Code and regulations
thereunder, or (ii) one of the ten most highly-paid Highly Compensated
Employees; provided, however, that any compensation paid to such spouse or
lineal descendant shall be treated as if it were paid to the individual
described in (i) or (ii) above. If, as a result of the family aggregation
rules, the dollar limitation under Section 401(a)(17) of the Code (as
adjusted from time to time) would be exceeded, the limitation shall be
prorated among the Participant and his or her family members in proportion
to each one's Average Career Pay as determined prior to the application of
this limitation.
1.5 "Code" shall mean the "Code" as defined in Section 1.11 of the Plan.
1.6 "Company" shall mean the "Company" as defined in Section 1.13 of the Plan.
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1.7 "Employee" shall mean an individual who is employed by an Employer.
1.8 "Employee Contributions" shall mean the amounts paid by Participants
through payroll deductions as described in Section 2.4 of this Appendix I.
1.9 "Employee Contributions With Interest" shall mean the aggregate of the
following:
1.9.1 Employee Contributions received prior to November 1, 1960,
with two percent (2%) interest compounded annually from the
November 1st immediately following the date each contribution
was made through December 31, 1967, and with three percent (3%)
interest compounded annually from January 1, 1968, through
December 31, 1975, or, if earlier, to the first day of the month
in which (a) the Participant dies, (b) occurs the later of the
date the Participant's employment terminates or the date elected
by him for payment of his Employee Contributions With Interest,
or (c) the Participant actually retires.
1.9.2 Employee Contributions received on and after November 1,
1960 through December 31, 1967, with two and one-half percent
(2.5%) interest compounded annually from the November 1st
immediately following the date each contribution was made
through December 31, 1967, and with three percent (3%) interest
compounded annually from January 1, 1968, through December 31,
1975, or, if earlier, to the first day of the month in which (a)
the participant dies, (b) occurs the later of the date the
Participant's employment terminates or the date elected by him
for payment of his Employee Contributions With Interest, or (c)
the Participant actually retires.
1.9.3 Employee Contributions received on and after January 1,
1968, with three percent (3%) interest compounded annually from
the January 1st immediately following the date each contribution
was made through December 31, 1975, or, if earlier, to the first
day of the month in which (a) the Participant dies, (b) occurs
the later of the date the Participant's employment terminates or
the date elected by him for payment of his Employee
Contributions With Interest, or (c) the Participant actually
retires.
1.9.4 All Employee Contributions received on and after January
1, 1976, and all Employee Contributions held on January 1, 1976,
with five percent (5%) interest (or such lesser or greater rate
of interest as is determined pursuant to sections
411(c)(2)(C)(iii) and (D) of the Code) compounded annually from
January 1, 1976, to the first day of the month in which (a) the
Participant dies, (b) occurs the later of the date the
Participant's employment terminates or the date
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elected by him for payment of his Employee Contributions With
Interest, or (c) the Participant actually retires.
1.10 "Employer" shall mean CP National Corporation and any Affiliate which has
been approved by the Board of Directors of the Company as an Employer for
purposes of the Plan, and which has accepted such designation and agreed
to be bound by the terms of the Plan and Trust Agreement. Each of the
Affiliates which from time to time has become an Employer for purposes of
this Appendix I shall be identified, together with the date(s) on which it
became and (if applicable) ceased to be an Employer, in Schedule A to this
Appendix I, which shall be updated periodically by the Administrative
Committee.
1.11 "ERISA" shall mean the "Act" as defined in Section 1.02
of the Plan.
1.12 "Fund" or "Trust Fund" shall mean the "Trust Fund" as defined in Section
1.46 of the Plan.
1.13 Reserved.
1.14 "Participant" shall mean an Employee who is participating in the Plan
as provided in Section 2 of this Appendix I.
1.15 "Plan" shall mean the "Plan" as defined in Section 1.28 of the Plan.
1.16 "Plan Year" shall mean the "Plan Year" defined in Section 1.30 of the
Plan.
1.17 "Retirement Benefit" shall mean any retirement benefit provided by Section
4 of this Appendix I.
1.18 "Service" shall mean a period of employment with an Employer or Affiliate
during which an Employee is directly or indirectly paid, or entitled to
payment, for the performance of duties (or for reasons other than the
performance of duties, such as a vacation, sickness, disability, holiday,
or paid leave of absence). Service terminates on the earlier of (a) the
date on which an Employee retires or dies or his employment with all
Employers and Affiliates otherwise terminates; (b) effective as of January
1, 1985, the second anniversary of the first date of a period in which an
Employee remains absent from active employment with all Employers and
Affiliates, if the period began by reason of a maternity or paternity
absence (within the meaning of section 410(a)(5)(E)(i) of the Code); or
(c) the first anniversary of the first date of a period in which an
Employee remains absent from active employment with all Employers and
Affiliates (other than as described in clause (b) above) for any reason
other than his retirement, death or other termination of employment.
Notwithstanding the foregoing, Service shall include all periods during
which an Employee is:
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1.18.1 On an authorized leave of absence, provided that such
leave of absence does not exceed two (2) years and the Employee
returns to active employment or retires at the end of such leave
of absence;
1.18.2 In military service, provided that the Employee returns
to active employment with an Employer or Affiliate while his
reemployment rights are protected by law; or
1.18.3 Disabled (within the meaning of Section 3.4 of this
Appendix I) prior to his Normal Retirement Date. The provisions
of this Section 1.18.3 shall be ineffective with respect to any
Employee who becomes disabled on or after January 1, 1991.
1.19 "Trustee" shall mean the "Trustee" as defined in Section 1.45 of the Plan.
1.20 "Valuation Date" shall mean the last business day of each Plan Year and
each such other date as the Administrative Committee may (in its
discretion) designate as a Valuation Date for any purpose under the Plan.
1.21 "Year of Participation" shall mean (a) for periods on and after January 1,
1976, each period included in an Employee's Service (under Section 1.18 of
this Appendix I), excluding each period which is not attributable to his
employment with an Employer, and (b) for periods prior to January 1, 1976,
each year of "Credited Service" (as defined under the Plan as in effect on
December 31, 1975), which term excluded certain periods of employment that
were not uninterrupted or during which the Employee failed to make or with
respect to which the Employee withdrew required Employee Contributions. In
addition, the following rules shall apply:
1.21.1 A Participant's Years of Participation for purposes of
the Plan shall include, for periods prior to January 1, 1976,
any year (or fractional portion thereof) not included in his
"Credited Service" (as defined above) solely because the
Participant (a) had already accumulated 36 Years of
Participation, (b) had attained age 65 or (c) had not yet become
a Participant in the Plan because of the Plan's service
eligibility requirement.
1.21.2A If an Employee transfers to a position at an Employer
from a position at a Utility- Type Company, his periods of
Qualifying Continuous Employment with all such Utility- Type
Companies and their predecessors shall be included in his Years
of Participation for purposes of the Plan; provided, however
that (a) such prior periods of employment would otherwise
qualify as Years of Participation under this Section 1.21 of
this Appendix I; (b) the Employee has completed five (5) Years
of Service with the Employers; (c) the Employee's transfer to an
Employer occurred within twenty-four
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(24) months of the termination of his employment with a
Utility-Type Company; (d) the Employee's transfer to an Employer
or a Utility-Type Company occurred prior to January 1, 1984; and
(e) the number of Years of Participation which may be credited
to an Employee under this Section 1.21.2A of this Appendix I is
limited to seven (7) years. Periods of employment with more than
one Utility-Type Company may be counted under this Section
1.21.2A of this Appendix I, provided that less than twenty-four
(24) months elapsed between the Employee's transfer from such
Utility-Type Company to another Utility-Type Company or to an
Employer. The provisions of this Section 1.21.2A of this
Appendix I are effective only with respect to a Participant who,
prior to August 1, 1989, applies to the Administrative Committee
for bridging of service credit under this Section 1.21.2A of
this Appendix I.
1.21.2B For purposes of Section 1.21.2A of this Appendix I only,
the following terms shall have the meanings indicated below:
"Utility-Type Company" means, with respect to a Participant, a
Utility Company or other business or governmental entity where
the Participant obtained Utility Related Work
Experience.
"Utility Company" means a private or public- sector company
regularly and substantially engaged in the provision of
electric, gas, telephone, water and/or CATV service.
"Utility Related Work Experience" means work experience
providing utility-specific services (a) to a Utility Company
while employed with a company engaged in providing
utility-specific services to a Utility Company; or (b) to a
governmental entity while employed with a unit of such
governmental entity, which unit is engaged in providing
utility-specific services to the governmental entity. Such work
experience must have required specialized training and/or
instruction. Utility-specific services are services that are
unique to the utility industry and that normally are performed
by utility operating companies. For example, Utility Related
Work Experience includes an electric or telephone lineman
working for a construction contractor building electric
transmission or utility lines for an electric or telephone
utility, a task normally performed by a Utility Company; a
computer programmer/analyst working for a computer programming
contractor providing customer billing services to a utility, a
function normally performed by a Utility Company. The following
examples illustrate prior work experience which is not Utility
Related Work experience: a CPA auditing the books and records of
a Utility Company; a secretary employed by a construction
company which performs work for an electric utility,
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a job category not unique to the utility industry and not
requiring special utility industry training; an electrician or
cable splicer working for a general contractor who contracts
with the Federal Government, because the work is not provided to
a Utility Company nor is the electrician or cable splicer
employed by a unit of a governmental entity which provides
utility-specific services to the governmental entity.
"Qualifying Continuous Employment" means (a) with respect to a
Participant's employment at a Utility Company, all periods of
continuous employment with such Utility Company during which the
Participant worked in a business segment (of such Utility
Company) that provided government-regulated utility services;
and (b) with respect to a Participant's employment at a
Utility-Type Company which is not a Utility Company, periods of
employment with such Utility-Type Company during which the
Participant obtained Utility Related Work Experience.
1.21.2C If an Employee transfers directly to an Employer from
another electric, gas, telephone, water or combination utility
company prior to January 1, 1984, his prior periods of
employment with such other utility company and its predecessors
shall, up to a maximum of seven (7) Years, but only after the
Employee has completed five (5) Years of Service with the
Employers, be included in his Years of Participation for
purposes of the Plan, provided that such prior periods of
employment otherwise qualify as Years of Participation under
this Section 1.21 of this Appendix I. The provisions of this
Section 1.21.2C of this Appendix I are effective with respect to
any Participant with respect to whom Section 1.21.2A of this
Appendix I is not effective.
1.21.2D Notwithstanding any contrary Plan provision, a
Participant shall not receive credit for Years of Participation
under this Section 1.21.2 of this Appendix I for a period of
employment with Great Southwest Telephone Corporation, Nevada
Telephone & Telegraph Company or Tuolumne Telephone Company and
their subsidiaries (collectively, the "Acquired Companies") if,
during such period of employment, the Participant became an
Employee or an employee of an Affiliate on account of the
acquisition by the Company of substantially all the assets or
stock of one of the Acquired Companies. A Participant shall not
be credited with a Year of Participation under this Section
1.21.2 of this Appendix I for any period of employment that is
also counted as a Year of Participation under any other
provision of the Plan.
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1.21.3 Notwithstanding any contrary Plan provision, if a
Participant's employment with all Employers and Affiliates
terminated at any time, and if the former Participant is
thereafter rehired by an Employer after December 31, 1983, then
his total Years of Participation shall include the Years of
Participation with which he was credited as of the date of such
prior termination; provided, however, that if the Participant's
interest in that part of the accrued portion of his Retirement
Benefit under the Plan which is derived from Employer
contributions was not at least 50% vested, his prior Years of
Participation shall be reinstated under this Section 1.21.3 of
this Appendix I only if the former Participant (a) repays to the
Plan the full amount of the Employee Contributions With Interest
distributed to him in conjunction with such prior termination,
together with interest on such amount (calculated in accordance
with Section 1.9 of this Appendix I) for the period from the
date such distribution was made to the date such repayment is
made in full; and (b) actually makes such repayment within six
(6) months of the date on which the Administrative Committee
notifies him that his prior Years of Participation may be
reinstated in accordance with this Section 1.21.3 of this
Appendix I or (if later) before the earlier of (1) the end of
the five (5)year period beginning on his reemployment date or
(2) the end of the five (5)-year period beginning on the date
his Employee Contributions With Interest were distributed to
him.
1.21.4 Notwithstanding any contrary Plan provision, if a
Participant was an Employee prior to May 1, 1976, but did not
earn Years of Participation (formerly, "Credited Service") for
any period prior to May 1, 1976 solely because of his failure to
make Employee Contributions (an "Omitted Period"), then the
Omitted Period shall be counted as Years of Participation, if,
but only if, prior to September 1, 1989 or the expiration of
ninety (90) days after the Participant's termination of
employment with the Employers and Affiliates, whichever is
later, the Participant pays to the Plan an amount equal to the
Employee Contributions that would have been required of the
Employee as a Participant under the Plan for the Omitted Period,
together with interest, (a) for the period ending December 31,
1987, at five percent (5%) and, (b) for the period beginning
January 1, 1988, at the rate of interest determined pursuant to
section 411(c)(2)(C)(iii) of the Code, commencing as of the last
day of the Omitted Period and compounded annually.
1.21.5 A Participant's total number of Years of Participation
shall be calculated by aggregating all periods to be included
(after disregarding all periods to be excluded) in his Years of
Participation
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and rounding any remaining fractional period of less than 30
days up to the nearest 1/12th of a Year of Participation.
1.22 "Year of Service" shall mean (a) for periods on and after January 1, 1976,
each period included in an Employee's Service (under Section 1.18), and
(b) for periods prior to January 1, 1976, each year of "continuous
unbroken service" (as defined under the Former Plan as in effect on
December 31, 1975), which term excluded certain periods of employment that
were not uninterrupted or during which the Employee failed to make or with
respect to which the Employee withdrew required Employee Contributions. In
addition, the following rules shall apply.
1.22.1 If an Employee retires or his employment with all
Employers and Affiliates otherwise terminates after December 31,
1975, and he returns to employment with an Employer or Affiliate
within the 12-month period beginning on the date of such
termination, then his Years of Service shall include the period
of time between such termination and such reemployment.
1.22.2 For purposes of determining an Employee's Years of
Service, Service shall include, in addition to periods of
employment with the Employers and Affiliates, periods of
employment with (a) any company which is a "predecessor
employer" with respect to an Employer, within the meaning of
section 414(a) of the Code, and (b) another electric, gas,
telephone or combination utility company for which an Employee
is credited with Years of Participation for purposes of the Plan
pursuant to Section 1.21.2 of this Appendix I.
1.22.3 If a group of employees of another employer become
Employees pursuant to a merger, spin-off, exchange of assets or
other corporate reorganization, the Administrative Committee
may, in its discretion (applied in a uniform and
nondiscriminatory manner), direct that all or any portion of the
Employees' respective periods of employment with such other
employer may be deemed to be Service with an Employer for
purposes of determining such Employees' Years of Service under
this Plan, provided that such periods of employment otherwise
qualify as Service under Section 1.18 of this Appendix I.
1.22.4 An Employee's total number of Years of Service shall be
calculated by aggregating all periods to be included (after
disregarding all periods to be excluded) in his Years of Service
and rounding any remaining fractional period of less than 30
days up to the nearest 1/12th of a Year of Service.
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SECTION 2
ELIGIBILITY AND EMPLOYEE CONTRIBUTIONS
2.1 Initial Eligibility. All Participants in the Former Plan on December 31,
1989, shall continue to be Participants. Each other Employee, hired prior
to the date he attains age 65, shall become a Participant in the Plan on
the first day of the month that occurs on or next follows the date he
completes one Year of Service; provided, however, that for the duration of
any period in which the terms and conditions of an Employee's employment
is governed by a collective bargaining agreement, the Employee shall
neither become a Participant nor accrue any benefit under the Plan, except
to the extent that the collective bargaining agreement specifically
provides for his coverage by the Plan.
2.2 Termination of Participation. A Participant ceases to be a Participant in
the Plan on the earlier of the date he retires or dies or his employment
otherwise terminates or the first anniversary of his absence from
employment with all Employers for any other reason (such as vacation,
leave of absence, sickness or layoff). Notwithstanding the foregoing, a
Participant continues to be a Participant during (a) an approved leave of
absence, provided that he returns to active employment at the end of such
leave of absence, and (b) a period in which he is Disabled (within the
meaning of Section 3.4 of this Appendix I) prior to his retirement
pursuant to Section 4.4 of this Appendix I.
2.3 Rehired Employee. A former Participant who is rehired shall again become a
Participant as of the first day of the month in which he returned to
employment with an Employer. A former Employee who is rehired and who has
completed one Year of Service shall become a Participant as of the first
day of the month in which he returned to employment with an Employer.
2.4 Employee Contributions. Employee Contributions were
required under the Former Plan as in effect prior to
January 1, 1976. For the period January 1 to May 1,
1976, each Participant with less than 36 Years of
Participation made Employee Contributions each month in
an amount equal to two percent (2%) of his monthly
compensation in excess of $550. No further Employee
Contributions were permitted to be made by any
Participant after May 1, 1976.
SECTION 3
RETIREMENT DATES
3.1 Normal Retirement. A Participant's Normal Retirement Date is the first day
of the month that occurs on or next follows the date he attains age 65;
provided, however, that the Participant's interest in the accrued portion
of his Retirement Benefit under the Plan shall become fully vested and
nonforfeitable on the date he attains age 65.
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3.2 Early Retirement. A Participant may elect to retire on an Early Retirement
Date, which may be the first day of any month after the Participant has
attained age 55 and completed ten (10) or more Years of Service.
3.3 Postponed Retirement. A Participant may remain in employment or be
reemployed after his Normal Retirement Date. No retirement payments shall
be made until after his Postponed Retirement Date, which shall be the date
on which the Participant's employment actually terminates.
3.4 Disability Retirement. A Participant who becomes totally and permanently
disabled prior to the date he attains age 65 shall receive a disability
retirement benefit upon his Normal Retirement Date. A Participant will be
deemed to be "totally and permanently disabled" for purposes of this
Section 3.4 of this Appendix I if he incurs a disability which, in the
opinion of the Administrative Committee, (a) prevents him permanently from
performing his assigned duties with his Employer and (b) qualifies him for
a federal Social Security disability benefit continuously from the date of
disability until he attains age 65. The provisions of this Section 3.4
shall be ineffective with respect to any Employee who becomes disabled on
or after January 1, 1991.
SECTION 4
RETIREMENT BENEFITS
4.1 Normal Retirement Benefit. Upon retirement on his Normal Retirement Date,
a Participant shall receive for life an annual Retirement Benefit, payable
in 12 equal monthly installments, which, when added to any retirement
benefits payable under any other tax-qualified defined benefit pension
plan of any Employer or Affiliate or any of their predecessor companies,
is equal to (a) one and five-tenths percent (1.5%) of the Participant's
Average Career Pay, multiplied by (b) the Participant's total number of
Years of Participation. Notwithstanding the foregoing, the following rules
shall apply:
4.1.1 For a Participant who made optional contributions after he
attained age 55, as authorized by prior provisions of the Plan,
the annual amount of his Retirement Benefit at Normal Retirement
Date shall be increased by an amount equal to ten percent (10%)
of the total of said optional contributions.
4.1.2 For an Employee who has been credited with Years of
Participation under Section 1.21.2 of this Appendix I, the
Retirement Benefit determined in accordance with this Section
4.1 of this Appendix I shall be reduced by the annual amount of
the retirement benefit (or the Actuarial Equivalent thereof) to
which the Employee is entitled from any tax-qualified retirement
plan sponsored by an employer which provided employment to the
Employee that was credited as
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Years of Participation under Section 1.21.2 of this Appendix
I, or to which he would have been entitled if he had left his
contributions (if any) with said plan.
4.1.3 The minimum annual Retirement Benefit, commencing at
Normal Retirement Date, for an Employee who was a Participant on
December 31, 1969, and who had not reached his Normal Retirement
Date by that time, shall be one-half of his total contributions
to December 31, 1969, plus an amount equal to one-half of the
total contributions he would have made from said date to the
earlier of the date his employment terminates or his Normal
Retirement Date, assuming no change in compensation, if had he
contributed (a) two percent (2%) of the first $3,000 of his
annual compensation; (b) four percent (4%) of his annual
compensation in excess of $3,000; and (c) unless, prior to
December 31, 1969, such Participant elected not to make
additional contributions after he attained age 55, an additional
two percent (2%) of his total compensation commencing at age 55.
4.2 Early Retirement Benefit. A Participant who retires on an Early Retirement
Date may elect to receive his Retirement Benefit, as determined under this
Section 4.2 of this Appendix I, commencing on such date or the first day
of any month prior to his Normal Retirement Date. A Participant's Early
Retirement Benefit shall be equal to his Retirement Benefit as determined
multiplied by the Early Retirement Factor applicable to the Participant
under paragraph (a) or (b) below:
(a) If the Participant has 30 or more Years of Participation on
his Early Retirement Date, his Early Retirement Factor shall be
determined under the following table, using his age at the date
as of which payments of his Retirement Benefit commence
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Early Retirement Factors
Age When Retirement Early Retirement Early Retirement
Benefits Commence Date Before 1985 Date After 1984
65 1.00 1.00
64 1.00 1.00
63 1.00 1.00
62 1.00 1.00
61 0.98 1.00
60 0.96 1.00
59 0.93 0.98
58 0.90 0.96
57 0.87 0.93
56 0.84 0.90
55 0.81 0.87
(b) If the Participant has less than 30 Years of Participation
on his Early Retirement Date, his Early Retirement Factor shall
be determined under the following table, using his age at the
date as of which payments of his Retirement Benefit commence:
Age When Retirement Early Retirement
Benefits Commence Factor
65 1.00
64 0.98
63 0.96
62 0.94
61 0.92
60 0.90
59 0.88
58 0.86
57 0.84
56 0.82
55 0.80
If a Participant makes no election of an earlier commencement
date for his Retirement Benefit under this Section 4.2 of this
Appendix I, or effective July 19, 1985, in the absence of a
Qualified Election if required by Section 5.3.1 of this Appendix
I, payment of the Participant's Retirement Benefit shall
commence on his Normal Retirement Date and be equal to his
Retirement Benefit as determined under Section 4.1 of this
Appendix I.
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4.3 Postponed Retirement Benefit. A Participant who retires on his Postponed
Retirement Date pursuant to Section 3.3 of this Appendix I shall receive,
commencing on or after his Postponed Retirement Date pursuant to Section
5.1 of this Appendix I, a Retirement Benefit calculated in accordance with
Section 4.1 of this Appendix I, but based on the Participant's Average
Career Pay and total number of Years of Participation as of his Postponed
Retirement Date, subject to the provisions of Section 5.2 of this Appendix
I.
4.4 Disability Retirement Benefit. A Participant who is eligible for a
Disability Retirement Benefit under Section 3.4 of this Appendix I shall
receive, commencing on his Normal Retirement Date, a Retirement Benefit
calculated in accordance with Section 4.1 of this Appendix I, but based on
the assumption that the disabled Participant continued to work for an
Employer until his Normal Retirement Date at his rate of pay as of the
date of his disability. In lieu of the foregoing, a Participant who is
eligible for a Disability Retirement Benefit and has attained age 55 may
elect to receive, commencing on the first day of any month prior to his
Normal Retirement Date, an Early Disability Retirement Benefit calculated
in accordance with Section 4.2 of this Appendix I, but based on the
assumption that the disabled Participant continued to work for an Employer
until the commencement date selected by the Participant at his rate of pay
as of the date of his disability. The provisions of this Section 4.4 shall
be ineffective with respect to any Employee who becomes disabled on or
after January 1, 1991.
4.5 Benefit Increase for Retirees. The Retirement Benefit payable this under
Section 4 of this Appendix I to any retired Participant shall be increased
(if at all) in accordance with the provisions of a Schedule to this
Appendix I.
4.6 Prior Benefit Accrual. Notwithstanding any contrary Plan provision, the
annual amount of the Retirement Benefit payable in the form of a single
life annuity to a Participant at his Normal Retirement Date shall not be
less than the dollar amount of the benefit accrued by such Participant as
of August 31, 1986, under the Former Plan as in effect on said date, or as
of August 1, 1990, under the Plan as in effect on said date, whichever is
greater. Furthermore, if a Participant elects early commencement of his
Retirement Benefit, the annual dollar amount payable shall not be less
than that which would have been payable to him as of August 31, 1986,
under the Former Plan as in effect on said date, or as of August 1, 1990,
under the Plan as in effect on that date, whichever is greater, calculated
as if the Participant had elected that payment of his benefit be commenced
on August 31, 1986, or August 1, 1990, as applicable, and be made in the
same form as that elected at his actual retirement.
4.7 Maximum Benefit Definitions. For purposes of Section 4.8 of this Appendix
I, the following words and phrases shall have the following meanings:
4.7.1 "Affiliate" shall mean a corporation, trade or business
which is, together with any Employer, a member of a controlled
group of
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corporations or an affiliated service group or under common
control (within the meaning of section 414(b), (c) or (m) of the
Code, as modified by section 415(h) of the Code), but only for
the period during which such other entity is so related to any
Employer or Affiliate.
4.7.2 "Annual Benefit" shall mean a retirement income benefit,
which is payable annually in the form of a straight life annuity
(with no ancillary benefits) or is adjusted to the Actuarial
Equivalent of such a benefit, provided that the annual rate of
interest assumed in computing the Actuarial Equivalent shall not
be less than five percent (5%). For purposes of the preceding
sentence, no ancillary benefits not directly related to
retirement income benefits, and no qualified portion of any
joint and survivor annuity, shall be taken into account.
4.7.3 "Defined Benefit Fraction" shall mean a fraction, of which
the numerator is the Participant's Projected Annual Benefit,
determined as of the last Valuation Date of the Plan Year, and
the denominator is the lesser of (a) the product of 1.25 and the
Dollar Limitation for the Plan Year, or (b) the product of 1.4
and the Participant's average annual Total Compensation for the
three (3) consecutive Plan Years for which such average is the
highest, provided that if the participant, on or before December
31, 1982, was a participant in this Plan or any other qualified
defined benefit pension plan maintained by any Employer or
Affiliate that was in existence on July 1, 1982, the denominator
of the Defined Benefit Fraction shall be no less than the
individual's accrued benefit under the provisions of such
defined benefit plan as of December 31, 1982, calculated without
regard to plan amendments or cost-of-living increases occurring
after July 1, 1982.
4.7.4 "Defined Contribution Fraction" shall mean a fraction, of
which (a) the numerator is the sum of the annual additions to
the Participant's accounts under all qualified defined
contribution plans maintained by all Employers and Affiliates
for the current and all prior Plan Years in which he was an
Employee (his "Total Service"), less the amount (if any)
permitted to be subtracted under the transitional rule of
section 235(g)(3) of the Tax Equity and Fiscal Responsibility
Act of 1982, and (b) the denominator is the sum of the lesser of
the following amounts (determined for each Plan Year included in
his Total Service, in accordance with Treas. Reg. 1.415-7(f)
(1980)): (1) the product of 1.25 and the dollar limitation in
effect under section 415(c)(1)(A) and (d) of the Code (but
without regard to section 415(c)(6) of the Code) for the Plan
Year or (2) an amount equal to 25% of the Participant's Total
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Compensation for the Plan Year, provided that for Plan Years
ended before January 1, 1983, the Administrative Committee (in
its discretion) may calculate the denominator of the Defined
Contribution Fraction for all such defined contribution plans
using the alternative method set forth in section 415(e)(6) of
the Code.
4.7.5 "Projected Annual Benefit" shall mean an amount equal to
the aggregate Annual Benefits to which a participant would be
entitled under this Plan and all other qualified defined benefit
plans maintained by all Employers and Affiliates (determined as
of the end of the Plan Year), assuming that the Participant
remains an Employee until his Normal Retirement Date and all
other factors relevant to the calculation of his Annual Benefits
remain constant for all future Plan Years.
4.7.6 "Total Compensation" shall mean the total, but not in
excess of the limitations of section 401(a)(17) of the Code, of
all earned income, wages, salaries, fees for professional
services and other amounts paid to an Employee for personal
services actually rendered in the course of employment or
service with all Employers and Affiliates, including (but not
limited to) bonuses, overtime, commissions, compensation for
services on the basis of a percentage of profits and incentive
compensation, but excluding any salary reduction contributions
made pursuant to section 401(k) of the Code and the other items
described in Treas. Reg. 1.415-2(d)(2) (1980).
4.8 Maximum Benefit Limitations. Notwithstanding any contrary Plan provision
in this Appendix I, the limitations set forth in Article VII of the Plan
shall apply to that portion of a Participant's accrued Normal Retirement
Benefit which is attributable to Employer contributions, but substituting
the definition of Actuarial Equivalent for the reference to Section 1.03.
4.9 Top-Heavy Plan Rules. Notwithstanding any contrary Plan provision, the
provisions of this Section 4.9 of this Appendix I shall apply with respect
to any Plan Year for which this Plan is a Top-Heavy Plan.
4.9.1 "Top-Heavy Plan" means, for any Plan Year beginning after
December 31, 1983, this Plan or any other qualified plan
maintained by any Employer or Affiliate which is for the Plan
Year a top-heavy plan (within the meaning of section 416(g) of
the Code). The Administrative Committee, acting on behalf of the
Company, shall determine as to each Plan Year whether or not the
Plan is a Top-Heavy Plan for that Plan Year. For purposes of
making that determination as to any Plan Year:
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(a) The date as of which the determination is made and
the applicable valuation date shall be the last Valuation
Date of the immediately preceding Plan Year;
(b) This Plan shall be aggregated with each other
qualified plan maintained by any Employer or Affiliate (1)
in which a key employee (within the meaning of section
416(i)(1) and (5) of the Code) participates, and/or (2)
which enables this Plan or any plan described in clause
(1) above to meet the requirements of section 401(a)(4) or
410 of the Code;
(c) This Plan may be aggregated with any other qualified
plan maintained by any Employer or Affiliate, which plan
is not required to be aggregated under paragraph (b)
above, if the resulting group of plans would continue to
meet the requirements of sections 401(a)(4) and 410 of the
Code;
(d) For purpose of this Section 4.9.1, all
determinations as to the present value of accrued benefits
under this Plan or any other defined benefit plan
maintained by any Employer or Affiliate shall be made on
an Actuarially Equivalent basis; and
(e) The determination of whether or not an individual is
a key employee shall be made on the basis of the
Employee's Total Compensation (as defined in Section 4.7.6
of this Appendix I).
4.9.2 Minimum Benefit. The accrued portion of the Normal
Retirement Benefit, as calculated in accordance with Section 4.1
of this Appendix I, of each Participant who is or was at any
time after December 31, 1983 a non-key employee (within the
meaning of section 416(i)(2) and (5) of the Code) shall in no
event be less than an amount computed by multiplying (a) times
(b) times (c) and subtracting (d) from the product, where:
(a) is two percent (2%).
(b)is the average annual Total Compensation of the Participant for the
period of five (5) consecutive Plan Years for which he or she had the
greatest Total Compensation, excluding (1) all Plan Years ended before
January 1, 1984 and (2) any subsequent Plan Year for which the Plan was
not a Top-Heavy Plan. If the Participant had Total Compensation for fewer
than five (5) such Plan Years, the average shall be based upon those of
such Plan Years for which the Participant had Total Compensation.
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(c) is the total number (which shall not be greater than
ten (10)) of the Participant's Years of Service, excluding
all such Years to the extent that they include any Plan
Year (1) ended before January 1, 1984, (2) for which the
participant was a key employee (within the meaning of
section 416(i)(1) and (5) of the Code) or (3) for which
the Plan was not a Top-Heavy Plan.
(d) is an annual benefit which is Actuarially Equivalent
to the total of the Participant's account balances under
all qualified defined contribution plans maintained by any
Employer or Affiliate to the extent that such balances are
attributable to contributions made by any Employer or
Affiliate under such plans, other than those contributions
made (1) pursuant to salary reduction elections under
section 401(k) of the Code or (2) on a matching basis in
respect of such contributions.
4.9.3 Minimum Vesting. For each Plan Year for which the Plan is
a Top Heavy Plan, the following vesting schedule shall be used,
instead of the provisions of Sections 6.2 and 6.3 of this
Appendix I, to determine the vested percentage of each
Participant who is a non-key employee (within the meaning of
section 416(i)(2) and (5) of the Code) in the accrued portion of
his Normal Retirement Benefit, as calculated in accordance with
Section 4.1 (as modified by Section 4.9.2):
Completed Years Vested
of Service Percentage
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
If the Plan ceases to be a Top-Heavy Plan, each Participant's
vested percentage shall again be determined pursuant to Sections
6.2 and 6.3 of this Appendix I, provided that (a) the
Participant's vested percentage shall not be less than his
vested percentage determined under this Section 4.9.3 of this
Appendix I as of the last day on which the Plan was a Top-Heavy
Plan, and (b) this Section 4.9.3 of this Appendix I shall
continue to apply to the Participant if he has at least five (5)
Years of Service as of the first date the Plan is no longer a
Top-Heavy Plan.
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4.9.4 Reserved
4.9.5 Section 415(e) Limits. With respect to each Participant
who is also a participant in a qualified defined contribution
plan maintained by any Employer or Affiliate, the 1.25
multiplier set forth in Sections 4.7.3 and 4.7.4 of this
Appendix I shall be reduced to 1.0 and $41,500 shall be
substituted for $51,875 in applying the transitional rule under
section 415(e)(6) of the Code as described in Section 4.7.4 of
this Appendix I, unless for the Plan Year (a) the aggregation
group of which the Plan is a member is not "super top-heavy"
(within the meaning of section 416(h)(2)(B) of the Code) and (b)
three percent (3%) is substituted for the reference to two
percent (2%) in applying factor (a) under Section 4.9.2 of this
Appendix I.
4.10 Internal Revenue Requirements
Notwithstanding any other provision of the Plan to the contrary, to
conform to the requirements of U.S. Treasury Regulations, the benefit
payable under the Plan shall be subject to the following limitations:
(a) If the Plan is terminated, the benefit of any "highly
compensated employee" or "highly compensated former employee,"
as defined in Section 414(q) of the Code, shall be limited to a
benefit that is nondiscriminatory under Section 401(a)(4) of the
Code.
(b) The annual payments in any one year to any of the 25 highly
compensated employees or highly compensated former employees
with the greatest compensation (hereinafter referred to as a
"restricted employee") in the current or any prior year shall
not exceed an amount equal to the payments that would be made on
behalf of the restricted employee under (1) a straight life
annuity that is the actuarial equivalent of the restricted
employee's accrued portion and other benefits to which the
restricted employee is entitled under the Plan (other than a
Social Security supplement), and (2) the amount of the payments
the restricted employee is entitled to receive under a Social
Security supplement. For purposes of this paragraph (b)
"benefit" includes, among other benefits, loans in excess of the
amounts set forth in Section 72(p)(2)(A) of the Code, any
periodic income, any withdrawal values payable to a living
employee, and any death benefits not provided for by insurance
on the restricted employee's life. The foregoing provisions of
this paragraph (b) shall not apply, however, if:
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(i) After payment to a restricted employee of all
benefits payable to the restricted employee under the
Plan, the value of Plan assets equals or exceeds 110
percent of the value of "current liabilities," as defined
in Section 412(b)(7) of the Code, (each value being
determined as of the same date in accordance with
applicable Treasury regulations);
(ii) The value of the benefits payable under the Plan to
or for a restricted employee is less than one percent of
the value of current liabilities before distribution; or
(iii) The value of benefits payable under the Plan to or
for a restricted employee does not exceed the amount
described in Section 411(a)(11)(A) of
the Code.
4.11 Prior Plan Benefit. In no event shall the Actuarial Equivalent of the
annual Retirement Benefit payable to a participant under Section 4 or 6 of
this Appendix I (expressed as an annual benefit payable as a single life
annuity commencing at the Participant's Normal Retirement Date) be less
than the Participant's Prior Plan Benefit (if any) as determined under the
applicable Schedule to the Plan as adopted by the Administrative
Committee.
SECTION 5
FORM AND PAYMENT OF BENEFITS
5.1 Commencement of Benefits. Subject to the provisions of Section 5.8 of this
Appendix I, payment of a Participant's Retirement Benefit normally shall
commence on his Normal Retirement Date, on or after his Early Retirement
Date (in accordance with his election under Section 4.2 of this Appendix
I), on or after his 55th birthday (in accordance with his election under
Section 6.3(b) of this Appendix I), or no later than the first day of the
third calendar month after the calendar month in which his Postponed
Retirement Date occurs. Whichever of such commencement dates applies shall
be known as the Participant's "Annuity Starting Date." Retirement Benefits
normally shall be payable monthly, except that small amounts may be paid
in Actuarially Equivalent amounts no less frequently than annually.
5.2 Suspension of Benefits. In the case of a retired Participant who is
reemployed by an Employer or Affiliate after his Annuity Starting Date or
a Participant whose employment with an Employer or Affiliate continues
after his Normal Retirement Date (whether in Suspension Service or not),
no Retirement Benefit shall be paid to the Participant for any calendar
month ending before his subsequent Annuity Starting Date; provided,
however, that his Retirement Benefit shall be increased upon his
subsequent Annuity Starting Date by the Actuarial Equivalent of the
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Retirement Benefit payments that would otherwise have been made (if any)
for the calendar months in which he was not employed in Suspension
Service.
5.2.1 Resumption or Commencement. If a Participant's Retirement
Benefit payments have been suspended after his Normal Retirement
Date in accordance with the foregoing provisions of this Section
5.2 of this Appendix I, they shall commence or resume (as
appropriate) after his Postponed Retirement Date pursuant to
Section 5.1 of this Appendix I. The initial payment made after
his Postponed Retirement Date shall include (a) the Retirement
Benefit payment scheduled for the calendar month in which the
initial payment is made, plus (b) any amount not previously paid
for any calendar month beginning on or after the Participant's
Postponed Retirement Date, less (c) any amounts which are
subject to offset under Section 5.2.2 of this Appendix I. In the
case of a Participant whose Retirement Benefit payments
commenced before his Normal Retirement Date and who is
reemployed by an Employer or Affiliate, his Retirement Benefit
shall be computed upon his subsequent Annuity Starting Date
based on his Retirement Benefit accrued pursuant to Section 4.1
of this Appendix I during his Years of Participation before and
after his reemployment and his then attained age, subject to (1)
the actuarial increase (if any) mandated by the proviso set
forth in the first sentence of this Section 5.2 of this Appendix
I and (2) actuarial reduction to take account of Retirement
Benefit payments made prior to the date of his reemployment and
before his Normal Retirement Date.
5.2.2 Offset Rule. There shall be deducted from future
Retirement Benefit payments, any payments previously made for
those calendar months in which the Participant was employed in
Suspension Service, provided that such deduction does not exceed
in any one month 25% of the total Retirement Benefit payment
which would have been due for that month but for the offset
(excluding the initial payment described in Section 5.2.1 of
this Appendix I).
5.2.3 Notification. No Retirement Benefit payment shall be
permanently withheld pursuant to Section 5.2 of this Appendix I
from a Participant who is reemployed in Suspension Service or
who continues in Suspension Service unless the Administrative
Committee notifies the Participant, during the first calendar
month in which the Plan withholds payments, that the
Participant's Retirement Benefit payments are being suspended.
Such notification shall contain a description of the specific
reasons why Retirement Benefit payments are being suspended, a
general description and copies of the Plan provisions relating
to the suspension of Retirement Benefit payments, and a
statement to the
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effect that applicable Department of Labor regulations may be
found in 29 C.F.R. 2530.203-3 and that the appropriate procedure
for affording a review of the suspension of Retirement Benefits
is contained in Section 9.4 of this Appendix I. The notification
shall also specifically identify periods of employment and any
suspendable amounts in respect thereof that are subject to
offset, and the manner in which an offset will be made.
5.2.4 Status Determination. Pursuant to Section 9.4 of this
Appendix I, if a Participant makes a written request for a
determination of whether specific contemplated employment will
result in suspension of Retirement Benefit payments under this
Section 5.2 of this Appendix I, the Administrative Committee
shall, within 30 days thereof, advise the Participant as to its
determination of the question.
5.2.5 Verification. The Participant shall notify the
Administrative Committee of any employment with an Employer or
Affiliate after his Annuity Starting Date. Furthermore, from
time to time, but not more frequently than annually, the
Administrative Committee may request that a Participant certify
(in writing) that he is not so employed or provide the
Administrative Committee with information sufficient for it to
establish that any employment does not constitute Suspension
Service within the meaning of this Section 5.2 of this Appendix
I. The Administrative Committee shall advise the Participant
that the requirement to provide such certification or
information may be a condition precedent to receiving future
Retirement Benefit payments.
5.2.6 Suspension Service. As used in this Section 5.2 of this
Appendix I, the term "Suspension Service" shall mean a calendar
month in which the Participant receives payment from any
Employer or Affiliate in respect of any hours of service (as
defined in 29 C.F.R. 2530.200b-2(a)(1) and (2)) performed on
each of eight (8) or more days (or separate work shifts) in such
month.
5.2.7 Accrued Benefit Attributable to Employee Contributions.
Notwithstanding any contrary Plan provision, in the case of a
retired Participant who is reemployed by an Employer or
Affiliate after his Annuity Starting Date or a Participant whose
employment with an Employer or Affiliate continues after his
Normal Retirement Date, unless the actuarial increase provided
in the second sentence of this Section 5.2 of this Appendix I
applies, upon his subsequent retirement his Retirement Benefit
shall be increased by the Actuarial Equivalent of the portion of
the Retirement Benefit payments that (a) constitute the portion
of his accrued benefit attributable to his
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Employee Contributions (determined in accordance with section
411(c)(2)(B) of the Code) and (b) would otherwise have been made
to the Participant for the months in which he was so employed.
5.3 Normal Form of Payment. Unless the Participant has made a Qualified
Election pursuant to Section 5.3.1 of this Appendix I within the 90-day
period ending on his Annuity Starting Date, the normal form of payment of
any Retirement Benefit provided by the Plan for a Participant (a) who is
not married on his Annuity Starting Date shall be a single life annuity
(as described in Section 5.6.1 of this Appendix I); or (b) who is married
on annuity (as described in Section 5.6.3 of this Appendix I) with his
spouse as his contingent annuitant. Notwithstanding the foregoing and
effective as of January 1, 1985, if the lump sum Actuarial Equivalent of
the vested accrued portion of a Participant's Retirement Benefit does not
exceed $3,500 as of his Annuity Starting Date, such amount shall be paid
to the Participant in a single lump sum payment. All benefit payments made
under the Plan from the Trust Fund shall be made in the form of cash (or
its equivalent).
5.3.1 "Qualified Election" shall mean a written waiver of the
normal form of payment which is signed by the Participant. Such
a waiver shall not be effective without Spousal Consent (a) to
the Participant's waiver of the normal form of payment, and (b)
effective July 19, 1985, if the Participant elects early
commencement of Retirement Benefit payments (in accordance with
Section 4.2, 4.4 or 6.3 of this Appendix I), to the
Participant's early payment election.
5.3.2 Notice Requirements. The Administrative Committee shall
provide to each Participant, within a reasonable period prior to
his Annuity Starting Date, a general written explanation of and,
upon the participant's written request made within a reasonable
period prior to his Annuity Starting Date, specific information
concerning (a) the terms, conditions and financial effects of
the normal form of payment for the Participant; (b) the
Participant's right to make a Qualified Election, the effect of
such an election to waive the normal form of payment, and the
terms, conditions and financial effects of the optional forms of
payment available to the Participant; (c) the rights of the
Participant's spouse; and (d) the right to revoke, and the
effect of a revocation of, a previous Qualified Election to
waive the normal form of payment.
5.3.3 Election of Optional Form. A Participant, if he has made
and not revoked the Qualified Election, may elect one of the
optional forms of payment provided in Section 5.6 of this
Appendix I, in lieu of the normal form of payment of any
Retirement Benefit provided by the Plan, at any time prior to
his Annuity Starting Date. An election, or a revocation and/or
reinstatement of the election, of an optional
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form of payment must be made in writing on such form, in such
manner and within such advance notice period as the
Administrative Committee shall specify.
5.4 Pre-Retirement Survivor Benefit. Subject to Section 5.4.6 of this Appendix
I, a survivor benefit shall be paid to the surviving spouse of a
Participant or former Participant who is married and dies before his
Annuity Starting Date if
(a) The participant dies after the earlier of the date he
completed five (5) Years of Service or the date he attained age
65; or
(b) The former Participant dies after the date he completed five
(5) Years of Service; or
(c) The Participant or former Participant dies (1) while a
segment of the accrued portion of his Retirement Benefit is
attributable to his Employee Contributions With Interest, but
(2) before he has completed
five (5) Years of Service.
The survivor benefit shall be payable only if the Participant or former
Participant had been married to his surviving spouse for at least one year
prior to the date of his death. The survivor benefit shall be paid in the
form of a single life annuity and, except as provided in Section 5.4.4 of
this Appendix I, shall be calculated as of the date of the Participant's
death using the procedure set forth in Section 4.2 of this Appendix I
(relating to the calculation of the reduction for early commencement of a
Participant's Early Retirement Benefit), but (i) if paragraph (a) or (b)
applies, using the accrued portion of the Participant's or former
Participant's Normal Retirement Benefit, or (ii) if paragraph (c) applies,
using only the segment of the accrued portion of his Retirement Benefit
that is attributable to his Employee Contributions With Interest.
5.4.1 Death Before Age 55 Without Employee Contributions. If the
Participant dies on or before the date he attained or would have
attained age 55, the survivor benefit shall be payable monthly,
beginning as of the date the Participant would have attained age
55, and shall be determined as if the Participant had (1)
terminated employment on the date of his death, (2) survived to
his 55th birthday, (3) retired with the joint and 50% survivor
annuity form of payment in effect, and (4) died on the following
day.
5.4.2 Death Before Age 55 with Employee Contributions. If the
Participant dies on or before the date he attained or would have
attained age 55 and a segment of the accrued portion of his
Retirement Benefit is attributable to his Employee Contributions
With Interest, the survivor benefit shall be payable monthly,
beginning as of the date of the Participant's death, and shall
be
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determined as if the Participant had (1) terminated employment
on the date of his death, (2) retired with the joint and 50%
survivor annuity form of payment in effect, and (3) died on the
following day.
5.4.3 Death After Age 55. If the Participant dies after the date
he attained age 55 and before his Annuity Starting Date, the
survivor benefit shall be payable monthly, beginning as of the
first day of the month that occurs on or next following the date
of his death, and shall be determined as if the Participant had
died with the joint and 50% survivor annuity form of payment in
effect and an Annuity Starting Date occurring on the day before
the date of his death.
5.4.4 No Subsidy. Notwithstanding any contrary provision of this
Section 5.4 of this Appendix I, if (a) the Participant or former
Participant dies with less than five (5) Years of Service or (b)
payment of the survivor benefit commences prior to the date the
Participant or former Participant attained or would have
attained age 55, the survivor benefit shall not be calculated
using the procedure set forth in Section 4.2 of this Appendix I
(relating to the calculation of the reduction for early
commencement of a Participant's Early Retirement Benefit), but
the survivor benefit instead shall be calculated on an
Actuarially Equivalent basis.
5.4.5 Commencement Rules. Payment of any survivor benefit
provided under this Section 5.4 of this Appendix I shall not
commence before the date that would have been the Participant's
Normal Retirement Date if the Participant had survived, unless
the spouse who is to receive the survivor benefit consents to
the earlier commencement. The consent shall be in such form as
the Administrative Committee shall specify; provided, however,
that the consent shall be in writing, signed by the spouse and
received by the Administrative Committee not more than 90 days
before the earlier commencement date.
5.4.6 Prior Vesting Rule. Notwithstanding any contrary provision
of this Section 5.4 of this Appendix I, in applying this Section
5.4 with respect to any Participant or former Participant who
died or terminated employment with all Employers and Affiliates
before September 1, 1986, each reference in this Section 5.4 of
this Appendix I to "five (5) Years of Service" shall be changed
to "ten (10) Years of Service", in order to reflect the vesting
rules in effect under the Plan prior to that date.
5.5 "Spousal Consent" shall mean, for all purposes under this Appendix I, the
consent of the spouse of a Participant which (a) is set forth in writing;
(b) acknowledges
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the effect of the waiver, election or designation made or other action
taken by the Participant; and (c) is signed by the spouse and witnessed by
a member or an authorized agent of the Administrative Committee or by a
notary public. Notwithstanding any requirement of Spousal Consent under
this Plan, if a Participant establishes to the satisfaction of the
Administrative Committee that Spousal Consent may not be obtained because
the Participant has no spouse or his spouse cannot be located, the
Participant's waiver, election, designation or other action shall be
effective without Spousal Consent. Any Spousal Consent required under this
Plan shall be valid only (1) with respect to the spouse who signs the
Spousal Consent and (2) as to the particular choice made by the
Participant in the waiver, election or designation requiring Spousal
Consent. A Participant may without Spousal Consent revoke a prior waiver,
election or designation requiring Spousal Consent at any time before his
Annuity Starting Date. The number of revocations shall not be limited.
5.6 Optional Forms of Retirement Benefits. Subject to Section 5.3 of this
Appendix I, the following optional forms of Retirement Benefit payment are
available under the Plan:
5.6.1 Single Life Annuity. This option, which is the normal form
of payment for an unmarried Participant, provides for unreduced
payments of Retirement Benefit determined in accordance with
Section 4 of this Appendix I to and for the life of the
Participant with no survivor benefit.
5.6.2 Joint and 100% Survivor Annuity. This option provides for
reduced pension payments to and for the life of the Participant
and for the continuance of pension payments, if the Participant
is survived by the contingent annuitant designated in accordance
with Section 7.2 of this Appendix I, equal to 100% of such
reduced pension amount for the then remaining life of the
contingent annuitant.
5.6.3 Joint and Reduced Survivor Annuity. This option provides
for reduced pension payments to and for the life of the
Participant and for the continuance of pension payments, if the
Participant is survived by the contingent annuitant designated
in accordance with Section 7.2 of this Appendix I, equal to 50%
or 66-2/3% (as elected by the Participant) of such reduced
pension amount for the then remaining life of the contingent
annuitant. This option is the normal form of payment for a
married Participant if the individual who was the Participant's
spouse on his Annuity Starting Date is his contingent annuitant
and the 50% pension continuation level is in effect.
5.6.4 Social Security Adjustment Option. If a participant's
Annuity Starting Date occurs before his Federal Old Age (Social
Security)
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Benefit first becomes payable, he may elect with Spousal
Consent to have his Retirement Benefit payments paid in the
single life annuity form after adjustment on an Actuarially
Equivalent basis to provide (so far as practicable) a constant
total retirement income inclusive of the estimated Federal Old
Age Benefit, both before and after such Benefit is scheduled to
commence.
5.6.5 Conversion Factors. The amount payable under any form of
payment described in this Section 5.6 of this Appendix I shall
be calculated using the conversion factors prescribed by Table A
to this Appendix I; provided, however, that the portion of the
Normal Retirement Benefit accrued to November 12, 1984 by any
Participant shall in no event be reduced as the result of the
use of such conversion factors.
5.7 Other Benefit Payment Rules.
5.7.1 Incidental Benefit Rule. If a Participant's spouse is not
his contingent annuitant, any joint and survivor annuity form of
payment provided under Section 5.6 of this Appendix I shall
provide for payments in such a manner that more than 50% of the
Actuarially Equivalent present value of all payments expected to
be made under the annuity form are expected to be made to the
Participant.
5.7.2 Rescission of Election. Once a choice as to an optional
form of payment of a Participant's Retirement Benefit payment
has been effectively made, it may be rescinded by the
Participant at any time before the benefit payments actually
commence.
5.7.3 Death Before Starting Date. If a Participant has elected a
joint and survivor annuity form of payment under Section 5.6.2
or 5.6.3 and his contingent annuitant dies before the
Participant's Annuity Starting Date, the participant's
Retirement Benefit shall be paid in the applicable normal form
(as if the optional form had not been elected) unless the
Participant makes a new election. No benefits shall be payable
under Section 5.6 of this Appendix I to a Participant's
designated contingent annuitant if the participant dies before
his Annuity Starting Date, and the only death or survivor
benefits payable (if any) shall be those provided by Sections
5.4 and 7 of this Appendix I.
5.7.4 Death After Starting Date. If the designated contingent
annuitant predeceases the Participant after his Annuity Starting
Date, the reduced pension amount payable under any joint and
survivor annuity form of payment shall cease upon the
Participant's death.
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If a Participant dies on or after his Annuity Starting Date, a
survivor benefit shall be payable under the Plan only if and to
the extent provided under Section 7 of this Appendix I or under
the form of payment actually in effect for the Participant on
the date of his death.
5.7.5 Minimum Payment Requirement. A participant's election of a
joint and survivor annuity form of payment under Section 5.6.2
or 5.6.3 of this Appendix I shall not become effective if an
annual rate of pension payments of less than $120 would be
payable to either the Participant or his contingent annuitant.
5.7.6 Annuity Contract Alternative. Annuity payments shall be
made by the Trustee in accordance with the provisions of this
Section 5 of this Appendix I; provided, however, that in lieu of
such payments, the Administrative Committee may direct the
Trustee to purchase from an insurance company or cause the
Insurer to issue a single premium annuity contract which
provides the pension benefits to which the Participant and/or
his spouse or other contingent annuitant is (or are) entitled
under the Plan. Such annuity contract may be held by the Trustee
as owner or may be a nontransferable annuity contract which is
distributed to the Participant or his surviving spouse or other
contingent annuitant and shall discharge all liabilities of the
Plan in respect of the Participant.
5.8 Commencement Rules. The Administrative Committee shall determine the
Annuity Starting Date for a Participant's Retirement Benefit, subject to
the provisions of Sections 5.1 and 5.2 of this Appendix I and the
following rules:
5.8.1 Earliest Commencement. No payments shall be made to a
Participant before (a) the date his employment with all
Employers and Affiliates terminates, or (b) unless the
Participant consents to the earlier commencement of payments in
a written instrument which is signed by him and received by the
Administrative Committee not more than 90 days before such
earlier commencement date, the date the Participant attains age
65; provided, however, that clause (b) of this sentence shall
apply only if the Actuarial Equivalent of the vested accrued
portion of the Participant's Retirement Benefit exceeds $3,500.
5.8.2 Latest Commencement With Consent. Even if a Participant
consents to the deferral in accordance with Section 5.8.3 of
this Appendix I, the commencement of his Retirement Benefit
payments may not be deferred beyond the April 1 that next
follows the calendar year in which the Participant attains age
70- 1/2 or his employment with all Employers and Affiliates
terminates (whichever
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is later); provided, however, that the commencement of
payments to a Participant who is a 5% owner (within the meaning
of section 416(i)(1)(B)(i) of the Code) for the calendar year in
which he attains age 70-1/2 or any later calendar year may not
be deferred beyond the April 1 that next follows such calendar
year.
5.8.3 Latest Commencement Without Consent. Unless a Participant
consents in writing to a deferral of the commencement of his
Retirement Benefit payments, Retirement Benefit payments to a
Participant shall in no event commence later than 60 days after
the end of the Plan Year in which occurs the latest of (a) the
Participant's Normal Retirement Date, (b) the tenth (10th)
anniversary of the date on which he first became a Participant
in the Plan or (c) the date on which the participant's
employment with all Employers and Affiliates terminated.
Notwithstanding the foregoing, if the amount of the Retirement
Benefit or the location of the Participant or his spouse (after
a reasonable search) cannot be ascertained by such date,
payments may be deferred but shall be commenced on a retroactive
basis no later than 60 days after the earliest date on which
such amount or location (as appropriate) is ascertained.
5.9 Prior Lump Sum Payment. If a Participant is reemployed by an Employer
after having received a lump sum payment of the vested accrued portion of
his Retirement Benefit, the Retirement Benefit that becomes payable to the
Participant following his subsequent termination of employment shall be
determined on the basis of all includible periods of his prior and current
Service, but the Retirement Benefit as so determined shall be reduced by
the Actuarial Equivalent of the amount of the prior lump sum payment.
5.10 Payments to Incompetents. If any individual to whom a benefit is payable
under the Plan is a minor, or if the Administrative Committee determines
that any individual to whom a benefit is payable under the Plan is
mentally incompetent to receive such payment or to give a valid release
therefor, payment shall be made to the guardian, committee or other
representative of the estate of such individual which has been duly
appointed by a court of competent jurisdiction. If no guardian, committee
or other representative has been appointed, payment may be made to any
person as custodian for such individual under the California Uniform
Transfers to Minors Act or may be made to or applied to or for the benefit
of the minor or incompetent, the incompetent's spouse, children or other
dependents, the institution or persons maintaining the minor or
incompetent or any of them, in such proportions as the Administrative
Committee from time to time shall determine; and the release of the person
or institution receiving the payment shall be a valid and complete
discharge of any liability of the Plan with respect to any benefit so
paid.
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SECTION 6
TERMINATION OF SERVICE
6.1 General Rules. A Participant whose employment with all Employers and
Affiliates terminates prior to his Retirement Date shall cease to be a
Participant and shall be entitled to the return of his Employee
Contributions With Interest. Notwithstanding any contrary provision of
this Section 6 of this Appendix I, any payment of a Participant's Employee
Contributions With Interest, or such segment of the vested accrued portion
of his Retirement Benefit as is attributable thereto, shall be subject to
the provisions of Section 5 of this Appendix I, with respect to the normal
form of payment, the commencement of payments and the consent
requirements; provided, however, that the lump sum payment of Employee
Contributions With Interest, to the extent provided for in this Section 6
of this Appendix I, shall be treated as an optional form of payment for
such amount as if specified in Section 5.6 of this Appendix I.
6.2 Less than 5 Years of Service. If a Participant has completed less than
five (5) Years of Service at the time his employment terminates, his
Employee Contributions With Interest shall be paid to him in a lump sum as
soon as practicable after his termination, and he shall be entitled to no
other benefits under the Plan. If the former Participant is again employed
by an Employer, the Participant's Years of Participation for all purposes
shall include Years of Participation both prior and subsequent to his date
of reemployment; provided that if the Participant's interest in that part
of the accrued portion of his Retirement Benefit under the Plan which is
derived from Employer Contributions was not at least 50% vested and he
does not repay the full amount of his Employee Contributions With
Interest, within the time required by Section 1.21.3 of this Appendix I,
then his Years of Participation shall include only Years of Participation
subsequent to the earlier of his date of reemployment or January 1, 1976.
For purposes of the preceding sentence, interest shall be computed on the
amount of the prior distribution from the distribution date to the
repayment date and shall be compounded annually from the distribution date
at the rate of five percent (5%) or such greater (or lesser) rate of
interest as is determined pursuant to section 411(c)(2)(C)(iii) and (D) of
the Code at the date of repayment.
6.3 Vested Termination. If the Participant terminates employment with all
Employers and Affiliates and if he has completed five (5) or more Years of
Service at the time his employment terminates, he may elect to leave his
Employee Contributions With Interest with the Plan, and he shall receive:
(a) Commencing as of his Normal Retirement Date, a Retirement
Benefit calculated in accordance with Section 4.1 of this
Appendix I, but based on his Years of Participation and Average
Career Pay as of the date his Service terminated; or
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(b) If he has completed ten (10) or more Years of Service, and
if he so elects with Spousal Consent, commencing as of the first
day of any month on or after the date he attains age 55 and
before his Normal Retirement Date, a Retirement Benefit
calculated pursuant to paragraph (a) as of the earlier
commencement date, but using the procedure set forth in Section
4.2 of this Appendix I (relating to the calculation of the
reduction for early commencement of a Participant's Early
Retirement Benefit);
provided, however, that the Retirement Benefit amount so calculated shall
be paid in an immediate single lump sum payment if and to the extent
provided by Section 5.3 of this Appendix I.
6.4 Withdrawal of Employee Contributions. At any time before his Annuity
Starting Date, a former Participant who has not elected to leave his
Employee Contributions With Interest with the Plan in accordance with
Section 6.3 of this Appendix I, or a former Participant who made but later
revoked such election, may elect with Spousal Consent to withdraw his
Employee Contributions With Interest. In such event the Participant's
Employee Contributions With Interest shall be distributed to him in an
immediate single lump sum payment, and the Retirement Benefit payable
under Section 6.3 of this Appendix I shall be reduced by an amount equal
to the portion of such Retirement Benefit that is derived from the
Participant's Employee Contributions. Such portion is an annual benefit
equal to the Participant's accumulated contributions multiplied by the
appropriate conversion factor, as determined in accordance with section
411(c)(2) of the Code; provided, however, that such portion shall not
exceed the Participant's accrued benefit under the Plan. No Participant
may withdraw or receive a refund of his Employee Contributions With
Interest before his employment with all Employers and Affiliates
terminates.
SECTION 7
DEATH BENEFITS
7.1 Return of Employee Contributions With Interest. Upon the death of a
Participant or former Participant, or upon the subsequent death of his
surviving spouse or other contingent annuitant who was receiving payments
under the Plan, and in the event that no amount is otherwise payable under
the Plan with respect to the deceased Participant or former Participant,
then an amount equal to his Employee Contributions With Interest, less the
sum of all benefit payments previously made to the Participant or former
Participant and/or his spouse or other contingent annuitant, shall be
payable to the beneficiary designated in accordance with Section 7.2 of
this Appendix I.
7.2 Beneficiary or Contingent Annuitant Designations. Each Participant may
designate, in a signed writing delivered to the Administrative Committee
on such
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form as it may prescribe, one or more individuals to be (a) his contingent
annuitant who shall receive any survivor annuity payments under Section
5.6 of this Appendix I (other than the pre-retirement survivor annuity
provided by Section 5.4 of this Appendix I) and/or (b) his beneficiary who
shall receive any death distribution under Section 7.1 of this Appendix I.
7.2.1 Changed Designations. A Participant may designate
different contingent annuitants and/or beneficiaries at any time
by delivering a new designation in like manner. Any designation
shall become effective only upon its receipt by the
Administrative Committee, and the last effective designation
received by the Administrative Committee shall supersede all
prior designations.
7.2.2 Spousal Consent. If a Participant designates any
individual other than his spouse as his contingent annuitant or
beneficiary, the designation shall be ineffective in the absence
of Spousal Consent.
7.2.3 Failed Beneficiary Designations. If a Participant dies
without having effectively designated his beneficiary, or if no
designated beneficiary survives the Participant, the
Administrative Committee shall designate as the Participant's
beneficiary (in the following order of priority) his (a)
surviving spouse, (b) surviving children (including adopted
children), (c) surviving parents, or (d) estate; provided,
however, that if the Participant has no surviving spouse, the
Administrative Committee may (in its discretion) designate the
Participant's estate as his beneficiary, irrespective of the
foregoing order of priority. The Administrative Committee's
determination as to which persons (if any) qualify within the
aforementioned categories shall be final and conclusive upon all
persons.
7.3 No Other Death Benefits. Except as provided in this Section 7 of this
Appendix I or Section 5 of this Appendix I, no death or other survivor
benefits are provided under the Plan.
SECTION 8
MISCELLANEOUS
8.1 Controlling Law. Except to the extent preempted by ERISA and other
applicable federal laws, this Appendix I and the Plan with respect to this
Appendix I shall be construed, regulated and administered in accordance
with the laws of the State of California.
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SCHEDULE A
TO
APPENDIX I
List of Employers
Date Became Date of
Name of Employer an Employer Withdrawal
Western States Utility Company 9/1/44 N/A
West Coast Power Company 6/1/45 N/A
Eastern Oregon Light & Power Co. 7/1/46 N/A
Colusa County Telephone Company 1/1/52 N/A
Northern Counties Utility Company 1/1/52 N/A
Umpqua Valley Telephone Company 3/31/52 N/A
Elko County Telephone &
Telegraph Co. 3/1/52 N/A
The Redwoods Telephone Company 1/1/78 N/A
Tel-Logic Communication, Inc. 1/1/81 N/A
Tuolumne Telephone Co. 1/1/81 N/A
RAI Consultants, Inc. 5/1/81 N/A
Great Southwest Telephone
Corporation and its
Subsidiaries: 9/1/81 N/A
Navajo Communications Co., Inc.
NCC Systems, Inc.
Romain Telephone Co., Inc.
Telephone Service Co., Inc.
Texas-Midland Telephone Co.
Trinity Valley Telephone Co.
The Warner-Whitney Group, Inc. 1/28/82 6/1/85
The Communications Processing
Group, Inc. 1/28/82 N/A
CP National CONTECH 8/10/84 N/A
Nevada Telephone & Telegraph 12/30/86 N/A
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SCHEDULE B
TO
APPENDIX I
Tuolumne Prior Plan Benefit
Effective as of January 1, 1981, Tuolumne Telephone Co. ("Tuolumne") adopted the
Former Plan as an amendment and complete restatement of the GR-4640 Pension Plan
for Employees of Tuolumne Telephone Co., as set forth in Group Annuity Contract
No. GR-4640 issued to Tuolumne by The Travelers Insurance Company effective as
of November 1, 1972, and as thereafter from time to time amended effective prior
to 1982 (the "Tuolumne Plan"). The benefits provided for each Participant under
the Former Plan who prior to January 1, 1981, was a participant in the Tuolumne
Plan (a "Tuolumne Plan Participant") shall be determined in accordance with all
of the terms and conditions of Appendix I, subject to the following
1. Prior Plan Benefit. For purposes of applying Section 4.13 of this Appendix
I, the Prior Plan Benefit for a Tuolumne Plan Participant shall be the
Actuarial Equivalent of the accrued benefit that would have been provided
for the Tuolumne Plan Participant as of October 31, 1981, as determined
under the provisions of the Tuolumne Plan as in effect on December 31,
1980, expressed as an annual benefit payable as a single life annuity
commencing at the Tuolumne Plan Participant's Normal Retirement Date.
2. Benefit Accrual. A Tuolumne Plan Participant shall commence to accrue Years
of Participation under the Former Plan on January 1, 1981, for periods of
his Service with the Employers after said date. An amount equal to the
Tuolumne Plan Participant's Prior Plan Benefit, as determined under
Paragraph 1 of this Schedule B (but calculated as of December 31, 1980,
rather than October 31, 1981), shall be added to the Actuarial Equivalent
of his accrued benefit as determined under Section 4.1 of this Appendix I
and related provisions of this Appendix I, based on his Years of
Participation after December 31, 1980, and expressed as an annual benefit
payable as a single life annuity commencing at his Normal Retirement Date,
in calculating the Retirement Benefit (if any) ultimately payable under the
CP National Plan.
3. Years of Service. The Years of Service credited to a Tuolumne Plan
Participant under the Former Plan on and after January 1, 1981, shall at
least equal the total of the years of service credited to such Participant
under Article VII, Section B(4) of the Tuolumne Plan as of December 31,
1980, plus the Years of Service credited to such Participant under Section
1.22 of this Appendix I for periods of his Service after said date.
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SCHEDULE C
TO
APPENDIX I
Trinity PUD Service Credit
Effective as of March 1, 1983, solely for purposes of determining the Years of
Service of an Employee (a) who was employed at the CP National Corporation's
facilities in Weaverville, California on February 28, 1983, (b) who transferred
to employment with the Trinity County Public Utility District (the "Trinity
PUD") on March 1, 1983, and (c) who was credited with less than ten (10) Years
of Service at the date of such transfer, Service shall include, in addition to
periods of employment with the Employers and Affiliates, periods of employment
with the Trinity PUD on and after the date of such transfer. For purposes of
determining his eligibility to receive benefits under Appendix I, the employment
of any such Employee shall not be deemed terminated until the termination of his
employment with the Trinity PUD.
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<PAGE>
TABLE A
TO
APPENDIX I
Conversion Factors
The conversion factors set forth below are to be applied to the Retirement
Benefit amount payable in the normal single life annuity form for unmarried
Participants to calculate, in accordance with Section 5.6 of this Appendix I,
the amount(s) payable under another form of payment. In applying the formulas,
age nearest birthday should be used for the Participant and his spouse or
designated contingent annuitant.
1. Joint and 100% Survivor Annuity:
1.1 Retirement at Age 65:
The conversion factor is 0.7450 plus (minus) 0.0100 for each
year that the Participant's spouse or designated contingent
annuitant is older (younger) than the Participant.
1.2 Retirement at Other Age:
The conversion factor is 0.7450 plus (minus) 0.0070 for each
year that the Participant is under (over) age 65 and plus (minus)
0.0100 for each year that the Participant's spouse or designated
contingent annuitant is older (younger) than the Participant.
2. Joint and 66-2/3% Survivor Annuity:
2.1 Retirement at Age 65:
The conversion factor is 0.8150 plus (minus) 0.0080 for each
year that the Participant's spouse or designated contingent
annuitant is older (younger) than the Participant.
2.2 Retirement at Other Age:
The conversion factor is 0.8150 plus (minus) 0.0050 for each
year that the Participant is under (over) age 65 and plus (minus)
0.0080 for each year that the Participant's spouse or designated
contingent annuitant is older (younger)than the Participant.
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<PAGE>
3. Joint and 50% Survivor Annuity:
3.1 Retirement at Age 65:
The conversion factor is 0.8540 plus (minus) 0.0070 for each
year that the Participant's spouse or designated contingent
annuitant is older (younger) than the Participant.
3.2 Retirement at Other Age:
The conversion factor is 0.8540 plus (minus) 0.0040 for each
year that the Participant is under (over) age 65 and plus (minus)
0.0070 for each year that the Participant's spouse or designated
contingent annuitant is older (younger) than the Participant.
4. Other Forms:
The conversion factors for any other form of payment under the Plan shall
be based on the Actuarial Equivalent of the normal single life annuity
form.
5. Lump Sum Restriction:
Effective as of January 1, 1985, in determining whether the lump sum
Actuarial Equivalent of the vested accrued portion of a Participant's
Retirement Benefit exceeds $3,500 as of any date, the rate of interest
used shall be the lesser of (a) the rate specified in clause (b) of
Section 1.1 of the Plan or (b) the rate established by the PBGC to value
immediate annuities for plans terminated on the first day of the Plan
Year which includes the date as of which the determination is made.
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<PAGE>
13.10 Employees of St. Matthews Telephone Company.
(a) Effective Date - Not applicable.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX J - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF ST. MATTHEWS TELEPHONE COMPANY, which
follows immediately hereafter.
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<PAGE>
APPENDIX J
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
ST. MATTHEWS TELEPHONE COMPANY
Effective as of the close of business on February 29, 1988, St. Matthews
Telephone Company ("St. Matthews") became a wholly-owned subsidiary of the
Company.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of St. Matthews on March 1, 1988:
A. Section 1.07 is modified by adding to the definition
thereof the following:
1.07J "Basic Compensation" shall include only amounts earned
after February 29, 1988.
B. Section 1.14 is modified by adding to the definition
thereof the following:
1.14J "Compensation" shall include only amounts earned after
February 29, 1988.
C. Section 1.37(g) is modified as follows:
1.37(g)J Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following.
(i) Service Prior to March 1, 1988: An
Employee's period(s) of employment with St. Matthews
prior to March 1, 1988, shall be counted as Vesting
Service to the extent that such periods would have
counted under the Plan if such employment had been
with the Company.
(ii) Service From and After March 1,
1988: In accordance with the provisions of Section
1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)J Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
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<PAGE>
(i) Benefit Service Prior to March 1,
1988: None.
(ii) Benefit Service From and After
March 1, 1988: In accordance with the provisions of
Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)J Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to March 1, 1988: An
Employee's period(s) of employment with St. Matthews
prior to March 1, 1988, shall be counted as
Eligibility Years of Service to the extent that such
periods would have counted under the Plan if such
employment had been with the Company.
(ii) Service From and After March 1,
1988: In accordance with the provisions of Section
1.37(f).
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<PAGE>
13.11 Employees of Area Marketing/Research Associates, Inc.
(a) Effective Date - Not Applicable.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX K - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF AREA MARKETING/RESEARCH ASSOCIATES, INC.,
which follows immediately hereafter.
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<PAGE>
APPENDIX K
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
AREA MARKETING/RESEARCH ASSOCIATES, INC.
Effective as of the close of business on April 30, 1988, Area Marketing/Research
Associates, Inc., ("AMRA") became a wholly-owned subsidiary of the Company.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of AMRA on May 1, 1988:
A. Section 1.07 is modified by adding to the definition thereof the
following:
1.07K "Basic Compensation" shall include only amounts earned
after April 30, 1988.
B. Section 1.14 is modified by adding to the definition thereof the
following:
1.14K "Compensation" shall include only amounts earned after
April 30, 1988.
C. Section 1.37(g) is modified as follows:
1.37(g)K Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to May 1, 1988: An
Employee's period(s) of employment with AMRA prior
to May 1, 1988, shall be counted as Vesting Service
to the extent that such periods would have counted
under the Plan if such employment had been with the
Company.
(ii) Service From and After May 1, 1988:
In accordance with the provisions of Section
1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)K Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
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<PAGE>
(i) Benefit Service Prior to May 1,
1988: None.
(ii) Benefit Service From and After May
1, 1988: In accordance with the provisions of
Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)K Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to May 1, 1988: An
Employee's period(s) of employment with AMRA prior
to May 1, 1988, shall be counted as Eligibility
Years of Service to the extent that such periods
would have counted under the Plan if such employment
had been with the Company.
(ii) Service From and After May 1, 1988:
In accordance with the provisions of Section
1.37(f).
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<PAGE>
13.12 Employees of Cellular Phone of Aiken-Augusta, Inc.
(a) Effective Date - Not Applicable.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX L - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF CELLULAR PHONE OF AIKEN-AUGUSTA, INC.,
which follows immediately hereafter.
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<PAGE>
APPENDIX L
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
CELLULAR PHONE OF AIKEN-AUGUSTA, INC.
Effective as of the close of business on April 1, 1990, Cellular Phone of
Aiken-Augusta, Inc., ("CPAA") became a wholly-owned (second-tier) subsidiary of
the Company.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of CPAA on April 2, 1990:
A. Section 1.07 is modified by adding to the definition
thereof the following:
1.07L "Basic Compensation" shall include only amounts earned
after April 1, 1990.
B. Section 1.14 is modified by adding to the definition
thereof the following:
1.14L "Compensation" shall include only amounts earned after
April 1, 1990.
C. Section 1.37(g) is modified as follows:
1.37(g)L Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to April 2, 1990:
None.
(ii) Service From and After April 2,
1990: In accordance with the provisions of Section
1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)L Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to April 2,
1990: None.
(ii) Benefit Service From and After
April 2, 1990: In accordance with the provisions of
Section 1.37(d).
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<PAGE>
E. Section 1.37(f) is modified as follows:
1.37(f)L Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to April 2, 1990:
None.
(ii) Service From and After April 2,
1990: In accordance with the provisions of Section
1.37(f).
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<PAGE>
13.13 Employees of Systematics, Inc. and its Subsidiaries
(a) Effective Date - Not Applicable.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX M - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF SYSTEMATICS, INC. AND ITS SUBSIDIARIES,
which follows immediately hereafter.
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<PAGE>
APPENDIX M
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
SYSTEMATICS, INC. AND ITS SUBSIDIARIES
Effective as of the close of business on May 31, 1990, Systematics, Inc., and
its subsidiaries ("Systematics") became a part of the Controlled Group.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of the Controlled Group on January
1, 1991:
A. Section 1.07 is modified by adding to the definition thereof the
following:
1.07M "Basic Compensation" shall include only amounts earned (as
an Employee of an Employer) after May 31, 1990.
B. Section 1.14 is modified by adding to the definition thereof the
following:
1.14M "Compensation" shall include only amounts earned (as an
Employee of an Employer) after May 31, 1990.
C. Section 1.37(g) is modified as follows:
1.37(g)M Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to June 1, 1990: An
Employee's period(s) of employment with Systematics
after December 31, 1985, and prior to June 1, 1990,
shall be counted as Vesting Service to the extent
that such periods would have counted under the Plan
if such employment had been with the Company.
(ii) Service From and After June 1,
1990: In accordance with the provisions of Section
1.37(g).
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<PAGE>
D. Section 1.37(d) is modified as follows:
1.37(d)M Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to June 1,
1990: None.
(ii) Benefit Service From and After June
1, 1990: In accordance with the provisions of
Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)M Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to June 1, 1990: An
Employee's period(s) of employment with Systematics
after December 31, 1985 and prior to June 1, 1990,
shall be counted as Eligibility Years of Service to
the extent that such periods would have counted
under the Plan if such employment had been with the
Company.
(ii) Service From and After June 1,
1990: In accordance with the provisions of Section
1.37(f).
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<PAGE>
13.14 Employees of HWC Distribution Corp. and its Subsidiaries
(a) Effective Date - Not Applicable.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX N - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF HWC DISTRIBUTION CORP. AND ITS
SUBSIDIARIES, which follows immediately hereafter.
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<PAGE>
APPENDIX N
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
HWC DISTRIBUTION CORP. AND ITS SUBSIDIARIES
Effective as of the close of business on April 14, 1989, HWC Distribution Corp.,
and its subsidiaries ("HWC") became part of the Controlled Group.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of the Controlled Group on January
1, 1991:
A. Section 1.07 is modified by adding to the definition thereof the
following:
1.07N "Basic Compensation" shall include only amounts earned (as
an Employee of an Employer) after April 14, 1989.
B. Section 1.14 is modified by adding to the definition thereof the
following:
1.14N "Compensation" shall include only amounts earned (as an
Employee of an Employer) after April 14, 1989.
C. Section 1.37(g) is modified as follows:
1.37(g)N Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to April 15, 1989: An
Employee's period(s) of employment with HWC after
December 31, 1985, and prior to April 15, 1989,
shall be counted as Vesting Service to the extent
that such periods would have counted under the Plan
if such employment had been with the Company.
(ii) Service From and After April 15,
1989: In accordance with the provisions of Section
1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)N Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
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<PAGE>
(i) Benefit Service Prior to April 15,
1989: None.
(ii) Benefit Service From and After
April 15, 1989: In accordance with the provisions of
Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)N Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to April 15, 1989: An
Employee's period(s) of employment with HWC after
December 31, 1985 and prior to April 15, 1989, shall
be counted as Eligibility Years of Service to the
extent that such periods would have counted under
the Plan if such employment had been with the
Company.
(ii) Service From and After April 15,
1989: In accordance with the provisions of Section
1.37(f).
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13.15 Employees of Missouri Telephone Company and Eastern Missouri Telephone
Company
(a) Effective Date - January 1, 1992
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX O - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF MISSOURI TELEPHONE COMPANY AND EASTERN
MISSOURI TELEPHONE COMPANY, which follows immediately hereafter.
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APPENDIX O
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
MISSOURI TELEPHONE COMPANY AND
EASTERN MISSOURI TELEPHONE COMPANY
Effective as of the close of business on September 30, 1991, Missouri Telephone
Company and Eastern Missouri Telephone Company (the "Missouri Telephone
Companies") became (direct and indirect) wholly-owned subsidiaries of the
Company.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of the Missouri Telephone Companies
on January 1, 1992:
A. Section 1.07 is modified by adding to the definition thereof the
following:
1.07O "Basic Compensation" shall include only amounts earned
after December 31, 1991.
B. Section 1.14 is modified by adding to the definition thereof the
following:
1.14O "Compensation" shall include only amounts earned after
December 31, 1991.
C. Section 1.37(g) is modified as follows:
1.37(g)O Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to October 1, 1991: An
Employee's period(s) of employment with the Missouri
Telephone Companies prior to October 1, 1991, shall
be counted as Vesting Service to the extent that
such periods would have counted under the Plan if
such employment had been with the Company.
(ii) Service From and After October 1,
1991: In accordance with the provisions of Section
1.37(g).
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D. Section 1.37(d) is modified as follows:
1.37(d)O Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to January 1,
1992: None.
(ii) Benefit Service From and After
January 1, 1992: In accordance with the provisions
of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)O Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to October 1, 1991: An
Employee's period(s) of employment with the Missouri
Telephone Companies prior to October 1, 1991, shall
be counted as Eligibility Years of Service to the
extent that such periods would have counted under
the Plan if such employment had been with the
Company.
(ii) Service From and After October 1,
1991: In accordance with the provisions of Section
1.37(f).
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13.16 Employees of Savannah MSA Cellular Partnership
(a) Effective Date - April 1, 1992.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX P - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF SAVANNAH MSA CELLULAR PARTNERSHIP, which
follows immediately hereafter.
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APPENDIX P
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
SAVANNAH MSA CELLULAR PARTNERSHIP
On April 1, 1992, certain former employees of Savannah MSA Cellular Partnership
("Savannah MSA Cellular") became
Employees.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of Savannah MSA Cellular on March
31, 1992 who became Employees on April 1, 1992:
A. Section 1.07 is modified by adding to the definition
thereof the following:
1.07P "Basic Compensation" shall include only amounts earned
after March 31, 1992.
B. Section 1.14 is modified by adding to the definition
thereof the following:
1.14P "Compensation" shall include only amounts earned after
March 31, 1992.
C. Section 1.37(g) is modified as follows:
1.37(g)P Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to April 1, 1992: An
Employee's period(s) of employment with Savannah MSA
Cellular during the period November 1, 1991, to
April 1, 1992 shall be counted as Vesting Service to
the extent that such periods would have counted
under the Plan if such employment had been with the
Company. An Employee's period(s) of employment with
Savannah MSA Cellular prior to November 1, 1991
shall not be counted as Vesting Service.
(ii) Service From and After April 1,
1992: In accordance with the provisions of Section
1.37(g).
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D. Section 1.37(d) is modified as follows:
1.37(d)P Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to April 1,
1992: None.
(ii) Benefit Service From and After
April 1, 1992: In accordance with the provisions of
Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)P Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to April 1, 1992: An
Employee's period(s) of employment with Savannah MSA
Cellular during the period November 1, 1991 to April
1, 1992 shall be counted as Eligibility Years of
Service to the extent that such periods would have
counted under the Plan if such employment had been
with the Company. An Employee's period(s) of
employment with Savannah MSA Cellular prior to
November 1, 1991 shall not be counted as Eligibility
Years of Service.
(ii) Service From and After April 1,
1992: In accordance with the provisions of Section
1.37(f).
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13.17 Employees of Sugar Land Telephone Company, Perco
Telephone Company, SLT Cable TV, Inc., and Metropolitan
Houston Paging Services, Inc.
(a) Effective Date - January 1, 1993.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX Q - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF SUGAR LAND TELEPHONE COMPANY, PERCO
TELEPHONE COMPANY, SLT CABLE TV, INC., AND METROPOLITAN HOUSTON
PAGING SERVICES, INC., which follows immediately hereafter.
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APPENDIX Q
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
SUGAR LAND TELEPHONE COMPANY, PERCO TELEPHONE COMPANY,
SLT CABLE TV, INC., AND
METROPOLITAN HOUSTON PAGING SERVICES, INC.
Pursuant to the merger of a subsidiary of ALLTEL Corporation into SLT
Communications, Inc. with SLT Communications, Inc. as the surviving corporation,
as defined in the Plan of Merger dated June 12, 1992 between ALLTEL Corporation
and SLT Communications, Inc., as amended, certain employees of Sugar Land
Telephone Company, Perco Telephone Company, and SLT Cable TV, Inc.
(collectively, "SLT") and certain former employees of Metropolitan Houston
Paging Services, Inc. ("Metropolitan") whose employment transferred to SLT Cable
TV, Inc. became Employees.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of SLT on the date of the merger
and the employees of Metropolitan whose employment transferred to SLT Cable TV,
Inc. in connection with the merger who became Employees:
A. Section 1.07 is modified by adding to the definition
thereof the following:
1.07Q "Basic Compensation" shall include only amounts earned
after December 31, 1992.
B. Section 1.14 is modified by adding to the definition
thereof the following:
1.14Q "Compensation" shall include only amounts earned after
December 31, 1992.
C. Section 1.37(g) is modified as follows:
1.37(g)Q Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to January 1, 1993: An
Employee's period(s) of employment with SLT or
Metropolitan shall be counted as Vesting Service to
the extent that such periods would have counted
under the Plan if such employment had been with the
Company.
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<PAGE>
(ii) Service From and After January 1,
1993: In accordance with the provisions of Section
1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)Q Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to January 1,
1993: None.
(ii) Benefit Service From and After
January 1, 1993: In accordance with the provisions
of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)Q Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to January 1, 1993: An
Employee's period(s) of employment with SLT or
Metropolitan shall be counted as Eligibility Years
of Service to the extent that such periods would
have counted under the Plan if such employment had
been with the Company.
(ii) Service From and After January 1,
1993: In accordance with the provisions of Section
1.37(f).
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<PAGE>
13.18 Employees of Contel Cellular of Arkansas, Inc.
(a) Effective Date - January 1, 1993.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX R - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF CONTEL CELLULAR OF ARKANSAS, INC., which
follows immediately hereafter.
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<PAGE>
APPENDIX R
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
CONTEL CELLULAR OF ARKANSAS, INC.
Pursuant to a Purchase and Sale Agreement dated December 22, 1992, by and among
ALLTEL Mobile Communications, Inc, Contel Cellular, Inc., and GTE Mobilnet
Incorporated, certain former employees of Contel Cellular of Arkansas, Inc.
and/or its Affiliates (as defined in the Purchase and Sale Agreement)
(collectively, "Contel") became Employees.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of Contel who became Employees
pursuant to the Purchase and Sale Agreement:
A. Section 1.07 is modified by adding to the definition
thereof the following:
1.07R "Basic Compensation" shall include only amounts earned
after December 31, 1992.
B. Section 1.14 is modified by adding to the definition
thereof the following:
1.14R "Compensation" shall include only amounts earned after
December 31, 1992.
C. Section 1.37(g) is modified as follows:
1.37(g)R Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to January 1, 1993: An
Employee's period(s) of employment with Contel shall
be counted as Vesting Service to the extent that
such periods would have counted under the Plan if
such employment had been with the Company.
(ii) Service From and After January 1,
1993: In accordance with the provisions of Section
1.37(g).
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<PAGE>
D. Section 1.37(d) is modified as follows:
1.37(d)R Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to January 1,
1993: None.
(ii) Benefit Service From and After
January 1, 1993: In accordance with the provisions
of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)R Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to January 1, 1993: An
Employee's period(s) of employment with Contel shall
be counted as Eligibility Years of Service to the
extent that such periods would have counted under
the Plan if such employment had been with the
Company.
(ii) Service From and After January 1,
1993: In accordance with the provisions of Section
1.37(f).
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<PAGE>
13.19 Employees of GTE South Incorporated and Contel of the
South, Inc.
(a) Effective Date - The Closing Date, as defined in
Appendices S and T.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - None.
(i) Provision Relative to Section 401(a)(12) of the
Code - Notwithstanding any other provision of this
Plan, in the event of the termination of the Plan, each
participant of the Plan who has a benefit under the
Plan attributable to the Former Plan shall receive a
benefit which is equal to or greater than the benefit
he would have been entitled to receive if the Former
Plan had terminated immediately prior to the Effective
Date.
(j) Miscellaneous - See APPENDICES S and T - SPECIAL
PROVISIONS APPLICABLE TO CERTAIN FORMER EMPLOYEES OF
GTE SOUTH INCORPORATED AND CONTEL OF THE SOUTH, INC.,
which appendices follow immediately hereafter.
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<PAGE>
APPENDIX S
SPECIAL PROVISIONS APPLICABLE TO CERTAIN FORMER EMPLOYEES
OF
GTE SOUTH INCORPORATED AND CONTEL OF THE SOUTH, INC.
Pursuant to Employee Transfer Agreements between ALLTEL Georgia Communications
Corp. and GTE South Incorporated, ALLTEL Illinois, Inc. and GTE South
Incorporated, ALLTEL Indiana, Inc. and Contel of the South, Inc., and ALLTEL
Michigan, Inc. and Contel of the South, Inc., each dated April 5, 1993, (the
"Employee Transfer Agreements") certain employees of GTE South Incorporated and
Contel of the South, Inc. who are not covered by a collective bargaining
agreement and whose employment transferred to ALLTEL Georgia Communica tions
Corp., ALLTEL Illinois, Inc., ALLTEL Indiana, Inc., or ALLTEL Michigan, Inc.
became Employees (the "Non-Bargaining Transfer Employees"). Effective as of the
"Closing Date," as Closing Date is defined in the Employee Transfer Agreements,
assets and liabilities with respect to the Non-Bargaining Transfer Employees
shall be transferred to the Plan from the Former Plan. Thereafter, the
provisions of the Plan shall govern the interests of participants, former
participants, contingent annuitants or any other person or entity claiming any
right or interest under the Former Plan with respect to the Non-Bargaining
Transfer Employees.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to the Non-Bargaining Transfer Employees.
A. Section 1.01S is modified as follows:
1.01S "Accrued Pension" for a Participant means (except
as otherwise provided herein) an amount equal to
the sum of (1) and (2) below:
(1) an amount equal to the Participant's Accrued
Pension under Section 1.01 without regard to this
subsection 1.01S.
plus
(2) An amount equal to the Participant's monthly
accrued benefit that has accrued at the close of business
on the Closing Date under the Former Plan (the "GTE
Benefit"), if any.
B. Section 1.03 is modified as follows:
1.03S "Actuarial Equivalent" means with respect to any
determination of actuarial equivalence required by
the provisions of the Plan involving the GTE
Benefit shall be made using the factors set forth
on Table I - Early Commencement Factors for
Deferred Vested Pensions, Table II - Joint and
Survivor Factors, Table III - Factors for
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Small Pensions, Table IV - Factors for Five-Year
Certain and Life Option, or Table V - Determination
of Actuarial Equivalence for Lump Sum Distributions
(Other than Small Pensions) and Lump Sum Factors, as
applicable, each of which Tables is attached to this
Appendix S to Section 13.19 and made a part hereof.
C. Section 1.24 is modified as follows:
1.24S "Normal Retirement Age" means age 65, except that,
in the case of any Employee who (i) was not employed
(as an Employee or otherwise) by the Company (as
defined in Section 9 of Article II of the Former
Plan) or an Affiliate (as defined in Section 3 of
Article II of the Former Plan) on or before the last
day of the month during which he attained age 60,
and (ii) completes at least one Hour of Service
after 1987, "Normal Retirement Age" means the fifth
anniversary of the date as of which the Employee's
participation in the Plan commenced.
D. Section 1.37(d) is modified as follows:
1.37(d)S Benefit Service
(1) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to the Closing
Date: None.
(ii) Benefit Service for the Calendar
Year in Which the Closing Date Occurs: For the
calendar year in which the Closing Date occurs, the
Participant shall accrue one-twelfth (1/12th) year
of Benefit Service with respect to benefits under
the Plan other than a Participant's GTE Benefit for
each one hundred sixty-six and two-thirds (166 2/3)
Hours of Service completed (during such calendar
year).
(iii) Benefit Service for Calendar Years
Beginning After the Closing Date: For calendar years
beginning after the Closing Date, Benefit Service
with respect to benefits under the Plan other than a
Participant's GTE Benefit shall be determined in
accordance with Section 1.37(d), except that the
last sentence of Section 1.37(d)(l)(ii) shall not
result in any duplication of Benefit Service for the
Calendar Year in which the Closing Date occurs.
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<PAGE>
(iv) Benefit Service for Purposes of
Appendix S: For purposes only of subsection (d) of
Section 1.37(h)S, Section 4.02S, Section 4.03S,
Section 4.04S, and Section 6.01S of this Appendix S
and solely for purposes of determining eligibility
under the provisions of such Sections with respect
to a Participant's GTE Benefit, a Participant shall
accrue Benefit Service for the calendar year in
which the Closing Date occurs and thereafter in
accordance with the provisions of Section 10 of
Article I of Appendix T to this Section 13.19 and
Section 6 of Article III of Appendix T to this
Section 13.19.
E. Section 1.37(f) is modified as follows:
1.37(f)S Eligibility Year of Service
Subject to the Break in Service provisions, an Employee,
whether or not a Participant, shall accrue Eligibility Years of
Service under the Plan in accordance with Section 1.37(f), but
taking into account his period(s) of employment taken into
account under the Former Plan as if such period(s) of employment
had been with the Controlled Group.
F. Section 1.37(g) is modified as follows:
1.37(g)S Vesting Service
(1) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the
following:
(i) Service Prior to the Closing Date:
For a Participant as of the Closing Date, the
Participant's period(s) of employment taken into
account under the Former Plan as of the Closing
Date, shall be counted as Vesting Service to the
extent of the number of whole 1-year periods of
service that were similarly credited under the
provisions of the Former Plan as of the Closing
Date.
(ii) Service From and After the Closing
Date: Subject to the Break in Service provisions, an
Employee, whether or not a Participant, shall accrue
one year of Vesting Service for each calendar year
in which
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he has 1,000 or more Hours of
Service. In determining such Vesting Service for the
computation period which includes the Closing Date,
the Participant shall receive credit for a number of
Hours of Service equal to the number of hours of
service for such computation period credited to the
Participant as of the Closing Date under the
provisions of the Former Plan.
(iii) Notwithstanding any other
provision of the Plan, there shall be no duplication
of Vesting Service or Vesting Years of Service under
the Plan and the Former Plan by reason of any
restoration of, crediting of, or granting of service
(or hours of service) in respect of any single
period or otherwise.
G. Section 1.37(h) is modified as follows:
1.37(h)S Bridging
(a) Notwithstanding any other provision of this
Plan, any former Participant who, irrespective of the date
of his Termination of Employment, had not fulfilled the
requirements for vested benefits under the Plan including
any prior provision hereof, and who again was or is
employed, shall have years of pre-termination Vesting
Service and Benefit Service restored, unless otherwise
restored in accordance with Section 1.37 or Section 10.04,
if the number of consecutive years of post-termination
employment is at least 5.
(b) When an Employee's Vesting Service is broken and
he is thereafter reemployed by an Employer or a member of
the Controlled Group and he accumulates 1,000 Hours of
Service constituting Vesting Service, then the break in
the Employee's employment shall be bridged and there shall
be added to the Vesting Service which has accumulated
since his reemployment the aggregate of all previous
periods of Vesting Service which the Employee had prior to
such reemployment, provided that the Employee had one year
of Vesting Service taken into account under the Plan
preceding the break in service.
(c) When an Employee's Accredited Service or Benefit
Service is broken and he is thereafter reemployed by an
Employer
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<PAGE>
or a member of the Controlled Group and he
accumulates 1,000 Hours of Service constituting Vesting
Service, then the break in the Employee's employment shall
be bridged, and he shall be credited with the aggregate of
all periods of Accredited Service which he had prior to
the break, provided that the Employee had one year of
Vesting Service preceding the break in service.
(d) Notwithstanding any other provision of the Plan,
there shall be no duplication of Vesting Service or
Vesting Years of Service under the Plan and the Former
Plan by reason of any restoration of, crediting of, or
granting of service or hours of service in respect of any
single period or otherwise.
H. Section 1.37 is modified as follows:
1.37(i)S Accredited Service
An Employee's period(s) of employment taken into account
as of the Closing Date as Accredited Service under Article IV of
the Former Plan.
I. Section 1.48S is added as follows:
1.48S "Former Plan" means the GTE Telephone Operations Salaried
Pension Plan or the GTE South Incorporated (Southeast) Plan for
Hourly- Paid Employees' Pensions (to the extent a Non-
Bargaining Transfer Employee has accrued benefits thereunder
immediately prior to the Closing Date), as applicable, as in
effect on the Closing Date.
J. Section 1.49 is added to provide as follows:
1.49S "Contel Provisions" means the provisions set forth on Attachment I
to this Appendix S or Attachment II to this Appendix S, as applicable.
The Contel Provisions shall modify or supplement the provisions of this
Appendix S, as appropriate, with respect to a Participant's GTE Benefit
to the extent the Contel Provisions would permit different or additional
optional forms of benefit with respect to the Participant's GTE Benefit.
K. Section 1.50 is added to provide as follows:
1.50S "Disabled" means the total disability of an Employee as
determined by the Plan Administrator on the basis of proper
medical evidence, whereby the Employee is completely unable to
engage in any and
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every duty pertaining to any occupation or employment for
wage or profit for which he is reasonably qualified by training,
education, or experience, and such total disability can be
expected to result in death or to be of long-continued and
indefinite duration.
L. Section 1.51 is added to provide as follows:
1.51S An "LTD Recipient" or "WC Recipient" shall mean an
Employee or former Employee of ALLTEL Illinois, Inc., ALLTEL
Indiana, Inc., or ALLTEL, Michigan, Inc., as defined in the
Employee Transfer Agreements, who may become an Employee covered
by the provisions of this Appendix S as provided in the Employee
Transfer Agreements, and the provisions of this Appendix S shall
apply to such former LTD Recipient or WC Recipient with the last
day of the calendar year that includes the date of the former
LTD Recipient's or WC Recipient's commencement of active service
with GTE South Incorporated or Contel of the South, Inc.
substituted for Closing Date.
M. Section 1.52 is added to provide as follows:
1.52S "Other Pension Plan" means Other Pension Plan as defined
in Section 20 of Article I of Appendix T to Section 13.19.
N. Section 1.53 is added to provide as follows:
1.53S "Pension Commencement Date" means the date as of which
payment with respect to a GTE Benefit is to commence or be made.
O. Section 10.01 is modified as follows:
10.01S Normal Retirement Pension
(c) The monthly pension of a Participant
attributable to his GTE Benefit shall be reduced by the
monthly amount, if any, payable from any Other
Pension Plan.
(d) The annual amount of a Participant's Normal
Retirement Benefit with respect to his GTE Benefit
attributable to the GTE Telephone Operations Salaried
Plan, if any, shall not be less than the applicable amount
determined under subparagraph (iii) of paragraph (c) of
Section 10.02S.
(e) The annual amount of a Participant's Normal
Retirement Benefit attributable to the GTE South
Incorporated (South-east) Plan for Hourly-Paid Employees'
Pensions, if any, shall
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not be less than the applicable amount determined under
subparagraph (iii) of paragraph (d) of Section 10.02S.
P. Section 10.02 is modified as follows:
10.02S Early Retirement Pension
(c) The provisions of this subsection (c) shall
apply with respect to that portion, if any, of a Partici
pant's GTE Benefit attributable to the GTE Telephone
Operations Salaried
Pension Plan.
(i) A Participant whose combined (1) age
and (2) the sum of his Benefit Service and his
Accredited Service (such sum to be not less than 15
years) total 76 or more years, may elect to receive
an Early Retirement Pension with respect to his GTE
Benefit attributable to the GTE Telephone Operations
Salaried Pension Plan. The monthly Pension of a
Participant eligible for an Early Retirement Pension
with respect to his GTE Benefit attributable to the
GTE Telephone Operations Salaried Pension Plan shall
be equal to his Accrued Pension attributable to his
GTE Benefit attributable to the GTE Telephone
Operations Salaried Pension Plan. Credit for
fractional parts of a year, with respect to both age
and Benefit Service and Accredited Service in excess
of 15 years shall be recognized at the rate of 1/12
of a year for each full month. A Participant with 15
or more years of combined Benefit Service and
Accredited Service who has a Termination of
Employment for a reason other than cause, either
(A) within 24 months of the
date on which his age combined with the sum of
his Benefit Service and his Accredited Service
at date of Termination of Employment would
equal 76, or
(B) within 24 months of the
date of his 55th birthday if his combined age
and the sum of his Benefit Service and his
Accredited Service on the date of his
Termination of Employment equal or exceed 76
on the date of his Termination of Employment
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shall be eligible for an Early
Retirement Pension with respect to his GTE Benefit
attributable to the GTE Telephone Operations
Salaried Plan computed under Section 1 of Article VI
of the Former Plan as in effect on the Closing Date
as of the last day of the month in which, if
subparagraph (A) applies, his age combined with his
previously accrued Benefit Service and Accredited
Service equal 76, or if subparagraph (B) applies, he
attains age 55. However, in no event shall a
Participant retiring under the provisions of the
preceding sentence accrue any additional Benefit
Service or Accredited Service for benefit
computation purposes for any period after his
Termination of Employment.
(ii) A Participant's Early Retirement
Pension with respect to his GTE Benefit attributable
to the GTE Telephone Operations Salaried Plan shall
be multiplied by the appropriate percentage as
indicated below:
Age at Pension
Commencement Date Percentage
Age 55 or Later 100%
Age 54 97%
Age 53 94%
Age 52 91%
Age 51 88%
Age 50 85%
Age 49 or Earlier 82%
In the case of a fractional part of a
year, the above percentages will be adjusted at the
rate of 1/4 of 1% for each full month by which the
Pension Commencement Date follows the first day of
the month after attainment of age 49 through age 54.
For the purpose of this calculation, the Pension
Commencement Date shall be deemed not to be earlier
than the first day of the month following the
Employee's 49th birthday.
(iii) The annual amount of a
Participant's Early Retirement Pension with respect
to his GTE Benefit attributable to the GTE Telephone
Operations
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Salaried Plan shall not be less than the
applicable amount according to the Participant's
years of Benefit Service and Accredited Service as
set forth below:
Years of
Benefit Service and
Accredited Service Amount
15 but less than 18 - $2,100
18 but less than 19 - 2,160
19 but less than 20 - 2,280
20 but less than 30 - 2,400
30 but less than 40 - 3,000
40 or more - 3,300
(iv) The normal Pension Commencement
Date of a Participant's GTE Benefit attributable to
the GTE Telephone Operations Salaried Plan shall be
the first day of the month following the
Participant's Normal Retirement Age. However, the
Participant may elect to have his GTE Benefit
attributable to the GTE Telephone Operations
Salaried Pension Plan commence as of the first day
of any month following his Retirement and preceding
his Normal Retirement Age, reduced in accordance
with paragraph (ii) of this Section 10.02S if the
Pension Commencement Date is prior to the
Participant's attaining the age of 55.
(v) The monthly pension of a Participant
with respect to his GTE Benefit attributable to the
GTE Telephone Operations Salaried Plan shall be
reduced by the monthly amount, if any, payable from
any Other Pension Plan.
(vi) If a Participant elects
commencement of his GTE Benefit attributable to the
GTE Telephone Operations Salaried Plan under this
subsection (c), the Participant's Accrued Pension
shall be calculated without regard to such GTE
Benefit.
(d) The provisions of this subsection (d) shall
apply with respect to that portion, if any, of a Par
ticipant's GTE Benefit attributable to the GTE South
Incorporated (Southeast) Plan for Hourly-Paid Employees'
Pensions.
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(i) A Participant whose combined (1) age
and (2) the sum of his Benefit Service and his
Accredited Service (such sum to be not less than 15
years) total 76 or more years, may elect to receive
an Early Retirement Pension with respect to his GTE
Benefit attributable to the GTE South Incorporated
(Southeast) Plan for Hourly-Paid Employees'
Pensions. The monthly Pension of a Participant
eligible for an Early Retirement Pension with
respect to his GTE Benefit attributable to the GTE
South Incorporated (Southeast) Plan for Hourly-Paid
Employees' Pensions shall be equal to his Accrued
Pension attributable to his GTE Benefit attributable
to the GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions. Credit for
fractional parts of a year, with respect to both age
and Benefit Service and Accredited Service in excess
of 15 years shall be recognized at the rate of 1/12
of a year for each full month.
(ii) A Participant's Early Retirement
Pension with respect to his GTE Benefit attributable
to the GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions shall be multiplied
by the appropriate percentage as indicated below:
Age at Pension
Commencement Date Percentage
Age 55 or Later 100%
Age 54 97%
Age 53 94%
Age 52 91%
Age 51 88%
Age 50 85%
Age 49 or Earlier 82%
Any Participant whose combined
Benefit Service and Accredited Service total 30 or
more years shall be entitled to an unreduced Pension
with respect to his GTE Benefit attributable to the
GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions.
In the case of a fractional part of a year, the above
percentages will be adjusted at the rate of 1/4 of
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1% for each full month by which the
Pension Commencement Date follows the first day of
the month after attainment of age 49 through age 54.
For the purpose of this calculation, the Pension
Commencement Date shall be deemed not to be earlier
than the first day of the month following the
Employee's 49th birthday.
(iii) The annual amount of a
Participant's Early Retirement Pension with respect
to his GTE Benefit attributable to the GTE South
Incorporated (Southeast) Plan for Hourly-Paid
Employees' Pensions shall not be less than the
applicable amount according to the Participant's
years of Benefit Service and Accredited Service as
set forth below:
Years of
Benefit Service and
Accredited Service Amount
15 but less than 20 - $2,700
20 but less than 25 - 2,820
25 but less than 30 - 3,000
30 but less than 35 - 3,600
35 but less than 40 - 4,500
40 or more - 5,400
(iv) The normal Pension Commencement
Date of a Participant's GTE Benefit attributable to
the GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions shall be the first
day of the month following the Participant's Normal
Retirement Age. However, the Participant may elect
to have his GTE Benefit attributable to the GTE
South Incorporated (Southeast) Plan for Hourly-Paid
Employees' Pensions commence as of the first day of
any month following his Retirement and preceding his
Normal Retirement Age, reduced in accordance with
paragraph (ii) of this Section 10.02S if the Pension
Commencement Date is prior to the Participant's
attaining the age of 55 and he does not have 30 or
more years of combined Benefit Service and
Accredited Service.
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(v) The monthly pension of a Participant
with respect to his GTE Benefit attributable to the
GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions shall be reduced by
the monthly amount, if any, payable from any Other
Pension Plan.
(vi) If a Participant elects
commencement of his GTE Benefit attributable to the
GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions under this
subsection (d), the Participant's Accrued Pension
shall be calculated without regard to such GTE
Benefit.
Q. Section 10.03 is modified as follows:
10.03S Disability Retirement Pension
(a) A Participant who has 15 or more years of
combined Benefit Service and Accredited Service who
becomes Disabled prior to age 65 shall be entitled to a
Disability Retirement Pension with respect to his GTE
Benefit until the earlier of (1) the earlier of (i) the
death of such retired Participant or (ii) the retired
Participant's recovery from his Total and Permanent
Disability, or (2) the retired Participant begins to
receive an Early Retirement Pension or Normal Retirement
Pension; provided that, with respect to benefits
attributable to the GTE Telephone Operations Salaried
Pension Plan, he is receiving benefits under the Social
Security Act. The monthly Pension of a Participant
eligible for a Disability Retirement Pension with respect
to his GTE Benefit shall be equal to his Accrued Pension
attributable to his GTE Benefit. If the Participant is
otherwise eligible to commence a retirement benefit under
this Appendix S to Section 13.19, he may elect to have
such Disability Retirement Pension commence as of the
first of any month preceding his Normal Retirement Age
without reduction for such early commencement.
(b) The monthly disability pension of a Participant
attributable to his GTE Benefit shall be reduced by the
monthly amount, if any, payable from any
Other Pension Plan.
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R. Section 10.04 is modified as follows:
10.04S Deferred Vested Pension Upon Termination of
Employment
(g) (i) A former Participant who has at least
5 years of Vesting Service but who is not eligible
for a Normal Retirement Pension, an Early Retirement
Pension, or a Disability Pension shall be entitled
to a Deferred Vested Pension with respect to his GTE
Benefit. The monthly Pension of a former Participant
eligible for a Deferred Vested Pension with respect
to his GTE Benefit shall be equal to his Accrued
Pension attributable to his GTE Benefit. Such
Deferred Vested Pension of a former Participant who
does not meet the age and service conditions in
paragraph (ii) or (iii) below shall commence on the
first day of the month next following his Normal
Retirement Age.
(ii) A former Participant who has
completed ten (10) years of combined Benefit Service
and Accredited Service may elect to have a Deferred
Vested Pension with respect to his GTE Benefit
commence on or after the first day of the month
after the date he attains age fifty-five (55),
calculated as of the early commencement date and
reduced by the appropriate factor set forth in Table
I - Early Commencement Factors for Deferred Vested
Pensions.
(iii) A former Participant who has
completed fifteen (15) or more years of combined
Benefit Service and Accredited Service may elect to
have a Deferred Vested Pension attributable to his
GTE Benefit commence on or after the first day of
the month after his combined age and Benefit Service
and Accredited Service equal 76, calculated as of
the early commencement date and reduced by the
appropriate factor set forth in Table 1 - Early
Commencement Factors for Deferred Vested Pensions.
Credit for fractional parts of a year, with respect
to both age and Benefit Service and Accredited
Service in excess of 15 years shall be recognized at
the rate of 1/12 of a year for each full month. The
minimum pension described in Section 1(c) of Article
VI of the Former Plan shall
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be based on the Benefit Service and
Accredited Service the Participant would have had at
his Normal Retirement Age (if he had accrued a year
of Benefit Service or Accredited Service in each
subsequent year until his Normal Retirement Age),
multiplied by the ratio of the Participant's actual
Vesting Service to the Vesting Service he would have
had at his Normal Retirement Age, if he had not had
a Termination of Employment.
(iv) If a Participant elects
commencement of his GTE Benefit under this Section
10.04S, the Participant's Accrued Pension shall be
calculated without regard to his GTE Benefit.
(h) If a former Participant is not eligible to
commence his GTE Benefit prior to his Normal Retirement
Age in accordance with subsections (g)(ii) or (g)(iii)
above and he has not elected to waive Preretirement
Survivor Annuity coverage, the amount of his Deferred
Vested Pension with respect to his GTE Benefit commencing
at his Normal Retirement Age shall be reduced in
accordance with the charges set forth below for each full
month that Preretirement Survivor Annuity coverage was in
effect during the period beginning on the date of his
Termination of Employment and ending on the date that the
earliest of the following occurs: (i) his reemployment by
the Employer or a member of the Controlled Group, (ii) the
death of his Spouse, (iii) the entry of a final divorce
decree dissolving the former Participant's marriage unless
coverage is required pursuant to a qualified domestic
relations order, (iv) commencement of the former
Participant's GTE Benefit, (v) the former Participant's
death, or (vi) the waiver of Preretirement Survivor
Annuity coverage as provided in paragraph (i) below.
For Each Year of Coverage The Reduction in the
in Effect After the Participant's Pension
Participant's Termination Accrued to his Termination
of Employment . . . . . . of Employment Shall be . . .
Prior to age 40 0.1%
From age 40 through 49 0.2%
From age 50 through 54 0.3%
From age 55 to commencement 0.5%
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(i) At any time during the period beginning 90 days
before the date as of which a Participant has a
Termination of Employment and ending on the earliest to
occur of the date he is reemployed by the Company or a
member of the Controlled Group, his Pension Commencement
Date with respect to his GTE Benefit, or his date of
death, a Participant who is not eligible to commence his
GTE Benefit prior to his Normal Retirement Age in
accordance with paragraph (g)(ii) or (g)(iii) of this
Section 10.04S may elect to waive, or revoke the election
to waive, Preretirement Survivor Annuity coverage with
respect to his GTE Benefit. Such election or revocation
shall be subject to the following terms and conditions:
(1) Any election or revocation shall be
made by giving written notice in such form and
manner as may be required by the Plan Administrator.
(2) An election or revocation shall be
ineffective unless the Participant's Spouse consents
in writing to such election or revocation. The
Spouse's consent must acknowledge the effect of such
election and must be witnessed by a notary public or
authorized plan representative. Any consent by a
Spouse shall be irrevocable unless the Participant
agrees to a revocation.
(3) Paragraph (i)(2) of this Section
10.04S shall not apply if the Plan Administrator
determines that the consent required therein cannot
be obtained because there is no Spouse, because the
Spouse cannot be located, or because of such other
circumstances as are specified in regulations
promulgated under Section 417 of the Code.
(4) Any consent by a Spouse pursuant to
paragraph (i)(2) of this Section 10.04S shall be
effective only with respect to that Spouse.
Similarly, any establishment that the consent of a
Spouse cannot be obtained for any of the reasons
described in paragraph (i)(3) of this Section 10.04S
shall be effective only with respect to that Spouse.
Preretirement Survivor Annuity coverage shall be
automatic and without charge while a Participant is
employed by the Company or a member of the
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Controlled Group, and a Participant's
waiver of Preretirement Survivor Annuity coverage
shall be ineffective during any period of employment
by the Company or a member of the Controlled Group,
except to the extent that such coverage is waived in
accordance with paragraph (g) of Section 11.05S of
this Appendix S during the 90-day period ending on
the Participant's Pension Commencement Date with
respect to his GTE Benefit.
(j) The Plan Administrator shall provide to each
Participant eligible to waive Preretirement Survivor
Annuity coverage pursuant to paragraph (i) of this Section
10.04S during a reasonable period ending on the date on
which he has a Termination of Employment, a written
explanation of:
(1) the terms and conditions of the
Preretirement Survivor Annuity;
(2) the Participant's right to elect,
and the effect of electing, to waive Preretirement
Survivor Annuity coverage with respect to his GTE
Benefit;
(3) the rights of a married
Participant's Spouse with respect to that election;
and
(4) the right of the Participant to
revoke, and the effect of revoking, an election to
waive Preretirement Survivor Annuity Pension
coverage.
The Plan Administrator shall also
provide to each Participant eligible to waive
Preretirement Survivor Annuity Pension coverage
pursuant to paragraph (g) of Section 11.05S of this
Appendix S with the written explanation described in
this paragraph (j). The Plan Administrator shall
provide such written explanation at the same time as
it provides the written explanation described in
Section 11.04.
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<PAGE>
(k) The monthly pension of a Participant
attributable to his GTE Benefit shall be reduced by
the monthly amount, if any, payable from any Other
Pension Plan.
S. Section 10.05 is modified as follows:
Section 10.05S Maximum Limitation on Pensions
(l) For purposes of subsection (j)
above, the Defined Contribution Plan Fraction shall
be limited only for Limitation Years beginning after
the Closing Date and prior to January 1, 1995, and
any adjustment in the Defined Benefit Plan Fraction
required as a result thereof shall be made.
T. Section 11.05 is modified as follows:
11.05S Optional Forms of Pension
(g) A Participant shall receive his GTE Benefit in
the normal form of payment provided in Section 11.01(b),
reduced in accordance with Table II - Joint and Survivor
Factors if he is married. The provisions of subsection (c)
of Section 11.04 shall not apply with respect to a
Participant's GTE Benefit.
A Participant may waive the normal form of
payment applicable to him and elect one of the following
optional forms of payment with respect only to his GTE
Benefit, provided that he is
eligible therefor.
(1) A reduced level Pension payable for
the life of the Participant, and continuing
thereafter in an amount equal to 100%, 66-2/3%, 50%,
or 33-1/3%, as elected by the Participant, for the
life of the Participant's Spouse or other designated
Benefi ciary, reduced in accordance with Table II -
Joint and Survivor Factors.
(2) An annuity that is the actuarial
equivalent of the Participant's GTE Benefit in the
form of a single life annuity and that provides
equal monthly payments for the life of the
Participant, with the condition that if the
Participant dies before he has received 60 monthly
payments, the Participant's designated
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<PAGE>
Beneficiary shall receive monthly
payments in the same amount as the Participant until
a total of 60 monthly payments have been made to the
Participant and his Beneficiary combined. Actuarial
equivalence shall be determined in accordance with
Table IV - Factors for Five- Year Certain and Life
Option.
(3) A lump sum distribution, with
respect to his GTE Benefit attributable to the GTE
Telephone Operations Salaried Pension Plan, if any,
but only if the Participant is eligible for a
Normal, Early, or Deferred Vested Retirement
Pension. The amount of any such lump sum
distribution shall be the actuarial equivalent of
the present value of the Participant's GTE Benefit
attributable to the GTE Telephone Operations
Salaried Pension Plan otherwise payable in the form
of a single life annuity as of the date the Pension
attributable to such GTE Benefit attributable to the
GTE Telephone Operations Salaried Pension Plan would
otherwise commence. Actuarial equivalence shall be
determined in accordance with Table V -
Determination of Actuarial Equivalence of Lump Sum
Distribution (Other Than Small Pensions) and Lump
Sum Factors. Notwithstanding anything to the
contrary in Article XI, the payment of a GTE Benefit
attributable to the GTE Telephone Operations
Salaried Pension Plan in the form of a lump sum
distribution shall be in one taxable year of the
recipient and shall be made on or as soon as
practicable after a Participant's Pension
Commencement Date. Elections to receive lump sum
distributions must be submitted in writing to the
Plan Administrator not later than 90 days prior to
the Participant's Pension Commencement Date.
Notwithstand ing, the Plan Administrator, on the
basis of uniform and non-discriminatory rules, may
waive the 90-day requirement for good cause shown.
A Participant who waives the normal
form of payment applicable to him may also waive the
Preretirement Survivor Annuity coverage, if any,
with respect to the GTE Benefit for which he is
eligible, under the following terms and conditions:
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<PAGE>
At any time during the period
beginning 90 days prior to the date as of which a
Partici pant has a Termination of Employment, his
GTE Benefit com mences, or his date of death, a
Participant may elect to waive, or revoke an
election to waive, Preretirement Survivor Annuity
coverage with respect to his GTE Benefit. Such
election or revocation may be made only under the
conditions described in Section 11.04 with respect
to waiver of the automatic Qualified Joint and
Survivor Annuity.
If a Participant dies before his
Pension Commencement Date, after having made (and
not revoked) a valid election of an optional form of
payment available under this Section 11.05S (other
than a lump sum payment) and (in the case of a
married Participant) a valid waiver of the
Preretirement Survivor Annuity coverage with respect
to his GTE Benefit, leaving a designated Beneficiary
surviving him, the designated Beneficiary shall be
eligible to receive benefits under the form of
payment the Participant elected with respect to his
GTE Benefit as if the Participant had died on the
date following his Pension Commencement Date. If a
Participant dies before his Pension Commencement
Date, after having made (and not revoked) a valid
election of a lump sum payment under this Section
11.05S with respect to his GTE Benefit attributable
to the GTE Telephone Operations Salaried Pension
Plan and (in the case of a married Participant) a
valid waiver of the Preretirement Survivor Annuity
coverage with respect to his GTE Benefit
attributable to the GTE Telephone Operations
Salaried Pension Plan, the lump sum payment shall be
paid to the Participant's estate.
Notwithstanding the foregoing, a
Participant whose GTE Benefit commences as of the
same time as his Accrued Pension (other than his GTE
Benefit) may elect to receive his entire benefit in
any form permitted and under the conditions and
actuarial equivalence provisions of the Plan (other
than this Appendix S).
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U. Section 11.06 is modified as follows:
11.06S Payment of Small Pensions
If the present value of a former Participant's Accrued
Benefit does not exceed $3,500 (and did not exceed $3,500 at the
time of any prior distribution), determined as of any date after
his Termination of Employment and on or before his Pension
Commencement Date, the former Participant shall receive a lump
sum payment of such present value. The portion of such lump sum
payment attributable to his GTE Benefit shall be the amount
determined by multiplying the Pension
(i) by the appropriate actuarial factor indicated in
Table I - Early Commencement Factors for Deferred Vested
Pensions (but only if the Pension is a Deferred Vested
Pension or is a Pre- Retirement Survivor Annuity that is
subject to reduction under Table I in accordance with
paragraph (g) of Section 12.01S) and then
(ii) by the appropriate actuarial factor indicated
in Table III - Factors for Small Pensions.
V. Section 11.10 is modified as follows:
11.10S Limitations on Distributions
(g) The provisions of this Section 11.10 shall not
apply with respect to a Participant's GTE Benefit to any
method of distribution designated in writing by a
Participant under the terms of the Former Plan before
January 1, 1984, in accordance with Section 242(b)(2) of
the Tax Equity and Fiscal Responsibility Act of 1982 (as
in effect before the amendments made by the Tax Reform Act
of 1984).
W. Section 11.09 is modified as follows:
11.09S Suspension of Benefits Upon Reemployment.
(a) Retirement benefits in pay status other than
those attributable to the Participant's GTE Benefit, will
be suspended for each calendar month during which the
Participant completes at least forty (40) Hours of Service
with the Employer or receives payment for Hours of Service
performed on each of eight (8) or more days in "Section
203(a)(3)(B) Service" as defined in Department of
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Labor Regulations Section 2530.203-3(c). If
the Participant has received any Pension payment or
distributions in lieu of a Pension under the Plan, the
Pension payable upon his subsequent Retirement shall be
reduced by the Actuarial Equivalent of any such payments
or distributions he had received prior to his Normal
Retirement Age, other than Disability Pension payments.
(b) With respect to retirement benefits in pay
status that are attributable to the Participant's GTE
Benefit, such retirement benefits will be suspended in
accordance with Section 3 of Article VI of Appendix T to
this Section 13.19.
X. Section 12.01 is modified as follows:
12.01S Death Prior to Pension Commencement
(e) If a Participant dies before his Pension
Commencement Date without having made a valid election of
an optional form of payment with respect to his GTE
Benefit, no individual shall have a right to any payment
under the Plan with respect to the Participant (unless the
Participant is survived by a Spouse who is entitled to a
Qualified Preretirement Survivor Annuity with respect to
his GTE Benefit).
(f) If the designated Beneficiary with respect to a
joint and survivor annuity described in subsection (g)(1)
of Section 11.05S dies before a Participant's Pension
Commencement Date with respect to his GTE Benefit, the
election, including any election pursuant to Section
11.05S to waive Preretirement Surviving Spouse Pension
coverage with respect to his GTE Benefit shall be void,
and the Participant shall be deemed not to have previously
elected such an annuity. If the designated Beneficiary
with respect to such a joint and survivor annuity dies
before the Participant, but after the Pension Commencement
Date with respect to his GTE Benefit, the amount of the
Pension thereafter payable to the Participant shall not be
affected in any way as a result thereof.
(g) The normal Pension Commencement Date of a
Qualified Preretirement Survivor Annuity shall be the
first day of the month next following the later of the
deceased Participant's Normal Retirement Age or the date
of his death. However, (i) if the deceased Participant
died while in the service of
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any member of the Controlled Group after he
had at least 5 years of Vesting Service or (ii) if the
deceased Participant had at least 15 years of combined
Benefit Service and Accredited Service, his surviving
Spouse may elect to commence a Qualified Preretirement
Survivor Annuity with respect to the Participant's GTE
Benefit at any time prior to the date the deceased
Participant would have attained his Normal Retirement Age,
provided that with respect to the Spouse of a Participant
described in (ii) of this paragraph (g) not earlier than
the earliest date on which the deceased Participant could
have elected to receive a retirement pension if he had not
died and had earned no additional Benefit Service or
Accredited Service under the Plan. The provisions of
subsection (c) of Section 12.01 shall not apply with
respect to a Participant's GTE Benefit.
(h) If a Spouse elects, in accordance with paragraph
(g) of this Section 12.01S, to have the Qualified
Preretirement Survivor Annuity with respect to the
deceased Participant's GTE Benefit attributable to the GTE
Telephone Operations Salaried Pension Plan commence as of
a date preceding the deceased Participant's Normal
Retirement Age, the amount of such Qualified Preretirement
Survivor Annuity shall not be reduced if the Participant
died in the service of any member of the Controlled Group
after he had at least 5 years of Vesting Service or had
met the age and Benefit Service and Accredited Service
requirements of Section 10.02S; otherwise, the Qualified
Preretirement Survivor Annuity with respect to the
Participant's GTE Benefit attributable to the GTE
Telephone Operations Salaried Pension Plan shall be
reduced for early commencement in accordance with the
appropriate factor in Table I - Early Commencement Factors
for Deferred Vested Benefits, except that the factor shall
be 100% in the case of a Disability Retirement with
respect to the Participant's GTE Benefit attributable to
the GTE Telephone Operations Salaried Pension Plan.
(i) If a Spouse elects, in accordance with paragraph
(g) of this Section 12.01S, to have the Qualified
Preretirement Survivor Annuity with respect to the
deceased Participant's GTE Benefit attributable to the GTE
South Incorporated (Southeast) Plan for Hourly-Paid
Employees' Pensions commence as of a date preceding the
deceased Participant's Normal Retirement Date, the amount
of such Qualified Preretirement Survivor Annuity (1) shall
not be
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reduced if the Participant died in the service
of any member of the Controlled Group after he had at
least 5 years of Vesting Service, (2) shall be reduced in
accordance with subparagraph (ii) of paragraph (e) of this
Section 10.02S if the deceased Participant had met the age
and service requirements for an Early Retirement Pension
with respect to his GTE Benefit attributable to the GTE
South Incorporated (Southeast) Plan for Hourly-Paid
Employees' Pensions specified in subparagraph (i) of
paragraph (d) of this Section 10.02S at the time of his
Termination of Employment, and (3) otherwise shall be
reduced for early commencement in accordance with the
appropriate factor in Table I - Early Commencement Factors
for Deferred Vested Benefits, except that the factor shall
be 100% in the case of a Disability Retirement with
respect to the Participant's GTE Benefit attributable to
the GTE South Incorporated (Southeast) Plan for Hourly-
Paid Employees' Pensions.
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ATTACHMENT I
TO
APPENDIX S
CONTEL PROVISIONS
WITNESSETH THAT WHEREAS, effective March 14, 1991, pursuant to the Merger
Agreement and Plan of Reorganization Dated as of August 7, 1990 By and Among GTE
Corporation, GTE Exchange Corporation and Contel Corporation (the "Merger
Agreement"), GTE Exchange Corporation, a wholly-owned subsidiary of GTE
Corporation ("GTE"), merged with and into Contel Corporation ("Contel"), and
Contel, as the surviving corporation, became a wholly-owned subsidiary of GTE;
WHEREAS, GTE now wishes (i) to transfer certain salaried employees who as of
June 30, 1992, are active participants in the Contel Plan (the "Contel Salaried
Employees") to certain tax-qualified defined benefit plans that are maintained
by GTE and/or its subsidiaries and their affiliates and that provide pension
benefits to similarly situated employees of GTE and its subsidiaries, (ii) to
provide for the transfer of the benefits accrued under the Contel Plan as of
June 30, 1992, by the Contel Salaried Employees and by certain participants in
the GTE plans who are former participants in the Contel Plan to the appropriate
GTE plans, and (iii) to provide for the transfer of assets from the Contel Plan
to the appropriate GTE plans in amounts that are at least sufficient to satisfy
the applicable asset allocation requirements of Section 414(l) of the Internal
Revenue Code of 1986, as amended (the "Code");
WHEREAS, GTE Service Corporation wishes to amend the GTE Telephone Operations
Salaried Pension Plan (the "GTE Salaried Plan"), effective July 1, 1992, to
permit certain Contel Salaried Employees to participate in the GTE Salaried Plan
and to permit the transfer into the GTE Salaried Plan and its related trust of
those Contel Salaried Employees' accrued benefits under the Contel Plan as of
June 30, 1992, and the related assets; and
WHEREAS, under the terms of the GTE Salaried Plan, the Board of Directors of GTE
Service Corporation has the authority to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of GTE Service
Corporation hereby amends the GTE Salaried Plan to provide as follows:
1. Effective July 1, 1992, the Contel Salaried Employees who are
identified in Part II of Exhibit 1 to these resolutions (the
"Current Contel Employees") shall be eligible to participate in
the GTE Salaried Plan as of
July 1, 1992.
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2. For purposes of these resolutions, the following words and
phrases shall have the meanings set forth below:
a. "Contel Participant" shall mean a Current Contel
Employee or an Individual Transferee.
b. "Contel Plan" shall mean the Contel System
Pension Plan, as in effect on June 30, 1992, except where
a different effective date is specified in these
resolutions.
c. "Contel Service" shall mean a Contel
Participant's period of service as of his Transfer Date,
that is recognized for benefit accrual purposes under the
terms of the Contel Plan.
d. "Contel Service Benefit" shall mean a Contel
Participant's accrued benefit determined as of his
Transfer Date, in accordance with Sections 1.1 and 14.2 of
the Contel Plan in effect on that date.
e. "GTE Benefit" shall mean (i) in the case of a
Contel Participant whose normal retirement benefit is
calculated under Paragraph 4.a., below, the Contel
Participant's GTE Service Benefit; and (ii) in the case of
a Contel Participant whose normal retirement benefit is
calculated under Paragraph 4.b., below, the difference
between the Contel Participant's Total Service Benefit and
his Contel Service Benefit.
f. "GTE Compensation" shall mean a Contel
Participant's compensation determined under the definition
of compensation set forth in the GTE Salaried Plan that is
used to determine a participant's benefits thereunder. GTE
Compensation shall include the remuneration that the
Contel Participant received on or before his Transfer Date
from Contel or from another company participating in the
Contel Plan, but only to the extent that such remuneration
is of a type that is recognized and taken into account
under the GTE Salaried Plan's definition of compensation.
g. "GTE Service" shall mean the Contel Participant's
period of service after his Transfer Date that is
recognized under the terms of the GTE Salaried Plan for
benefit accrual purposes.
h. "GTE Service Benefit" shall mean a Contel
Participant's accrued benefit determined under the GTE
Salaried Plan's
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benefit formula and based on the Contel
Participant's GTE Service and GTE Compensation.
i. "Individual Transferee" shall mean a person who
(i) is a Classified Employee (as defined in Section 7.9(b)
of the Merger Agreement), (ii) became a participant in the
GTE Salaried Plan before July 1, 1992, (iii) transferred
from a Contel business unit to a GTE business unit before
July 1, 1992, (iv) was a participant in the Contel Plan
before he transferred to a GTE business unit, (v) ceased
accruing a benefit under the Contel Plan as of the date he
transferred to a GTE business unit, and (vi) is an active
employee as of June 30, 1992 and has not commenced
receiving benefits under either the Contel Plan or the GTE
Salaried Plan as of June 30, 1992.
j. "Total Service Benefit" shall mean a Contel
Participant's accrued benefit determined solely under the
GTE Salaried Plan's benefit formula based on the Contel
Participant's Contel Service and GTE Service and his GTE
Compensation.
k. "Transfer Date" shall mean (i) with respect to a
Current Contel Employee, June 30, 1992, and (ii) with
respect to an Individual Transferee, the date on which he
ceased accruing benefits under the Contel Plan.
3. For purposes of determining vesting and benefit eligibility
(including eligibility for early retirement benefits, disability
benefits, and other benefits), the GTE Salaried Plan shall
recognize the period of service with which a Contel Participant
is credited as of June 30, 1992, for vesting and benefit
eligibility purposes under the terms of the Contel Plan.
4. The normal retirement benefit under the GTE Salaried Plan of
a Contel Participant shall be equal to the greater of the
following:
a. The sum of the Contel Participant's Contel
Service Benefit and GTE Service Benefit; or
b. The Contel Participant's Total Service Benefit.
5. The early retirement benefits, optional forms of benefit, and
ancillary benefits that are available under the Contel Plan,
shall be available under the GTE Salaried Plan to Contel
Participants subject to the following conditions:
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a. Early Retirement Benefits:
(1) A Contel Participant who, as of July
1, 1992, has satisfied the requirements for an early
retirement benefit under Section 4.3 of the Contel
Plan shall be eligible to receive an early
retirement benefit subject to the following
conditions:
(a) if the Contel Participant's
benefit is determined under Paragraph 4.a.,
above, his Contel Service Benefit shall be
reduced in accordance with the Contel Plan's
early retirement reduction factors, and his
GTE Service Benefit shall not be reduced to
reflect commencement before his normal
retirement date; and
(b) if the Contel Participant's
benefit is determined under Paragraph 4.b.,
above, his Total Service Benefit shall not be
reduced to reflect commencement before his
normal retirement date.
(2) A Contel Participant who, after July
1, 1992, satisfies the requirements for an early
retirement benefit under Section 4.3 of the Contel
Plan, but who does not satisfy the requirements for
an early retirement benefit under the GTE Salaried
Plan, shall be eligible to receive an early
retirement benefit subject to the following
conditions.
(a) if the Contel Participant's
benefit is determined under Paragraph 4.a.,
above, his Contel Service Benefit shall be
reduced in accordance with the Contel Plan's
early retirement reduction factors, and his
GTE Service Benefit shall be actuarially
reduced from his normal retirement date (using
the GTE Salaried Plan's early commencement
factors that are applicable to deferred vested
pensions); and
(b) if the Contel Participant's
benefit is determined under Paragraph 4.b.,
above, his Total Service Benefit shall be
actuarially reduced from his normal
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retirement date (using the GTE Salaried Plan's
early commencement factors that are applicable
to deferred vested pensions).
(3) A Contel Participant who, either
before or after July 1, 1992, satisfies the
requirements for an early retirement benefit under
the GTE Salaried Plan shall be eligible to receive
an early retirement benefit pursuant to the terms of
the GTE Salaried Plan, regardless of whether he has
satisfied the requirements for an early retirement
benefit under Section 4.3 of the Contel Plan,
subject to the following conditions:
(a) if the Contel Participant's
benefit is determined under Paragraph 4.a.,
above, his Contel Service Benefit shall be
reduced in accordance with the Contel Plan's
early retirement reduction factors, and his
GTE Service Benefit shall be reduced in
accordance with the GTE Salaried Plan's early
retirement reduction factors; and
(b) if the Contel Participant's
benefit is determined under Paragraph 4.b.,
above, his Total Service Benefit shall be
reduced in accordance with the GTE Salaried
Plan's early retirement reduction factors.
b. Deferred Vested Benefits
(1) If a Contel Participant terminates
from service with a nonforfeitable right to a
benefit under Article 6 of the Contel Plan, he may
elect to begin receiving his benefit under the GTE
Salaried Plan as of any date provided under Article
6 of the Contel Plan, or, if earlier, as of any date
provided under the terms of the GTE Salaried Plan.
(2) If a Contel Participant elects to
receive his benefit as provided in Paragraph
5.b.(1), above, his entire benefit shall be reduced
in accordance with the GTE Salaried Plan's early
commencement factors that are applicable to deferred
vested pensions. However, in no event shall the
amount of a Contel
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Participant's benefit determined as
provided in the preceding sentence be less than the
amount of his Contel Service Benefit reduced in
accordance with the Contel Plan's early commencement
factors that are applicable to deferred vested
pensions.
c. Optional Forms of Payment
(1) If a Contel Participant satisfies
(either before or after July 1, 1992) the
requirements for an optional form of benefit under
the Contel Plan (other than any optional forms of
benefit that are available solely with respect to a
Transitional Benefit or Special Minimum Benefit
under Articles 14 and 15 of the Contel Plan), the
Contel Participant may elect to receive his entire
benefit in any optional form of benefit provided
under the Contel Plan (including, but not limited
to, a life and 5-year certain annuity, and the
various qualified joint and survivor annuities
available under Section 4.6B. of the Contel Plan),
subject to the conditions specified in subparagraph
(2), below. If a Contel Participant satisfies
(either before or after July 1, 1992) the
requirements for an optional form of benefit under
the GTE Salaried Plan, the Contel Participant may
elect to receive his entire benefit in any optional
form of benefit provided under the GTE Salaried Plan
(including, but not limited to, a lump sum payment).
Except as provided in Paragraph 6.c., below, with
respect to certain grandfathered benefits, a Contel
Participant's election of an optional form shall be
applicable to his entire benefit.
(2) If a Contel Participant elects to
receive his benefit in a form that is available
under both the Contel Plan and the GTE Salaried Plan
(including a lump sum payment of a vested accrued
benefit whose value is $3,500 or less), his benefit
shall be determined as follows:
(a) if the Contel Participant's
benefit is determined under Paragraph 4.a.,
above, the Contel Participant's Contel
Service Benefit payable in the form provided
in Section 4.6.A. of the Contel Plan shall be
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converted to an actuarially
equivalent single life annuity ("Converted
Contel Service Benefit"), and then the
actuarial factors or assumptions that are
applicable to the form elected as provided
under the terms of the GTE Salaried Plan
shall be applied to the Contel Participant's
Converted Contel Service Benefit and GTE
Service Benefit; and
(b) if the Contel Participant's
benefit under the GTE Salaried Plan is
determined under Paragraph 4.b., above, the
actuarial factors or assumptions that are
applicable to the form elected as provided
under the terms of the GTE Salaried Plan shall
be applied to the Contel Participant's entire
benefit.
However, in no event shall
the amount of a Contel Participant's benefit
determined as provided in subparagraph (a) or
(b), above, be less than the amount of the
Contel Participant's Contel Service Benefit
payable in the same form and determined on the
basis of the actuarial factors and assumptions
that are applicable to the form elected as
provided under the terms of the Contel Plan.
(3) If a Contel Participant elects to
receive his benefit in a form that is available
solely under the GTE Salaried Plan, the actuarial
factors or assumptions that are applicable to the
form elected as provided under the terms of the Plan
shall be applied to the Contel Participant's entire
benefit.
(d) Ancillary Benefits: Except as provided in
Paragraph 6.a., below, with respect to certain
grandfathered benefits, a Contel Participant shall not be
eligible under the GTE Salaried Plan to receive any
ancillary benefit (including, but not limited to any
disability benefit not in excess of a "qualified
disability benefit" under Section 411(a)(9) of the Code
and any pre-retirement or post-retirement death benefit)
that is available under the Contel Plan and that is a part
of the Contel Participant's Contel Service Benefit. A
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Contel Participant's entitlement to any ancillary
benefit under the GTE Salaried Plan shall be determined
solely by the terms of the GTE Salaried Plan with respect
to the Contel Participant's entire accrued benefit. The
terms of the GTE Salaried Plan shall determine the type,
amount, duration, and other characteristics of each
ancillary benefit that is payable to a Contel Participant.
6. Provisions Applicable to Certain
Grandfathered Benefits:
a. A Contel Participant shall be
eligible under the GTE Salaried Plan to receive any
ancillary benefit that is part of a Transitional
Benefit or Special Minimum Benefit provided under
Articles 14 and 15 of the Contel Plan, including,
but not limited to, the Special Surviving Spouse
Benefit that is provided for in Section 14.5 of the
Contel Plan, but only with respect to the Contel
Participant's Transitional Benefit or Special
Minimum Benefit that has accrued as of June 30,
1992.
b. If a Contel Participant satisfied the
requirements under Article 14 or 15 of the Contel
Plan for commencement of benefits before his normal
retirement date, he may elect to receive his Contel
Service Benefit pursuant to the terms of Article 14
or 15 of the Contel Plan. If a Contel Participant
elects to begin receiving his Contel Service Benefit
under Article 14 or 15 of the Contel Plan before he
is otherwise eligible to receive his GTE Benefit,
the Contel Participant shall begin receiving his GTE
Benefit on the earliest date under the GTE Salaried
Plan on which a Contel Participant may begin
receiving a benefit.
c. If a Contel Participant satisfies the
requirements applicable to any optional forms of
benefit that are available solely with respect to a
Transitional Benefit or Special Minimum Benefit
under Article 14 or 15 of the Contel Plan, the
Contel Participant may elect to receive his Contel
Service Benefit in any such forms. If a Contel
Participant elects to receive his Contel Service
Benefit pursuant to this Paragraph 6.c. in a form
that includes a survivor annuity, the Contel
Participant's GTE Benefit shall be payable under the
GTE
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Salaried Plan's automatic qualified
joint and survivor annuity, with the same person
receiving the survivor annuity under the Contel
Service Benefit and the GTE Benefit. If a Contel
Participant elects to receive his Contel Service
Benefit pursuant to this Paragraph 6.c. in a form
that does not provide a survivor annuity, the Contel
Participant's GTE Benefit shall be payable as a
straight life annuity.
7. Provisions Applicable to All Participants in
the GTE Salaried Plan:
Effective July 1, 1992, all pre-March 14, 1991
GTE pension plan or Contel System Pension Plan Vesting,
Credited or Accredited Service of current participants in
the Plan that has not already been taken into account
under the terms of the GTE Salaried Plan will be
considered to be Vesting Service or Accredited Service, as
the case may be, for all purposes under the terms of the
GTE Salaried Plan, including vesting, eligibility and
benefit computation purposes.
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EXHIBIT 1
TO
ATTACHMENT I
TO
APPENDIX S
PART I: Contel Cellular Employees Participating in the Contel System
Pension Plan on December 31, 1991.
Employees Transferred to the GTE Service Corporation Plan for Employees'Pensions
PART II: Telops Employees Participating in the Contel System Pension Plan
on June 30, 1992.
Employees Transferred to the GTE Telephone Operations Salaried Pension Plan
PART III: Contel Employees Participating in the Contel Retirement Savings
Plan on December 31, 1991
Section A - Employees Transferred to the GTE Service Corporation Plan for
Employees' Pensions
Section B - Employees Transferred to the GTE Government Systems Pension Plan for
Salaried Employees
PART IV: Former Contel Plan Participants Who Transferred to a GTE
Business Unit
Section A - Transferred Employees Participating in the GTE Service Corporation
Plan for Employees' Pensions
Section B - Transferred Employees Participating in the GTE Telephone Operations
Salaried Pension Plan
Section C - Transferred Employees Participating in the GTE Government Systems
Corporation Pension Plan for Salaried Employees
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ATTACHMENT II
To
APPENDIX S
CONTEL PROVISIONS
RESOLVED: That effective February 1, 1993 (except as otherwise provided), the
GTE South Incorporated (Southeast) Plan for Hourly-Paid Employees' Pensions (the
"Southeast Plan") is amended conditional upon the receipt of a favorable
determination letter from the Internal Revenue Service that the Southeast Plan
continues to be qualified under section 401(a) of the Internal Revenue Code, as
follows:
1. For purposes of these resolutions, the following words and
phrases shall have the meanings set forth below:
a. "Contel Affiliate" shall mean Contel of Virginia,
Inc. (d/b/a GTE Virginia), Contel of West Virginia, Inc.
(d/b/a GTE West Virginia), Contel of the South, Inc.
(d/b/a GTE Systems of the South), Contel of North
Carolina, Inc. (d/b/a GTE North Carolina), and Contel of
South Carolina, Inc. (d/b/a GTE South Carolina).
b. "Contel Participant" shall mean (i) an
hourly-paid employee of a Contel Affiliate who, on
February 1, 1993, is an "Employee" within the meaning of
Section 15 of Article II of the Southeast Plan or (ii) an
Individual Transferee.
c. "Contel Plan" shall mean the Contel System
Pension Plan, as in effect on January 31, 1993, except
where a different effective date is specified in these
resolutions.
d. "Contel Service" shall mean a Contel
Participant's period of service as of his Transfer Date
that is recognized for benefit accrual purposes under the
terms of the Contel Plan in effect on that date.
e. "Contel Service Benefit" shall mean a Contel
Participant's accrued benefit determined as of his
Transfer Date in accordance with Sections 1.1 and 14.2 of
the Contel Plan in effect on that date.
f. "GTE Benefit" shall mean (i) in the case of a
Contel Participant whose normal retirement benefit is
calculated under Paragraph 3.a., below, the Contel
Participant's GTE
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Service Benefit; and (ii) in the case of a
Contel Participant whose normal retirement benefit is
calculated under Paragraph 3.b., below, the difference
between the Contel Participant's Total Service Benefit and
his Contel Service Benefit.
g. "GTE Compensation" shall mean a Contel
Participant's compensation determined under the definition
of compensation set forth in the Southeast Plan that is
used to determine a participant's benefits thereunder. GTE
Compensation shall include the remuneration that the
Contel Participant received on or before his Transfer Date
from a Contel Affiliate or from another company
participating in the Contel Plan, but only to the extent
that such remuneration is of a type that is recognized and
taken into account under the Southeast Plan's definition
of compensation.
h. "GTE Service" shall mean the Contel Participant's
period of service after his Transfer Date that is
recognized under the terms of the Southeast Plan for
benefit accrual purposes.
i. "GTE Service Benefit" shall mean a Contel
Participant's accrued benefit determined under the
Southeast Plan's benefit formula and based on the Contel
Participant's GTE Service and GTE Compensation.
j. "Individual Transferee" shall mean a person who
(i) became a participant in the Southeast Plan before
February 1, 1993, (ii) transferred (either voluntarily or
involuntarily) from a Contel business unit to a GTE
business unit before February 1, 1993, (iii) was a
participant in the Contel Plan before he transferred to a
GTE business unit, (iv) ceased accruing a benefit under
the Contel Plan as of the date he transferred to a GTE
business unit, and (v) has not commenced receiving
benefits under either the Contel Plan or the Southeast
Plan as of January 31, 1993.
k. "Total Service Benefit" shall mean a Contel
Participant's accrued benefit determined solely under the
Southeast Plan's benefit formula based on the Contel
Participant's Contel Service and GTE Service and his GTE
Compensation.
l. "Transfer Date" shall mean (i) with respect to an
Individual Transferee, the date on which he ceased
accruing benefits
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under the Contel Plan, and (ii) with respect
to all other Contel Participants, January 31, 1993.
2. For purposes of determining vesting and benefit eligibility
(including eligibility for early retirement benefits, disability
benefits, and other benefits), the Southeast Plan shall
recognize the period of service with which a Contel Participant
is credited as of January 31, 1993, for vesting and benefit
eligibility purposes under the terms of the Contel Plan.
3. The normal retirement benefit under the Southeast Plan of a
Contel Participant shall be equal to the greater of the
following:
a. The sum of the Contel Participant's Contel
Service Benefit and GTE Service Benefit; or
b. The Contel Participant's Total Service Benefit.
4. The early retirement benefits, optional forms of benefit, and
ancillary benefits that are available under the Contel Plan,
shall be available under the Southeast Plan to Contel
Participants subject to the following conditions:
a. Early Retirement Benefits:
(1) A Contel Participant who, as of
January 31, 1993, has satisfied the requirements for
an early retirement benefit under Section 4.3 of the
Contel Plan shall be eligible to receive an early
retirement benefit subject to the following
conditions:
(a) if the Contel Participant's
benefit is determined under Paragraph 3.a.,
above, his Contel Service Benefit shall be
reduced in accordance with the Contel Plan's
early retirement reduction factors, and his
GTE Service Benefit shall not be reduced to
reflect commencement before his normal
retirement date; and
(b) if the Contel Participant's
benefit is determined under Paragraph 3.b.,
above, his Total Service Benefit shall not be
reduced to reflect commencement before his
normal retirement date.
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(2) A Contel Participant who, after
February 1, 1993, satisfies the requirements for an
early retirement benefit under Section 4.3 of the
Contel Plan, but who does not satisfy the
requirements for an early retirement benefit under
the Southeast Plan, shall be eligible to receive an
early retirement benefit subject to the following
conditions:
(a) if the Contel Participant's
benefit is determined under Paragraph 3.a.,
above, his Contel Service Benefit shall be
reduced in accordance with the Contel Plan's
early retirement reduction factors, and his
GTE Service Benefit shall be actuarially
reduced from his normal retirement date (using
the Southeast Plan's early commencement
factors that are applicable to deferred vested
pensions); and
(b) if the Contel Participant's
benefit is determined under Paragraph 3.b.,
above, his Total Service Benefit shall be
actuarially reduced from his normal retirement
date (using the Southeast Plan's early
commencement factors that are applicable to
deferred vested pensions).
(3) A Contel Participant who, either
before or after February 1, 1993, satisfies the
requirements for an early retirement benefit under
the Southeast Plan shall be eligible to receive an
early retirement benefit pursuant to the terms of
the Southeast Plan, regardless of whether he has
satisfied the requirements for an early retirement
benefit under Section 4.3 of the Contel Plan,
subject to the following conditions:
(a) if the Contel Participant's
benefit is determined under Paragraph 3.a.,
above, his Contel Service Benefit shall be
reduced in accordance with the Contel Plan's
early retirement reduction factors, and his
GTE Service Benefit shall be reduced in
accordance with the Southeast Plan's early
retirement reduction factors; and
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(b) if the Contel Participant's
benefit is determined under Paragraph 3.b.,
above, his Total Service Benefit shall be
reduced in accordance with the Southeast
Plan's early retirement reduction factors.
b. Deferred Vested Benefits:
(1) If a Contel Participant terminates
from service with a nonforfeitable right to a
benefit under Article 6 of the Contel Plan, he may
elect to begin receiving his benefit under the
Southeast Plan as of any date provided under Article
6 of the Contel Plan, or, if earlier, as of any date
provided under the terms of the Southeast Plan.
(2) If a Contel Participant elects to
receive his benefit as provided in Paragraph
4.b.(1), above, his entire benefit shall be reduced
in accordance with the Southeast Plan's early
commencement factors that are applicable to deferred
vested pensions. However, in no event shall the
amount of a Contel Participant's benefit determined
as provided in the preceding sentence be less than
the amount of his Contel Service Benefit reduced in
accordance with the Contel Plan's early commencement
factors that are applicable to deferred vested
pensions.
c. Optional Forms of Payment:
(1) If a Contel Participant satisfies
(either before or after February 1, 1993) the
requirements for an optional form of benefit under
the Contel Plan (other than any optional forms of
benefit that are available solely with respect to a
Transitional Benefit or Special Minimum Benefit
under Articles 14 and 15 of the Contel Plan), the
Contel Participant may elect to receive his entire
benefit in any optional form of benefit provided
under the Contel Plan (including, but not limited
to, a life and 5- year certain annuity, and the
various qualified joint and survivor annuities
available under Section 4.6B. of the Contel Plan),
subject to the conditions specified in subparagraph
(2), below. If a Contel Participant satisfies
(either before or after February 1, 1993) the
requirements for an optional
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form of benefit under the Southeast
Plan, the Contel Participant may elect to receive
his entire benefit in any optional form of benefit
provided under the Southeast Plan. Except as
provided in Paragraph 5.c., below, with respect to
certain grandfathered benefits, a Contel
Participant's election of an optional form shall be
applicable to his entire benefit.
(2) If a Contel Participant elects to
receive his benefit in a form that is available
under both the Contel Plan and the Southeast Plan
(including a lump sum payment of a vested accrued
benefit whose value is $3,500 or less) 1 his benefit
shall be determined as follows:
(a) if the Contel Participant's
benefit is determined under Paragraph 3.a.,
above, the Contel Participant's Contel Service
Benefit payable in the form provided in
Section 4.6.A. of the Contel Plan shall be
converted to an actuarially equivalent single
life annuity ("Converted Contel Service
Benefit"), and then the actuarial factors or
assumptions that are applicable to the form
elected as provided under the terms of the
Contel Plan shall be applied to the Contel
Participant's Converted Contel Service Benefit
and GTE Service Benefit; and
(b) if the Contel Participant's
benefit under the Southeast Plan is determined
under Paragraph 3.b., above, the actuarial
factors or assumptions that are applicable to
the form elected as provided under the terms
of the Southeast Plan shall be applied to the
Contel Participant's entire benefit.
However, in no event shall the amount
of a Contel Participant's benefit determined as
provided in subparagraph (a) or (b), above, be less
than the amount of the Contel Participant's Contel
Service Benefit payable in the same form and
determined on the basis of the actuarial factors or
assumptions that are applicable to the form elected
as provided under the terms of the Contel Plan
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(3) If a Contel Participant elects to
receive his benefit in a form that is available
solely under the Southeast Plan, the actuarial
factors or assumptions that are applicable to the
form elected as provided under the terms of the
Southeast Plan shall be applied to the Contel
Participant's entire benefit.
d. Ancillary Benefits: Except as provided in
Paragraph 5.a., below, with respect to certain
grandfathered benefits, a Contel Participant shall not be
eligible under the Southeast Plan to receive any ancillary
benefit (including, but not limited to any disability
benefit not in excess of a "qualified disability benefit"
under Section 411(a)(9) of the Code and any preretirement
or post-retirement death benefit) that is available under
the Contel Plan and that is a part of the Contel
Participant's Contel Service Benefit. A Contel
Participant's entitlement to any ancillary benefit under
the Southeast Plan shall be determined solely by the terms
of the Southeast Plan with respect to the Contel
Participant's entire accrued benefit. The terms of the
Southeast Plan shall determine the type, amount, duration,
and other characteristics of each ancillary benefit that
is payable to a Contel Participant.
5. Provisions Applicable to Certain Grandfathered Benefits:
a. A Contel Participant shall be eligible under the
Southeast Plan to receive any ancillary benefit that is
part of a Transitional Benefit or Special Minimum Benefit
provided under Articles 14 and 15 of the Contel Plan,
including, but not limited to, the Special Surviving
Spouse Benefit that is provided for in Section 14.5 of the
Contel Plan, but only with respect to the Contel
Participant's Transitional Benefit or Special Minimum
Benefit that has accrued as of January 31, 1993.
b. If a Contel Participant satisfies the
requirements under Article 14 or 15 of the Contel Plan for
commencement of benefits before his normal retirement
date, he may elect to receive his Contel Service Benefit
pursuant to the terms of Article 14 or 15 of the Contel
Plan. If a Contel Participant elects to begin receiving
his Contel Service Benefit under
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Article 14 or 15 of the Contel Plan before he
is otherwise eligible to receive his GTE Benefit, the
Contel Participant shall begin receiving his GTE Benefit
on the earliest date under the Southeast Plan on which a
Contel Participant may begin receiving a benefit.
c. If a Contel Participant satisfies the
requirements applicable to any optional forms of benefit
that are available solely with respect to a Transitional
Benefit or Special Minimum Benefit under Article 14 or 15
of the Contel Plan, the Contel Participant may elect to
receive his Contel Service Benefit in any such forms. If a
Contel Participant elects to receive his Contel Service
Benefit pursuant to this Paragraph 5.c. in a form that
includes a survivor annuity, the Contel Participant's GTE
Benefit shall be payable under the Southeast Plan's
automatic qualified joint and survivor annuity, with the
same person receiving the survivor annuity under the
Contel Service Benefit and the GTE Benefit. If a Contel
Participant elects to receive his Contel Service Benefit
pursuant to this Paragraph 5.c. in a form that does not
provide a survivor annuity, the Contel Participant's GTE
Benefit shall be payable as a single life annuity.
6. Provisions Applicable to All Participants in the Southeast
Plan:
Effective February 1, 1993, all pre- March 14, 1991 GTE
pension plan or Contel Plan Vesting Credited or Accredited
Service of current participants in the Southeast Plan that has
not already been taken into account under the terms of the
Southeast Plan will be considered to be Vesting Service or
Accredited Service, as the case may be, for all purposes under
the terms of the Southeast Plan, including vesting, eligibility
and benefit computation purposes; provided that no participant
shall be credited with Accredited Service pursuant to this
Paragraph 6 if such participant is receiving a benefit under the
Contel System Pension Plan with respect to such Service.
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APPENDIX T
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
GTE SOUTH INCORPORATED AND CONTEL OF THE SOUTH, INC.
Pursuant to Employee Transfer Agreements between ALLTEL Georgia Communications
Corp. and GTE South Incorporated, ALLTEL Illinois, Inc. and GTE South
Incorporated, ALLTEL Indiana, Inc. and Contel of the South, Inc., and ALLTEL
Michigan, Inc. and Contel of the South, Inc., each dated April 5, 1993, (the
"Employee Transfer Agreements") certain employees of GTE South Incorporated and
Contel of the South, Inc. who are covered by a collective bargaining agreement
and whose employment transferred to ALLTEL Georgia Communications Corp., ALLTEL
Illinois, Inc., ALLTEL Indiana, Inc., or ALLTEL Michigan, Inc. became Employees
(the "Bargaining Transfer Employees"). Effective as of the "Closing Date," as
Closing Date is defined in the Employee Transfer Agreements, assets and
liabilities with respect to the Bargaining Transfer Employees shall be
transferred to the Plan from the General Telephone Company of the South
(Southeast) Plan for Hourly- Paid Employees' Pensions. Thereafter, the
provisions of the Plan shall govern the interests of participants, former
participants, contingent annuitants or any other person or entity claiming any
right or interest under the Former Plan with respect to the Bargaining Transfer
Employees.
Notwithstanding any other provision of the Plan, the Plan is
modified as set forth below with respect to the Bargaining Transfer Employees.
Notwithstanding any other provision of the Plan, effective as of the
Closing Date, Articles VIII, IX, X, XI, and XII, and Article I to the extent it
applies to Articles VIII, IX, X, XI, and XII, of the Plan are replaced in their
entirety (except to the extent Change in Employment Status provisions apply) the
provisions set forth below with respect to any Bargaining Transfer Employee or
other Employee who is in employment of the Controlled Group covered under the
Plan on or after the Closing Date as an employee covered by a collective
bargaining agreement providing for coverage under this Appendix T.
ARTICLE I Definitions
The following words and phrases shall have the following meanings for
purposes of this Appendix T unless a different meaning is plainly required by
the context:
1. "Accredited Service" means the period of employment which shall be taken
into account, pursuant to Article III of this Appendix T, in the computation of
benefits under the Plan.
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2. "Accrued Benefit" means for any participant, on any given date, the
Service Pension (whether or not vested) which would be payable to the
participant at Normal Retirement Date in accordance with the formulas set forth
in Section 1 of Article V of this Appendix T.
3. "Affiliate" shall have the meaning set forth in Section 3 of Article II
of the Former Plan for periods prior to the Closing Date, and thereafter shall
mean any member of the "Controlled Group" as defined in Section 1.15 of the
Plan.
4. "Average Annual Compensation" means the average annual basic
remuneration (exclusive of overtime, differentials, premiums and other similar
types of payment, but inclusive of commissions and bonuses on account of sales
when received by an Employee pursuant to a written commitment of his employer)
based on the Employee's rate of compensation during the five consecutive years
of employment with the Company, or any employer recognized, pursuant to Section
6 of Article III of this Appendix T for the purpose of determining Accredited
Service, during which he was compensated at the highest rates of pay. Any amount
that would qualify as remuneration but for the Employee's agreement to forego
receipt of remuneration pursuant to a written agreement shall be treated as
remuneration for purposes of determining the Average Annual Compensation. If an
Employee's Average Annual Compensation is determined on the basis of any year
during which the Employee was credited with less than the Customary Work Year,
the Employee's basic remuneration for such calendar year shall be adjusted,
solely for the purpose of calculating such Employee's Average Annual
Compensation, by multiplying the Employee's basic remuneration by a fraction,
the numerator of which is the Customary Work Year and the denominator of which
is the number of Hours of Service credited to the Employee during such year.
Notwithstanding the foregoing, for Plan Years that begin after December 31,
1993, no compensation in excess of $150,000 (as adjusted annually for cost of
living increases in accordance with Sections 401(a)(17) and 415(d) of the Code)
shall be taken into account for purposes of this Section 4 of Article I of this
Appendix T.
In addition to other applicable limitations which may be set forth in the
Plan and notwithstanding any other contrary provision of the Plan, Compensation
(after aggregation of "family members") taken into account under the Plan shall
not exceed $200,000, adjusted for changes in the cost of living as provided in
Section 415(d) of the Internal Revenue Code, for the purpose of calculating a
Plan participant's Accrued Benefit (including the right to any optional benefit
provided under the Plan) for any Plan Year commencing after December 31, 1988.
For Plan Years beginning after 1993, $150,000 shall be substituted for $200,000
in the immediately preceding sentence. For purposes of the preceding sentence, a
"family member" shall mean an employee of the Controlled Group who is, on any
one day of the year, a spouse or a lineal descendant who has not attained age 19
before the last day of the year, of an individual who during the year was (i) an
active or former employee of the Controlled Group and a 5% owner within the
meaning of Section 414(q)(3) of the Code and regulations thereunder, or (ii) one
of the ten most highly- paid Highly Compensated Employees; provided, however,
that any compensation paid to such spouse or lineal descendant shall be treated
as if it were paid
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to the individual described in (i) or (ii) above. If, as a result of the family
aggregation rules, the dollar limitation under Section 401(a)(17) of the Code
(as adjusted from time to time) would be exceeded, the limitation shall be
prorated among the Participant and his or her family members in proportion to
each one's Average Annaul Compensation as determined prior to the application of
this limitation. However, the Accrued Benefit determined in accordance with this
provision shall not be less than the Accrued Benefit determined on May 31, 1989
without regard to this provision.
Notwithstanding the preceding sentence, the Accrued Benefit of any Plan
participant who is a highly compensated employee, within the meaning of section
414(q) of the Code, is reduced to the extent a benefit has accrued with respect
to Compensation in excess of $200,000 during the 1989 Plan Year before the later
of the adoption or effective date of this provision.
5. "Beneficiary means the Spouse of a deceased Employee who is entitled to
a Spouse's Pension or any individual designated or deemed designated by an
Employee or former Employee in accordance with Section 5 of Article IV of this
Appendix T to receive a Joint-Survivor Pension or other benefit after his death
under this Plan.
6. "Board" shall have the meaning set forth in Section 6 of Article II of
the Former Plan prior to the Closing Date and thereafter means the "Board of
Directors" as defined in Section 1.10 of the Plan.
7. "Code" means the "Code" as defined in Section 1.11 of the Plan.
8. "Committee" or "Employee Benefits Committee" means the "Committee" as
defined in Section 1.12 of the Plan.
9. "Company" shall have the meaning set forth in Section 9 of Article II of
the Former Plan for periods prior to the Closing Date, and thereafter means any
Employer (as defined in Section 1.19 of the Plan) whose employees are covered by
a collective bargaining agreement providing for coverage under this Appendix T.
10. "Customary Work Year" means:
(a) in the case of the Company, the lesser of (i) 2080 hours or (ii)
the standard number of hours worked in any calendar year by Employees comparably
situated in the Company according to written statements of Company policy in
effect from time to time, and
(b) in the case of an Affiliate or any other employer, the lesser of
(i) the number of hours required for a year of service under any Other Pension
Plan sponsored by such employer or (ii) the standard number of hours worked in
any calendar year by employees comparably situated according to written
statements of the employer's policy in effect from time to time.
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11. "Deferred Vested Pension" means the payments under the Plan to an
Employee who is eligible by reason of age and Vesting Service, pursuant to
Section 5 of Article IV of this Appendix T and Section 3 of Article V of this
Appendix T.
12. "Disability Pension" means the payments under the Plan, by reason of
Disability, to a Retired Employee for the period of Disability, pursuant to
Section 4 of Article IV of this Appendix T and Section 2 of Article V of this
Appendix T.
13. "Disabled" or "Disability" means the total disability of an Employee as
determined by the Committee on the basis of proper medical evidence, whereby the
Employee is completely unable to engage in any and every duty pertaining to any
occupation or employment for wage or profit for which he is reasonably qualified
by training, education or experience, and such total disability can be expected
to result in death or to be of long-continued and indefinite duration.
14. "Eligibility Computation Period" means the following: The initial
computation period shall be the twelve (12) consecutive month period commencing
on the date the Employee completes an Hour of Service; the second computation
period shall be the Plan Year which includes the first anniversary of the date
the Employee completes an Hour of Service and succeeding computation periods
shall be computed on the basis of the Plan Year.
15. "Employee" shall have the meaning set forth in Section 15 of Article II
of the Former Plan for periods prior to the Closing Date, and thereafter means
any employee of an Employer (as defined in Section 1.19 of the Plan) covered by
a collective bargaining agreement providing for coverage under this Appendix T.
The term "Employee" shall not include a "leased employee" within the meaning of
Section 414(n) of the Code (this provision shall be effective as of January 1,
1984, as if it had been adopted as part of the Plan in effect on that date); and
shall not include an Employee who is retained by the Company pursuant to a
contract or agreement that specifies that the Employee is not eligible to
participate in the Plan. The term "Employee" shall not include an individual
whose basic compensation for services rendered on behalf of the Company is not
paid directly by the Company.
16. "Enrolled Actuary" means "Actuary" as defined in Section 1.04 of the
Plan.
17. "ERISA" means the "Act" as defined in Section 1.02 of the Plan.
18. "Hour of Service" means the following: Each Employee shall be credited
with an Hour of Service for:
(a) each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Company or any Affiliate for the performance of
duties (such hours to be credited to the Employee for the computation period or
periods in which the duties are performed); and
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(b) each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Company or any Affiliate for reasons other than the
performance of duties; and
(c) each hour for which back pay to an Employee, irrespective of
mitigation of damages, has been either awarded or agreed to by the Company or
any Affiliate.
For the purpose of crediting hours in subsections (b) and (c) above, such
hours shall be credited in accordance with Section 2530.200b-2(b) and (c) of
Title 29 of the Code of Federal Regulations, as amended from time to time.
19. "Normal Retirement Age" means age 65, except that, in the case of any
Employee who (i) was not employed (as an Employee or otherwise) by the Company
or any Affiliate on or before the last day of the month during which he attained
age 60, and (ii) completes at least one Hour of Service after 1987, "Normal
Retirement Age" means the fifth anniversary of the date as of which the
Employee's participation in the Plan commenced. (This provision is effective
January 1, 1988.)
20. "Other Pension Plan" means
(a) any pension plan or any pension system (except this Appendix T),
(b) any payment required to be made by law or regulation on account
of termination or separation from employment,
(c) any other similar program, or
(d) any similar plan, system, payment, or program to the extent that
it provides benefits that are attributable to service with the Company or an
employer described in Section 6 of Article III of this Appendix T as a result of
a transfer of liabilities from this Plan or any other arrangement described in
clause (a), (b), or (c), to which the Company, any employer described in Section
6 of Article III of this Appendix T, or (in the case of an arrangement described
in clause (d)) any other employer has contributed or does contribute during the
continuance of the Plan, either directly or indirectly, but in any case only to
the extent that amounts paid thereunder are provided by or are attributable to
employer contributions; but this term does not include:
(i) a pension paid or payable pursuant to any Federal or State
law;
(ii) any amount paid or payable pursuant to any applicable law
relating to worker's compensation or occupational diseases; or
(iii) any deferred compensation or similar payments made directly
by the employer on an unfunded basis.
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21. "Pension" means a Service Pension, Disability Pension, Spouse's
Pension, or Deferred Vested Pension.
22. "Pension Commencement Date" means the date as of which a Pension is
scheduled to commence.
23. "Pension Fund" means the "Trust Fund" as defined in Section 1.46 of the
Plan.
24. "Plan" shall have the meaning set forth in Section 24 of Article II to
the Former Plan prior to the Closing Date and thereafter means "Plan" as defined
in Section 1.28 of the Plan.
25. "Plan Year" shall have the meaning set forth in Section 25 of Article
II to the Former Plan prior to the Closing and thereafter means "Plan Year" as
defined in Section 1.30 of the Plan.
26. "Qualified Domestic Relations Order" means (a) a "qualified domestic
relations order" within the meaning of Section 206(d) of ERISA (b) a domestic
relations order entered before January 1, 1985, if payment of benefits pursuant
to such order had commenced as of such date, and (c) any other domestic
relations order entered before January 1, 1985, that the Committee elects, in
its sole discretion, to treat as a Qualified Domestic Relations Order.
27. "Retire," "Retired" or "Retirement" means the separation of an Employee
from employment with the Company or the Affiliates under such circumstances that
he is entitled to receive a Pension, except that an Employee who becomes
entitled to a Deferred Vested Pension shall be deemed to Retire on the last day
of the month immediately preceding his Pension Commencement Date.
28. "Retired Employee" means a former Employee who is eligible to receive
or is receiving a Pension under the Plan, except a former Employee eligible for
a Deferred Vested Pension prior to his Pension Commencement Date.
29. "Retirement Date" means the date on which an Employee actually Retires
or is Retired pursuant to the terms of this Plan.
(a) "Early Retirement Date" means any date prior to his Normal
Retirement Date on which an Employee Retires or is Retired pursuant to Section 3
of Article IV of this Appendix T.
(b) "Normal Retirement Date" means the last day of the month during
which any Employee or former Employee attains Normal Retirement Age. (This
provision is effective January 1, 1988.)
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30. "Service Pension" means the payments under the Plan, by reason of an
Employee's age and Accredited Service, to a Retired Employee for life, but does
not include a Deferred Vested Pension or a Disability Pension.
31. "Spouse" means the person to whom an Employee or former Employee is
married on his date of death or Pension Commencement Date, whichever occurs
first. The term "Spouse" shall also include a former spouse of an Employee or
former Employee to the extent required by a Qualified Domestic Relations Order.
32. "Spouse's Pension" means the payments under the Plan for life to the
Spouse of an Employee or former Employee who dies prior to his Pension
Commencement Date pursuant to Section 6 of Article IV of this Appendix T and
Section 4 of Article V of this Appendix T.
33. "Tables" means Table I - Early Commencement Factors for Deferred Vested
Pensions, Table II - Joint and Survivor Factors, Table III - Factors for Small
Pensions, and Table IV - Factors for Five-Year Certain and Life Option and which
are hereby made a part of this Appendix T.
34. "Trust Agreement" shall have the meaning set forth in Section 34 of
Article II to the Former Plan prior to the Closing Date and thereafter means
"Trust Agreement and Trust" as defined in Section 1.44 of the Plan.
35. "Trust Fund" shall have the meaning set forth in Section 35 of Article
II to the Former Plan prior to the Closing Date and thereafter means "Trust
Fund" as defined in Section 1.46 of the Plan.
36. "Trustee" shall have the meaning set forth in Section 36 of Article II
to the Former Plan prior to the Closing and thereafter means "Trustee" as
defined in Section 1.45 of the Plan.
37. "Vesting Service" means the period of employment which shall be taken
into account, pursuant to Article III of this Appendix T, in determining
eligibility for a Spouse's Pension or a Deferred Vested Pension under the Plan.
38. "Contel Provisions" means the provisions set forth on Attachment I to
this Appendix T. The Contel Provisions shall modify or supplement the provisions
of this Appendix S, as appropriate, with respect to a Participant's GTE Benefit
to the extent the Contel Provisions would permit different or additional
optional forms of benefit with respect to the Participant's GTE Benefit.
30. "Former Plan" means the GTE South Incorporated (Southeast) Plan for
Hourly-Paid Employees' Pensions, as in effect on the Closing Date.
40. An "LTD Recipient" or "WC Recipient" shall mean an Employee or former
Employee of ALLTEL Illinois, Inc., ALLTEL Indiana, Inc., or ALLTEL, Michigan,
Inc., as
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defined in the Employee Transfer Agreements, who may become an Employee covered
by the provisions of this Appendix T as provided in the Employee Transfer
Agreements, and the provisions of this Appendix T shall apply to such former LTD
Recipient or WC Recipient with the last day of the calendar year that includes
the date of the former LTD Recipient's or WC Recipient's commencement of active
service with GTE South Incorporated or Contel of the South, Inc. substituted for
Closing Date.
ARTICLE II Participation
Any individual shall become a participant in the Plan as of the first day
of the Eligibility Computation Period in which he qualifies as an Employee under
Article I; provided, however, that an Employee who was not employed (as an
Employee or otherwise) by the Company or any Affiliate on or before the last day
of the month during which he attained age 60 shall not participate in the Plan
unless he completes at least one Hour of Service after 1987; and provided
further that if an Employee described in the immediately preceding provision
completes at least one Hour of Service after 1987, he shall become a participant
in the Plan (which participation may become effective retroactively) as of the
first day of the Eligibility Computation Period in which he qualifies as an
Employee under Article I of this Appendix T. (This provision is effective
January 1, 1988.)
ARTICLE III Computation of Vesting Service and Accredited Service
1. Vesting Service, in respect of any period of employment prior to January
1, 1984, shall be determined on the same basis as Vesting Service is determined
in respect of any period of employment after December 31, 1983 under this
Article III; except that for any period of employment prior to January 1, 1976 a
year of Vesting Service or any fraction thereof shall be:
(a) in the case of Employees then under this Plan, the similar period
of "Accredited Service" as computed under the terms of this Plan then in effect;
(b) in the case of Employees then employed by any Affiliate or other
employer sponsoring any Other Pension Plan, the similar period of service under
the terms of such Other Pension Plan then in effect; and
(c) in the case of all other Employees their Customary Work Year.
2. Vesting Service, in respect of any period of employment after December
31, 1983, shall consist without duplication of the aggregate of the following:
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(a) active employment with the Company and any excused absence time
specifically approved for Vesting Service purposes in accordance with Company
policy in effect from time to time;
(b) active employment with an Affiliate during the period of time in
which such Affiliate is a member of the controlled group of corporations defined
in Section 3 of Article I of this Appendix T; and
(c) active employment with any other employer when specifically
approved for Vesting Service purposes by the Board.
A full year of Vesting Service shall be included in the Employee's,
aggregate of Vesting Service with respect to any calendar year in which he has
been credited with not less than 1000 Hours of Service. In the case of an
Employee who, in any calendar year, has been credited with less than 1000 Hours
of Service, the Employee shall accrue a fraction of a year of Vesting Service
(not in excess of one (l)) where the numerator of the fraction is the number of
Hours of Service credited to the Employee during such year and the denominator
is the Customary Work Year.
3. Vesting Service shall be broken in any calendar year in which an
Employee who has not been credited with more than 500 Hours of Service ceases to
be an Employee of any employer described in Section 2 of this Article III of
this Appendix T.
4. When an Employee's Vesting Service is broken and he is thereafter
reemployed by an employer described in Section 2 of this Article III of this
Appendix T and he accumulates 1000 Hours of Service constituting Vesting
Service, then the break in the Employee's employment shall be bridged and there
shall be added to the Vesting Service which has accumulated since his
reemployment the aggregate of all previous periods of Vesting Service which the
Employee had prior to such reemployment, provided that the Employee had one year
of Vesting Service preceding the break in service.
5. Accredited Service, in respect of any period of employment prior to
January 1, 1984, shall be determined on the same basis as Accredited Service is
determined in respect of any period of employment after December 31, 1983 under
this Article III; except that for any period of employment prior to January 1,
1976, in the case of any Employee then employed by any Affiliate or other
employer sponsoring any Other Pension Plan, Accredited Service shall be computed
in accordance with the terms governing similar service under such Other Pension
Plan.
6. Accredited Service, in respect of any period of employment after
December 31, 1983, shall consist without duplication of the aggregate of the
following:
(a) active employment with the Company and any excused absence time
specifically approved for Accredited Service purposes in accordance with Company
policy in effect from time to time;
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(b) active employment with an Affiliate during the period of time in
which such Affiliate is a member of the controlled group of corporations defined
in Section 3 of Article I of this Appendix T; and
(c) active employment with any other employer when specifically
approved for Accredited Service purposes by the Board.
A full year of Accredited Service shall be added to the Employee's
aggregate Accredited Service for any calendar year in which he has been credited
with not less than the Customary Work Year. In the case of an Employee who, in a
calendar year, is credited with less than the Customary Work Year, the Employee
shall accrue a fraction of a year of Accredited Service (not in excess of one
(l)) where the numerator of the fraction is the number of Hours of Service
credited to the Employee during such year and the denominator is the Customary
Work Year.
7. Accredited Service shall be broken in any calendar year in which the
Employee has a break in Vesting Service pursuant to Section 3 of this Article
III of this Appendix T.
8. When an Employee's Accredited Service is broken and he is thereafter
reemployed by an employer described in Section 2 of this Article III of this
Appendix T and he accumulates 1000 Hours of Service constituting Vesting
Service, then the break in the Employee's employment shall be bridged, and he
shall be credited with the aggregate of all periods of Accredited Service which
he had prior to the break, provided that the Employee had one year of Vesting
Service preceding the break in service.
Provided, however, that if the Employee is a "Special Retiree" as that term
is defined in an enhanced (or incentive) early retirement program under the
Plan, or any other pension plan sponsored by the Company or an Affiliate ("the
Program"), and he is reemployed by an employer described in Section 2 of this
Article III of this Appendix T after his "Qualified Retirement Date" (as that
term is defined in the Program), then the Accredited Service with which he is
credited under this Article III in respect of the period preceding his Qualified
Retirement Date shall be the Accredited Service with which he would have been
credited pursuant to this Article III excluding the provisions of the Program,
as if he had terminated his employment on his Qualified Retirement Date but had
not elected to Retire under the Program; provided that, upon his Retirement
following his reemployment, his Pension shall be not less than the actuarial
equivalent of the Pension to which he was entitled, in accordance with the
provisions of the Plan including the provisions of the Program, when he Retired
under the Program.
9. Upon Retirement or separation from service following the bridging of a
break in Accredited Service pursuant to Section 8 of this Article III of this
Appendix T, the Employee's Pension shall be based on his Average Annual
Compensation and Accredited Service before and after the break.
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10. Except for the purpose of determining his Average Annual Compensation
or other compensation under the terms of this Plan, no Employee who Retires, is
Retired or whose service terminates prior to January 1, 1981 shall receive any
Accredited Service for service with the Company or any Affiliate after his
Normal Retirement Date; provided, however, that the foregoing provisions of this
Section 10 to Article III of this Appendix T shall not apply to any Employee who
completes at least one Hour of Service after 1988. (This provision is effective
January 1, 1989.)
ARTICLE IV Eligibility for Pension
1. Normal Retirement - Any Employee who is a participant in this Plan and
attains Normal Retirement Age shall have the right to separate from the service
of the Company and the Affiliates with a fully vested and nonforfeitable Service
Pension commencing as of the first day of the month next following his
Retirement.
2. Reserved.
3. Early Retirement - Any Employee whose combined age and Accredited
Service (of not less than 15 years) total 76 or more years, may Retire, and
shall be entitled to a Service Pension. Additionally, any Employee whose
Accredited Service totals thirty (30) or more years, may Retire, and shall be
entitled to a Service Pension. Credit for fractional parts of a year with
respect to both age and Accredited Service in excess of 15 years, shall be
recognized at the rate of 1/12 of a year for each full month.
4. Disability Retirement - Any Employee who shall become Disabled and whose
Accredited Service is 15 or more years shall be entitled to a Disability
Pension. The Employee may elect, in accordance with Section 8 of Article VI of
this Appendix T, to have his Disability Pension commence as of the first day of
any month preceding his Normal Retirement Date.
5. Deferred Vested Pension - Any Employee whose employment with the
employers described in Section 2 of Article III of this Appendix T terminates
other than by death after 5 or more years of Vesting Service, but who cannot
qualify for a Service Pension or Disability Pension, shall be entitled to a
Deferred Vested Pension. The normal Pension Commencement Date of the Deferred
Vested Pension shall be the first day of the month next following the Employee's
Normal Retirement Date. However, if such former Employee terminates (1) after
completion of 15 or more years of Accredited Service, he may elect in accordance
with Section 8 of Article VI of this Appendix T, to have his Deferred Vested
Pension commence prior to his Normal Retirement Date on the first day of any
month following the date on which his combined age and Accredited Service equal
76 years, or (2) after completing ten (10) years of Accredited Service, he may
elect in accordance with Section 8 of Article VI of this Appendix T, to have his
Deferred Vested Pension commence on the first day of the month of any month
following the date he attains age fifty-five (55). Credit for fractional parts
of a year, with respect to both age
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and Accredited Service in excess of 15 years, shall be recognized at the rate of
1/12 of a year for each full month. The Deferred Vested Pension of any former
Employee whose Pension Commencement Date occurs prior to his Normal Retirement
Date shall be reduced in accordance with Section 3 of Article V of this Appendix
T.
6. Spouse's Pension -
(a) (i) If a married participant who has not terminated his employment
with the Company and the Affiliates, and who has earned a nonforfeitable right
to a Pension dies before his Pension Commencement Date without having in effect
a valid election of an optional form of payment under Section 6 of Article V of
this Appendix T and a valid waiver of the Spouse's Pension under Section 5(b) of
Article V of this Appendix T, a Spouse's Pension shall be payable to his Spouse.
(ii) If a married participant, who terminated employment with the
Company and the Affiliates after (A) attaining Normal Retirement Age, (B)
meeting the age and Accredited Service requirements prescribed by Section 3 of
this Article IV of this Appendix T, or (C) meeting the requirements prescribed
by Section 4 of this Article IV of this Appendix T, dies before his Pension
Commencement Date without having in effect a valid election of an optional form
of payment under Section 6 of Article V of this Appendix T, and a valid waiver
of the Spouse's Pension under Section 5(b) of Article V of this Appendix T, a
Spouse's Pension shall be payable to his Spouse.
(iii) Unless he has elected to waive Spouse's Pension coverage in
accordance with the provisions of Section 4(e) of Article V of this Appendix T,
if a married participant, who terminated employment with the Company and the
Affiliates after acquiring a nonforfeitable right to a Pension but before (A)
attaining Normal Retirement Age, (B) meeting the age and Accredited Service
requirements prescribed by subsection 3 of this Article IV, or (C) meeting the
requirements prescribed by Section 4 of this Article IV of this Appendix T, dies
before his Pension Commencement Date without having in effect a valid election
of an optional form of payment under Section 6 of Article V of this Appendix T,
and a valid waiver of the Spouse's Pension under Section 5(b) of Article V of
this Appendix T, a Spouse's Pension shall be payable to his Spouse.
(b) Subsection (a), above, shall apply to any participant or former
participant who completed at least one Hour of Service on or after August 23,
1984.
(c) Notwithstanding the provisions of subsection (b), above, a former
Employee who
(i) ceased to be an employee of the Company and the Affiliates
before August 23, 1984, and did not thereafter resume employment with the
Company or an Affiliate,
(ii) completed at least 10 Years of Service, including at least
one Hour of Service after December 31, 1975,
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(iii) was alive but not yet receiving benefits under the Plan as
of August 23, 1984, and
(iv) was not covered by the provisions of the Plan that were in
effect before August 23, 1984, that provided a survivor annuity for the benefit
of the former Employee's spouse,
may elect to have the provisions of subsection (a), above, apply. Every
participant eligible to make such election shall be notified of this right at
such time and in such manner as the Secretary of the Treasury shall prescribe.
If any participant described in this subsection (c) elects to be covered by the
provisions of subsection (a), the amount of his Pension shall be reduced as
provided by Section 4(d) of Article V of this Appendix T to reflect the cost of
coverage for the period beginning on the date the election is made.
ARTICLE V Computation of Pensions and Form of Payment
1. Service Pension - The annual Service Pension payable to a Retired
Employee shall be computed as follows:
(a) By multiplying an Employee's Average Annual Compensation by his
Accredited Service expressed as a percentage on the basis of allowing 1.35% for
each year of Accredited Service.
(b) The amount determined under subsection (a) above shall be
multiplied by the appropriate percentage as indicated below:
Age at Pension
Commencement Date Percentage
Age 55 and Later 100%
Age 54 97%
Age 53 94%
Age 52 91%
Age 51 88%
Age 50 85%
Age 49 or Earlier 82%
Any Employee whose Accredited Service totals thirty (30) or more years
shall be entitled to an unreduced Service Pension.
In the case of a fractional part of a year the above percentage shall be
adjusted at the rate of 1/4 of l% for each full month by which the Pension
Commencement Date follows the first day of the month after the attainment of
years 49 through 54 inclusive.
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For the purpose of this calculation, the Pension Commencement Date shall be
deemed to be not earlier than the first day of the month following the
Employee's 49th birthday.
(c) The amount determined in subsections (a) and (b) above shall not
be less than the applicable amount according to the Employee's years of
Accredited Service as set forth below:
(i) For Employees affiliated with the Georgia IBEW Local 84:
Years of
Accredited Service Amount
15 but less than 20 - $3,600
20 but less than 25 - 4,650
25 but less than 30 - 5,700
30 but less than 35 - 6,750
35 but less than 40 - 7,800
40 or more - 8,850
(ii) For Employees affiliated with the Communication Workers of America
Locals 3270, 3271, 3272, and 3275:
Years of
Accredited Service Amount
15 but less than 20 - $4,000
20 but less than 25 - 5,200
25 but less than 30 - 6,400
30 but less than 35 - 7,600
35 but less than 40 - 8,800
40 or more - 10,000
(d) The amount determined under subsection (b) or (c) above shall be
reduced by
(i) the annual amount, if any, payable from any Other Pension
Plan; and
(ii) the amount prescribed by Section 4(d) of this Article V of
this Appendix T, if applicable.
2. Disability Pension - The annual Disability Pension payable to a Retired
Employee shall be computed as prescribed in subsections (a), (c) and (d) of
Section 1 of this Article V of this Appendix T. A Retired Employee receiving a
Disability Pension may elect in accordance with Section 8 of Article VI of this
Appendix T to receive a Service Pension in lieu of a Disability Pension
beginning in any month after he becomes eligible
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therefor. Upon attaining his Normal Retirement Age, a Retired Employee whose
Disability Pension has not been terminated, shall, in lieu of any further
Disability Pension, be entitled to a Service Pension under Section 1 of this
Article V. Such Service Pension shall commence with the month following the
month in which he attains his Normal Retirement Age, and shall be subject to the
applicable provisions of this Appendix T other than this Section 2 of this
Article V.
3. Deferred Vested Pension - The annual Deferred Vested Pension payable
after reaching Normal Retirement Age to a former Employee who qualified for such
a Pension shall be computed as prescribed in subsections (a) (c) and (d) of
Section 1 of this Article V of this Appendix T, except that the amount
applicable under subsection (c) shall be based on the Accredited Service the
Employee would have had at his Normal Retirement Date (if he had accrued a year
of Accredited Service in each subsequent year until his Normal Retirement Date),
multiplied by the ratio of the Employee's actual Vesting Service to the Vesting
Service he would have had at his Normal Retirement Date, if his employment with
the employers described in Section 2 of Article III of this Appendix T had not
been terminated. If such former Employee is eligible in accordance with Section
5 of Article IV of this Appendix T, to elect to have his Deferred Vested Pension
commence prior to his Normal Retirement Date, the amount of such Deferred Vested
Pension shall be reduced by multiplying his Deferred Vested Pension at his
Normal Retirement Date by the appropriate factor as indicated in Table I - Early
Commencement Factors for Deferred Vested Pensions.
4. Spouse's Pension -
(a) The annual Spouse's Pension payable to the Spouse of a deceased
Employee or former Employee who has not elected to waive Spouse's Pension
coverage in accordance with subsection (e) below, shall be computed as
prescribed by Section 6 of this Article V of this Appendix T for the Spouse as
Beneficiary on the basis of a 50% Joint-Survivor election as if the Employee or
former Employee had
(i) terminated employment with the employers described in Section
1 of Article III of this Appendix T on the date of his death (or, if earlier, on
the date of his actual termination of employment),
(ii) elected the first day of the month next following his Normal
Retirement Date (or, if later, the first day of the month next following the
date of his death) as his Pension Commencement Date, and
(iii) died on his Pension Commencement Date.
(b) The normal Pension Commencement Date of a Spouse's Pension shall
be the first day of the month next following the later of the deceased
Employee's Normal Retirement Date or the date of his death. However, (i) if the
deceased Employee died in the service of the Company after he had at least 5
years of Vesting Service or (ii) if the deceased Employee had completed at least
15 years of Accredited Service before his
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death, the Spouse may elect, in accordance with Section 8 of Article VI of this
Appendix T, that the Pension Commencement Date shall be the first day of any
month before the deceased Employee's Normal Retirement Date and after the month
of the Employee's death, provided that with respect to the Spouse of such
Employee described in (ii) of this subsection (b) the Pension Commencement Date
shall not be earlier than the earliest date on which the deceased Employee could
have elected to receive a Pension if he had not died and had earned no
additional Accredited Service under the Plan.
(c) If a Spouse elects, in accordance with subsection (b) above, to
have the Spouse's Pension commence as of a date preceding the deceased
Employee's Normal Retirement Date, the amount of the Spouse's Pension (1) shall
not be reduced if the Employee died in the service of the Company after he had
at least 5 years of Vesting Service, (2) shall be reduced in accordance with
paragraph (b) of Section 1 of Article V of this Appendix T if the deceased
Participant had met the age and service requirements for Early Retirement
specified in Section 3 of Article IV of this Appendix T at the time his
employment terminated with the Company and the Affiliates, and (3) otherwise,
shall be reduced for early commencement in accordance with the appropriate
factor in Table I - Early Commencement Factors for Deferred Vested Benefits,
except that the factor shall be 100% in the case of a Disability Retirement with
respect to the Participant's GTE Benefit attributable to the GTE South
Incorporated (Southeast) Plan for Hourly-Paid Employees' Pensions.
(d) The amount of the Pension of a participant described in Section
6(a)(iii) of Article IV of this Appendix T shall be reduced in accordance with
the charges set forth below for each full month that Spouse's Pension coverage
was in effect during the period beginning on the date the participant terminated
employment with the Company and the Affiliates and ending on the date that the
earliest of the following occurred: (i) his reemployment by the Company or an
Affiliate, (ii) the death of his Spouse, (iii) the entry of a final divorce
decree dissolving the participant's marriage unless coverage is required
pursuant to a Qualified Domestic Relations Order, (iv) the participant's Pension
Commencement Date, (v) the participant's death or (vi) the waiver of coverage in
accordance with subsection (e), below.
For Each Year of Coverage The Reduction in the
in Effect After the Participant's Pension
Participant's Termination Accrued to his Termination
of Employment . . . . . . of Employment Shall be . . .
Prior to age 40 0.1%
From age 40 through 49 0.2%
From age 50 through 54 0.3%
From age 55 to commencement 0.5%
(e) At any time during the period beginning 90 days before the date as
of which a participant terminates employment with the Company and the Affiliates
and ending on the earliest to occur of the date he is reemployed by the Company
or an
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Affiliate, his Pension Commencement Date or his date of death, a participant
described in subsection 6(a) (iii) of Article IV of this Appendix T may elect to
waive, or revoke the election to waive, Spouse's Pension coverage. Such election
or revocation shall be subject to the following terms and conditions:
(i) Any election or revocation shall be made by giving written
notice in such form and manner as may be required by the Committee.
(ii) An election or revocation shall be ineffective unless the
participant's Spouse consents in writing to such election or revocation. The
Spouse's consent must acknowledge the effect of such election and must be
witnessed by a notary public or authorized plan representative. Any consent by a
Spouse shall be irrevocable unless the participant agrees to a revocation.
(iii) Subsection (e)(ii) above, shall not apply if the Committee
determines that the consent required therein cannot be obtained because there is
no Spouse, because the Spouse cannot be located, or because of such other
circumstances as are specified by Treasury Department regulations promulgated
under Section 417 of the Code.
(iv) Any consent by a Spouse pursuant to subsection (e)(ii),
above, shall be effective only with respect to that Spouse. Similarly, any
establishment that the consent of a Spouse cannot be obtained for any of the
reasons described in subsection (e)(iii), above, shall be effective only with
respect to that Spouse.
Spouse's Pension coverage shall be automatic and without charge while a
participant, is employed by the,Company or an Affiliate, and a participant s
waiver of Spouse s Pension coverage shall be ineffective during any period of
employment by the Company or an Affiliate, except to the extent that such
coverage is waived in accordance with subsection (b) hereof during the 90-day
period ending on the Participant's Pension Commencement Date.
(f) The Committee shall provide to each participant eligible to waive
Spouse's Pension coverage pursuant to subsection (e) hereof during a reasonable
period ending on the date as of which he terminates employment with the Company
and the Affiliates, a written explanation of:
(i) the terms and conditions of the Spouse's Pension;
(ii) the participant's right to elect, and the effect of
electing, to waive Spouse's Pension coverage;
(iii) the rights of a married participant's Spouse with respect
to that election; and
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(iv) the right of the participant to revoke, and the effect of
revoking, an election to waive Spouse's Pension coverage.
The Committee shall also provide to each participant eligible to waive
Spouse's Pension coverage pursuant to Section 5(b) hereof with the written
explanation described in this subsection (f). The Committee shall provide such
written explanation at the same time as it provides the written explanation
described in Section 5(e) hereof.
5. Normal Form of Payment -
(a) Unless he elects another form of payment in
accordance with the provisions of this Section 5,
(i) a participant who is married on his Pension Commencement Date
shall receive a Joint-Survivor Pension, with a 50% survivor annuity and his
Spouse as the Beneficiary, and
(ii) a participant who is not married on his Pension Commencement
Date shall receive his Pension in the form of a single life annuity.
(b) A participant may elect to waive the form of Pension otherwise
applicable to him, as prescribed by subsection (a), above, and to receive his
pension as
(i) a single life annuity;
(ii) a Joint-Survivor Pension with one of the percentages set
forth in Section 6(a) of this Article V of this Appendix T (other than a 50%
Joint-Survivor Pension);
(iii) a Joint-Survivor Pension with an individual other than his
Spouse (if applicable) as Beneficiary, designated by the participant; or
(iv) a Five Year Certain and Life Annuity that is the actuarial
equivalent of the Plan's single life annuity and that provides equal monthly
payments for the life of the participant, with the condition that if the
participant dies before he has received 60 monthly payments, the participant's
designated Beneficiary shall receive monthly payments in the same amount as the
participant until a total of 60 monthly payments have been made to the
participant and his Beneficiary combined. Actuarial equivalence shall be
determined in accordance with Table IV - Factors for Five-Year Certain and Life
Option.
Any election of a Joint-Survivor Pension must be accompanied by proof of
the Beneficiary's age satisfactory to the Committee. A participant who waives
the form of Pension otherwise applicable to him pursuant to this subsection (b)
may also waive the Spouse's Pension coverage, if any, for which he is eligible.
A waiver of the Spouse's Pension coverage pursuant to this subsection (b) shall
be subject to the terms and
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conditions set forth in subsections (e)(i) through (e)(iv) of Section 4 hereof
and shall be effective for the period beginning on the date on which the
Committee receives the participant's waiver and ending on the earlier of the
participant's Pension Commencement Date or the date on which the waiver is
revoked.
(c) An election under subsection (b) may be revoked either
automatically in the circumstances described in subsection (f), below, or by
filing a written revocation with the Committee in a form and in a manner
acceptable to the Committee. After any such revocation, an election under
subsection (b) may be made again at any time prior to the participant's Pension
Commencement Date. However, except as provided by Section 3(d)(iii) of Article
VI of this Appendix T, any election under subsection (b) shall be irrevocable
after the participant's Pension Commencement Date.
(d) An election or revocation of an election under subsections (b) and
(c) above, shall be subject to the following terms and conditions:
(i) Any election or revocation shall be made within the 90-day
period ending on the Pension Commencement Date by giving written notice in such
form and manner as may be required by the Committee.
(ii) An election or revocation shall be ineffective unless the
participant's Spouse consents in writing to such election or revocation, and the
consent acknowledges the effect of the election or revocation and is witnessed
by a notary public or authorized plan representative. The Spouse's consent must
acknowledge the Beneficiary, including any class of Beneficiaries and any
contingent Beneficiaries. Any consent by a Spouse shall be irrevocable unless
the participant agrees to a revocation.
(iii) Subsection (d)(ii), above, shall not apply if the Committee
determines that the consent required therein cannot be obtained because there is
no Spouse, because the Spouse cannot be located, or because of such other
circumstances as are specified by Treasury Department regulations promulgated
under Section 417 of the Code.
(iv) Any consent by a Spouse pursuant to subsection (d)(ii),
above, shall be effective only with respect to that Spouse. Similarly, any
establishment that the consent of a Spouse cannot be obtained for any of the
reasons described in subsection (d)(iii), above, shall be effective only with
respect to that Spouse.
(v) Any consent by a Spouse pursuant to subsection (d)(ii),
above, shall be effective only as long as the participant makes no change in the
designated Beneficiary or class of Beneficiaries.
(e) The Committee shall provide to each participant, within a
reasonable period of time before his Pension Commencement Date, a written
explanation of:
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(i) the terms and conditions of the otherwise applicable form of
Pension;
(ii) the participant's right to elect, and the effect of
electing, to waive the otherwise applicable form of Pension;
(iii) the rights of a married participant's Spouse with respect
to that election; and
(iv) the right of the participant to revoke, and the effect of
revoking, an election to waive the otherwise applicable form of Pension.
(f) (i) If the designated Beneficiary with respect to a Joint-Survivor
Pension shall die before the Pension Commencement Date, the election (including
any election pursuant to subsection (b) hereof to waive Spouse's Pension
coverage) shall be void, and the Employee shall be deemed not to have previously
elected a Joint-Survivor Pension. If the designated Beneficiary with respect to
a Joint-Survivor Pension shall die before the Retired Employee, but after the
Pension Commencement Date, the amount of the Pension thereafter payable to the
Retired Employee shall not be affected in any way as a result thereof.
(ii) If an Employee shall die before his Pension Commencement
Date without having made a valid election of an optional form of payment under
Section 6 of Article V of this Appendix T, no individual shall have a right to
any payment under the Plan with respect to the Employee (unless the Employee is
survived by a Spouse who is entitled to a Spouse's Pension). If an Employee
shall die before his Pension Commencement Date after having made (and not
revoked) a valid election of an optional form of payment under Subsection 6 of
Article V and (in the case of a married participant) a valid waiver of the
Spouse's Pension leaving a designated Beneficiary surviving him, the designated
Beneficiary shall be eligible to receive benefits under the form of payment the
Participant elected as if the Participant had died on the date following his
Pension Commencement Date.
(g) This Section 5 shall apply on and after January 1, 1985, to any
participant who completed at least one Hour of Service with the Company or an
Affiliate on or after August 23, 1984.
(h) Notwithstanding subsection (g), above, if
(i) a participant completed at least one Hour of Service under a
predecessor to the Plan (from which assets were transferred directly to the
Plan) on or after September 2, 1974,
(ii) Section 401(a)(11) of the Code, as in effect on August 22,
1984, would not otherwise apply to the participant,
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(iii) Section 4 or 5 of this Article V of this Appendix T does
not otherwise apply to the participant, and
(iv) as of August 23, 1984, the participant was alive and had not
reached his Pension Commencement Date, unless the participant declines the
annuity in writing, any Pension payable to or on behalf of the participant shall
be paid as a joint and survivor annuity, within the meaning of Section
401(a)(11) of the Code (as in effect on August 22, 1984), with a 50% survivor
annuity, for the benefit of the participant and his Spouse (if any); provided,
that this subsection (h) shall not apply to the extent that equivalent benefits
would otherwise be provided by the Plan.
6. Optional Forms of Payment
(a) Under the Joint-Survivor Pension, a reduced amount shall be
payable to the Retired Employee for his lifetime. The Beneficiary, if surviving
at the Retired Employee's death, shall be entitled to receive thereafter a
lifetime survivor benefit in an amount equal to 100%, 66 2/3%, 50%, or 33 1/3%,
as elected by the Employee, of the reduced amount which had been payable to the
Retired Employee, determined without regard to subsection (d) of Section 1 of
this Article V of this Appendix T, subject however to further reduction by the
annual amount of the survivor benefit, if any payable to the Beneficiary from
any Other Pension Plan.
(b) The reduced amount payable to the Retired Employee under the Joint
Survivor Option shall be determined as prescribed in Section 1, 2, or 3 of this
Article V of this Appendix T, as the case may be, except that the amount
obtained under subsection (b) or (c) of Section 1, but before application of
paragraph (i) of Section 1(d) of this Article V (and incorporated into Section 2
or 3 if applicable), shall be multiplied by the appropriate actuarial factor as
indicated in Table II - Joint and Survivor Factors, which is hereby made a part
of this Plan, subject however to further reduction by the annual amount of any
benefit payable from any Other Pension Plan.
(c) The appropriate actuarial factor shall be determined for any
Employee and his Beneficiary as of the Pension Commencement Date.
(d) If an Employee designates any individual other than his Spouse as
his Beneficiary, the annual amount of the Employee's annuity under the
Joint-Survivor Pension shall be not less than 50% of his annual Pension
calculated as a single life annuity, and the Beneficiary's survivor annuity
under the Joint-Survivor Pension shall be reduced, in accordance with the Table
referred to in paragraph (b), above, to the extent necessary to reflect any
adjustment required by this paragraph (d) in the amount of the Employee's
annuity under the Joint-Survivor Pension.
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(e) Under the Five-Year Certain and Life Option, a reduced amount
shall be payable to the Retired Employee for his lifetime. If the Retired
Employee dies before he has received 60 monthly payments, the Retired Employee's
designated beneficiary shall receive monthly payments in the same amount as the
Retired Employee until a total of 60 monthly payments have been made to the
Employee and his beneficiary combined. Actuarial equivalence shall be determined
in accordance with Table IV - Factors for Five-Year Certain and Life Option. The
appropriate actuarial factor shall be determined for any Employee and his
Beneficiary as of the Pension Commencement Date.
(f) The reduced amount payable to the Retired Employee under the
Five-Year Certain and Life Option shall be determined as prescribed in Section
1, 2, or 3 of this Article V of this Appendix T, as the case may be, except that
the amount obtained under subsection (b) or (c) of Section 1, but before
application of paragraph (i) of Section 1(d) of this Article V (and incorporated
into Section 2 or 3 if applicable), shall be multiplied by the appropriate
actuarial factor as indicated in Table IV - Factors for Five-Year Certain and
Life Option, which is hereby made a part of this Plan, subject however to
further reduction by the annual amount of any benefit payable from any Other
Pension Plan.
7. Limitations on Pensions -
(a) The maximum annual Pension payable under the Plan, when added to
any pension or retirement allowance provided to the Employee under any other
defined benefit plan on account of the contributions of the Company or its
Affiliates thereto, shall be equal to the lesser of (i) $90,000 or (ii) 100% of
the Employee's average annual remuneration, not in excess of the Code Section
401(a)(17) limitations, during the three consecutive years of his Accredited
Service (not more than three) as an Employee affording the highest such average.
If the Pension commences prior to the Employee's social security retirement
age, the maximum Pension in (i) above shall be reduced so that the maximum
Pension is the equivalent of the maximum Pension payable at the Employee's
social security retirement age. The reduction shall be made in such manner as
the Secretary of the Treasury may prescribe which is consistent with the
reduction for old-age insurance benefits commencing before the social security
retirement age. If the Pension commences before the Participant attains age 62,
the reduction shall be based on an interest rate of five percent per year. If
the Pension commences after the Employee's social security retirement age, the
maximum Pension in (i) above shall be the actuarial equivalent (based on an
interest rate of five percent per year) of the maximum Pension payable at the
Employee's social security retirement age. If the Employee's Pension is payable
as a Joint-Survivor Pension with his Spouse as the Beneficiary, the modification
of the Pension for that form of payment shall be made prior to the application
of the maximum limitation, and, as so modified, shall be subject to the
limitation. For purposes of this Section 7, the term "social security retirement
age" means the age used as the retirement age under Section 216(l) of the Social
Security Act, except that such Section shall be applied without regard to the
age increase factor and as if the early retirement age under Section 216(l)(2)
of that Act were 62.
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(b) Notwithstanding the provisions of subsection (a) above, the
Pension payable with respect to an Employee under the Plan shall not be deemed
to exceed the limitation set forth in this Section 7, if:
(i) The annual Pension with respect to the Employee under the
Plan does not exceed $10,000 multiplied by the ratio described in subsection (a)
above, for the calendar year or any prior calendar year; and
(ii) neither the Company nor any Affiliate has at any time
maintained a defined contribution plan in which the Employee participated.
(c) In the case of an Employee who has less than ten years of
participation in the Plan, the limitations referred to in (i) of subsection (a)
shall be the limitation determined under (i) of subsection (a) (without regard
to this subsection) multiplied by a fraction, the numerator of which is the
number of years (or part thereof) of the Employee's participation in the Plan,
and the denominator of which is ten. This subsection also shall apply to the
limitations set forth in (ii) of subsection (a) and in subsection (b), except
that this subsection shall be applied on the basis of years of Vesting Service,
rather than years of participation in the Plan. To the extent provided in
regulations issued by the Secretary of the Treasury, this subsection shall be
applied separately with respect to each change in the benefit structure of the
Plan. In no event shall this subsection reduce the limitations imposed by
subsections (a) and (b) to amounts less than 1/10th of such limitations
(determined without regard to this subsection).
(d) Notwithstanding anything herein to the contrary, in the case of an
Employee who was an active participant in a predecessor plan prior to October 3,
1973, the annual amount of his Pension (when expressed as a single-life annuity
with no ancillary benefits) shall not be deemed to exceed the limitation set
forth in the preceding provisions of this Section 7 if:
(i) such Pension does not exceed 100 percent of the Employee's
annual rate of compensation on the earlier of (A) October 2, 1973, or (B) the
date on which he separated from the service of the Company and its Affiliates;
(ii) such Pension does not exceed the annual benefit which would
have been payable to the Employee on Retirement if all the terms and conditions
of the predecessor plan in existence on such date had remained in existence
until such Retirement, and if his compensation taken into account for any period
after October 2, 1973, did not exceed his annual rate of compensation on such
date; and
(iii) in the case of an Employee who separated from service prior
to October 2, 1973, the annual amount of the Pension is no greater than his
vested accrued benefit as of the date he separated from service.
(e) As of January l of each calendar year on and after January 1,
1988, the dollar limitation as determined by the Commissioner of Internal
Revenue for that calendar
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year shall become effective as the maximum permissible dollar amount of any
Pension payable under the Plan during that calendar year, including Pensions
payable to Employees who retired prior to that calendar year, in lieu of the
dollar amount in (i) of subsection (a) above.
(f) In the case of an Employee who is also a member of a defined
contribution plan of the Company or an Affiliate, his maximum benefit limitation
shall not exceed the adjusted limitation computed as follows:
(i) Determine the defined contribution fraction.
(ii) Subtract the result of (i) from one (1.0).
(iii) Multiply the dollar amount in (i) of subsection (a) above
by 1.25.
(iv) Multiply the amount described in (ii) of subsection (a)
above by 1.4.
(v) Multiply the lesser of the result of (iii) or the result of
(iv) by the result of (ii).
(vi) The adjusted maximum benefit limitation applicable to such
employee shall be the lesser of the following: the result of (v) or the lesser
of the amounts in (i) or (ii) of paragraph (a) above.
(g) For purposes of this Section 7:
(i) The defined contribution fraction for an Employee who is a
member of one or more defined contribution plans of the Company or an Affiliate
shall be a fraction the numerator of which is the sum of the following:
(A) the Company's and Affiliates' contributions credited
to such Employee's accounts under the defined contribution plan or
plans plus any amount allocated after December 31, 1984, to an
individual medical account as described in Section 415(l) of the Code,
and any amount allocated after December 31, 1985, to a key employee's
post-retirement medical benefit account, as described in Section
419A(d) of the Code,
(B) the Employee's contributions to such plan or plans;
provided that this subparagraph (B) shall not require the
recomputation of the portion of the Employee's contributions to such
plan or plans that are taken into account hereunder for any year
beginning before 1987, and
(C) any forfeitures allocated to his accounts under such
plan or plans, but reduced by any amount permitted by regulations
promulgated by the Commissioner of Internal Revenue,
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and the denominator of which is the lesser of the following amounts determined
for each year of such Employee's Vesting Service:
(D) 1.25 multiplied by the maximum dollar amount allowed
by law for that year; or
(E) 1.4 multiplied by 25% of such Employee's remuneration
for that year.
At the direction of the Committee, for plans in existence on or before July
1, 1982, the portion of the denominator of that fraction with respect to
calendar years before 1983 shall be computed as the denominator for 1982, as
determined under the law as then in effect, multiplied by a fraction the
numerator of which is the lesser of:
(F) $51,875, or
(G) 1.4 multiplied by 25% of such Employee's remuneration
for 1981,
and the denominator of which is the lesser of:
(H) $41,500, or
(I) 25% of such Employee's remuneration for 1981.
Pursuant to regulations prescribed by the Secretary of the Treasury, an
amount shall be subtracted from the numerator of the defined contribution plan
fraction so that the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall not exceed 1.0 for the 1986 calendar year.
(ii) A defined contribution plan shall mean a plan which provides
for an individual account for each member and for benefits based solely on the
amount contributed to the member's account, and any income, expenses, gains and
losses, and any forfeitures of accounts of other members which may be allocated
to such member's accounts, subject to (iii) below; and
(iii) A defined benefit plan shall mean any plan which is not a
defined contribution plan; however, in the case of a defined benefit plan which
provides a benefit which is based partly on the balance of the separate account
of a member, that plan shall be treated as a defined contribution to the extent
benefits are based on the separate account of a member and as a defined benefit
plan with respect to the remaining portion of the benefits under such plan.
(h) Notwithstanding the preceding subsections of this Section 7, in no
event shall an Employee's annual Pension payable under the Plan be less than the
benefit which the Employee had accrued under a predecessor plan as of December
31, 1982; provided,
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however, that in determining such benefit no changes in the terms and conditions
of a predecessor plan on or after July 1, 1982 shall be taken into account.
(i) In the case of an Employee who is a Participant on January 1,
1987, and with respect to whom the requirements of Section 415 of the Code have
been met for all Plan Years, if the Employee's current accrued benefit under the
Plan exceeds the limitations prescribed by this Section 7, then the limitations
imposed by this Section 7 with respect to such Employee shall be equal to the
Employee's current accrued benefit. For this purpose, the term "current accrued
benefit" means the Employee's accrued benefit as of December 31, 1986, when
expressed as an annual benefit (within the meaning of Section 415(b) (2) of the
Code). For purposes of determining the amount of an Employee's current accrued
benefit, no change in the terms and conditions of the Plan after May 5, 1986,
and no cost-of-living adjustment occurring after May 5, 1986, shall be taken
into account.
(j) For purposes of this Section 7, all defined benefit plans (whether
or not terminated) of the Company and its Affiliates shall be treated as one
defined benefit plan, and all defined contribution plans (whether or not
terminated) of the Company and its Affiliates shall be treated as one defined
contribution plan; provided, however, that for purposes of applying Section 3 of
Article I and Section 1563(a) of the Code to this Section 7, the phrase "more
than 50 percent" shall be substituted for the phrase "at least 80 percent."
(k) In the event that a participant under the Plan and any defined
contribution plan maintained by the Company or an Affiliate has a combined
benefit under the plans which exceeds the combined limitation established under
Section 415 of the Code, as amended, the participant's benefits under the Plan
projected to Normal Retirement Date shall be adjusted, to the extent permitted
by law, so that the combined benefit under the plans does not exceed such
limitation.
(l) If the benefits of a Retired Employee which would otherwise be
payable under this Plan are limited by the provisions of this Section 7 and such
limitation is raised to the extent permitted by Treasury regulations issued
under Section 415 of the Code, the amount of benefits under the raised
limitation shall thereafter be paid under this Plan, except that the amount of
benefits under the raised limitation shall not be paid under this Plan if the
Company has in effect an excess benefit plan for the payment of benefits in
excess of the limitation under this Section 7 and the Retired Employee has
elected a form of payment or Beneficiary for his excess benefits different from
the form of payment or Beneficiary of his benefits hereunder.
ARTICLE VIPayment of Pensions and Conditions Related Thereto
1. All Pensions shall be payable in monthly installments as follows:
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(a) The first installment shall be paid to the Retired Employee (or
Spouse, in the case of a Spouse's Pension) as of the Pension Commencement Date
determined in accordance with Articles IV, V and VI.
(b) Where installments are to be paid to a Beneficiary under a
Joint-Survivor Pension, the first installment to the Beneficiary shall be paid
as of the beginning of the first month following the death of the participant.
(c) The final installment shall be paid as of the beginning of the
month during which the death of the Retired Employee or Beneficiary, as the case
may be, occurs, except that the final Disability Pension installment shall be
paid as of (1) the beginning of the month in which occurs the earlier of (i) the
death of such Retired Employee or (ii) the Retired Employee ceases to be
Disabled, or (2) the beginning of the month preceding the month in which the
Retired Employee begins to receive a Service Pension.
2. The benefits under the Plan may not be anticipated, assigned (either at
law or in equity), alienated or subjected to attachment, garnishment, levy,
execution or other legal or equitable process; provided that:
(a) an arrangement whereby benefit payments are paid to a
participant's savings or checking account in a financial institution is not
prohibited; and
(b) once a participant begins receiving benefits under the Plan, such
participant may assign or alienate the right to future payments if such
transaction is limited to assignments or alienations which:
(i) are voluntary and revocable.
(ii) with respect to a particular benefit payment, do not in the
aggregate exceed 10 percent of such payment, and
(iii) are neither for the purpose, nor have the effect, of
defraying administration costs of the Plan; and
(c) payments were made in accordance with a Qualified Domestic
Relations Order are not prohibited.
For the purposes of subsection (b) above, an attachment, garnishment, levy,
execution or other legal or equitable process is not considered a voluntary
assignment or alienation.
3. (a) If a Retired Employee is employed by the Company or any Affiliate as
a regular or temporary employee for at least 40 Hours of Service (within the
meaning of Section 18(a) and (b) of Article I of this Appendix T) per month, his
Pension shall be suspended during each such month in accordance with subsection
(c), below.
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(b) If a participant remains employed by the Company or an Affiliate
as a regular or temporary employee for at least 40 Hours of Service (within the
meaning of Section 18(a) and (b) of Article I of this Appendix T) per month
after attaining Normal Retirement Age, his Pension Commencement Date shall be
delayed in accordance with subsection (c), below.
(c) The Company shall determine whether specific contemplated
employment will result in a suspension or delay in the commencement of a Pension
pursuant to subsection (a) or (b), above, and shall notify the participant of
such suspension or delay by personal delivery or first class mail during the
first calendar month in which the Pension is to be suspended or delayed, shall
afford him a review of such suspension or delay under the procedure specified in
Article IX and shall otherwise administer such suspension or delay and any
subsequent resumption or commencement of Pension payments in a manner consistent
with Subsection 2530.203-3 of Title 29 of the Code of Federal Regulations, as
amended from time to time.
(d) Notwithstanding the foregoing provisions of this Section:
(i) No Pension that has previously commenced shall be suspended
for any month in which a Retired Employee is reemployed after attaining his
Normal Retirement Age, except in accordance with subsections (a) and (c), above;
(ii) If a participant is employed or remains in employment as an
employee as described in subsection (a) or (b), above, his Pension Commencement
Date shall occur no earlier than the first day of the first month in which he
ceases to be so employed, and his Pension shall be calculated, in accordance
with Sections 6, 7, 8 and 9 of Article III of this Appendix T, to take such
employment into account; and
(iii) If a participant whose Pension has been suspended in
accordance with the preceding provisions of this Section 3 becomes entitled to
have his Pension resume, the amount and form of the Pension shall be governed
by, the generally applicable provisions of the Plan, as if the participant had
then first Retired.
4. The Committee may request an Employee, former Employee, Retired
Employee, or Beneficiary to furnish it with such information as it considers
necessary or appropriate for the proper administration of the Plan or the
payment of a Pension. In the event that an Employee, former Employee, Retired
Employee, or Beneficiary refuses to furnish any such information which is
pertinent to the calculation or payment of a Pension, the Committee shall be
authorized to withhold payment of the Pension until the information is provided.
5. Any Employee who is transferred to any employer described in Section
2(b) or (c) of Article III shall not by reason of such transfer be eligible for
Early Retirement or a Deferred Vested Pension under this Plan. However, upon the
conclusion of any such employment (other than by transfer to another such
employer or retransfer to the Company) he shall be entitled to the Pension, if
any, for which he is eligible on the basis
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of his Average Annual Compensation, Vesting Service, and Accredited Service at
that time, calculated in accordance with the provisions of this Plan.
6. (a) The Committee shall direct a lump sum payment of the present value
of a former Employee's Pension, provided that such payment does not exceed
$3,500, determined as of any date after his separation from service and on or
before his Pension Commencement Date. Such lump sum payment shall be the amount
determined by multiplying the Pension
(i) by the appropriate actuarial factor indicated in Table I -
Early Commencement Factors for Deferred Vested Pensions (but only if the Pension
is a Deferred Vested Pension or is a Spouse's Pension that is subject to
reduction under Table I in accordance with Section 4(c) of Article V of this
Appendix T) and then
(ii) by the appropriate actuarial factor indicated in Table III -
Factors for Small Pensions.
(b) For purposes of subsection (a), above, Tables I and III shall be
based on the interest rate used by the Pension Benefit Guaranty Corporation for
the purpose of determining the present value of a lump sum distribution on plan
termination in effect 90 days prior to the proposed distribution date.
(c) This Section 6 is effective as of January 1, 1984, as though it
had been adopted as part of the Plan in effect on that date; provided that the
$3,500 limit in the first sentence of this Section 6 shall not become effective
until January 1, 1987 (August 23, 1984, with respect to the Spouse's Pension)
and that the limit shall be $1,750 before that date; and provided further, that
subsection (b) above, shall not be effective until January 1, 1987 (August 23,
1984, with respect to the Spouse's Pension). Notwithstanding the second
provision in the preceding sentence, subsection (b), above, shall not cause a
lump sum payment to a former Employee to be less than the lump sum payment would
have been as of December 31, 1986.
7. The following subsections limit the timing of Pension distributions
under the Plan:
(a) Any Pension that is payable to a participant hereunder shall be
distributed or commence not later than April I of the calendar year following
the later of (i) the calendar year in which the participant attains age 70 1/2,
or (ii) in the case of a participant who is not a 5% owner as that term is
defined in Section 416(i)(l)(B)(i) of the Code and the regulations thereunder
with respect to the calendar year in which he attains age 70 1/2, the calendar
year in which the participant Retires. The Pension shall be distributed, in
accordance with the regulations under Section 401(a) (9) of the Code,
(i) in a lump sum (to the extent permitted by Section 6 of this
Article VI)
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(ii) over the life of the participant,
(iii) over the lives of the participant and the participant's
Beneficiary,
(iv) over a period not extending beyond the participant's life
expectancy, or
(v) over a period not extending beyond the joint and last
survivor expectancy of the participant and the participant's Beneficiary.
If the participant's entire interest is to be distributed over a period of
more than one year, then the amount to be distributed each year shall be no less
than the amount prescribed in the regulations under Section 401(a) (9) of the
Code.
(b) If the distribution of the participant's Pension has commenced in
conformity with subsection (a) above, and the participant dies before his entire
Pension has been distributed to him, the remaining portion of his Pension shall
be distributed to his Beneficiary at least as rapidly as under the method of
distribution that was in effect, as of the date of the participant's death.
(c) Subject to subsection (d), below, if the participant dies before
distribution of his Pension has commenced, any Pension that is payable under the
terms of the Plan shall be distributed within 5 years after the participant's
death.
(d) Subsection (c), above, shall not apply to
(i) any portion of the participant's Pension payable to (or for
the benefit of) a Beneficiary that is distributed (in accordance with the
regulations under Section 401(a) (9) of the Code) over the Beneficiary's life
(or a period not extending beyond his life expectancy) commencing within one
year after the date of the participant's death (or such later date as may be
prescribed by the regulations under Section 401(a) (9) of the Code), or
(ii) any portion of the participant's Pension payable to his
Spouse that is distributed over the Spouse's life (or a period not extending
beyond the Spouse's life expectancy) commencing no later than the date on which
the participant would have attained age 70 1/2; provided that if the Spouse dies
before payments to such Spouse begin, subsections (c) and (d) shall apply as if
the Spouse were the participant; and further provided that any amount paid to
the child of the participant shall be treated as if it had been paid to the
Spouse of the participant if such amount is payable to the Spouse upon such
child's reaching majority (or such other event as may be prescribed by the
regulations under Section 401(a)(9) of the Code).
(e) For purposes of this Section 7, the life expectancy of the
participant and his Spouse shall be recomputed on an annual basis, but the life
expectancy of any
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nonspouse Beneficiary shall be computed only on the date as of
which the distribution commences.
(f) This Section 7 shall apply notwithstanding any other provision of
the Plan. The sole purpose of this Section 7 is to limit the manner in which the
benefit payments may be made under the Plan in accordance with Section 401(a)(9)
of the Code. This Section 7 does not confer any rights or benefits upon any
participant, Spouse, Beneficiary, or any other person.
(g) This Section 7 shall not apply to any method of distribution
designated in writing by a participant under the terms of the Plan before
January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act of 1982 (as in effect before the amendments made by
the
Tax Reform Act of 1984).
8. Notwithstanding any other provision in the Plan, and subject to the
provisions of Section 5 of Article V of this Appendix T and Section 6 of this
Article VI of this Appendix T, the participant (or his Spouse, in the case of a
Spouse's Pension) may elect a Pension Commencement Date that precedes the normal
Pension Commencement Date if he is otherwise eligible to do so under the terms
of the Plan. The election shall be in writing, in a form acceptable to the
Committee, and executed and filed with the Committee during the 90-day period
ending on the Pension Commencement Date.
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ATTACHMENT I
To
APPENDIX T
CONTEL PROVISIONS
RESOLVED: That effective February 1, 1993 (except as otherwise provided), the
GTE South Incorporated (Southeast) Plan for Hourly-Paid Employees' Pensions (the
"Southeast Plan") is amended conditional upon the receipt of a favorable
determination letter from the Internal Revenue Service that the Southeast Plan
continues to be qualified under section 401(a) of the Internal Revenue Code, as
follows:
1. For purposes of these resolutions, the following words and phrases
shall have the meanings set forth below:
a. "Contel Affiliate" shall mean Contel of Virginia, Inc.
(d/b/a GTE Virginia), Contel of West Virginia, Inc. (d/b/a GTE
West Virginia), Contel of the South, Inc. (d/b/a GTE Systems of
the South), Contel of North Carolina, Inc. (d/b/a GTE North
Carolina), and Contel of South Carolina, Inc. (d/b/a GTE South
Carolina).
b. "Contel Participant" shall mean (i) an hourly-paid
employee of a Contel Affiliate who, on February 1, 1993, is an
"Employee" within the meaning of Section 15 of Article II of the
Southeast Plan or (ii) an Individual Transferee.
c. "Contel Plan" shall mean the Contel System Pension Plan,
as in effect on January 31, 1993, except where a different
effective date is specified in these resolutions.
d. "Contel Service" shall mean a Contel Participant's period
of service as of his Transfer Date that is recognized for benefit
accrual purposes under the terms of the Contel Plan in effect on
that date.
e. "Contel Service Benefit" shall mean a Contel Participant's
accrued benefit determined as of his Transfer Date in accordance
with Sections 1.1 and 14.2 of the Contel Plan in effect on that
date.
f. "GTE Benefit" shall mean (i) in the case of a Contel
Participant whose normal retirement benefit is calculated under
Paragraph 3.a., below, the Contel Participant's GTE Service
Benefit; and (ii) in the case of a Contel Participant whose
normal retirement benefit is calculated under Paragraph 3.b.,
below, the difference between the
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Contel Participant's Total Service Benefit and his Contel
Service Benefit.
g. "GTE Compensation" shall mean a Contel Participant's
compensation determined under the definition of compensation set
forth in the Southeast Plan that is used to determine a
participant's benefits thereunder. GTE Compensation shall include
the remuneration that the Contel Participant received on or
before his Transfer Date from a Contel Affiliate or from another
company participating in the Contel Plan, but only to the extent
that such remuneration is of a type that is recognized and taken
into account under the Southeast Plan's definition of
compensation.
h. "GTE Service" shall mean the Contel Participant's period
of service after his Transfer Date that is recognized under the
terms of the Southeast Plan for benefit accrual purposes.
i. "GTE Service Benefit" shall mean a Contel Participant's
accrued benefit determined under the Southeast Plan's benefit
formula and based on the Contel Participant's GTE Service and GTE
Compensation.
j. "Individual Transferee" shall mean a person who (i) became
a participant in the Southeast Plan before February 1, 1993, (ii)
transferred (either voluntarily or involuntarily) from a Contel
business unit to a GTE business unit before February 1, 1993,
(iii) was a participant in the Contel Plan before he transferred
to a GTE business unit, (iv) ceased accruing a benefit under the
Contel Plan as of the date he transferred to a GTE business unit,
and (v) has not commenced receiving benefits under either the
Contel Plan or the Southeast Plan as of January 31, 1993.
k. "Total Service Benefit" shall mean a Contel Participant's
accrued benefit determined solely under the Southeast Plan's
benefit formula based on the Contel Participant's Contel Service
and GTE Service and his GTE Compensation.
l. "Transfer Date" shall mean (i) with respect to an
Individual Transferee, the date on which he ceased accruing
benefits under the Contel Plan, and (ii) with respect to all
other Contel Participants, January 31, 1993.
2. For purposes of determining vesting and benefit eligibility
(including eligibility for early retirement benefits, disability
benefits, and other benefits), the Southeast Plan shall recognize the
period of service with
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which a Contel Participant is credited as of January 31, 1993, for
vesting and benefit eligibility purposes under the terms of the Contel
Plan.
3. The normal retirement benefit under the Southeast Plan of a Contel
Participant shall be equal to the greater of the following:
a. The sum of the Contel Participant's Contel Service Benefit
and GTE Service Benefit; or
b. The Contel Participant's Total Service Benefit.
4. The early retirement benefits, optional forms of benefit, and
ancillary benefits that are available under the Contel Plan, shall be
available under the Southeast Plan to Contel Participants subject to
the following conditions:
a. Early Retirement Benefits:
(1) A Contel Participant who, as of January 31, 1993,
has satisfied the requirements for an early retirement
benefit under Section 4.3 of the Contel Plan shall be
eligible to receive an early retirement benefit subject to
the following conditions:
(a) if the Contel Participant's benefit
is determined under Paragraph 3.a., above, his Contel
Service Benefit shall be reduced in accordance with the
Contel Plan's early retirement reduction factors, and
his GTE Service Benefit shall not be reduced to reflect
commencement before his normal retirement date; and
(b) if the Contel Participant's benefit
is determined under Paragraph 3.b., above, his Total
Service Benefit shall not be reduced to reflect
commencement before his normal retirement date.
(2) A Contel Participant who, after February 1, 1993,
satisfies the requirements for an early retirement benefit
under Section 4.3 of the Contel Plan, but who does not
satisfy the requirements for an early retirement benefit
under the Southeast Plan, shall be eligible to receive an
early retirement benefit subject to the following
conditions:
(a) if the Contel Participant's benefit
is determined under Paragraph 3.a., above, his Contel
Service Benefit shall be reduced in accordance with the
Contel Plan's early retirement reduction factors, and
his GTE Service Benefit shall be actuarially reduced
from his normal
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retirement date (using the Southeast Plan's early
commencement factors that are applicable to deferred
vested pensions); and
(b) if the Contel Participant's benefit
is determined under Paragraph 3.b., above, his Total
Service Benefit shall be actuarially reduced from his
normal retirement date (using the Southeast Plan's
early commencement factors that are applicable to
deferred vested pensions).
(3) A Contel Participant who, either before or after
February 1, 1993, satisfies the requirements for an early
retirement benefit under the Southeast Plan shall be
eligible to receive an early retirement benefit pursuant to
the terms of the Southeast Plan, regardless of whether he
has satisfied the requirements for an early retirement
benefit under Section 4.3 of the Contel Plan, subject to the
following conditions:
(a) if the Contel Participant's benefit
is determined under Paragraph 3.a., above, his Contel
Service Benefit shall be reduced in accordance with the
Contel Plan's early retirement reduction factors, and
his GTE Service Benefit shall be reduced in accordance
with the Southeast Plan's early retirement reduction
factors; and
(b) if the Contel Participant's benefit
is determined under Paragraph 3.b., above, his Total
Service Benefit shall be reduced in accordance with the
Southeast Plan's early retirement reduction factors.
b. Deferred Vested Benefits:
(1) If a Contel Participant terminates from service with
a nonforfeitable right to a benefit under Article 6 of the
Contel Plan, he may elect to begin receiving his benefit
under the Southeast Plan as of any date provided under
Article 6 of the Contel Plan, or, if earlier, as of any date
provided under the terms of the Southeast Plan.
(2) If a Contel Participant elects to receive his
benefit as provided in Paragraph 4.b.(1), above, his entire
benefit shall be reduced in accordance with the Southeast
Plan's early commencement factors that are applicable to
deferred vested pensions. However, in no event shall the
amount of a Contel
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Participant's benefit determined as provided in the
preceding sentence be less than the amount of his Contel
Service Benefit reduced in accordance with the Contel Plan's
early commencement factors that are applicable to deferred
vested pensions.
c. Optional Forms of Payment:
(1) If a Contel Participant satisfies (either before or
after February 1, 1993) the requirements for an optional
form of benefit under the Contel Plan (other than any
optional forms of benefit that are available solely with
respect to a Transitional Benefit or Special Minimum Benefit
under Articles 14 and 15 of the Contel Plan), the Contel
Participant may elect to receive his entire benefit in any
optional form of benefit provided under the Contel Plan
(including, but not limited to, a life and 5-year certain
annuity, and the various qualified joint and survivor
annuities available under Section 4.6B. of the Contel Plan),
subject to the conditions specified in subparagraph (2),
below. If a Contel Participant satisfies (either before or
after February 1, 1993) the requirements for an optional
form of benefit under the Southeast Plan, the Contel
Participant may elect to receive his entire benefit in any
optional form of benefit provided under the Southeast Plan.
Except as provided in Paragraph 5.c., below, with respect to
certain grandfathered benefits, a Contel Participant's
election of an optional form shall be applicable to his
entire benefit.
(2) If a Contel Participant elects to receive his benefit
in a form that is available under both the Contel Plan and
the Southeast Plan (including a lump sum payment of a vested
accrued benefit whose value is $3,500 or less) 1 his benefit
shall be determined as follows:
(a) if the Contel Participant's benefit
is determined under Paragraph 3.a., above, the Contel
Participant's Contel Service Benefit payable in the
form provided in Section 4.6.A. of the Contel Plan
shall be converted to an actuarially equivalent single
life annuity ("Converted Contel Service Benefit"), and
then the actuarial factors or assumptions that are
applicable to the form elected as provided under the
terms of the Contel Plan shall be applied to the Contel
Participant's Converted Contel Service Benefit and GTE
Service Benefit; and
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(c) if the Contel Participant's benefit
under the Southeast Plan is determined under Paragraph
3.b., above, the actuarial factors or assumptions that
are applicable to the form elected as provided under
the terms of the Southeast Plan shall be applied to the
Contel Participant's entire benefit.
However, in no event shall the amount of a Contel
Participant's benefit determined as provided in subparagraph
(a) or (b), above, be less than the amount of the Contel
Participant's Contel Service Benefit payable in the same
form and determined on the basis of the actuarial factors or
assumptions that are applicable to the form elected as
provided under the terms of the Contel Plan
(3) If a Contel Participant elects to receive his benefit
in a form that is available solely under the Southeast Plan,
the actuarial factors or assumptions that are applicable to
the form elected as provided under the terms of the
Southeast Plan shall be applied to the Contel Participant's
entire benefit.
d. Ancillary Benefits: Except as provided in Paragraph 5.a.,
below, with respect to certain grandfathered benefits, a Contel
Participant shall not be eligible under the Southeast Plan to
receive any ancillary benefit (including, but not limited to any
disability benefit not in excess of a "qualified disability
benefit" under Section 411(a)(9) of the Code and any
preretirement or post-retirement death benefit) that is available
under the Contel Plan and that is a part of the Contel
Participant's Contel Service Benefit. A Contel Participant's
entitlement to any ancillary benefit under the Southeast Plan
shall be determined solely by the terms of the Southeast Plan
with respect to the Contel Participant's entire accrued benefit.
The terms of the Southeast Plan shall determine the type, amount,
duration, and other characteristics of each ancillary benefit
that is payable to a Contel Participant.
5. Provisions Applicable to Certain Grandfathered Benefits:
a. A Contel Participant shall be eligible under the Southeast
Plan to receive any ancillary benefit that is part of a
Transitional Benefit or Special Minimum Benefit provided under
Articles 14 and 15 of the Contel Plan, including, but not limited
to, the Special Surviving Spouse Benefit that is provided for in
Section 14.5 of the Contel Plan, but only with respect to the
Contel Participant's Transitional Benefit or Special Minimum
Benefit that has accrued as of January 31, 1993.
-198-
525
<PAGE>
b. If a Contel Participant satisfies the requirements under
Article 14 or 15 of the Contel Plan for commencement of benefits
before his normal retirement date, he may elect to receive his
Contel Service Benefit pursuant to the terms of Article 14 or 15
of the Contel Plan. If a Contel Participant elects to begin
receiving his Contel Service Benefit under Article 14 or 15 of
the Contel Plan before he is otherwise eligible to receive his
GTE Benefit, the Contel Participant shall begin receiving his GTE
Benefit on the earliest date under the Southeast Plan on which a
Contel Participant may begin receiving a benefit.
c. If a Contel Participant satisfies the requirements
applicable to any optional forms of benefit that are available
solely with respect to a Transitional Benefit or Special Minimum
Benefit under Article 14 or 15 of the Contel Plan, the Contel
Participant may elect to receive his Contel Service Benefit in
any such forms. If a Contel Participant elects to receive his
Contel Service Benefit pursuant to this Paragraph 5.c. in a form
that includes a survivor annuity, the Contel Participant's GTE
Benefit shall be payable under the Southeast Plan's automatic
qualified joint and survivor annuity, with the same person
receiving the survivor annuity under the Contel Service Benefit
and the GTE Benefit. If a Contel Participant elects to receive
his Contel Service Benefit pursuant to this Paragraph 5.c. in a
form that does not provide a survivor annuity, the Contel
Participant's GTE Benefit shall be payable as a single life
annuity.
6. Provisions Applicable to All Participants in the Southeast Plan:
Effective February 1, 1993, all pre-March 14, 1991 GTE pension
plan or Contel Plan Vesting Credited or Accredited Service of current
participants in the Southeast Plan that has not already been taken
into account under the terms of the Southeast Plan will be considered
to be Vesting Service or Accredited Service, as the case may be, for
all purposes under the terms of the Southeast Plan, including vesting,
eligibility and benefit computation purposes; provided that no
participant shall be credited with Accredited Service pursuant to this
Paragraph 6 if such participant is receiving a benefit under the
Contel System Pension Plan with respect to such Service.
-199-
526
<PAGE>
13.20 Employees of CPI Acquisition, Inc. d/b/a Computer Power, Inc.
(a) Effective Date - March 1, 1992.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX U - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF CPI ACQUISITION, INC. D/B/A COMPUTER POWER,
INC., which follows immediately hereafter.
-200-
527
<PAGE>
APPENDIX U
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
CPI ACQUISITION, INC. D/B/A COMPUTER POWER, INC.
Effective as of the close of business on February 28, 1992, CPI Acquisition,
Inc. d/b/a Computer Power, Inc. ("CPI") became a member of the Controlled Group.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of CPI who became employees of the
Controlled Group on March 1, 1993.
A. Section 1.07 is modified by adding to the definition thereof the
following:
1.07U "Basic Compensation" shall include only amounts earned (as
an Employee of an Employer) after February 28, 1992.
B. Section 1.14 is modified by adding to the definition thereof the
following:
1.14U "Compensation" shall include only amounts earned (as an
Employee of an Employer) after February 28, 1992.
C. Section 1.37(g) is modified as follows:
1.37(g)R Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to March 1, 1992: An
Employee's period(s) of employment with CPI after
February 28, 1987, and prior to March 1, 1992, shall
be counted as Vesting Service to the extent that
such periods would have counted under the Plan if
such employment had been with the Company.
(ii) Service From and After March 1,
1992: In accordance with the provisions of Section
1.37(g).
-201-
528
<PAGE>
D. Section 1.37(d) is modified as follows:
1.37(d)U Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to March 1,
1992: None.
(ii) Benefit Service From and After
March 1, 1992: In accordance with the provisions of
Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)U Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to March 1, 1992: An
Employee's period(s) of employment with CPI after
February 28, 1987, and prior to March 1, 1992, shall
be counted as Eligibility Years of Service to the
extent that such periods would have counted under
the Plan if such employment had been with the
Company.
(ii) Service From and After March 1,
1992: In accordance with the provisions of Section
1.37(f).
-202-
529
<PAGE>
13.21 Employees of TDS Healthcare Systems Corporation
(a) Effective Date - October 1, 1993.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to Section 401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX V - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF TDS HEALTHCARE SYSTEMS CORPORATION, which
follows immediately hereafter.
-203-
530
<PAGE>
APPENDIX V
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
SLT COMMUNICATIONS, INC. AND ITS SUBSIDIARIES
Effective as of October 1, 1993, certain employees of TDS Healthcare Systems
Corporation and/or its subsidiaries ("TDS") became employees of the Controlled
Group.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of TDS who became employees of the
Controlled Group on October 1, 1993.
A. Section 1.07 is modified by adding to the definition thereof the
following:
1.07V "Basic Compensation" shall include only amounts earned (as
an Employee of an Employer) after September 30, 1993.
B. Section 1.14 is modified by adding to the definition thereof the
following:
1.14V "Compensation" shall include only amounts earned (as an
Employee of an Employer) after September 30, 1993.
C. Section 1.37(g) is modified as follows:
1.37(g)R Vesting Service
(a) A Participant's eligibility for benefits under
the Plan shall be determined by his period of Vesting
Service, in accordance with the following:
(i) Service Prior to October 1, 1993: An
Employee's period(s) of employment with TDS after
September 30, 1988, and prior to October 1, 1993,
shall be counted as Vesting Service to the extent
that such periods would have counted under the Plan
if such employment had been with the Company.
(ii) Service From and After October 1,
1993: In accordance with the provisions of Section
1.37(g).
-204-
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<PAGE>
D. Section 1.37(d) is modified as follows:
1.37(d)V Benefit Service
(a) The amount of the benefit payable to or on
behalf of a Participant shall be determined on the basis
of his Benefit Service, in accordance with the following:
(i) Benefit Service Prior to October 1,
1993: None.
(ii) Benefit Service From and After
October 1, 1993: In accordance with the provisions
of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)V Eligibility Year of Service
(a) A Participant's Eligibility Years of Service
under the Plan shall be determined in accordance with the
following:
(i) Service Prior to October 1, 1993: An
Employee's period(s) of employment with TDS after
September 30, 1988, and prior to October 1, 1993,
shall be counted as Eligibility Years of Service to
the extent that such periods would have counted
under the Plan if such employment had been with the
Company.
(ii) Service From and After October 1,
1993: In accordance with the provisions of Section
1.37(f).
-205-
532
<PAGE>
EXHIBIT 10(l)
ALLTEL CORPORATION
PROFIT-SHARING PLAN
(January 1, 1994 Restatement)
533
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
ARTICLE I DEFINITIONS 2
1.01 Authorized Leave of Absence 2
1.02 Beneficiary 2
1.03 Board of Directors 2
1.04 Break in Service 2
1.05 Code 2
1.06 Company 2
1.07 Compensation 3
1.08 Computation Period 3
1.09 Controlled Group 4
1.10 Early Retirement Date 4
1.11 Effective Date 4
1.12 Eligible Employee 4
1.13 Employee 5
1.14 Employer 5
1.15 Employer Contribution 5
1.16 Employment Commencement Date 5
1.17 ERISA 5
1.18 Forfeiture 6
1.19 Guaranteed Principal Investment Fund 6
1.20 Highly Compensated Employee 6
1.21 Hour of Service 8
1.22 Investment Fund A 8
1.23 Late Retirement Date 8
1.24 Nonhighly Compensated Employee 8
1.25 Normal Retirement Age 8
1.26 Normal Retirement Date 8
1.27 Participant 8
1.28 Plan 9
1.29 Plan Administrator 9
1.30 Plan Year 9
1.31 Prior Plan 9
1.32 Reemployment Commencement Date 9
1.33 Region 9
1.34 Separate Account 9
1.35 Spouse 9
1.36 Sub-Account 9
1.37 Termination of Employment 10
(i)
534
<PAGE>
1.38 Total and Permanent Disability 10
1.39 Trust 10
1.40 Trust Agreement 10
1.41 Trustee 10
1.42 Trust Fund 10
1.43 Valuation Date 11
1.44 Year of Eligibility Service 11
1.45 Year of Participation 11
1.46 Year of Service 11
1.47 Year of Vesting Service 11
ARTICLE II ADMINISTRATION 12
2.01 Plan Administrator 12
2.02 Allocation of Authority and Responsibility
Among Named Fiduciaries 12
2.03 Rights, Powers and Duties of the Plan
Administrator 12
2.04 Discharge of Duties 13
2.05 Indemnification 13
2.06 Compensation and Expenses 14
2.07 Committee 14
2.08 Administrative Expenses 15
ARTICLE III GENERAL PROVISIONS 16
3.01 Adoption of the Plan by Other Employers 16
3.02 No Contract of Employment 16
3.03 Restrictions Upon Assignments and
Creditor's Claims 16
3.04 Facility of Payment 17
3.05 Restriction of Claims Against Trust 17
3.06 Benefits Payable from Trust 17
3.07 Merger and Transfer of Assets or
Liabilities 17
3.08 Applicable Law 17
3.09 Reversion of Employer Contributions 18
ARTICLE IV CLAIMS PROCEDURES 19
4.01 Claim for Benefits 19
4.02 Review 19
ARTICLE V AMENDMENT AND TERMINATION 21
5.01 Amendment and Termination of the Plan 21
5.02 Procedure Upon Termination 21
(ii)
535
<PAGE>
5.03 Non-Forfeitability Upon Termination of
Plan 22
5.04 Reorganization 22
5.05 Withdrawal of an Employer 22
ARTICLE VI TRUST AGREEMENT AND TRUST FUND 23
6.01 Trust Agreement and Trust Fund 23
6.02 Irrevocability 23
6.03 Benefits Payable Only from Trust Fund 23
6.04 Optional Provision for Benefits 23
6.05 Commingling Authorized 23
ARTICLE VII LIMITATION ON CONTRIBUTIONS 25
7.01 Definitions 25
7.02 Limitations on Crediting of
Contributions and Forfeitures 26
7.03 Coverage Under Other Qualified Defined
Contribution Plan 27
7.04 Coverage Under Qualified Defined
Benefit Plan 27
7.05 Scope of Limitations 28
ARTICLE VIII TOP-HEAVY PROVISIONS 29
8.01 Definitions 29
8.02 Applicability 31
8.03 Minimum Employer Contribution 31
8.04 Coordination with Other Plans 32
8.05 Adjustments to Section 415 Limitations 32
8.06 Accelerated Vesting 32
ARTICLE IX SERVICE 34
9.01 Crediting of Hours of Service 34
9.02 Limitations on Crediting of Hours of
Service 35
9.03 Department of Labor Rules 36
9.04 Years of Eligibility Service 36
9.05 Years of Vesting Service 38
9.06 Vesting Following Break in Service 41
ARTICLE X ELIGIBILITY AND PARTICIPATION 42
10.01 Eligibility 42
10.02 Termination and Rehiring 42
10.03 Duration of Participation 43
(iii)
536
<PAGE>
ARTICLE XI INVESTMENT FUNDS, ACCOUNTING, AND SEPARATE
ACCOUNTS 44
11.01 Composition of Trust Fund 44
11.02 Election to Transfer to Guaranteed
Principal Investment Fund 45
11.03 Allocation of Earnings or Losses to
Separate Accounts 45
11.04 Separate Accounts 45
11.05 Sub-Accounts 46
ARTICLE XII VOLUNTARY CONTRIBUTIONS AND ROLLOVER
CONTRIBUTIONS 47
12.01 No Voluntary Contributions 47
12.02 No Rollover Contributions 47
ARTICLE XIII EMPLOYER CONTRIBUTIONS AND ALLOCATIONS 48
13.01 Employer Contributions 48
13.02 Timing of Employer Contributions 48
13.03 Allocation of Forfeitures 48
13.04 Allocation of Employer Contributions 49
13.05 Allocation of Employer Contributions
for Certain Transfer Employees 49
13.06 Limitation on Employer Contributions 51
ARTICLE XIV BENEFITS AND DISTRIBUTIONS 52
14.01 Normal Retirement 52
14.02 Late Retirement 52
14.03 Early Retirement 52
14.04 Disability Retirement 52
14.05 Death 53
14.06 Other Termination of Employment 54
14.07 Provision Pursuant to Section 401(a)(9)
of the Code 54
14.08 Provision Pursuant to Section 401(a)(14)
of the Code 55
14.09 Administrative Powers Relating to
Payments 55
14.10 Reemployment 56
14.11 Special Provisions Effective
January 1, 1995 57
ARTICLE XV FORMS OF PAYMENT 58
15.01 Method of Distribution 58
15.02 Notice Regarding Distributions 58
(iv)
537
<PAGE>
15.03 Small Benefit Cash-Out 59
15.04 Payment to Estate 60
15.05 Direct Rollover Requirements 60
15.06 Valuation Date 61
15.07 Form of Election 61
ARTICLE XVI VESTING AND FORFEITURES 62
16.01 Full Vesting 62
16.02 Vesting Schedule 62
16.03 Forfeitures 63
16.04 Restoration of Certain Forfeitures
on Reemployment 64
16.05 Vesting Following Certain Distributions 64
16.06 Election of Former Vesting Schedule 65
ARTICLE XVII BENEFICIARIES 66
17.01 Designation of Beneficiary 66
17.02 Spousal Consent Requirements 66
17.03 No Beneficiary 66
17.04 Reliance 67
ARTICLE XVIII LOANS 68
18.01 No Loans 68
ARTICLE XIX IN-SERVICE WITHDRAWALS 69
19.01 No In-Service Withdrawals 69
ARTICLE XX MERGER OF CERTAIN PLANS INTO THE PLAN 70
20.01 In General 70
20.02 Merger of Allied Telephone Company
Profit Sharing Plan 70
20.03 Merger of Profit Sharing Plan for
Employees of Systematics Information
Services, Inc. and Participating
Affiliates 71
ARTICLE XXI SPECIAL PROVISIONS AND EFFECTIVE DATES 73
21.01 Effective Date 73
21.02 Tax Reform Act of 1986 Effective Dates 73
(v)
538
<PAGE>
ALLTEL CORPORATION
PROFIT-SHARING PLAN
(January 1, 1994 Restatement)
PREAMBLE
The ALLTEL Corporation Profit-Sharing Plan, originally
effective as of January 1, 1988, is hereby amended and
restated in its entirety. The Plan, as amended and restated
hereby, is intended to qualify as a profit-sharing plan under
Section 401(a) of the Code. The Plan is maintained for the
exclusive benefit of eligible employees and their
beneficiaries.
Notwithstanding any other provision of the Plan to the
contrary, a Participant's vested interest in his Separate
Account under the Plan on and after the effective date of this
amendment and restatement shall be not less than his vested
interest in his account on the day immediately preceding the
effective date.
539
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used herein with the initial letter capitalized, the
following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context.
For purposes of construction of the Plan, the masculine term
shall include the feminine and the singular shall include the
plural in all cases in which they could thus be applied.
1.01 Authorized Leave of Absence
Any absence from regular employment authorized or
excused by the Employer under its standard personnel
practices, provided that all persons under similar
circumstances shall be treated alike in the granting of
such Authorized Leaves of Absence.
1.02 Beneficiary
The person or persons entitled under the provisions of
the Plan to receive distribution hereunder in the event
the Participant dies before receiving distribution of
his entire vested interest under the Plan.
1.03 Board of Directors
The Board of Directors of the Company.
1.04 Break in Service
A Computation Period during which an Employee does not
complete more than 500 Hours of Service.
1.05 Code
The Internal Revenue Code of 1986, as amended from time
to time. Reference to a section of the Code includes
such section and any comparable section or sections of
any future legislation that amends, supplements, or
supersedes such section.
1.06 Company
ALLTEL Corporation, its corporate successors, and the
surviving corporation resulting from any merger of
ALLTEL Corporation with any other corporation or
corporations.
-2-
540
<PAGE>
1.07 Compensation
The amount paid by the Employer during the Plan Year
directly to the Employee, including basic wages, cash
bonuses, overtime compensation, commissions, shift
differentials, in-charge premiums, and any amount the
payment of which is deferred under the ALLTEL Corpora
tion Executive Deferred Compensation Plan, the ALLTEL
Corporation Performance Incentive Compensation Plan, or
the ALLTEL Corporation Long-Term Performance Incentive
Plan, but excluding any other forms of additional
compensation and further excluding non-wage taxable
fringe benefits. Compensation which a Participant
elects to defer under the above-specified plans shall,
for purposes of the Plan, be credited to the
Participant as compensation during the period when such
deferred amounts would have been paid (in the absence
of the deferral election) rather than during the period
when such deferred amounts are earned or actually paid.
Compensation shall not be affected by any compensation
reduction pursuant to a "cafeteria plan" as defined in
Section 125 of the Code.
In no event, however, shall the Compensation of a
Participant taken into account under the Plan for any
Plan Year exceed (1) $200,000 for Plan Years beginning
after December 31, 1988 but prior to January 1, 1994,
or (2) $150,000 for Plan Years beginning on or after
January 1, 1994 (subject to adjustment annually as
provided in Section 401(a)(17)(B) and Section 415(d) of
the Code). If the compensation of a Participant is
determined over a period of time that contains fewer
than 12 calendar months, then the annual compensation
limitation described above shall be adjusted with
respect to that Participant by multiplying the annual
compensation limitation in effect for the Plan Year by
a fraction the numerator of which is the number of full
months in the period and the denominator of which is
12. In determining the Compensation, for purposes of
applying the annual compensation limitation described
above, of a Participant who is a five-percent owner or
among the ten Highly Compensated Employees receiving
the greatest Compensation for the Plan Year, the
Compensation of the Participant's Spouse and of his
lineal descendants who have not attained age 19 as of
the close of the Plan Year shall be included as
Compensation of the Participant for the Plan Year. If
as a result of applying the family aggregation rule
described in the preceding sentence the annual
compensation limitation would be exceeded, the
limitation shall be prorated among the affected family
members in proportion to each member's Compensation as
determined prior to application of the family
aggregation rules.
1.08 Computation Period
For purposes of determining an Employee's Years of
Eligibility Service, a Computation Period means (i) the
12-consecutive-month period beginning on his Employment
Commencement Date, and (ii) each Plan Year beginning
after his Employment Commencement Date.
-3-
541
<PAGE>
For purposes of determining an Employee's Years of
Vesting Service, a Computation Period means each Plan
Year, commencing with the Plan Year in which occurs his
Employment Commencement Date.
For purposes of determining a Participant's Years of
Participation, a Computation Period means each Plan
Year.
1.09 Controlled Group
An Employer and any and all other corporations, trades,
businesses, or organizations, the employees of which
together with the employees of the Employer are
required, pursuant to the applicable provisions of
Section 414(b), (c), or (m) of the Code, to be treated
as if they were employed by a single employer.
1.10 Early Retirement Date
The last day of the month in which a Participant's
employment terminates with the Employer and all other
members of the Controlled Group before his Normal
Retirement Age but after he has met the age and service
requirements specified in Section 14.03.
1.11 Effective Date
The Plan was originally effective as of January 1,
1988.
1.12 Eligible Employee
Each Employee of the Employer, except
(1) an Employee covered by a collective
bargaining agreement between an Employer and a
representative of such Employee that does not
specifically provide for coverage under the Plan;
provided, however, that if an Employee ceases to
be covered by a collective bargaining agreement
(other than by a transfer of employment), such an
Employee shall not become an Eligible Employee
unless coverage under the Plan is specifically
extended to such an Employee by an amendment to
the Plan,
(2) any person who is a nonresident alien and
who receives no earned income (within the meaning
of Section 911(b) of the Code) from the Employer
that constitutes income from sources within the
United States (within the meaning of Section
861(a)(3) of the Code), or
(3) a leased employee.
-4-
542
<PAGE>
1.13 Employee
A person employed by the Controlled Group.
"Employee" shall include any "leased employee" (as
hereinafter defined); provided, however, contributions
or benefits provided by the leasing organization which
are attributable to services performed for the Employer
shall be treated as provided by the Employer. For
purposes of this paragraph, the term "leased employee"
means any person who, pursuant to an agreement between
the Employer and any other person ("leasing
organization"), has performed services for the Employer
(or for the Employer and related persons determined in
accordance with Section 414(n)(6) of the Internal
Revenue Code) on a substantially full-time basis for a
period of at least one year, if such services are of a
type historically performed by employees in the
business field of the Employer. Notwithstanding the
foregoing, a leased employee shall not be considered an
Employee for any Plan Year if such leased employees
constitute less than 20% of the number of the
Employer's Nonhighly Compensated Employees within the
meaning of Section 414(n)(5)(C)(ii) of the Code and if
during such Plan Year the leased employee is covered by
a plan described in Section 414(n)(5)(B) of the Code.
A leased employee is not eligible to participate in the
Plan unless he actually becomes an Employee without
regard to this paragraph.
1.14 Employer
The Company and any other member of the Controlled
Group adopting the Plan pursuant to Section 3.01 or any
corresponding predecessor provision of the Plan.
1.15 Employer Contribution
An Employer profit-sharing contribution made pursuant
to Section 13.01.
1.16 Employment Commencement Date
The date on which an Employee first performs an Hour of
Service for the Employer or any other member of the
Controlled Group.
1.17 ERISA
The Employee Retirement Income Security Act of 1974, as
the same has been and may be amended from time to time.
Reference to a section of ERISA includes such section
and any comparable section or sections of any future
legislation that amends, supplements, or supersedes
such section.
-5-
543
<PAGE>
1.18 Forfeiture
The non-vested portion of a Participant's Separate
Account that is forfeited pursuant to Section 16.03.
1.19 Guaranteed Principal Investment Fund
An investment fund described in Section 11.01.
1.20 Highly Compensated Employee
(a) An Employee is a Highly Compensated
Employee under this provision if (a) the Employee
is a 5-percent owner; (b) the Employee's
compensation for the Plan Year exceeds the
Section 414(q)(1)(B) of the Code amount; (c) the
Employee's compensation exceeds the
Section 414(q)(1)(C) of the Code amount for the
Plan Year and the Employee is in the top-paid
group of employees within the meaning of
Section 414(q)(4) of the Code, or (d) the
Employee is an officer described in
Section 414(q)(1)(D) of the Code.
(b) The lookback provisions of Section 414(q)
of the Code shall not apply to determining Highly
Compensated Employees under this provision.
This simplified method for determining Highly
Compensated Employees shall apply on the basis of a
snapshot day. In applying this simplified method on a
snapshot basis:
(a) Who is a Highly Compensated Employee is
determined on the basis of the data as of the
snapshot day, except as provided below in (c).
(b) If the determination of who is a Highly
Compensated Employee is made earlier than the
last day of the Plan Year, the Employee's
compensation that is used to determine an
Employee's status must be projected for the Plan
Year under a reasonable method established by the
Company.
(c) Employees not employed on the snapshot day
that are taken into account in testing must be
categorized as either Highly Compensated
Employees or Non-Highly Compensated Employees.
In that case, the method described in this
section shall be subject to the following
modifications. In addition to those Employees who
are determined to be Highly Compensated Employees
on the Plan's snapshot day, as described above,
the Plan shall treat as a Highly Compensated
Employee an eligible Employee for the Plan Year
who:
(1) terminated prior to the
snapshot day and was a Highly Compensated
Employee in the prior year;
-6-
544
<PAGE>
(2) terminated prior to the
snapshot day and (i) was a 5-percent owner,
(ii) has compensation for the Plan Year
greater than or equal to the projected
compensation of any Employee who is treated
as a Highly Compensated Employee on the
snapshot day (except for Employees who are
Highly Compensated Employees solely because
they are 5-percent owners or officers), or
(iii) was an officer and has compensation
greater than or equal to the projected
compensation of any other officer who is a
Highly Compensated Employee on the snapshot
day solely because that person is an
officer; or
(3) becomes employed subsequent to
the snapshot day and (i) is a 5-percent
owner, (ii) has compensation for the Plan
Year greater than or equal to the projected
compensation of any Employee who is treated
as a Highly Compensated Employee on the
snapshot day (except for Employees who are
Highly Compensated Employees solely because
they are 5-percent owners or officers), or
(iii) is an officer and has compensation
greater than or equal to the projected
compensation of any other officer who is a
Highly Compensated Employee on the snapshot
day solely because that person is an
officer.
In applying this provision, Section 1.414(q)-1T of the
Temporary Income Tax Regulations applies to the extent
that it is not inconsistent with the methods
specifically provided above.
"Highly Compensated Employee" shall include a former
Employee of the Company whose employment with the
Controlled Group terminated prior to the Plan Year and
who was a Highly Compensated Employee for the Plan Year
in which his employment terminated or for any Plan Year
ending on or after his 55th birthday.
If an Employee is a member of the family of a 5-percent
owner or one of the 10 Highly Compensated Employees
paid the greatest compensation for a Plan Year, then
the Employee shall not be considered a separate
Employee and any compensation paid to such Employee
(and any contribution on behalf of such Employee) shall
be treated as if it were paid to (or on behalf of) the
5-percent owner or the Highly Compensated Employee.
For the purposes of this definition of "Highly
Compensated Employee",
(a) the term "compensation" shall mean an
Employee's compensation (within the meaning of
Section 415(c)(3) of the Code determined without
regard to Sections 125, 402(a)(8) and
402(h)(1)(B) of the Code),
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(b) the term "top-paid group of Employees"
shall mean that group of Employees of the
Controlled Group consisting of the top 20 percent
of such Employees when ranked on the basis of
compensation paid by the Controlled Group during
the Plan Year and
(c) the term "family" shall mean an Employee's
spouse and lineal ascendants and descendants and
the spouses of such lineal ascendants or
descendants.
1.21 Hour of Service
Each hour, if any, that may be credited to a person in
accordance with the provisions of Article IX.
1.22 Investment Fund A
An investment fund described in Section 11.01.
1.23 Late Retirement Date
The last day of the month in which a Participant's
employment terminates with the Employer and all other
members of the Controlled Group after his Normal
Retirement Age.
1.24 Nonhighly Compensated Employee
Any Employee who is not a Highly Compensated Employee.
1.25 Normal Retirement Age
The date a Participant attains age 65.
1.26 Normal Retirement Date
The last day of the month in which a Participant
attains his Normal Retirement Age.
1.27 Participant
An Eligible Employee who fulfills the eligibility
requirements as provided in Article X and who continues
to qualify as a Participant in accordance with
Section 10.03.
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1.28 Plan
The ALLTEL Corporation Profit-Sharing Plan, as set
forth herein and as may be amended from time to time.
1.29 Plan Administrator
The Company, which shall serve pursuant to the terms of
Article II. The Company may allocate or delegate any
or all of its authority under the Plan to a Committee
of no less than three persons.
1.30 Plan Year
The twelve-month period which begins on the first day
of January and which ends on the last day of December.
1.31 Prior Plan
Any other qualified plan that is merged into the Plan
under Article XX.
1.32 Reemployment Commencement Date
The date on which an Employee first performs an Hour of
Service following a termination of employment with the
Controlled Group.
1.33 Region
An operating region, corporate division or other
grouping of Employees of the Employer, as designated
from time to time by the Committee.
1.34 Separate Account
The separate account maintained by the Trustee in the
name of a Participant that reflects his interest in the
Trust Fund and any Sub-Accounts established thereunder,
as provided in Article XI.
1.35 Spouse
The person to whom a Participant is legally married at
the time in question.
1.36 Sub-Account
Any of the individual sub-accounts of a Participant's
Separate Account that is maintained as provided in
Article XI.
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1.37 Termination of Employment
A termination of employment with the Employer or other
member of the Controlled Group following which the
person is no longer employed by any member of the
Controlled Group.
1.38 Total and Permanent Disability
Permanent incapacity resulting in the Participant's
being unable to engage in gainful employment at his
usual occupation, or any other occupation for which he
is reasonably suited by education, training and
experience, by reason of any medically demonstrable
physical or mental condition, excluding, however, (i)
incapacity contracted, suffered or incurred while the
Participant was engaged in, or which resulted from
having engaged in, a felonious enterprise; (ii) incapac
ity resulting from or consisting of chronic alcoholism
or addiction to drugs of abuse; (iii) incapacity
resulting from an intentionally self-inflicted injury
or illness; (iv) incapacity contracted, suffered or
incurred in the employment of other than the Employer,
including self-employment; (v) incapacity resulting
from injury or disease incurred while serving in the
armed forces of any country and for which a government
disability benefit is payable. Notwithstanding the
foregoing, for purposes of Section 14.04, but not for
purposes of Sections 13.03 and 13.04, the incapacity of
a Participant who became an Employee prior to
January 1, 1995, may be determined in accordance with
the definition of Total and Permanent Disability in
effect under the Plan prior to January 1, 1995 to the
extent that the prior definition is more favorable to
the Participant.
1.39 Trust
The trust maintained by the Trustee under the Trust
Agreement.
1.40 Trust Agreement
The Agreement between the Company and the Trustee
establishing or maintaining the ALLTEL Corporation
Profit-Sharing Trust, as amended from time to time.
1.41 Trustee
The entity or individual or individuals designated
under the Trust Agreement and includes and denotes any
successor or successor in trust under the Trust
Agreement, unless the context clearly indicates a
contrary intention.
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1.42 Trust Fund
All cash, securities, real estate, or any other
property held by the Trustee pursuant to the terms of
the Trust Agreement, together with the income
therefrom.
1.43 Valuation Date
The last day of each calendar quarter and any other
date or dates that may be established from time to time
by the Plan Administrator.
1.44 Year of Eligibility Service
A Computation Period commencing before, on, or after
the Effective Date during which an Employee is credited
with a Year of Service for purposes of determining his
eligibility to participate in the Plan. The
determination of Years of Eligibility Service for
certain Employees may be modified by Section 9.04.
1.45 Year of Participation
A Computation Period commencing on or after the
Effective Date during which an Employee is credited
with a Year of Service for purposes of determining his
eligibility to receive an allocation under
Sections 13.03 and 13.04 for a Plan Year.
1.46 Year of Service
A Computation Period during which an Employee completes
at least 1,000 Hours of Service.
1.47 Year of Vesting Service
A Computation Period commencing before, on, or after
the Effective Date during which an Employee is credited
with a Year of Service for purposes of determining his
vested interest in his Separate Account. The
determination of Years of Vesting Service for certain
Employees may be modified by Section 9.05.
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<PAGE>
ARTICLE II
ADMINISTRATION
2.01 Plan Administrator
The Company shall be the Plan Administrator and shall
be the administrator for purposes of ERISA and the plan
administrator for purposes of the Code.
2.02 Allocation of Authority and Responsibility Among Named
Fiduciaries
The Company, the Plan Administrator, and the Trustee
shall be "named fiduciaries" as defined in Section
402(a)(2) of ERISA. The Employers shall have the sole
responsibility for making contributions under the Plan,
as determined by the Company. The Company shall have
the sole responsibility for appointing one or more
trustees as the Trustee. The Plan Administrator shall
have the sole responsibility for the administration of
the Plan as provided herein. Except to the extent that
an investment manager (as defined in Section 3(38) of
ERISA) has been appointed, the Trustee shall have the
responsibility for the administration and management of
the Trust Fund, in accordance with the provisions of
the Trust Agreement. Each named fiduciary warrants
that any directions given, information furnished, or
action taken by it shall be in accordance with the
provisions of the Plan, unless inconsistent with
applicable law. Each named fiduciary may rely on any
direction, information or action of another named
fiduciary. It is intended under the Plan that each
named fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities
and obligations under the Plan and shall not be
responsible for any act or failure to act of another
fiduciary (including named fiduciaries) if the
responsibility or authority of the act or failure to
act was not within the scope of the named fiduciary's
authority or delegated responsibility. No fiduciary
guarantees the Trust Fund in any manner against
investment loss or depreciation in asset values.
2.03 Rights, Powers and Duties of the Plan Administrator
The Plan Administrator shall have all such powers and
authority as may be necessary to discharge its
responsibilities under the Plan, including the
following rights, powers, and responsibilities:
(1) The Plan Administrator shall administer the
plan uniformly and consistently with respect to
persons who are similarly situated.
(2) The Plan Administrator shall direct the
Trustee in writing to make payments from the
Trust Fund to persons who qualify for such
payments hereunder. Such written order to the
Trustee shall specify the name of the person, his
address, and the amount and frequency of such
payments.
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<PAGE>
(3) The Plan Administrator shall have the sole
responsibility for the administration of the
Plan; and, except as herein expressly provided,
the Plan Administrator shall have the exclusive
discretionary power and authority to interpret
and construe the provisions of the Plan and to
determine any question arising hereunder or in
connection with the administration of the Plan,
including the remedying of any omission,
inconsistency or ambiguity, and its decision or
action in respect thereof shall be conclusive and
binding upon any and all Participants,
Beneficiaries, and their heirs, distributees,
executors, administrators and assigns.
(4) The Plan Administrator shall resolve all
questions relating to participation in the Plan
and determine the amount, manner, and timing of
the payment of benefits under the Plan.
(5) The Plan Administrator shall maintain such
records as it determines are necessary,
appropriate, or convenient to properly administer
the Plan.
(6) The Plan Administrator may adopt rules and
procedures for the administration of the Plan
that are consistent with the terms of the Plan.
(7) The Plan Administrator may employ such
counsel and agents for administrative, clerical,
legal, medical, accounting, or other services as
it may require in carrying out the provisions of
the Plan.
(8) The Plan Administrator shall prepare and
distribute to Participants or their Beneficiaries
all information required under federal law or by
the other provisions of the Plan.
(9) The Plan Administrator shall prepare and
file all reports or other information required by
applicable law.
2.04 Discharge of Duties
Each fiduciary under the Plan shall discharge its
duties solely in the interest of Participants and their
Beneficiaries in accordance with the applicable
provisions of Section 404 of ERISA.
2.05 Indemnification
The Company shall indemnify any officer, director, or
employee of a member of the Controlled Group to whom
any power, authority, or responsibility is allocated or
delegated for any liability actually and reasonably
incurred with respect to the
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<PAGE>
exercise or failure to exercise such power, authority,
or responsibility, unless such liability results from
such person's own gross negligence or willful
misconduct.
2.06 Compensation and Expenses
No person who already receives full-time pay from a
member of the Controlled Group shall receive
compensation from the Plan, except for reimbursement of
expenses properly and actually incurred.
2.07 Committee
(a) The Company, pursuant to authority of its
Board of Directors, may allocate or delegate any
or all of its powers, authority, or
responsibilities as Plan Administrator to a
Committee of no less than three persons. Nothing
contained herein shall be construed to prevent
any Participant or any director, officer, or
employee of a member of the Controlled Group from
serving as a member of the Committee.
(b) Any action authorized, permitted, or
required to be taken by the Committee may be
taken by a majority of its members at the time
acting hereunder, except that no member of the
Committee who is a Participant shall take any
part in any action relating solely to his
participation. The decision of the majority may
be expressed by a vote at a meeting of the
Committee, or in writing without a meeting. Any
direction or certification required or authorized
to be given by the Committee shall be in writing
and signed by a majority of the members of the
Committee, or by such member as may be designated
by an instrument in writing signed by all of the
members thereof. The Committee shall keep a
permanent record of its meetings and actions.
(c) The Committee may from time to time
allocate to one or more of its members and may
delegate to any other persons or organizations
any of its rights, powers, duties and responsi
bilities with respect to the operation and
administration of the Plan that are permitted to
be delegated under ERISA unless delegation is
expressly prohibited by the terms of the Plan or
the Trust Agreement. Any such allocation or
delegation will be made in writing, will be
reviewed periodically by the Committee, and will
be terminable upon such notice as the Committee
in its discretion deems reasonable and proper
under the circumstances. Whenever a person or
organization has the power and authority under
the Plan to delegate discretionary authority
respecting the administration of the Plan to
another person or organization, the delegating
party's responsibility with respect to such
delegation is limited to the selection of the
person to whom authority is delegated and the
periodic review of such person's performance and
compliance with applicable law and
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<PAGE>
regulations. Any breach of fiduciary
responsibility by the person to whom authority
has been delegated which is not proximately
caused by the delegating party's failure to
properly select or supervise, and in which breach
the delegating party does not otherwise
participate, will not be considered a breach by
the delegating party, to the extent permitted by
law.
(d) The Company, pursuant to authority of its
Board of Directors, may from time to time remove
members of the Committee and add members thereto.
A member of the Committee may, at any time,
notify the Company in writing of his intent to
resign from the Committee, and such resignation
shall be effective as of the date such written
notification is received by the Company, unless a
later date is specified therein. Vacancies
occurring in the Committee whether by reason of
resignation, removal, death or otherwise, shall
be filled pursuant to authority of the Board of
Directors.
(e) The Committee may from time to time
formulate such rules and regulations for its
organization and the transaction of its business
as it deems suitable and as are consistent with
the provisions of the Plan and the Trust
Agreement.
2.08 Administrative Expenses
The Plan Administrator may, in its discretion, direct
the Trustee to pay from the Trust Fund all
administrative expenses of the Plan and Trust,
including the compensation of all persons employed by
the Plan Administrator. To the extent such expenses
are not paid from the Trust Fund, they shall be paid
directly by the Company. Any expenses to be paid by
the Trustee out of the Trust Fund shall be approved by
the Plan Administrator before payment by the Trustee.
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<PAGE>
ARTICLE III
GENERAL PROVISIONS
3.01 Adoption of the Plan by Other Employers
Any member of the Controlled Group may, with the
consent of the Company, adopt the Plan and thereby
become an Employer hereunder by executing an instrument
evidencing such adoption on the order of its board of
directors or other organizational authority. Such
instrument shall specify the effective date of the
adoption.
3.02 No Contract of Employment
Nothing herein contained shall be construed to
constitute a contract of employment between the
Employer and any Employee nor shall the maintenance of
the Plan affect the Employer's right to discharge or
otherwise discipline Employees. The employment records
of the Employer and the Trustee's records shall be
final and binding upon all Employees as to eligibility
and participation.
3.03 Restrictions Upon Assignments and Creditor's Claims
(a) Except as may be otherwise provided in the
Plan, no Participant or Beneficiary shall have
any power to assign, pledge, encumber or transfer
any interest in the Trust Fund while the same
shall be in the possession of the Trustee. Any
such attempt at alienation shall be void. No
such interest shall be subject to attachment,
garnishment, execution, levy or any other legal
or equitable proceeding or process and any
attempt to so subject such interest shall be
void. The foregoing provisions of this
subsection (a), however, shall not preclude (i)
the enforcement of a Federal tax levy made
pursuant to Section 6331 of the Code or (ii) the
collection by the United States on a judgment
resulting from an unpaid tax assessment.
(b) Notwithstanding the foregoing, this
Section 3.03 shall not apply to a qualified
domestic relations order, as defined in
Section 414(p) of the Code. The Plan
Administrator shall establish a procedure to
determine the qualified status of domestic
relations orders and to administer distributions
under such qualified orders. The Plan
Administrator shall promptly notify the
Participant and each alternate payee of the
receipt of any State domestic relations order and
the procedure which the Plan Administrator will
follow in determining whether the order
constitutes a qualified domestic relations order,
as defined in Section 414(p) of the Code.
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<PAGE>
3.04 Facility of Payment
If any person to whom a benefit under the Plan is
payable is unable to care for his affairs because of
illness or accident, any payment due may be paid, in
the discretion of the Plan Administrator, to the
Spouse, child, brother or sister of such person, or to
any other persons deemed by the Plan Administrator to
be maintaining or responsible for the maintenance of
such person (unless prior claim therefor shall have
been made by a duly qualified guardian or other legal
representative). Any payment made in accordance with
the provisions of this Section 3.04 shall be a complete
discharge of any liabilities of the Plan with respect
to the benefit so paid.
3.05 Restriction of Claims Against Trust
The Trust and the corpus and income thereof shall not
be subject to the rights or claims of any creditor of
the Employer or Controlled Group. Neither the
establishment of the Trust, the modification of the
Trust Agreement, the creation of any fund or account,
nor the payment of any benefits shall be construed as
giving any Participant or any other person any legal or
equitable rights against the Controlled Group or any of
its officers, employees, directors, or shareholders, or
the Trustee unless the same shall be specifically
provided for in the Plan.
3.06 Benefits Payable from Trust
All benefits payable under the Plan shall be paid or
provided for solely from the Trust.
3.07 Merger and Transfer of Assets or Liabilities
The Plan shall not be merged or consolidated with any
other plan, nor shall any assets or liabilities of the
Plan be transferred to another plan, unless,
immediately after such merger, consolidation, or
transfer of assets, each Participant would receive a
benefit having a value equal to or greater than the
benefit he would have received if the Plan had
terminated immediately prior to the merger,
consolidation or transfer.
3.08 Applicable Law
To the extent not preempted by federal law, the
provisions of the Plan shall be construed, regulated,
and administered in accordance with the laws of the
State of Delaware. The invalidity or illegality of any
provision of the Plan shall not affect the legality or
validity of any other part thereof.
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<PAGE>
3.09 Reversion of Employer Contributions
At no time shall any part of the corpus or income of
the Trust Fund be used for or diverted to purposes
other than for the exclusive benefit of Participants
and their Beneficiaries. Notwithstanding the
foregoing, if a contribution to the Trust is made by
the Employer by a mistake in fact, such contribution
shall be returned to the Employer within one year after
the payment of the contribution to the Trust if the
Employer so directs. If a contribution by the Employer
is conditioned on initial qualification of the Plan
under Section 401 of the Code, and if the Plan does not
qualify, then such contribution shall be returned to
the Employer within one year after the date of denial
of qualification of the Plan. If a contribution to the
Trust is not fully deductible by the Employer under
Section 404 of the Code, then, to the extent the
deduction is disallowed, such a contribution may be
returned to the Employer if the Employer so directs
within one year after the disallowance of the
deduction. Unless otherwise specified in writing,
contributions made by the Employer to the Trust shall
be deemed to be conditioned upon the initial and
continued qualification of the Plan under
Section 401(a) of the Code, the exempt status of the
Trust under Section 501(a) of the Code, and the
deductibility of the contribution under Section 404 of
the Code.
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<PAGE>
ARTICLE IV
CLAIMS PROCEDURES
4.01 Claim for Benefits
If any claim for benefits filed by any person under the
Plan (the "claimant") is denied in whole or in part,
the Plan Administrator shall issue a written notice of
such decision to the claimant. The notice shall be
issued to the claimant as soon as possible but in no
event later than 90 days from the date the claim for
benefits was filed. The notice issued by the Plan
Administrator shall be written in a manner calculated
to be understood by the claimant, and shall include the
following:
(1) the specific reason or reasons for any
denial of benefits;
(2) the specific Plan provisions on which any
denial is based;
(3) a description of any further material or
information which is necessary for the claimant
to perfect his claim and an explanation of why
the material or information is needed; and
(4) an explanation of the Plan's claim review
procedure.
If the Plan Administrator fails to respond to a claim
for benefits, such claim shall be deemed to have been
denied.
4.02 Review
If the Plan Administrator denies a claim for benefits
in whole or in part, or the claim is otherwise deemed
to have been denied, the claimant or his duly
authorized representative may submit to the Plan
Administrator a written request for review of the claim
denial within 60 days of the mailing of the notice or
deemed denial of his claim. The claimant or his duly
authorized representative may:
(1) review pertinent documents; and
(2) submit issues and comments in writing to
which the Plan Administrator shall respond.
The Plan Administrator shall furnish a written decision
on review not later than 60 days after receipt of the
written request for review of the claim denial, unless
special circumstances require an extension of the time
for processing the appeal. If an extension of time for
review is required because of special circumstances,
written notice of the extension shall be furnished to
the claimant prior to the
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<PAGE>
commencement of the extension, and the Plan
Administrator shall furnish a written decision on
review not later than 120 days after receipt of the
written request for review of the claim denial. If a
written decision on review is not furnished within 60
days (or 120 days, if applicable) after receipt of the
written request for review of the claim denial, the
claim shall be deemed denied on review. The decision
on review shall be in writing and shall include
specific reasons for the decision, shall be written in
a manner calculated to be understood by the claimant,
and shall contain specific references to the pertinent
Plan provisions on which the decision is based.
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<PAGE>
ARTICLE V
AMENDMENT AND TERMINATION
5.01 Amendment and Termination of the Plan
The Company expressly reserves the right, at any time
and from time to time, by action of or pursuant to
authority of its Board of Directors:
(1) to terminate the Plan in whole or in part;
and/or
(2) to amend the Plan in any respect.
A Participant's accrued benefit shall not be decreased
by an amendment to the Plan, except as may be permitted
under Section 411(d)(6) of the Code.
Any termination or amendment shall be evidenced by an
instrument executed on behalf of the Company by an
authorized officer. No termination or amendment shall
increase the duties or responsibilities of a Trustee
without its consent thereto in writing.
Promptly after any amendment of the Plan has become
effective, the Company shall cause a copy of such
amendment to be filed with the Plan Administrator and
with the Trustee.
5.02 Procedure Upon Termination
Upon termination of the Plan, the following actions
shall be taken for the benefit of Participants and
Beneficiaries:
(a) As of the termination date, the Trust Fund
shall be valued and all Separate Accounts and sub-
accounts shall be adjusted in the manner provided
in Article XI, with any unallocated Employer
Contributions or Forfeitures being allocated as
of the termination date in the manner otherwise
provided in the Plan. The termination date shall
become a Valuation Date for purposes of
Article XI. In determining the net worth of the
Trust Fund, there shall be included as a
liability such amounts as shall be necessary to
pay all expenses in connection with the
termination of the Trust and the liquidation and
distribution of the property of the Trust, as
well as other expenses, whether or not accrued,
and shall include as an asset all accrued income.
(b) All Separate Accounts shall then be
distributed to or for the benefit of each
Participant or Beneficiary in accordance with the
provisions of Article XIV as if the termination
date were a termination of his employment with
all members of the Controlled Group.
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<PAGE>
5.03 Non-Forfeitability Upon Termination of Plan
Upon termination or partial termination of the Plan or
the complete discontinuance of contributions to the
Plan, the rights of all affected Participants to the
amounts credited to the Participants' Separate Accounts
shall be nonforfeitable.
5.04 Reorganization
The merger, consolidation, or liquidation of a member
of the Controlled Group that has adopted the Plan with
or into any other member of the Controlled Group shall
not constitute a termination of the Plan as to such
adopting member of the Controlled Group.
5.05 Withdrawal of an Employer
A member of the Controlled Group that has adopted the
Plan, other than the Company, may withdraw from the
Plan (a "withdrawing employer") at any time upon notice
in writing to the Plan Administrator and shall
thereupon cease to be an adopting employer for all
purposes of the Plan. A member of the Controlled Group
that has adopted the Plan shall be deemed automatically
to withdraw from the Plan in the event of its complete
discontinuance of contributions or, subject to Section
5.03 and unless the Company otherwise directs, it
ceases to be a member of the Controlled Group. The
withdrawal of a member of the Controlled Group shall be
treated as a termination of the Plan with respect to
Participants who at the time are employed by such
withdrawing employer. In the event of any such
withdrawal of an adopting employer, the action
specified in Section 5.02 shall be taken as of the
withdrawal date, as on a termination of the Plan, but
with respect only to Participants who are employed
solely by the withdrawing employer, and who, upon such
withdrawal, are neither transferred to nor continued in
employment with any other member of the Controlled
Group. The interest of any Participant employed by the
withdrawing employer who is transferred to or continues
in employment with any other member of the Controlled
Group, and the interest of any Participant employed
solely by a member of the Controlled Group other than
the withdrawing employer, shall remain unaffected by
such withdrawal; no adjustment to his Separate Account
shall be made by reason of the withdrawal; and he shall
continue as a Participant hereunder subject to the
remaining provisions of the Plan.
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<PAGE>
ARTICLE VI
TRUST AGREEMENT AND TRUST FUND
6.01 Trust Agreement and Trust Fund
The Company shall execute one or more Trust Agreements
(collectively referred to as the "Trust Agreement")
with a trustee or trustees selected by the Company
under the terms of which a Trust Fund will be
established for the purpose of receiving or holding
contributions made to the Plan, as well as interest and
other income on investments of such funds, and for the
purpose of paying benefits provided by the Plan. The
Company may amend the Trust Agreement from time to time
to accomplish the purposes of the Plan, may remove any
Trustee, and may select any successor trustee. The
Trust Agreement and the Trust maintained thereunder
shall be deemed to be a part of the Plan as if fully
set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the
Plan.
6.02 Irrevocability
The Trust Fund shall be used to pay benefits as
provided in the Plan. No part of the principal or
income of the Trust Fund shall be used for, or diverted
to, purposes other than those provided in the Plan, and
no part of the Trust Fund shall revert to the Company
or any member of the Controlled Group except as may be
otherwise specifically provided under the Plan, the
Trust Agreement, or both.
6.03 Benefits Payable Only from Trust Fund
All benefits paid under the Plan shall be paid from the
Trust Fund or from any insurance contract established
under Section 6.04, and the Employer shall not be
otherwise liable for benefits payable under the Plan.
6.04 Optional Provision for Benefits
The Company reserves the right to change at any time
the means through which the benefits under the Plan
shall be provided, including the substitution of a
contract or contracts with an insurance company or
companies, and may thereupon make suitable provision
for the use of assets of the Trust Fund to provide for
the payment of benefits under such insurance contract
or contracts. No such change shall constitute a
termination of the Plan or result in the diversion to
the Employer of any funds previously contributed
hereunder.
6.05 Commingling Authorized
As permitted in the Trust Agreement, the Trust Fund
held under the Plan may be commingled with any trust
funds held under other employee benefit plans of
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<PAGE>
the Controlled Group, provided such other funds qualify
as tax exempt under the applicable provisions of the
Code.
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ARTICLE VII
LIMITATION ON CONTRIBUTIONS
7.01 Definitions
For purposes of this Article VII, the following terms
have the following meanings:
(a) The "annual addition" with respect to a
Participant for a limitation year means the sum
of the Employer Contributions and Forfeitures
allocated to his Separate Account for the
limitation year (including any excess
contributions that are distributed pursuant to
this Article VII), the employer contributions,
employee contributions, and forfeitures allocated
to his accounts for the limitation year under any
other qualified defined contribution plan
(whether or not terminated) maintained by a
member of the Controlled Group, and amounts
described in Sections 415(l)(2) and 419A(d)(2) of
the Code allocated to his account for the
limitation year.
(b) The "employer" shall mean each employer
that adopts the Plan, 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), commonly controlled
trades or businesses (as defined in
Section 414(c) of the Code, as modified by
Section 415(h) of the Code), or affiliated
service groups (as defined in Section 414(m) of
the Code) of which the adopting employer is a
part.
(c) The "compensation" of a Participant for a
limitation year shall mean compensation as
defined in Treasury Regulation Section 1.415-
2(d).
(d) An "elective contribution" means any
employer contribution made to a plan maintained
by a member of the Controlled Group on behalf of
a Participant in lieu of cash compensation
pursuant to his written election to defer under
any qualified cash or deferred arrangement as
defined in Section 401(k) of the Code, any
simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B)
of the Code, any eligible deferred compensation
plan under Section 457 of the Code, or any plan
as described in Section 501(c)(18) of the Code,
and any contribution made on behalf of the
Participant by a member of the Controlled Group
for the purchase of an annuity contract under
Section 403(b) of the Code pursuant to a salary
reduction agreement.
(e) An "excess amount" shall mean the excess of
a Participant's annual addition for the
limitation year over the maximum permissible
amount.
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(f) A "limitation year" means the Plan Year or
such other 12-month period designated as such by
the Company.
(g) The "maximum permissible amount" shall be
the lesser of:
(1) $30,000 (or, if greater, one-
fourth of the defined benefit dollar
limitation set forth in Section 415(b)(i)
of the Code as in effect for the limitation
year); or
(2) 25 percent of the Participant's
compensation for the limitation year.
7.02 Limitations on Crediting of Contributions and
Forfeitures
Notwithstanding any other provision of the Plan to the
contrary, the annual addition with respect to a
Participant for a limitation year shall in no event
exceed the maximum permissible amount. If the annual
addition to the Separate Account of a Participant in
any limitation year would exceed the maximum
permissible amount because of the allocation of
Forfeitures, a reasonable error in estimating a
Participant's annual compensation, a reasonable error
in determining the amount of elective deferrals that
may be made with respect to any Participant under the
limits of Section 415 of the Code, or other limited
facts and circumstances that justify the availability
of the provisions set forth below, the excess amount
shall be forfeited by the Participant and disposed of
as follows:
(a) The excess amount shall be reallocated
among the remaining Participants' Separate
Accounts in the same way Forfeitures are
allocated as specified in Section 16.03;
provided, however, that such reallocation shall
not cause the annual additions to any other
Participant's Separate Account to exceed the
maximum permissible amount.
(b) To the extent subsection (a) is not
applicable, and if the Participant is covered by
the Plan at the end of the limitation year, the
excess amount in the Participant's Separate
Account shall be used to reduce Employer
Contributions for such Participant in the next
limitation year, and each succeeding limitation
year, if necessary.
(c) To the extent subsection (a) is not
applicable, and if the Participant is not covered
by the Plan at the end of the limitation year,
the excess amount shall be held unallocated in a
suspense account. The suspense account shall be
applied to reduce future Employer Contributions
for all remaining Participants in the next
limitation year, and each succeeding limitation
year if necessary.
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<PAGE>
If a suspense account is in existence at any time
during a limitation year, all amounts in the suspense
account must be allocated to Participants' Separate
Accounts (subject to the limitations contained herein)
before any further Employer Contributions may be made
to the Plan on behalf of Participants. If a suspense
account is in existence at any time during a limitation
year, it shall not share in any increase or decrease in
the net worth of the Trust Fund.
7.03 Coverage Under Other Qualified Defined Contribution
Plan
If a Participant is covered by any other qualified
defined contribution plan (whether or not terminated)
maintained by the Employer or a member of the
Controlled Group, and if the annual addition for the
limitation year would otherwise exceed the maximum
permissible amount, the excess amount shall be
eliminated by reducing contributions under such other
plan to the extent necessary. If the annual addition
for the limitation year would still exceed the maximum
permissible amount after returning contributions under
such other plan, the excess amount shall be eliminated
by returning Employer Contributions under the Plan to
the extent necessary. In the event that a Participant
is covered by a qualified defined benefit plan, the
procedure specified in Section 7.04 shall be
implemented prior to effecting any reduction in the
benefit of the Participant under the defined
contribution plans.
7.04 Coverage Under Qualified Defined Benefit Plan
If a Participant in the Plan is also covered by a
qualified defined benefit plan (whether or not
terminated) maintained by the Employer or a member of
the Controlled Group, in no event shall the sum of the
defined benefit plan fraction (as defined in Section
415(e)(2) of the Code) and the defined contribution
plan fraction (as defined in Section 415(e)(3) of the
Code) exceed 1.0 in any limitation year. In the event
the limitation contained in this Section 7.04 is
exceeded, (i) for Plan Years beginning before January
1, 1995, the Employer Contributions and Forfeitures
that would otherwise be allocated to the Participant
shall be reduced to the extent necessary to meet such
limitation, and (ii) for Plan Years beginning after
December 31, 1994, the benefits otherwise payable to
the Participant under the qualified defined benefit
plan shall be reduced to the extent necessary to meet
such limitation.
If a Participant was a participant in one or more
defined contribution plans maintained by the employer
which were in existence on July 1, 1982, the numerator
of the defined contribution plan fraction (as defined
in Section 415(e)(3) of the Code) will be adjusted if
the sum of this fraction and the defined benefit plan
fraction (as defined in Section 415(e)(2) of the Code)
would otherwise exceed 1.0 under the terms of the Plan.
Under this adjustment, an amount equal to the product
of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of the
defined contribution plan fraction (as
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<PAGE>
defined in Section 415(e)(3) of the Code). The
adjustment is calculated using the fractions as they
would be computed as of the later of the end of the
last limitation year beginning before January 1, 1983,
or September 30, 1983. This adjustment also will be
made if at the end of the last limitation year
beginning before January 1, 1984, the sum of the
fractions exceeds 1.0 because of accruals or additions
that were made before the limitations of this
Article VII became effective as to any plans of the
employer in existence on July 1, 1982.
7.05 Scope of Limitations
The limitations contained in this Article VII shall be
applicable only with respect to benefits provided
pursuant to defined contribution plans and defined
benefit plans described in Section 415(k) of the Code.
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<PAGE>
ARTICLE VIII
TOP-HEAVY PROVISIONS
8.01 Definitions
For purposes of this Article VIII, the following terms
have the following meanings:
(a) The "compensation" of a Participant means
compensation as defined in Section 415 of the
Code and regulations issued thereunder. In no
event, however, shall the compensation of a
Participant taken into account under the Plan for
any Plan Year exceed (1) $200,000 for Plan Years
beginning prior to January 1, 1994, or
(2) $150,000 for Plan Years beginning on or after
January 1, 1994 (subject to adjustment annually
as provided in Section 401(a)(17)(B) and Section
415(d) of the Code. If the compensation of a
Participant is determined over a period of time
that contains fewer than 12 calendar months, then
the annual compensation limitation described
above shall be adjusted with respect to that
Participant by multiplying the annual
compensation limitation in effect for the Plan
Year by a fraction the numerator of which is the
number of full months in the period and the
denominator of which is 12. In determining the
compensation, for purposes of applying the annual
compensation limitation described above, of a
Participant who is a five-percent owner or one of
the ten Highly Compensated Employees receiving
the greatest compensation for the Plan Year, the
compensation of the Participant's Spouse and of
his lineal descendants who have not attained age
19 as of the close of the Plan Year shall be
included as compensation of the Participant for
the Plan Year. If as a result of applying the
family aggregation rule described in the
preceding sentence the annual compensation
limitation would be exceeded, the limitation
shall be prorated among the affected family
members in proportion to each member's
compensation as determined prior to application
of the family aggregation rules.
(b) The "determination date" with respect to
any Plan Year means the last day of the preceding
Plan Year, except that the determination date
with respect to the first Plan Year of the Plan,
shall mean the last day of such Plan Year.
(c) A "key employee" means any Employee or
former Employee who is a key employee pursuant to
the provisions of Section 416(i)(1) of the Code
and any Beneficiary of such Employee or former
Employee.
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<PAGE>
(d) A "non-key employee" means any Employee or
former Employee who is a not a key employee and
any Beneficiary of such Employee or former
Employee.
(e) A "permissive aggregation group" means
those plans included in the Employer's required
aggregation group together with any other plan or
plans of the Employer, so long as the entire
group of plans would continue to meet the
requirements of Sections 401(a)(4) and 410 of the
Code.
(f) A "required aggregation group" means the
group of tax-qualified plans maintained by a
member of the Controlled Group consisting of each
plan in which a key employee participates and
each other plan that enables a plan in which a
key employee participates to meet the
requirements of Section 401(a)(4) or Section 410
of the Code, including any plan that terminated
within the five-year period ending on the
relevant determination date.
(g) A "super top-heavy group" with respect to a
particular Plan Year means a required or
permissive aggregation group that, as of the
determination date, would qualify as a top-heavy
group under the definition in subsection (i) of
this Section 8.01 with "90 percent" substituted
for "60 percent" each place where "60 percent"
appears in the definition.
(h) A "super top-heavy plan" with respect to a
particular Plan Year means a plan that, as of the
determination date, would qualify as a top-heavy
plan under the definition in subsection (j) of
this Section 8.01 with "90 percent" substituted
for "60 percent" each place where "60 percent"
appears in the definition. A plan is also a
"super top-heavy plan" if it is part of a super
top-heavy group.
(i) A "top-heavy group" with respect to a
particular Plan Year means a required or
permissive aggregation group if the sum, as of
the determination date, of the present value of
the cumulative accrued benefits for key employees
under all defined benefit plans included in such
group and the aggregate of the account balances
of key employees under all defined contribution
plans included in such group exceeds 60 percent
of a similar sum determined for all employees
covered by the plans included in such group.
(j) A "top-heavy plan" with respect to a
particular Plan Year means (i), in the case of a
defined contribution plan (including any
simplified employee pension plan), a plan for
which, as of the determination date, the
aggregate of the accounts (within the meaning of
Section 416(g) of the Code and the regulations
and rulings thereunder) of key employees exceeds
60 percent of the aggregate of the accounts of
all participants
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<PAGE>
under the plan, with the accounts valued as
of the relevant valuation date and increased for
any distribution of an account balance made in
the five-year period ending on the determination
date, (ii), in the case of a defined benefit
plan, a plan for which, as of the determination
date, the present value of the cumulative accrued
benefits payable under the plan (within the
meaning of Section 416(g) of the Code and the
regulations and rulings thereunder) to key
employees exceeds 60 percent of the present value
of the cumulative accrued benefits under the plan
for all employees, with the present value of
accrued benefits to be determined under the
accrual method uniformly used under all plans
maintained by the Employer or, if no such method
exists, under the slowest accrual method
permitted under the fractional accrual rate of
Section 411(b)(1)(C) of the Code and including
the present value of any part of any accrued
benefits distributed in the five-year period
ending on the determination date, and (iii) any
plan included in a required aggregation group
that is a top-heavy group. For purposes of this
subsection, the accounts and accrued benefits of
any Employee who has not performed services for a
member of the Controlled Group during the
five-year period ending on the determination date
shall be disregarded. Notwithstanding the
foregoing, if a plan is included in a required or
permissive aggregation group that is not a
top-heavy group, such plan shall not be a
top-heavy plan.
(k) The "valuation date" with respect to any
determination date means the most recent
Valuation Date occurring within the 12-month
period ending on the determination date.
8.02 Applicability
Notwithstanding any other provision of the Plan to the
contrary, the provisions of this Article VIII shall be
applicable during any Plan Year in which the Plan is
determined to be a top-heavy plan. If the Plan is
determined to be a top-heavy plan and upon a subsequent
determination date is determined no longer to be a top-
heavy plan, the vesting provisions of Article XVI shall
again become applicable as of such subsequent
determination date; provided, however, that if the
prior vesting provisions do again become applicable,
any Employee with three or more Years of Vesting
Service may elect in accordance with the provisions of
Article XVI, to continue to have his vested interest in
his Separate Account determined in accordance with the
vesting schedule specified in Section 8.06.
8.03 Minimum Employer Contribution
If the Plan is determined to be a top-heavy plan, the
Employer Contributions and Forfeitures allocated to the
Separate Account of each non-key employee who is a
Participant and who is employed by a member of the
Controlled Group on
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<PAGE>
the last day of such top-heavy Plan Year shall be no
less than the lesser of (i) three percent of his
compensation or (ii) the largest percentage of
compensation that is allocated as an Employer
Contribution or Forfeiture for such Plan Year to the
Separate Account of any key employee; except that, in
the event the Plan is part of a required aggregation
group, and the Plan enables a defined benefit plan
included in such group to meet the requirements of
Section 401(a)(4) or 410 of the Code, the minimum
allocation of Employer Contributions and Forfeitures to
each such non-key employee shall be three percent of
the compensation of such non-key employee. Any minimum
allocation to a non-key employee required by this
Section 8.03 shall be made without regard to any social
security contribution made on behalf of the non-key
employee, his number of Hours of Service, his level of
compensation, or whether he declined to make elective
or mandatory contributions.
8.04 Coordination with Other Plans
If the Plan is a top-heavy plan, each non-key employee
who is a Participant and who is employed by a member of
the Controlled Group on the last day of a top-heavy
Plan Year and who is also covered under any other
top-heavy plan or plans maintained by the Employer will
receive a top-heavy benefit under the Plan of no less
than five percent of his compensation in lieu of the
minimum allocation provided in Section 8.04 or under
the other top-heavy plan or plans.
8.05 Adjustments to Section 415 Limitations
If the Plan is determined to be a top-heavy plan and
the Employer maintains a defined benefit plan covering
some or all of the Participants that are covered by the
Plan, the defined benefit plan fraction and the defined
contribution plan fraction, described in Article VII,
shall be determined as provided in Section 415 of the
Code by substituting "1.0" for "1.25" each place where
"1.25" appears, except that such substitutions shall
not be applied to the Plan if (i) the Plan is not a
super top-heavy plan, (ii) the Employer Contribution
for such top-heavy Plan Year for each non-key employee
who is to receive a minimum top-heavy benefit hereunder
is not less than four percent of such non-key
employee's compensation, and (iii) the minimum annual
retirement benefit accrued by a non-key employee who
participates under one or more defined benefit plans of
the Employer or any other member of the Controlled
Group for such top-heavy Plan Year is not less than the
lesser of three percent times years of service with the
Employer or any other member of the Controlled Group or
thirty percent of his compensation.
8.06 Accelerated Vesting
If the Plan is determined to be a top-heavy plan, a
Participant's vested interest in his Separate Account
shall be determined no less rapidly than in accordance
with the following vesting schedule:
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<PAGE>
Years of Vesting Service Vested Interest
less than 3 0%
3 or more 100%
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<PAGE>
ARTICLE IX
SERVICE
9.01 Crediting of Hours of Service
(a) An Employee shall be credited with an Hour
of Service for:
(1) Each hour for which the
Employee is directly or indirectly
compensated or entitled to compensation by
the Employer or any other member of the
Controlled Group for the performance of
duties during the applicable Computation
Period;
(2) Subject to the provisions of
Section 9.02, each hour for which the
Employee is directly or indirectly
compensated or entitled to compensation by
the Employer or any other member of the
Controlled Group (irrespective of whether
the employment relationship has terminated)
for reasons other than the performance of
duties (such as vacation, holidays,
sickness, jury duty, disability, lay-off,
military duty or leave of absence) during
the applicable Computation Period; and
(3) Each hour for which back pay is
awarded or agreed to by the Employer or any
other member of the Controlled Group
without regard to mitigation of damages
(provided that the same Hours of Service
shall not be credited under both this
paragraph (3) and paragraph (1) or
(2) above).
(b) Solely for the purpose of determining
whether a Participant has incurred a Break in
Service, Hours of Service shall be recognized for
a "maternity or paternity leave of absence" as
specified herein. A "maternity or paternity
leave of absence" means an absence from work for
any period by reason of the Participant's
pregnancy, birth of the Participant's child,
placement of a child with the Participant in
connection with the adoption of such child, or
any absence for the purpose of caring for such
child for a period immediately following such
birth or placement. For this purpose, Hours of
Service shall be credited for the Computation
Period in which the absence from work begins, if
the Employee would otherwise incur a Break in
Service in such Computation Period, or, in any
other case, in the immediately following
Computation Period. The Hours of Service
credited for a maternity or paternity leave of
absence shall be those which would normally have
been credited but for such absence, or, in any
case in which the Plan Administrator is unable to
determine such hours normally credited, 8 Hours
of Service per day. The total Hours of Service
required to be credited for a maternity or
paternity leave of absence shall not exceed 501.
An absence from
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<PAGE>
work will be treated as a maternity and
paternity leave of absence only if and to the
extent that the Employee timely furnishes to the
Plan Administrator such information as it may
reasonably require to establish that the absence
is a maternity and paternity leave of absence as
defined herein and to establish the number of
days of absence attributable to maternity and
paternity leave.
(c) If an Employee has been granted an
Authorized Leave of Absence, he shall be credited
with Hours of Service as if he had been
compensated by the Employer for what would have
been his regularly scheduled hours of work during
the period of such Authorized Leave of Absence.
An Employee for whom records of his actual
numbers of Hours of Service are not normally
maintained shall be credited with 10 Hours of
Service for each day of his Authorized Leave of
Absence.
(d) Notwithstanding the provisions of
subsection (a) above, an Employee for whom
records of his actual number of Hours of Service
are not normally maintained shall be credited
with 10 Hours of Service for each day he would be
required to be credited with at least one Hour of
Service.
9.02 Limitations on Crediting of Hours of Service
In the application of the provisions of paragraph (2)
of subsection (a) of Section 9.01, the following shall
apply:
(a) No more than 501 Hours of Service are
required to be credited to an Employee on account
of any single continuous period during which the
Employee performs no duties (whether or not such
period occurs in a single Computation Period);
(b) An hour for which an Employee is directly
or indirectly paid, or entitled to payment, on
account of a period during which no duties are
performed, is not required to be credited to the
Employee if such payment is made or due under a
plan maintained solely for the purpose of
complying with applicable worker's compensation,
unemployment compensation or disability insurance
laws; and
(c) Hours of Service are not required to be
credited for a payment which solely reimburses an
Employee for medical or medically related
expenses incurred by the Employee.
(d) A payment shall be deemed to be made by or
due from the Employer or any other member of the
Controlled Group regardless of whether such
payment is made by or due from the Employer or
any other member of the Controlled Group directly
or indirectly through, among others, a trust
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<PAGE>
fund, or insurer, to which the Employer or
other member of the Controlled Group contributes
or pays premiums and regardless of whether
contributions made or due to the trust fund,
insurer, or other entity are for the benefit of
particular Employees or are on behalf of a group
of Employees in the aggregate.
9.03 Department of Labor Rules
The provisions of Department of Labor Regulations
Sections 2530.200b-2(b) and (c) are incorporated herein
by reference.
9.04 Years of Eligibility Service
The following provisions shall apply in determining the
Years of Eligibility Service for the Employees
specified in such provisions:
(a) In determining Years of Eligibility
Service, an Employee, other than an Employee
described in paragraph (b), (c), (d), or (e) of
this Section 9.04, shall receive credit for
"Eligibility Years of Service" credited to the
Employee pursuant to the terms of the ALLTEL
Corporation Pension Plan (if any) in respect of
any period not otherwise taken into account under
the Plan for purposes of determining Years of
Eligibility Service; provided, however, that
there shall be no duplication of Years of
Eligibility Service under the Plan by reason of
any restoration of, crediting of, or granting of
service in respect of any single period or
otherwise.
(b) In determining Years of Eligibility Service
for an Employee who was an employee of CP
National Corporation or its subsidiaries prior to
January 1, 1990, for a Computation Period that
includes January 1, 1990, the Employee shall
receive credit, for a number of Hours of Service
with respect to any fractional part of a year of
service credited to the Employee as of the close
of business on December 31, 1989 under the
provisions of the Retirement Plan for Employees
of CP National Corporation (the "CPN Plan"),
determined by crediting the Employee with 190
Hours of Service for each 1/12th of a fractional
year of service. Notwithstanding any other
provision of this Section 9.04, an Employee
described in the preceding sentence shall not be
credited with less Years of Eligibility Service
for service in the Employee's initial Computation
Period than under the method for determining
eligibility service under the CPN Plan.
(c) In determining Years of Eligibility Service
for an Employee who was an employee of HWC
Distribution Corp. or one of its subsidiaries
("HWC") immediately prior to the date as of which
HWC became a member of the Controlled Group, the
Employee's period or periods of employment with
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<PAGE>
HWC prior to the date as of which HWC
became a member of the Controlled Group that
would have been taken into account under the Plan
if such period or periods of employment were
service with a member of the Controlled Group,
shall be counted as Years of Eligibility Service.
Notwithstanding any other provision of the Plan,
there shall be no duplication of Years of
Eligibility Service under the Plan by reason of
service (or hours of service) in respect of any
single period or otherwise.
(d) In determining Years of Eligibility Service
for an Employee who was an "Employee," as defined
in the Profit Sharing Plan for Employees of
Systematics Information Services, Inc. and
Participating Affiliates (the "Systematics Plan")
prior to its merger into the Plan, of Systematics
Information Services, Inc. or its subsidiaries,
prior to January 1, 1995, for a Computation
Period that includes January 1, 1995, the
Employee shall receive credit, for a number of
Hours of Service with respect to any fractional
part of a year of service credited to the
Employee as of the close of business on
December 31, 1994 under the provisions of the
Systematics Plan determined by crediting the
Employee with 190 Hours of Service for each 1/12
of a fractional year of service. Notwithstanding
any other provision of this Section 9.04, an
Employee described in the preceding sentence
shall not be credited with less Years of
Eligibility Service for service in the Employee's
initial Computation Period than under the method
for determining eligibility service under the
Systematics Plan.
Furthermore, each person who became an
"Employee" (as defined in the Systematics Plan
prior to its merger into the Plan) of Systematics
Information Services, Inc. or its subsidiaries
(or Systematics, Inc. or its subsidiaries) or
becomes an Employee of Systematics Information
Services, Inc. or its subsidiaries pursuant to a
Facilities Management Agreement shall be credited
with Years of Eligibility Service for service
with a prior employer to the extent, if any,
provided in the Facilities Management Agreement.
(e) In determining the Years of Eligibility
Service for an Employee who was an employee of
GTE Directories Service Corporation or one of its
subsidiaries ("GTE Directories") immediately
prior to October 15, 1993 and became an Employee
on October 15, 1993 in connection with the
Purchase and Sale Agreement dated May 18, 1993
between GTE Directories Service Corporation and
ALLTEL Publishing Corporation, the Employee's
period or periods of employment with GTE
Directories and its affiliated corporations prior
to October 15, 1993 that would have been taken
into account under the Plan if such period or
periods of employment were service with a member
of the Controlled Group, shall be counted as
Years of Eligibility
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<PAGE>
Service. Notwithstanding any other
provision of the Plan, there shall be no duplica
tion of Years of Eligibility Service under the
Plan by reason of service (or hours of service)
in respect of any single period or otherwise.
9.05 Years of Vesting Service
The following provisions shall apply in determining the
Years of Vesting Service for the Employees specified in
such provisions:
(a) In determining Years of Vesting Service, an
Employee, other than an Employee described in
paragraph (b), (c), (d), (e), or (f) of this
Section 9.05, shall receive credit for "Vesting
Years of Service" credited to the Employee
pursuant to the terms of the ALLTEL Corporation
Pension Plan (if any) in respect of any period
not otherwise taken into account under the Plan
for purposes of determining Years of Vesting
Service; provided, however, that there shall be
no duplication of Years of Vesting Service under
the Plan by reason of any restoration of,
crediting of, or granting of service in respect
of any single period or otherwise.
(b) The Years of Vesting Service of an Employee
who was an employee of CP National Corporation or
its subsidiaries ("CPN") prior to January 1, 1990
shall be determined in accordance with the
following:
(1) Service Prior to January 1,
1990: The Employee's period or periods of
employment with CPN prior to January 1,
1990, shall be counted as Years of Vesting
Service to the extent of the number of
whole one-year periods of service that were
similarly credited under the provisions of
the Retirement Plan for Employees of CP
National Corporation (the "CPN Plan").
(2) Service From and After
January 1, 1990: The Employee shall accrue
one Year of Vesting Service for each
calendar year in which he has 1,000 or more
Hours of Service. For all purposes except
for determining eligibility for Early
Retirement under Section 14.03, in
determining such Years of Vesting Service
for the Computation Period which includes
January 1, 1990, the Employee shall receive
credit for a number of Hours of Service
with respect to any fractional part of a
year of service credited to the Employee as
of December 31, 1989 under the provisions
of the CPN Plan, determined by crediting
the Employee with 190 Hours of Service for
each 1/12th of a fractional year of
service. Only for purposes of determining
eligibility for Early Retirement under
Section 14.03, in determining such Years of
Vesting Service for the Computation Period
in which the Employee has a Termination of
Employment, the Employee shall receive
credit for a number of Hours of Service
with respect to
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<PAGE>
any fractional part of a year
of service credited to the Employee as of
December 31, 1989 under the provisions of
the CPN Plan, determined by crediting the
employee with 190 Hours of Service for each
1/12 of a fractional year of service.
(3) Notwithstanding the provisions
of paragraph (2) of this subsection (b),
the Employee shall not be credited with
less Years of Vesting Service for service
from and after January 1, 1990 than under
the method for determining vesting service
under the CPN Plan.
(4) There shall be no duplication
of Years of Vesting Service under the Plan
by reason of any restoration of, crediting
of, or granting of service in respect of
any single period or otherwise.
(c) In determining Years of Vesting Service for
an Employee who was an employee of HWC
Distribution Corp. or one of its subsidiaries
("HWC") immediately prior to the date as of which
HWC became a member of the Controlled Group, the
Employee's period or periods of employment with
HWC prior to the date as of which HWC became a
member of the Controlled Group that would have
been taken into account under the Plan if such
period or periods of employment were service with
a member of the Controlled Group, shall be
counted as Years of Vesting Service.
Notwithstanding any other provision of the Plan,
there shall be no duplication of Years of Vesting
Service under the Plan by reason of any
restoration of, crediting of, or granting of
service (or hours of service) in respect of any
single period or otherwise.
(d) The Years of Vesting Service of an Employee
who was an "Employee," as defined in the Profit
Sharing Plan for Employees of Systematics
Information Services, Inc. and Participating
Affiliates (the "Systematics Plan") prior to its
merger into the Plan, of Systematics Information
Services, Inc. or its subsidiaries
("Systematics"), prior to January 1, 1995, shall
be determined in accordance with the following:
(1) Service Prior to January 1,
1995: The Employee's period or periods of
employment with Systematics prior to
January 1, 1995, shall be counted as Years
of Vesting Service to the extent of the
number of whole one-year periods of service
that were similarly credited under the
provisions of the Systematics Plan.
(2) Service From and After
January 1, 1995: The Employee shall accrue
one Year of Vesting Service for each
calendar year in which he has 1,000 or more
Hours of Service. For all purposes except
for determining eligibility for Early
Retirement under
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<PAGE>
Section 14.03, in determining
such Years of Vesting Service for the
Computation Period which includes
January 1, 1990, the Employee shall receive
credit for a number of Hours of Service
with respect to any fractional part of a
year of service credited to the Employee as
of December 31, 1994 under the provisions
of the Systematics Plan, determined by
crediting the Employee with 190 Hours of
Service for each 1/12 of a fractional year
of service. Only for purposes of
determining eligibility for Early
Retirement under Section 14.03, in
determining such Years of Vesting Service
for the Computation Period in which the
Employee has a Termination of Employment,
the Employee shall receive credit for a
number of Hours of Service with respect to
any fractional part of a year of service
credited to the Employee as of December 31,
1994 under the provisions of the
Systematics Plan, determined by crediting
the employee with 190 Hours of Service for
each 1/12 of a fractional year of service.
(3) Notwithstanding the provisions
of paragraph (2) of this subsection (f),
the Employee shall not be credited with
less Years of Vesting Service for service
from and after January 1, 1995 than under
the method for determining vesting service
under the Systematics Plan.
(4) There shall be no duplication
of Years of Vesting Service under the Plan
by reason of any restoration of, crediting
of, or granting of service in respect of
any single period or otherwise.
Furthermore, each person who became an
"Employee" (as defined in the Systematics Plan
prior to its merger into the Plan) of Systematics
Information Services, Inc. or its subsidiaries
(or Systematics, Inc. or its subsidiaries) or
becomes an Employee of Systematics Information
Services, Inc. or its subsidiaries pursuant to a
Facilities Management Agreement shall be credited
with Years of Vesting Service for service with a
prior employer to the extent, if any, provided in
the Facilities Management Agreement.
(e) In determining Years of Vesting Service for
an Employee who was an employee of GTE
Directories Service Corporation or one of its
subsidiaries ("GTE Directories") immediately
prior to October 15, 1993 and became an Employee
on October 15, 1993 in connection with the
Purchase and Sale Agreement dated May 18, 1993
between GTE Directories Service Corporation and
ALLTEL Publishing Corporation, the Employee's
period or periods of employment with GTE
Directories and its affiliated corporations prior
to October 15, 1993 that would have been taken
into account under the Plan if such period or
periods of
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<PAGE>
employment were service with a member of
the Controlled Group, shall be counted as Years
of Vesting Service. Notwithstanding any other
provision of the Plan, there shall be no
duplication of Years of Vesting Service under the
Plan by reason of any restoration of, crediting
of, or granting of service (or hours of service)
in respect of any single period or otherwise.
(f) Effective as of the Closing Date, as
Closing Date is defined in the Employee Transfer
Agreements between ALLTEL Illinois, Inc. and GTE
South Incorporated, ALLTEL Indiana, Inc. and
Contel of the South, Inc., and ALLTEL Michigan,
Inc. and Contel of the South, Inc., each dated
April 5, 1993, with respect to Participants who
are GTE Transfer Employees (as GTE Transfer
Employees is defined in subsection (a) of
Section 13.05) as of the Closing Date or Partici
pants who become GTE Transfer Employees after the
Closing Date, the Years of Vesting Service of an
Employee who transfers employment from an
Employer to GTE South Incorporated or to Contel
of the South, Inc. pursuant to an Employee
Transfer Agreement shall be determined taking
into account service with GTE (as defined in the
Employee Transfer Agreements).
9.06 Vesting Following Break in Service
If a former Employee is reemployed after a Break in
Service and is subsequently credited with a Year of
Vesting Service, such Employee shall be credited, for
purposes of vesting, with both his pre-Break in Service
Years of Vesting Service and his post-Break in Service
Years of Vesting Service.
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<PAGE>
ARTICLE X
ELIGIBILITY AND PARTICIPATION
10.01 Eligibility
(a) Each Eligible Employee shall become a
Participant on the day following his completion
of one Year of Eligibility Service, provided that
he has not had a Termination of Employment and he
remains an Eligible Employee on such date.
(b) Any ineligible Employee who becomes an
Eligible Employee shall become a Participant as
follows: (i) if the Employee has completed one
Year of Eligibility Service, then he shall become
a Participant on the day he becomes an Eligible
Employee; and (ii) if the Employee has not
completed one Year of Eligibility Service, then
he shall become a Participant on the day
following his completion of one Year of
Eligibility Service, provided that he has not had
a Termination of Employment.
(c) An Eligible Employee who becomes an
ineligible Employee by means of a transfer of
employment to a member of the Controlled Group
that is not an Employer and who would be an
Eligible Employee after such transfer of
employment but for the fact that his employer is
not an Employer or an Employee who would have
become an Eligible Employee during a Plan Year
but for such a transfer of employment shall, for
the Plan Year in which such transfer of
employment occurs, be treated as an Eligible
Employee (provided he remains an Employee who
would be an Eligible Employee but for the fact
that his employer is not an Employer or would
otherwise be eligible for an allocation of
Employer Contributions and Forfeitures as a
former Eligible Employee by reason of retirement,
death, or Total and Permanent Disability) for
purposes of sharing in Employer Contributions and
Forfeitures (but based only on his Compensation
paid by an Employer or Employers for such Plan
Year) and after the Plan Year in which such
transfer of employment occurs shall be ineligible
to share in further Employer Contributions and
Forfeitures unless he again becomes an Eligible
Employee.
10.02 Termination and Rehiring
A Participant who has a Termination of Employment and
who is subsequently rehired by the Employer or an
Eligible Employee who has a Termination of Employment
after he has met the eligibility requirements of
Section 10.01 but before he has become a Participant
and who is subsequently rehired by the Employer shall
be eligible to participate in the Plan on his
Reemployment Commencement Date.
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<PAGE>
An Eligible Employee who has a Termination of
Employment before he has met the eligibility
requirements of Section 10.01 and who is subsequently
rehired as an Eligible Employee shall be eligible to
participate in the Plan on the day following his
completion of one Year of Eligibility Service.
10.03 Duration of Participation
Once an Eligible Employee becomes a Participant, he
shall remain a Participant for so long as a portion of
the Trust is credited to his Separate Account whether
or not he continues to be an Eligible Employee;
provided, however, that if a Participant ceases to be
an Eligible Employee (other than by reason of his
retirement, death, or Total and Permanent Disability),
no further Employer Contributions or Forfeitures shall
be allocated to his Separate Account, except as
provided in subsection (c) of Section 10.01. A
Participant who is on an Authorized Leave of Absence
shall continue as a Participant but no Employer
Contributions or Forfeitures shall be made to his
Separate Account for any Plan Year during which he does
not receive Compensation from an Employer.
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<PAGE>
ARTICLE XI
INVESTMENT FUNDS, ACCOUNTING, AND SEPARATE ACCOUNTS
11.01 Composition of Trust Fund
All amounts contributed to the Plan, as increased or
decreased by income, expenditure, appreciation and
depreciation, shall constitute a single fund known as
the Trust Fund. The Trust Fund shall be invested in an
Investment Fund A and a Guaranteed Principal Investment
Fund in accordance with the following:
(a) The assets of Investment Fund A shall be
invested by the Trustee in common stocks and
other securities, which are convertible into
common stocks, including qualifying securities
and qualifying real property of the Company,
repurchase agreements, corporate and government
bonds, real estate notes, and investment company
shares. Notwithstanding the preceding sentence
or the provisions of paragraph (c) of
Section 2.15 of the Trust Agreement, 20% of the
annual Employer Contribution to the Plan
allocable to Investment Fund A shall be invested
by the Trustee in "Common Stock of the Company"
(as hereinafter defined) to the extent that such
investment does not result in the assets of
Investment Fund A invested in Common Stock of the
Company exceeding approximately 35% of the total
assets of Investment Fund A, and the Trustee
shall maintain the foregoing investment of assets
of Investment Fund A in Common Stock of the
Company subject to a maximum investment of the
assets of Investment Fund A in Common Stock of
the Company of approximately 35% of the total
assets of Investment Fund A. "Common Stock of
the Company" shall mean the common stock, par
value $1.00 per share, of ALLTEL Corporation, a
Delaware corporation, as such common stock is
from time to time constituted. That portion of
Investment Fund A invested in Common Stock of the
Company shall constitute the ALLTEL Corporation
Common Stock Fund as described in Section 2.15 of
the Trust Agreement. Notwithstanding the
foregoing, the investment of assets in Investment
Fund A shall be subject to limitations under
ERISA and Section 401(a) of the Code and
regulations issued thereunder.
(b) The assets of the Guaranteed Principal
Investment Fund shall be invested by the Trustee
in certificates of deposits, time deposit
accounts, money market funds, guaranteed
investment contracts or similar investments
designed to protect the principal invested
therein, as the Trustee may deem advisable for
purposes of Section 11.02.
The interest of each Participant or Beneficiary under
the Plan in Investment Fund A or in the Guaranteed
Principal Investment Fund, as applicable, shall be an
undivided interest.
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<PAGE>
11.02 Election to Transfer to Guaranteed Principal Investment
Fund
Each retiring Participant, who has attained age 55 may,
as of the date of his retirement, make an irrevocable
one-time election to direct the Plan Administrator to
transfer 100% of his Separate Account balance to the
Guaranteed Principal Investment Fund. Furthermore,
each Participant who has attained age 55 may make an
irrevocable one-time election to direct the Plan
Administrator to transfer 100% of his then current
Separate Account balance to the Guaranteed Principal
Investment Fund. Such election shall also apply to all
future Employer Contributions and Forfeitures allocated
to a Participant's Separate Account, if any. This
right shall be exercised only as provided in the Plan
on a form provided by the Plan Administrator. The Plan
Administrator may establish such rules and procedures
regarding the exercise of this investment power as it
deems appropriate.
11.03 Allocation of Earnings or Losses to Separate Accounts
As of each current Valuation Date and prior to the
allocation of Employer Contributions attributable to
the period beginning with the day following the
preceding Valuation Date and ending with such current
Valuation Date, there shall be allocated to each
Participant's Separate Account, by credit to or
deduction therefrom, as the case may be, a portion of
the increase or decrease in the value of the fund or
funds within the Trust Fund in which the Participant's
Separate Account is invested since the preceding
Valuation Date attributable to interest, dividends,
changes in market value, expenses, and gains and losses
realized from the sale of assets. In determining the
value of the fund or funds within the Trust Fund, the
Trustee shall value the assets at their fair market
value as of the Valuation Date. Allocations with
respect to each fund within the Trust Fund shall be
made in the proportion that each such Participant's
Separate Account or percentage thereof as of the
preceding Valuation Date, reduced by any distributions
from a Participant's Separate Account attributable to
such fund since such date, bears to the total of all
such Separate Accounts or percentages thereof which are
invested in the particular fund as of the preceding
Valuation Date, reduced by any distributions from all
Participants' Separate Accounts attributable to such
fund since such date. For purposes of this
Section 11.03, all assets of the Trust Fund, other than
those assets held within the Guaranteed Principal
Investment Fund, shall constitute a single investment
fund.
11.04 Separate Accounts
A Separate Account shall be established in the name of
each Participant reflecting his interest in the Trust
Fund. Each Separate Account shall be maintained and
administered for each Participant and Beneficiary in
accordance with the provisions of the Plan. The
balance of each Separate Account shall be the balance
of the account after all credits and charges thereto,
for and as of such date, have been made as provided
herein.
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<PAGE>
11.05 Sub-Accounts
A Participant's Separate Account shall be divided into
such Sub-Accounts as are necessary or appropriate to
reflect a Participant's interest in the Trust Fund.
-46-
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<PAGE>
ARTICLE XII
VOLUNTARY CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS
12.01 No Voluntary Contributions
Participants shall not be permitted to make any
voluntary contributions to the Plan.
12.02 No Rollover Contributions
Participants shall not be permitted to make any
rollover contributions to the Plan.
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<PAGE>
ARTICLE XIII
EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
13.01 Employer Contributions
For each Plan Year, the Company shall make an annual
Employer Contribution under the Plan in an amount which
the Board of Directors shall so determine by
resolution. Such resolution shall specify the portion
of such Employer Contribution assignable to each
Region, which portions shall be uniform with respect to
more than one Region to the extent necessary to comply
with applicable regulations under Section 401(a)(26) of
the Code. In any event the annual Employer
Contribution so determined shall be an amount not less
than 2% of each Participant's Compensation paid by the
Employer during such Plan Year.
13.02 Timing of Employer Contributions
The Employer contributions which are to be made for a
Plan Year shall be paid to the Trust from time to time
as deemed advisable by the Employer but in no event
later than the time prescribed by law for filing the
Employer's Federal income tax return for its applicable
taxable year, including extensions thereof. In no
event shall the total amount of Employer contributions
under this Article XIII exceed the maximum amount
deductible in such year, under the provisions of the
Code and applicable Treasury Regulations thereunder.
13.03 Allocation of Forfeitures
At the end of each Plan Year, after the allocation of
earnings or losses pursuant to Section 11.03, the
Forfeitures (as determined pursuant to Section 16.03
and to the extent not required for restoration purposes
under Section 16.04 or to provide allocations for
Eligible Employees for whom an allocation was
erroneously omitted) for such Plan Year shall be
allocated to the Separate Accounts of all Participants
who are actively employed by an Employer on the last
day of the Plan Year and who have a Year of
Participation, or who have retired, died or had a
Termination of Employment because of a Total and
Permanent Disability during the Plan Year, regardless
of the number of Hours of Service such Participant
worked during the Plan Year. A Participant who is on
an Authorized Leave of Absence, or a transferred
Employee who pursuant to subsection (c) of
Section 10.01 is treated as an Eligible Employee, shall
be deemed to be actively employed by an Employer on the
last day of the Plan Year for purposes of this
Section 13.03. Such allocation to a Participant's
Separate Account shall be based on the ratio that each
such Participant's Compensation for the Plan Year bears
to the total Compensation for the Plan Year of all such
Participants.
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<PAGE>
13.04 Allocation of Employer Contributions
As of the end of such Plan Year, after the allocation
of earnings or losses pursuant to Section 11.03, and
after the allocation of the Forfeitures pursuant to
Section 13.03, the Employer Contribution assignable to
each Region shall be allocated to the Separate Accounts
of all Participants in such Region who are actively
employed by an Employer on the last day of the Plan
Year and who have a Year of Participation, or who had a
Termination of Employment during the Plan Year because
of retirement, death, or a Total and Permanent
Disability, regardless of the number of Hours of
Service such Participant worked during the Plan Year.
For purposes of the immediately preceding sentence, a
Participant shall be considered to be in the Region
from which he received his last payment of Compensation
during the Plan Year. A Participant who is on an
Authorized Leave of Absence, or a transferred Employee
who pursuant to subsection (c) of Section 10.01 is
treated as an Eligible Employee, shall be deemed to be
actively employed by an Employer on the last day of the
Plan Year for purposes of this Section 13.04. The
allocation of such Employer Contribution to a
Participant's Separate Account shall be based on the
ratio that each such Participant's Compensation for the
Plan Year bears to the total compensation for the Plan
Year of all such Participant's in the Region. For
purposes of this Section, a Participant who retires
under conditions of eligibility for increased benefits
under the provisions of Article XIV of the ALLTEL
Corporation Pension Plan shall be deemed to have
retired under the Plan, notwithstanding the provisions
of Article XIV.
13.05 Allocation of Employer Contributions for Certain
Transfer Employees
(a) Effective as of the Closing Date, as
Closing Date is defined in the Employee Transfer
Agreements between ALLTEL Illinois, Inc. and GTE
South Incorporated, ALLTEL Indiana, Inc. and
Contel of the South, Inc., and ALLTEL Michigan,
Inc. and Contel of the South, Inc., each dated
April 5, 1993, with respect to Participants who
are GTE Transfer Employees (as hereinafter
defined) as of the Closing Date or Participants
who become GTE Transfer Employees after the
Closing Date, the provisions of Sections 10.01,
13.03, and 13.04 shall be modified as follows:
(i) The requirement in Sections
13.03 and 13.04 that a Participant be
actively employed by an Employer on the
last day of the Plan Year and the
requirement in Section 10.01 that an
Eligible Employee becomes a Participant if
he has not had a Termination of Employment
prior to the date he has one Year of
Eligibility Service shall not apply with
respect to the Plan Year in which the
Participant becomes a GTE Transfer Employee
if the Participant was actively employed or
on an Authorized Leave of Absence as of the
day immediately preceding the date the
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<PAGE>
Participant becomes a GTE
Transfer Employee, provided that the
Participant is employed by GTE South
Incorporated or Contel of the South, Inc.
on the last day of the Plan Year in which
the Participant becomes a GTE Transfer
Employee. The preceding sentence shall
also apply to any GTE Transfer Employee who
would have become a Participant during the
period beginning on the date as of which he
becomes a GTE Transfer Employee and the
last day of the Plan Year in which he
becomes a GTE Transfer Employee had he
remained an Eligible Employee during such
period.
(ii) The requirement in Sections
13.03 and 13.04 that a Participant have a
Year of Participation shall be satisfied
for the Plan Year in which he becomes a GTE
Transfer Employee if the Participant is
credited with at least such number of Hours
of Service as the number determined by
multiplying 1,000 by a fraction the
numerator of which is the number of days of
employment with the Controlled Group
completed by the Participant in such Plan
Year and the denominator of which is 365.
A "GTE Transfer Employee" shall mean an
active Employee (including an Employee on
military leave, maternity leave, or other
approved leaves of absence, short-term
disability, and an Employee on layoff with recall
rights) whose employment transfers from ALLTEL
Illinois, Inc. to GTE South Incorporated, from
ALLTEL Indiana, Inc. to Contel of the South,
Inc., or from ALLTEL Michigan, Inc. to Contel of
the South, Inc., as of the Closing Date. An "LTD
Recipient" or "WC Recipient" (as defined in the
GTE Employee Transfer Agreements) shall not be a
Transfer Employee on the Closing Date, but an LTD
Recipient or WC Recipient may, however, become a
GTE Transfer Employee upon commencement of
employment with GTE (as defined in the Employee
Transfer Agreements), as provided in the Employee
Transfer Agreements.
(b) Effective as of the Closing Date, as
Closing Date is defined in the Employee Transfer
Agreements between ALLTEL Georgia Communications
Corp. and GTE South Incorporated, ALLTEL
Illinois, Inc. and GTE South Incorporated, ALLTEL
Indiana, Inc. and Contel of the South, Inc., and
ALLTEL Michigan, Inc. and Contel of the South,
Inc., each dated April 5, 1993, (the "Employee
Transfer Agreements") with respect to each person
who becomes an Employee pursuant to the Employee
Transfer Agreements as of the Closing Date or
subsequent thereto (a "Former GTE Employee") and
has met the eligibility requirements to become a
Participant on or before the last day of the Plan
Year in which he becomes a Former GTE Employee,
the requirement in Sections 13.03 and 13.04 that
a Participant have a Year of Participation shall
be satisfied for the Plan Year in which he
becomes a Former GTE Employee
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<PAGE>
if the Participant is credited with at
least such number of Hours of Service as the
number determined by multiplying 1,000 by a
fraction the numerator of which is the number of
days of employment with the Controlled Group
completed by the Participant in such Plan Year
and the denominator of which is 365. An "LTD
Recipient" or "WC Recipient" (as defined in the
Employee Transfer Agreements) shall not become a
Former GTE Employee on the Closing Date, but an
LTD Recipient or WC Recipient may, however,
become a Former GTE Employee upon commencement of
employment with ALLTEL (as defined in the
Employee Transfer Agreements), as provided in the
Employee Transfer Agreements.
(c) Effective as of October 15, 1993, with
respect to each person who becomes an Employee in
connection with the Purchase and Sale Agreement
dated May 18, 1993 between GTE Directories
Service Corporation and ALLTEL Publishing
Corporation, (a "Former GTE Directories
Employee") and has met the eligibility
requirements to become a Participant on or before
the last day of the Plan Year in which he becomes
a Former GTE Directories Employee, the
requirement in Sections 13.03 and 13.04 that a
Participant have a Year of Participation shall be
satisfied for the Plan Year in which he becomes a
Former GTE Directories Employee if the
Participant is credited with at least such number
of Hours of Service as the number determined by
multiplying 1,000 by a fraction the numerator of
which is the number of days of employment with
the Controlled Group completed by the Participant
in such Plan Year and the denominator of which is
365.
13.06 Limitation on Employer Contributions
Employer Contributions are subject to the limitations
contained in Article VII.
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<PAGE>
ARTICLE XIV
BENEFITS AND DISTRIBUTIONS
14.01 Normal Retirement
A Participant who retires from employment with the
Employer and all other members of the Controlled Group
on his Normal Retirement Date shall be entitled to
receive distribution, in accordance with Section 15.01,
of the value of his Separate Account, as soon as
reasonably practicable following his retirement or the
date his application for distribution is filed with the
Plan Administrator, if later.
14.02 Late Retirement
A Participant who retires from employment with the
Employer and all other members of the Controlled Group
on his Late Retirement Date shall be entitled to
receive distribution, in accordance with Section 15.01,
of the value of his Separate Account, as soon as
reasonably practicable following his retirement or the
date his application for distribution is filed with the
Plan Administrator, if later.
14.03 Early Retirement
A Participant shall be eligible for early retirement
following his attainment of age 55 and completion of 20
Years of Vesting Service or his attainment of age 60
and completion of 15 Years of Vesting Service. A
Participant who retires from employment with the
Employer and all other members of the Controlled Group
on his Early Retirement Date shall be entitled to
receive distribution, in accordance with Section 15.01,
of the value of his Separate Account, as soon as
reasonably practicable following his retirement or the
date his application for distribution is filed with the
Plan Administrator, if later. A Participant who
retires under conditions of eligibility for increased
benefits under the provisions of Article XIV of the
ALLTEL Corporation Pension Plan shall be eligible for
distribution of his Separate Account as described in
the immediately preceding sentence.
14.04 Disability Retirement
A Participant who retires from employment with the
Employer and all other members of the Controlled Group
on account of a Total and Permanent Disability shall be
entitled to receive distribution, in accordance with
Section 15.01, of the value of his Separate Account, as
soon as reasonably practicable following his retirement
or the date his application for distribution is filed
with the Plan Administrator, if later.
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<PAGE>
14.05 Death
In the event of a Participant's death prior to
distribution of his entire vested interest under the
Plan, the following shall apply:
(a) If a Participant has a Termination of
Employment on account of his death, his
Beneficiary shall be entitled to receive a
distribution, in accordance with Section 15.01,
of the value of the Participant's Separate
Account, as soon as reasonably practicable
following the Participant's death or the date his
Beneficiary's application for distribution is
filed with the Plan Administrator, if later.
(b) If a Participant dies after his Termination
of Employment, his Beneficiary shall be entitled
to receive a distribution, in accordance with
Section 15.01, of the Participant's vested
interest in his Separate Account, if any, as soon
as reasonably practicable following the
Participant's death or the date his Beneficiary's
application for distribution is filed with the
Plan Administrator, if later.
(c) If a Participant dies after the date
distribution of his vested interest in his
Separate Account has commenced in the form of
installment payments, his Beneficiary shall
receive distribution of the remainder of the
installment payments beginning as soon as
reasonably practicable following the
Participant's date of death; except that, a
Participant's Beneficiary may elect to receive a
single sum payment of the Participant's remaining
Separate Account in lieu of any further
installment payments.
(d) If a Participant dies prior to the date
distribution of his vested interest in his
Separate Account has commenced, his Beneficiary
shall receive distribution of the Participant's
vested interest in his Separate Account in an
available form of payment provided under
Article XVI, beginning as soon as reasonably
practicable following the date the Beneficiary's
application for distribution is filed with the
Plan Administrator.
(e) If a Participant dies prior to the date
distribution of his vested interest in his
Separate Account has been made or commenced and
distribution of his vested interest in his
Separate Account is to be made to his surviving
Spouse, distribution to the surviving Spouse must
be made or commenced no later than the end of the
first calendar year beginning after the
Participant's death or the end of the calendar
year in which the Participant would have reached
age 70 1/2, whichever is later.
(f) If a Participant dies prior to the date
distribution of his vested interest in his
Separate Account has been made or commenced and
distribution of his vested interest in his
Separate Account is to be made to a
-53-
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<PAGE>
Beneficiary who is not his surviving Spouse
in a single sum payment, distribution to such
Beneficiary must be made no later than the end of
the fifth calendar year beginning after the
Participant's death.
(g) If a Participant dies prior to the date
distribution of his vested interest in his
Separate Account has been made or commenced and
distribution of his vested interest in his
Separate Account is to be made to a Beneficiary
who is not his surviving Spouse in installment
payments, distribution to such Beneficiary must
commence no later than the end of the first
calendar year beginning after the Participant's
death.
(h) If distribution is to be made to a
Participant's surviving Spouse, it shall be made
available within a reasonable period of time
after the Participant's death that is no less
favorable than the period of time applicable to
other distributions.
14.06 Other Termination of Employment
A Participant who has a vested interest in his Separate
Account pursuant to Section 16.02 and who has a
Termination of Employment for a reason other than
retirement, Total and Permanent Disability, or death
shall be entitled to receive distribution of his
Separate Account, at the option of the Participant, as
follows:
(a) A Participant may elect to receive
distribution of the value of his vested interest
in his Separate Account prior to his Normal
Retirement Age, but not before January 1, 1995,
in the form provided in paragraph (a) of Section
15.01.
(b) A Participant may elect to receive
distribution of the value of his vested interest
in his Separate Account after attainment of
Normal Retirement Age in any available form of
payment provided in Section 15.01; or
(c) A Participant who had met the Years of
Vesting Service requirement but not the age
requirement for early retirement under
Section 14.03, may elect to receive distribution
of the value of his vested interest in his
Separate Account after he satisfies the age
requirement for early retirement, in any
available form of payment provided in Section
15.01.
14.07 Provision Pursuant to Section 401(a)(9) of the Code
Notwithstanding any other provision of the Plan to the
contrary, a Participant's benefits shall be distributed
to him not later than April 1 of the calendar year
following the later of (1) the calendar year in which
he attains age 70-1/2, or (2) the calendar year in
which he retires provided the Participant was not a
"five percent owner" (as defined in Section 416 of the
Code) at any time during the
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five-Plan-Year period ending in the calendar year in
which he attains age 70-1/2. If a Participant becomes
a "five percent owner" during any subsequent Plan Year,
his benefits shall be distributed to him not later than
April l of the calendar year following the calendar
year in which such subsequent Plan Year ends.
Unless applicable law permits (or requires) otherwise,
for Plan Years beginning on and after January 1, 1989,
a Participant's benefits shall be distributed to him
not later than April 1 of the calendar year following
the calendar year in which he attains age 70-1/2.
However, if a Participant attains age 70-1/2 by
January 1, 1988 and if such Participant was not a "five
percent owner" in the five-Plan-Year period ending with
or within the calendar year in which he attained
age 70-1/2 or any subsequent year, such Participant's
benefits need not be distributed until his actual
retirement.
If distribution is required to commence pursuant to
this Section 14.07 to a Participant who has not had a
Termination of Employment, distributions shall commence
in a form of payment provided under Article XVI and
shall be made in accordance with Section 401(a)(9) of
the Code and the regulations thereunder, the provisions
of which are incorporated herein by reference.
Notwithstanding any other provision of the Plan to the
contrary, a Participant's vested interest in his
Separate Account shall be distributed either at the
time of commencement of distribution or thereafter over
a period not extending beyond the life expectancy of
such Participant or the joint life expectancies of such
Participant and his Beneficiary.
14.08 Provision Pursuant to Section 401(a)(14) of the Code
Unless a Participant elects a later date (subject to
the provisions of Section 14.07), payments shall be
made or commenced not later than sixty days after the
latest of the close of the Plan Year in which:
(1) occurs the date on which the Participant
attains age 65;
(2) occurs the 10th anniversary of the year the
Participant commenced participation in the Plan;
or
(3) the Participant has a Termination of
Employment.
14.09 Administrative Powers Relating to Payments
If a Participant or Beneficiary is under a legal
disability or, by reason of illness or mental or
physical disability, is in the opinion of the Plan
Administrator unable properly to attend to his personal
financial matters, the Trustee may make such payments
in such of the following ways as the Plan Administrator
shall direct:
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(a) directly to such Participant or
Beneficiary;
(b) to the legal representative of such
Participant or Beneficiary; or
(c) to some relative by blood or marriage, or
friend, for the benefit of such Participant or
Beneficiary.
Any payment made pursuant to this Section 14.09 shall
be in complete discharge of the obligation under the
Plan.
14.10 Reemployment
If a vested Participant is reemployed by an Employer or
a member of the Controlled Group, the portion of his
Separate Account that is attributable to contributions
made with respect to his period of reemployment,
including any earnings thereon, shall not be
distributable in accordance with the terms of the Plan
until his subsequent retirement or other Termination of
Employment.
If distribution of such Participant's Separate Account
has already commenced at the time he is reemployed, the
portion of his Separate Account that is attributable to
contributions made with respect to his prior
employment, including any earnings thereon, shall
continue to be distributed after his reemployment in
accordance with his election pursuant to the provisions
of Section 15.01 made at his prior retirement or other
Termination of Employment.
If distribution of such Participant's Separate Account
has not commenced at the time he is reemployed, the
portion of his Separate Account that is attributable to
contributions made with respect to his prior
employment, including any earnings thereon, shall
remain distributable pursuant to the terms of the Plan
because of his prior retirement or other Termination of
Employment, but not in the form of payment provided
under paragraph (a) of Section 15.01; provided,
however, that Years of Vesting Service credited to such
Participant because of his reemployment shall be taken
into account only after his subsequent retirement or
other Termination of Employment for purposes of
determining whether such Participant may commence
distribution prior to his Normal Retirement Age of such
distributable portion of his Separate Account.
Notwithstanding the foregoing, a Participant shall have
no right to continue distribution or to receive
distribution upon reemployment of any amounts
attributable to a Prior Plan, unless expressly provided
for under such Prior Plan.
A Participant who is reemployed by an Employer or a
member of the Controlled Group and who was not vested
at the time of his prior Termination of Employment
shall be entitled (if at all) to receive distribution
of his Separate Account only upon his subsequent
retirement or other Termination of Employment.
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14.11 Special Provisions Effective January 1, 1995
Notwithstanding any other provision of the Plan to the
contrary, a Participant who has a Termination of
Employment prior to January 1, 1995, and who has not
commenced distribution of his vested interest in his
Separate Account, prior to January 1, 1995, may elect
that distribution of his vested interest in his
Separate Account be made or commenced on or after
January 1, 1995 in accordance with Section 14.06. A
Participant who has a Termination of Employment prior
to January 1, 1995, and who is receiving his vested
interest in his Separate Account in the form of
installment payments shall have a one-time opportunity
to elect to receive the undistributed balance of his
vested interest in his Separate Account in the form of
payment specified in paragraph (a) of Section 15.01 in
lieu of any remaining installment payments, in
accordance with procedures established by the Plan
Administrator and within the time period established by
the Plan Administrator for making such an election.
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ARTICLE XV
FORMS OF PAYMENT
15.01 Method of Distribution
The benefits to be distributed to a Participant or his
Spouse (or other Beneficiary) upon his Termination of
Employment shall be paid, at the election of the
Participant or his Spouse or other Beneficiary as
follows:
(a) in a single sum payment, except that, a
single sum payment is not available for
distributions made before January 1, 1995, or
(b) in monthly, quarterly, semi-annual or
annual installments over a period of 5, 10, 15,
or 20 years, as selected by the recipient, but
not exceeding the life expectancy of the
Participant (or the life expectancy of the Spouse
or other Beneficiary, if applicable) determined
at the time benefits commence. The amount of
each installment shall be redetermined annually
by multiplying the value of the amount of the
Separate Account to be distributed by a fraction,
the numerator of which is one and the denominator
of which is the total number of installments
remaining to be paid.
A Participant with respect to whom there may be an
additional allocation under Sections 13.03 and 13.04
following the Participant's Termination of Employment
because of his retirement, death, or Total and
Permanent Disability (or his Beneficiary) and whose
account balance exceeds $3,500 (or such other amount as
is established by the Secretary of the Treasury
pursuant to Section 411(a)(7)(B)(i) of the Code) on the
date of his Termination of Employment (or exceeded such
amount at the time of any prior distribution), shall be
entitled to elect to defer any distribution until the
Employer Contribution for the Plan Year that includes
the date of such Termination of Employment is made, or
to elect a distribution of the Participant's vested
interest in his Separate Account prior to the
additional allocation and a subsequent distribution of
his vested interest in any additional allocation.
If a Participant's vested interest in his Separate
Account at the time benefits are to commence (or at the
time of any prior distribution) exceeds $3,500 (or such
other amount as is established by the Secretary of the
Treasury pursuant to Section 411(a)(7)(B)(i) of the
Code), if the Participant has not attained his Normal
Retirement Age, distribution shall not be made without
the Participant's written consent.
15.02 Notice Regarding Distributions
Within the 60 day period ending 30 days prior to the
date distribution of a Participant's Separate Account
is to be made or commenced, the Plan
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Administrator shall provide him with a written
explanation of the forms of payment available under the
Plan, and, except as otherwise provided in Section
15.03, the Participant's right to defer distribution of
his Separate Account until a date not later than the
April 1 following the close of the calendar year in
which the Participant attains age 70 1/2, and his right
to make a direct rollover. Notwithstanding the
foregoing, distribution may be made or commenced less
than 30 days after the notice required by this
Section 15.03 is given to the Participant, provided
that:
(1) the Plan Administrator clearly informs the
Participant that he has a right to a period of at
least 30 days after receiving the notice to
consider the decision of whether or not to elect
a distribution and, if applicable, a particular
distribution option, and
(2) the Participant, after receiving the
notice, affirmatively elects a distribution.
15.03 Small Benefit Cash-Out
Notwithstanding the preceding provisions of this
Article XV, the vested Separate Account of a
Participant shall be distributed in a single sum
payment as soon as practicable following his
Termination of Employment, if the value of his vested
Separate Account as of the Valuation Date coinciding
with or immediately preceding his Termination of
Employment is (or at the time of any prior distribution
was) $3,500 (or such other amount as is established by
the Secretary of the Treasury pursuant to
Section 411(a)(7)(B)(i) of the Code) or less; provided,
however, that no such payment shall be made after
benefits have commenced in installments as provided in
Section 15.01. Notwithstanding the above, the
provisions of Section 14.06, or the provisions of
Section 15.01, a distributee the value of whose
Separate Account does not exceed $3,500 (or such other
amount as is established by the Secretary of the
Treasury pursuant to Section 411(a)(7)(B)(i) of the
Code) as of the date on which he would otherwise
receive distribution of such Separate Account and with
respect to whom there may be an additional allocation
under Sections 13.03 and 13.04 following the
Participant's Termination of Employment due to
retirement, death, or Total and Permanent Disability
shall be entitled to elect, in accordance with the
procedures established by the Plan Administrator, to
defer such payment or commencement of payment until the
Employer Contribution for the Plan Year that includes
the date of such Termination of Employment is made, in
which case the determination of the value of his
Separate Account for purposes of the timing, amount,
and form of distribution hereunder shall be made as of
the Valuation Date as of which the Employer
Contribution for the Plan Year that includes the date
of such Termination of Employment is allocated if
distribution is made or commenced to the distributee
prior to the next Valuation Date, and, otherwise, as of
the Valuation Date coinciding with or immediately
preceding the date as of which distribution is made or
commenced; provided, however, that
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notwithstanding the provisions of paragraph (a) of
Section 15.01, such distributee shall be entitled to
elect distribution in a single sum payment prior to
January 1, 1995, if the value of the Separate Account
exceeds $3,500 (or such other amount as is established
by the Secretary of the Treasury pursuant to
Section 411(a)(7)(B)(i) of the Code) at such later
Valuation Date.
15.04 Payment to Estate
Notwithstanding any other provision of the Plan to the
contrary, if a Participant's Beneficiary is his estate,
the executor or other personal representative of the
Participant may elect on the estate's behalf to receive
any benefit which may become payable under the Plan
upon the death of the Participant, or in lieu of any
installment payments remaining unpaid at the death of
the Participant, a single sum payment.
15.05 Direct Rollover Requirements
(a) This Section 15.05 applies to distributions
made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a
distributee's election under this Section 15.05,
a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator to
have any portion of an eligible rollover
distribution paid directly to an eligible
retirement plan specified by the distributee in a
direct rollover.
(b) For purposes of this Section 15.05, the
following definitions shall apply:
(i) Eligible rollover distribution:
An eligible rollover distribution is any
distribution of all or any portion of the
balance to the credit of the distributee,
except that an eligible rollover
distribution does not include: any
distribution that is one of a series of
substantially equal periodic payments (not
less frequently than annually) made for the
life (or life expectancy) of the
distributee or the joint lives (or joint
life expectancies) of the distributee and
the distributee's Beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such
distribution is required under Section
401(a)(9) of the Code; and the portion of
any distribution that is not includible in
gross income (determined without regard to
the exclusion for net unrealized
appreciation with respect to Employer
securities).
(ii) 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
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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.
(iii) 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.
(iv) Direct rollover: A direct
rollover is a payment by the Plan to the
eligible retirement plan specified by the
distributee.
15.06 Valuation Date
A Participant's vested interest in the balance of his
Separate Account shall be determined as of the
Valuation Date coinciding with or immediately preceding
the date as of which distribution is to be made or
commenced.
15.07 Form of Election
All elections under Article XIV and this Article XV
shall be in writing on the form prescribed by the Plan
Administrator from time to time and must be filed on a
timely basis.
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ARTICLE XVI
VESTING AND FORFEITURES
16.01 Full Vesting
A Participant shall have a fully vested and
nonforfeitable interest in his Separate Account on the
first to occur of the following:
(a) his attainment of age 65;
(b) the date of his death;
(c) his completion of the required Years of
Vesting Service, pursuant to Section 16.02;
(d) termination of the Plan pursuant to
Section 5.01; or
(e) the date on which he incurs a Total and
Permanent Disability.
16.02 Vesting Schedule
(a) A Participant, other than a Participant who
is an Employee of Systematics Information
Services, Inc. or its subsidiaries whose
Employment Commencement Date occurred prior to
January 1, 1995, shall vest in the value of his
Separate Account in accordance with the following
schedule:
Vesting Years Vested
of Service Percentage
less than 5 0%
5 or more 100%
(b) A Participant who is an Employee of
Systematics Information Services, Inc. or its
subsidiaries whose Employment Commencement Date
occurred prior to January 1, 1995, shall vest in
the value of his Separate Account in accordance
with the following schedule:
Vesting Years Vested
of Service Percentage
less than 3 0%
3 but not 4 25%
4 but not 5 50%
5 or more 100%
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16.03 Forfeitures
If a Participant who has a Termination of Employment
for any reason other than retirement, Total and
Permanent Disability, or death is not 100% vested in
his Separate Account, the non-vested portion of his
Separate Account shall be forfeited as follows:
(a) If the Participant has no vested interest
in his Separate Account, the non-vested balance
of the Participant's Separate Account shall be a
Forfeiture at the end of the Plan Year in which
his Termination of Employment occurs; provided
that he has not returned to employment prior to
such date.
(b) If the value of a Participant's vested
interest in his Separate Account as of the date
of distribution (or at the time of any prior
distribution) does not exceed $3,500 (or such
other amount as is established by the Secretary
of the Treasury pursuant to
Section 411(a)(7)(B)(i) of the Code) resulting in
his receipt of a single sum payment pursuant to
Section 15.04, the non-vested portion of the
Participant's Separate Account shall be a
Forfeiture at the end of the Plan Year in which
the single sum payment occurs; provided that he
has not returned to employment prior to such
date; and provided, further, that such
distribution occurs prior to the end of the
second Plan Year beginning on or after the
Participant's Termination of Employment.
(c) If the value of a Participant's vested
interest in his Separate Account as of the date
of distribution (or at the time of any prior
distribution) exceeds $3,500 (or such other
amount as is established by the Secretary of the
Treasury pursuant to Section 411(a)(7)(B)(i) of
the Code) and the Participant is eligible for and
consents in writing to a single sum payment of
his vested interest in his Separate Account, the
non-vested portion of the Participant's Separate
Account shall be a Forfeiture at the end of the
Plan Year in which the single sum payment occurs;
provided that he has not returned to employment
prior to such date; and provided, further, that
such distribution occurs prior to the end of the
second Plan Year beginning on or after the
Participant's Termination of Employment.
(d) If paragraphs (a), (b), and (c) of this
Section 16.03 are not applicable, the non-vested
portion of the Participant's Separate Account
shall be a Forfeiture at the end of the Plan Year
in which the Participant incurs five consecutive
one-year Breaks in Service; provided that he has
not returned to employment prior to such date.
Forfeitures shall be used for restoration purposes
under Section 16.04 and to provide allocations under
Section 13.03 and 13.04 for Eligible Employees for
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whom an allocation was erroneously omitted, if any. To
the extent that forfeitures are not used for the
preceding purposes, they shall be reallocated pursuant
to Section 13.03.
16.04 Restoration of Certain Forfeitures on Reemployment
If a Participant who had a Termination of Employment
returns to employment prior to incurring five
consecutive one-year Breaks in Service, the amount
previously forfeited by him (his Forfeiture) shall be
restored to his Separate Account as of the last day of
the Plan Year in which he returns to employment with an
Employer, provided he has not had an Employment
Termination prior to such date. The funds for such
restoration shall come first from Forfeitures allocated
at the end of such Plan Year, to the extent available
and, if necessary, thereafter from additional
contributions to the Plan by the Employer.
16.05 Vesting Following Certain Distributions
If a Participant receives a distribution of amounts
attributable to Employer Contributions from his
Separate Account at a time when he is less than 100%
vested in his Separate Account and under the terms of
the Plan the Participant could increase his vested
interest in such amounts after the distribution, the
balance of his Separate Account attributable to
Employer Contributions with respect to which his vested
interest can increase shall be computed as follows:
(1) A separate account shall be established for
the portion of the Participant's Separate Account
attributable to Employer Contributions at the
time of the distribution (or account balances
shall be maintained under a method having the
same effect), and
(2) At any relevant time, the Participant's
vested interest in such separate account is not
less than an amount ("X") determined by the
following formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the formula:
P = The Participant's
vested interest in such separate
account at the relevant time;
AB = The balance of such
separate account at the relevant
time;
R = The ratio of (i) the
balance of such separate account at
the relevant time to (ii) the balance
of such separate account after the
distribution; and
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D = The amount of the
distribution.
The relevant time is the time at which,
under the Plan, the Participant's vested interest
in such separate account cannot increase.
16.06 Election of Former Vesting Schedule
If the Company adopts an amendment to the Plan that
directly or indirectly affects the computation of a
Participant's vested interest in his Separate Account,
any Participant with three or more Years of Vesting
Service shall have a right to have his vested interest
in his Separate Account continue to be determined under
the vesting provisions in effect prior to the amendment
rather than under the new vesting provisions, unless
the vested interest of the Participant in his Separate
Account under the Plan as amended is not at any time
less than such vested interest determined without
regard to the amendment. A Participant shall exercise
his right under this Section 16.06 by giving written
notice of his exercise thereof to the Administrator
within 60 days after the latest of (i) the date he
receives notice of the amendment from the Plan
Administrator, (ii) the effective date of the
amendment, or (iii) the date the amendment is adopted.
Notwithstanding the foregoing, a Participant's vested
interest in his Separate Account on the effective date
of such an amendment shall not be less than his vested
interest in his Separate Account immediately prior to
the effective date of the amendment.
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ARTICLE XVII
BENEFICIARIES
17.01 Designation of Beneficiary
Subject to the provisions of Section 17.02, each
Participant shall have the right to designate, by
filing a written designation with the Plan
Administrator on such form as the Plan Administrator
may prescribe, a person or persons or entity to receive
any benefit which may become payable upon the death of
such Participant or any installment payments remaining
unpaid at the death of the Participant. A married
Participant's Beneficiary shall be his Spouse, unless
the Spouse has consented in the manner provided in
Section 17.02 to the Participant's designation of a
Beneficiary other than his Spouse. A non-Spouse
Beneficiary designation made by a Participant and
consented to by his Spouse may be revoked by the
Participant in writing at any time, without the consent
of his Spouse. Any new Beneficiary designation must
again comply with the requirements of Section 17.02.
17.02 Spousal Consent Requirements
Any written spousal consent given pursuant to this
Article XVII shall acknowledge the effect of the action
taken, shall specifically acknowledge any non-spouse
Beneficiary designated by the Participant, and shall be
witnessed by a Plan representative or a notary public.
Such spousal consent shall be valid only with respect
to the Spouse who signs the consent. Notwithstanding
any other provision of the Plan to the contrary,
written spousal consent shall not be required if the
Participant establishes to the satisfaction of the Plan
Administrator that such consent cannot be obtained
because the Spouse cannot be located or because of
other circumstances set forth in Section 401(a)(11) of
the Code and regulations issued thereunder.
17.03 No Beneficiary
If no Beneficiary has been designated pursuant to
Section 17.01, if a designation is for any reason
illegal or ineffective, or if no Beneficiary survives
the Participant and he has no surviving Spouse, then
the Beneficiary under the Plan shall be the
Participant's estate. If a Beneficiary dies after
becoming entitled to receive a distribution under the
Plan but before distribution is made to him in full,
and if no other Beneficiary has been designated to
receive the balance of the distribution in that event,
the estate of the deceased Beneficiary shall be the
Beneficiary as to the balance of the distribution.
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17.04 Reliance
In determining a Participant's Beneficiary, the Plan
Administrator may act and rely upon any information it
deems reliable upon reasonable inquiry, and upon any
affidavit, certificate, or other paper believed by it
to be genuine, and upon any evidence believed by it to
be sufficient.
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ARTICLE XVIII
LOANS
18.01 No Loans
A Participant shall not be permitted to obtain any
loans from the Plan.
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ARTICLE XIX
IN-SERVICE WITHDRAWALS
19.01 No In-Service Withdrawals
A Participant shall not be permitted to withdraw any
portion of his interest in the Plan.
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ARTICLE XX
MERGER OF CERTAIN PLANS INTO THE PLAN
20.01 In General
This Article XX contains special provisions regarding
Prior Plans that have been merged into the Plan from
time to time. Except as may be expressly provided
elsewhere in this Article XX, the forms of payment or
other rights that may not be eliminated under
Section 411(d)(6) of the Code available under a Prior
Plan shall be available under the Plan solely with
respect to a Participant's interest under a Prior Plan
and not to the Participant's interest under the Plan
determined without regard to this Article XX. A
Participant may, however, elect to receive his entire
interest under the Plan in a form of payment provided
under Article XV.
20.02 Merger of Allied Telephone Company Profit Sharing Plan
(a) Effective as of the beginning of business
on January 1, 1995, the Allied Telephone Company
Profit Sharing Plan (the "Allied Plan") shall be
merged into and made a part of the Plan, and the
trust fund maintained in connection with the
Allied Plan shall be added to the assets of the
Trust Fund to be disposed of under the terms,
conditions, and provisions of the Plan and the
Trust. On and after January 1, 1995, except as
otherwise expressly provided in this Article XX,
the general provisions of the Plan shall govern
with respect to the interests under the Allied
Plan of all persons, to the extent not
inconsistent with any provision of the Allied
Plan that may not be eliminated under Section
411(d)(6) of the Code.
(b) As of January 1, 1995, Separate Accounts
shall be established in accordance with the
provisions of Section 11.04 (to the extent not
previously established) in the name of each
person who as of the close of business on
December 31, 1994 was a participant or
beneficiary with an interest under the Allied
Plan. In addition to any credits or debits to
the Separate Account of the persons described in
the immediately preceding sentence on or after
January 1, 1995 (or with respect to periods prior
to January 1, 1995, if any, during which a person
described in the immediately preceding sentence
was a Participant), in accordance with the Plan's
general provisions, as of the date the assets of
the trust fund for the Allied Plan are received
by the Trustee and deposited in the Trust Fund
there shall be credited to each such Separate
Account or Sub-Account, as applicable, the value
of such person's prior separate account or sub-
account of the corresponding type under the
Allied Plan as certified to the Plan
Administrator by the Plan administrator of the
Allied Plan.
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(c) Any election, waiver, or beneficiary
designation made by a person with respect to his
interest under the Allied Plan shall remain in
effect, but with respect only to that portion of
his Separate Account attributable to the Allied
Plan and the provisions of the Plan other than
this Section 19.02 shall apply to the portion of
his Separate Account not attributable to the
Allied Plan, if any. Provided that an election,
waiver, or beneficiary designation has not become
irrevocable (by reason of death or otherwise), a
person described in the first sentence of
paragraph (b) of this Section 19.02 may make a
new election, waiver, or beneficiary designation
for his entire interest under the Plan.
20.03 Merger of Profit Sharing Plan for Employees of
Systematics Information Services, Inc. and
Participating Affiliates
(a) Effective as of the beginning of business
on January 1, 1995, the Profit Sharing Plan for
Employees of Systematics Information Services,
Inc. and Participating Affiliates (the
"Systematics Plan") shall be merged into and made
a part of the Plan, and the trust fund maintained
in connection with the Systematics Plan shall be
added to the assets of the Trust Fund to be
disposed of under the terms, conditions, and
provisions of the Plan and the Trust. On and
after January 1, 1995, except as otherwise
expressly provided in this Article XX, the
general provisions of the Plan shall govern with
respect to the interests under the Systematics
Plan of all persons, to the extent not
inconsistent with any provision of the
Systematics Plan that may not be eliminated under
Section 411(d)(6) of the Code.
(b) As of January 1, 1995, Separate Accounts
shall be established in accordance with the
provisions of Section 11.04 in the name of each
person who as of the close of business on
December 31, 1994 was a participant or
beneficiary with an interest under the
Systematics Plan. In addition to any credits or
debits to the Separate Account of the persons
described in the immediately preceding sentence
on or after January 1, 1995, in accordance with
the Plan's general provisions, as of the date the
assets of the trust fund for the Systematics Plan
are received by the Trustee and deposited in the
Trust Fund there shall be credited to each such
Separate Account or Sub-Account, as applicable,
the value of such person's prior separate account
or sub-account of the corresponding type under
the Systematics Plan as certified to the Plan
Administrator by the plan administrator of the
Systematics Plan.
(c) Each Employee who is a participant in the
Systematics Plan on December 31, 1994, and
becomes an Eligible Employee on January 1, 1995,
shall become a Participant on January 1, 1995.
An Employee of Systematics Information Services,
Inc. or its subsidiaries who was hired prior to
January 1, 1995, who becomes an Eligible Employee
on
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January 1, 1995, and who would have become
a participant in the Systematics Plan upon
fulfilling the age and service eligibility
requirements under the Systematics Plan shall
become a Participant on the earlier of (i) the
date that he would have become a participant in
the Systematics Plan or (ii) the date that he
would become a Participant in accordance with
Section 10.01. Each other Employee of
Systematics Information Services, Inc. or its
subsidiaries who is hired on or after January 1,
1995, and who becomes an Eligible Employee shall
become a Participant on the date that he would
become a Participant in accordance with
Section 10.01.
(d) Any election, waiver, or beneficiary
designation made by a participant or beneficiary,
as applicable, under the Systematics Plan with
respect to his interest under the Systematics
Plan shall remain in effect unless superseded by
a valid election, waiver, or beneficiary
designation under the Plan.
(e) Any election, waiver, or beneficiary
designation made by a person with respect to his
interest under the Systematics Plan shall remain
in effect, but with respect only to that portion
of his Separate Account attributable to the
Systematics Plan and the provisions of the Plan
other than this Section 19.03 shall apply to the
portion of his Separate Account not attributable
to the Systematics Plan, if any. Provided that
an election, waiver, or beneficiary designation
has not become irrevocable (by reason of death or
otherwise), a person described in the first
sentence of paragraph (b) of this Section 19.03
may make a new election, waiver, or beneficiary
designation for his entire interest under the
Plan.
(f) Notwithstanding any other provision of the
Plan to the contrary, any outstanding loan under
the Systematics Plan shall continue to be repaid
and administered in accordance with its terms and
the applicable provisions of the Systematics Plan
in effect at the time the loan was granted.
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ARTICLE XXI
SPECIAL PROVISIONS AND EFFECTIVE DATES
21.01 Effective Date
This amended and restated Plan is effective as of January 1,
1994, but with respect only to Participants who have a
Termination of Employment on or after January 1, 1994, except
as may otherwise be provided herein.
21.02 Tax Reform Act of 1986 Effective Dates
With respect to any change made to the Plan to satisfy the
provisions of the Tax Reform Act of 1986 and any subsequent
legislation, including any regulations, rulings, or other
published guidance, such change shall be effective on the
first day of the first period (which may or may not be the
first day of a Plan Year) with respect to which such change
became required because of such provisions.
EXECUTED this 29th day of December, 1994.
ALLTEL CORPORATION
By /s/ John L. Comparin
Title:Vice-President - Human Resources
611
<PAGE>
EXHIBIT (10)(P)
ALLTEL CORPORATION
THRIFT PLAN
(January 1, 1994 Restatement)
612
<PAGE>
TABLE OF CONTENTS
Page
PREAMBLE 1
ARTICLE I DEFINITIONS 2
1.01 Active Participant ............................................2
1.02 Authorized Leave of Absence....................................2
1.03 Beneficiary ...................................................2
1.04 Board of Directors.............................................2
1.05 Code...........................................................2
1.06 Committee......................................................2
1.07 Company........................................................3
1.08 Compensation...................................................3
1.09 Controlled Group...............................................4
1.10 Effective Date.................................................4
1.11 Eligible Employee..............................................4
1.12 Employee........................................... ...........4
1.13 Employer.......................................................5
1.14 Employer Contribution..........................................5
1.15 ERISA..........................................................5
1.16 Highly Compensated Employee....................................5
1.17 Hour of Service................................................8
1.18 Investment Fund................................................8
1.19 Matched Salary Deferral Contributions..........................8
1.20 Nonhighly Compensated Employee.................................8
1.21 Normal Retirement Age..........................................8
1.22 Participant....................................................8
1.23 Plan...........................................................9
1.24 Plan Administrator.............................................9
1.25 Plan Year......................................................9
1.26 Prior Plan.....................................................9
1.27 Reemployment Commencement Date.................................9
1.28 Rollover Contribution..........................................9
1.29 Salary Deferral Contribution...................................9
1.30 Separate Account...............................................9
1.31 Settlement Date.............................................. 10
1.32 Special Loan Investment Fund................................. 10
1.33 Spouse....................................................... 10
1.34 Sub-Account.................................................. 10
(i)
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<PAGE>
1.35 Total and Permanent Disability............................... 10
1.36 Trust........................................................ 10
1.37 Trust Agreement.............................................. 11
1.38 Trustee...................................................... 11
1.39 Trust Fund................................................... 11
1.40 Unmatched Salary Deferral Contributions...................... 11
1.41 Valuation Date............................................... 11
ARTICLE II ADMINISTRATION 12
2.01 Plan Administrator........................................... 12
2.02 Allocation of Authority and Responsibility Among
Named Fiduciaries............................................ 12
2.03 Rights, Powers and Duties of the Plan Administrator.......... 12
2.04 Discharge of Duties.......................................... 13
2.05 Indemnification.............................................. 14
2.06 Compensation and Expenses.................................... 14
2.07 Committee.................................................... 14
2.08 Administrative Expenses...................................... 15
ARTICLE III GENERAL PROVISIONS 16
3.01 Adoption of the Plan by Other Employers...................... 16
3.02 No Contract of Employment.................................... 16
3.03 Restrictions Upon Assignments and Creditor's Claims.......... 16
3.04 Facility of Payment.......................................... 17
3.05 Restriction of Claims Against Trust.......................... 17
3.06 Benefits Payable from Trust.................................. 17
3.07 Merger and Transfer of Assets or Liabilities................. 17
3.08 Applicable Law............................................... 17
3.09 Reversion of Employer Contributions.......................... 18
ARTICLE IV CLAIMS PROCEDURES 19
4.01 Claim for Benefits........................................... 19
4.02 Review....................................................... 19
ARTICLE V AMENDMENT AND TERMINATION 21
5.01 Amendment and Termination of the Plan........................ 21
5.02 Procedure Upon Termination................................... 21
(ii)
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<PAGE>
5.03 Non-Forfeitability Upon Termination of Plan.................. 22
5.04 Reorganization............................................... 22
5.05 Withdrawal of an Employer.................................... 23
ARTICLE VI TRUST AGREEMENT AND TRUST FUND 24
6.01 Trust Agreement and Trust Fund............................... 24
6.02 Irrevocability............................................... 24
6.03 Benefits Payable Only from Trust Fund........................ 24
6.04 Optional Provision for Benefits.............................. 24
6.05 Commingling Authorized....................................... 25
ARTICLE VII LIMITATIONS ON CONTRIBUTIONS 26
7.01 Definitions.................................................. 26
7.02 Code Section 402(g) Limit.................................... 29
7.03 Distribution of Excess Deferrals............................. 29
7.04 Limitation on Salary Deferral Contributions of Highly
Compensated Employees........................................ 30
7.05 Distribution of Excess Salary Deferral Contributions......... 31
7.06 Limitation on Matching Contributions of Highly
Compensated Employees........................................ 32
7.07 Distribution of Excess Contributions......................... 33
7.08 Multiple Use Limitation...................................... 34
7.09 Determination of Income or Loss.............................. 34
7.10 Code Section 415 Limitations on Crediting of
Contributions and Forfeitures................................ 34
7.11 Coverage Under Other Qualified Defined Contribution Plan..... 35
7.12 Coverage Under Qualified Defined Benefit Plan................ 35
7.13 Scope of Limitations......................................... 36
7.14 Separate Testing............................................. 36
ARTICLE VIII TOP-HEAVY PROVISIONS 37
8.01 Definitions.................................................. 37
8.02 Applicability................................................ 39
8.03 Minimum Employer Contribution................................ 40
8.04 Coordination with Other Plans................................ 40
8.05 Adjustments to Section 415 Limitations....................... 40
8.06 Accelerated Vesting.......................................... 41
(iii)
615
<PAGE>
ARTICLE IX SERVICE 42
9.01 Hour of Service...............................................42
9.02 Department of Labor Rules.................................... 42
ARTICLE X ELIGIBILITY AND PARTICIPATION 43
10.01 Eligibility.................................................. 43
10.02 Participation................................................ 43
10.03 Termination and Rehiring..................................... 43
10.04 Duration of Participation.................................... 43
ARTICLE XI INVESTMENT FUNDS, ACCOUNTING, AND SEPARATE ACCOUNTS 45
11.01 Investment Funds............................................. 45
11.02 Participant Loans............................................ 45
11.03 Special Loan Investment Fund................................. 45
11.04 Participant Investment Elections............................. 45
11.05 Change of Investment Elections............................... 46
11.06 Transfers Among Investment Funds............................. 46
11.07 Allocation of Earnings or Losses to Separate Accounts........ 46
11.08 Separate Accounts............................................ 47
11.09 Sub-Accounts................................................. 47
ARTICLE XII SALARY DEFERRAL CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS 48
12.01 Salary Deferral Contributions................................ 48
12.02 Amount of Salary Deferral Contributions...................... 48
12.03 Changes in Salary Reduction Agreement........................ 48
12.04 Suspension of Salary Deferral Contributions.................. 48
12.05 Resumption of Salary Deferral Contributions.................. 49
12.06 Delivery of Salary Deferral Contributions.................... 49
12.07 Limitations on Salary Deferral Contributions................. 49
12.08 Rollover Contributions....................................... 49
ARTICLE XIII EMPLOYER CONTRIBUTIONS AND ALLOCATIONS 51
13.01 Employer Contributions....................................... 51
(iv)
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<PAGE>
13.02 Timing of Employer Contributions............................. 51
13.03 Allocation of Employer Contributions......................... 51
13.04 Limitations on Employer Contributions........................ 53
ARTICLE XIV DISTRIBUTIONS 54
14.01 Distributions................................................ 54
14.02 Distributions to Beneficiaries.......................... .... 54
14.03 Provision Pursuant to Section 401(a)(9) of the Code.......... 55
14.04 Provision Pursuant to Section 401(a)(14) of the Code......... 55
14.05 Administrative Powers Relating to Payments................... 56
14.06 Reemployment................................................. 56
ARTICLE XV FORMS OF PAYMENT 57
15.01 Method of Distribution....................................... 57
15.02 Consent and Timing........................................... 57
15.03 Notice Regarding Distribution................................ 58
15.04 Small Benefit Cash-Out....................................... 58
15.05 Payment to Estate............................................ 59
15.06 Direct Rollover Requirements................................. 59
15.07 Valuation Date............................................... 60
15.08 Form of Election............................................. 60
ARTICLE XVI VESTING 61
16.01 Full Vesting................................................. 61
16.02 Election of Former Vesting Schedule.......................... 61
ARTICLE XVII BENEFICIARIES 62
17.01 Designation of Beneficiary................................... 62
17.02 Spousal Consent Requirements................................. 62
17.03 No Beneficiary............................................... 62
17.04 Reliance..................................................... 63
ARTICLE XVIII LOANS 64
18.01 Application for Loan......................................... 64
18.02 Reduction of Account Upon Distribution....................... 64
18.03 Requirements to Prevent a Taxable Distribution............... 65
(v)
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<PAGE>
18.04 Administration of Loans...................................... 65
18.05 Default...................................................... 66
ARTICLE XIX IN-SERVICE WITHDRAWALS 67
19.01 Withdrawals While Still Employed............................. 67
19.02 Certain Other Withdrawals.................................... 69
ARTICLE XX MERGER OF CERTAIN PLANS INTO THE PLAN 70
20.01 In General................................................... 70
20.02 Merger of CP National Corporation Incentive Thrift
Savings Plan................................................. 70
20.03 Merger of Houston Wire & Cable Company Combination
Profit Sharing and Salary Deferral Plan...................... 71
20.04 Merger of Computer Power, Inc. Retirement Savings Plan....... 71
ARTICLE XXI SPECIAL PROVISIONS AND EFFECTIVE DATES 73
21.01 Effective Date............................................... 73
21.02 Tax Reform Act of 1986 Effective Dates....................... 73
(iv)
618
<PAGE>
ALLTEL CORPORATION
THRIFT PLAN
(January 1, 1994 Restatement)
PREAMBLE
The Thrift Plan for Employees of Systematics Information Services, Inc. and
Participating Affiliates, originally effective as of January 1, 1986, and to be
known for periods on and after October 26, 1994 as the ALLTEL Corporation Thrift
Plan, is hereby amended and restated in its entirety. The Plan, as amended and
restated hereby, is intended to qualify as a profit-sharing plan under Section
401(a) of the Code, and includes a cash or deferred arrangement that is intended
to qualify under Section 401(k) of the Code. The Plan is maintained for the
exclusive benefit of eligible employees and their beneficiaries.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Separate Account under the Plan on and after the
effective date of this amendment and restatement shall be not less than his
vested interest in his account on the day immediately preceding the effective
date.
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<PAGE>
ARTICLE I
DEFINITIONS
Whenever used herein with the initial letter capitalized, the following words
and phrases shall have the following meanings unless a different meaning is
plainly required by the context. For purposes of construction of the Plan, the
masculine term shall include the feminine and the singular shall include the
plural in all cases in which they could thus be applied.
1.01 Active Participant
Any Participant for whom Salary Deferral Contributions are
currently being made to the Plan.
1.02 Authorized Leave of Absence
Any absence from regular employment authorized or excused by the
Employer under its standard personnel practices, provided that all
persons under similar circumstances shall be treated alike in the
granting of such Authorized Leaves of Absence.
1.03 Beneficiary
The person or persons entitled under the provisions of the Plan to
receive distribution hereunder in the event the Participant dies
before receiving distribution of his entire vested interest under
the Plan.
1.04 Board of Directors
The Board of Directors of the Company.
1.05 Code
The Internal Revenue Code of 1986, as amended from time to time.
Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that
amends, supplements, or supersedes such section.
620
<PAGE>
1.06 Committee
The committee that may be established pursuant to Section 2.07.
1.07 Company
For periods on and after October 1, 1994, ALLTEL Corporation, a
Delaware corporation, its corporate successors, and the surviving
corporation resulting from any merger of ALLTEL Corporation with
any other corporation or corporations. For periods on and after
January 27, 1992, but before October, 1994, Systematics Information
Services, Inc., a Delaware corporation, and its successor or
successors. For periods prior to January 27, 1992, Systematics,
Inc., an Arkansas corporation, and its successor or successors.
1.08 Compensation
The sum of:
(a) the amounts actually paid to an Eligible Employee by the
Employer for services rendered as reported on the
Eligible Employee's federal income tax withholding
statement (Form W-2) or its subsequent equivalent for the
applicable calendar year; exclusive however, of any such
amounts that would not be subject to tax (for the
purposes of the Federal Insurance Contributions Act)
under Section 3101(a) of the Internal Revenue Code
without the dollar limitation of Section 3121(a)(1) of
said Code and exclusive of relocation pay, any non-cash
compensation, allowances for cost-of-living,
international incentives such as housing allowances and
all other extraordinary international incentives; and
(b) any amounts that would have been includable in the
Employee's Compensation as described in (a) above for
such calendar year if they had not received special tax
treatment because they were deferred by the Eligible
Employee under the Plan through a salary reduction
agreement pursuant to Section 401(k) of the Code or under
a "cafeteria plan" as defined in Section 125 of the Code.
In no event, however, shall the Compensation of a Participant taken
into account under the Plan for any Plan Year exceed (1) $200,000
for Plan Years beginning on or after January 1, 1989 but prior to
January 1, 1994, or (2) $150,000 for Plan Years beginning on or
after January 1, 1994 (subject to adjustment annually as provided
in Section 401(a)(17)(B) and Section 415(d) of the Code). In
determining the Compensation, for purposes of applying the annual
compensation limitation described above, of a Participant who is a
five-
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<PAGE>
percent owner or among the ten Highly Compensated Employees
receiving the greatest Compensation for the Plan Year, the
Compensation of the Participant's spouse and of his lineal
descendants who have not attained age 19 as of the close of the
Plan Year shall be included as Compensation of the Participant for
the Plan Year. If as a result of applying the family aggregation
rule described in the preceding sentence the annual compensation
limitation would be exceeded, the limitation shall be prorated
among the affected family members in proportion to each member's
Compensation as determined prior to application of the family
aggregation rules.
1.09 Controlled Group
An Employer and any and all other corporations, trades, businesses,
or organizations, the employees of which together with the
employees of the Employer are required, pursuant to the applicable
provisions of Section 414(b), (c), or (m) of the Code, to be
treated as if they were employed by a single employer.
1.10 Effective Date
The Plan was originally effective as of January 1, 1986.
1.11 Eligible Employee
Each Employee of the Employer, except
(1) an Employee covered by a collective bargaining agreement
between an Employer and a representative of such Employee
that does not specifically provide for coverage under the
Plan,
(2) any person who is a nonresident alien and who receives no
earned income (within the meaning of Section 911(b) of
the Code) from the Employer that constitutes income from
sources within the United States (within the meaning of
Section 861(a)(3) of the Code), or
(3) a leased employee.
1.12 Employee
A person employed by the Controlled Group.
"Employee" shall include any "leased employee" (as hereinafter
defined); provided, however, contributions or benefits provided
by the leasing
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<PAGE>
organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer. For purposes
of this paragraph, the term "leased employee" means any person who,
pursuant to an agreement between the Employer and any other person
("leasing organization"), has performed services for the Employer
(or for the Employer and related persons determined in accordance
with Section 414(n)(6) of the Internal Revenue Code) on a
substantially full-time basis for a period of at least one year, if
such services are of a type historically performed by employees in
the business field of the Employer. Notwithstanding the foregoing,
a leased employee shall not be considered an Employee for any Plan
Year if such leased employees constitute less than 20% of the
number of the Employer's Nonhighly Compensated Employees within the
meaning of Section 414(n)(5)(C)(ii) of the Code and if during such
Plan Year the leased employee is covered by a plan described in
Section 414(n)(5)(B) of the Code. A leased employee is not eligible
to participate in the Plan unless he actually becomes an Employee
without regard to this paragraph.
1.13 Employer
Systematics Information Services, Inc., and any other member of the
Controlled Group adopting the Plan pursuant to Section 3.01 or any
corresponding predecessor provision of the Plan.
1.14 Employer Contribution
An Employer matching contribution made pursuant to Section 13.01.
1.15 ERISA
The Employee Retirement Income Security Act of 1974, as the same
has been and may be amended from time to time. Reference to a
section of ERISA includes such section and any comparable section
or sections of any future legislation that amends, supplements, or
supersedes such section.
1.16 Highly Compensated Employee
For a particular Plan Year, any Employee who, during the preceding
Plan Year:
(a) was at any time a 5 percent owner (as such term is
defined in Section 416(i)(1) of the Code);
(b) received compensation from the Employer or any other
member of the Controlled Group, in excess of $75,000
(subject to adjustment
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<PAGE>
annually at the same time and in the same manner as under
Section 415(d) of the Code);
(c) received compensation from the Controlled Group in excess
of $50,000 (subject to adjustment annually at the same
time and in the same manner as under Section 415(d) of
the Code) and was in the top-paid group of Employees for
such Plan Year;
(d) was at any time an officer (limited to no more than 50
Employees or, if less, the greater of 3 Employees or 10
percent of the Employees) and received compensation
greater than 50 percent of the amount in effect under
Section 415(b)(1)(A) of the Code for such Plan Year; or
(e) who during the particular Plan Year (but not the prior
Plan Year):
(1) was at any time a 5 percent owner (as such
term is defined in Section 416(i)(1) of the
Code); or
(2) was included in the foregoing paragraphs (b),
(c) or (d) above and was in the group
consisting of the 100 Employees paid the
greatest compensation by the Controlled Group
during such Plan Year.
Notwithstanding the foregoing, for purposes of the
nondiscrimination requirements of the Code, other than Sections
401(k)(3) and 401(m)(2) of the Code, "Highly Compensated Employee"
("HCE") shall be determined as follows:
(a) An Employee is an HCE under this provision if (a) the
Employee is a 5-percent owner; (b) the Employee's
compensation for the Plan Year exceeds the Section
414(q)(1)(B) of the Code amount; (c) the Employee's
compensation exceeds the Section 414(q)(1)(C) of the Code
amount for the Plan Year and the Employee is in the
top-paid group of employees within the meaning of Section
414(q)(4) of the Code, or (d) the Employee is an officer
described in Section 414(q)(1)(D) of the Code.
(b) The lookback provisions of Section 414(q) of the Code
shall not apply to determining HCEs under this provision.
This simplified method for determining HCEs shall apply on the
basis of a snapshot day. In applying this simplified method on a
snapshot basis:
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(a) Who is an HCE is determined on the basis of the data as
of the snapshot day, except as provided below in (c).
(b) If the determination of who is an HCE is made earlier
than the last day of the Plan Year, the Employee's
compensation that is used to determine an Employee's
status must be projected for the Plan Year under a
reasonable method established by the Company.
(c) Employees not employed on the snapshot day that are taken
into account in testing must be categorized as either
HCEs or non-HCEs. In that case, the method described in
this section shall be subject to the following
modifications. In addition to those Employees who are
determined to be HCEs on the Plan's snapshot day, as
described above, the Plan shall treat as an HCE an
eligible Employee for the Plan Year who:
(1) terminated prior to the snapshot day and was
an HCE in the prior year;
(2) terminated prior to the snapshot day and (i)
was a 5-percent owner, (ii) has compensation
for the Plan Year greater than or equal to the
projected compensation of any Employee who is
treated as an HCE on the snapshot day (except
for Employees who are HCEs solely because they
are 5-percent owners or officers), or (iii)
was an officer and has compensation greater
than or equal to the projected compensation of
any other officer who is an HCE on the
snapshot day solely because that person is an
officer; or
(3) becomes employed subsequent to the snapshot
day and (i) is a 5-percent owner, (ii) has
compensation for the Plan Year greater than or
equal to the projected compensation of any
Employee who is treated as an HCE on the
snapshot day (except for Employees who are
HCEs solely because they are 5-percent owners
or officers), or (iii) is an officer and has
compensation greater than or equal to the
projected compensation of any other officer
who is an HCE on the snapshot day solely
because that person is an officer.
In applying this provision, Section 1.414(q)-1T of the Temporary
Income Tax Regulations applies to the extent that it is not
inconsistent with the methods specifically provided above.
-7-
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<PAGE>
"Highly Compensated Employee" shall include a former Employee of
the Company whose employment with the Controlled Group terminated
prior to the Plan Year and who was a Highly Compensated Employee
for the Plan Year in which his employment terminated or for any
Plan Year ending on or after his 55th birthday.
If an Employee is a member of the family of a 5-percent owner or
one of the 10 Highly Compensated Employees paid the greatest
compensation for a Plan Year, then the Employee shall not be
considered a separate Employee and any compensation paid to such
Employee (and any contribution on behalf of such Employee) shall be
treated as if it were paid to (or on behalf of) the 5-percent owner
or the Highly Compensated Employee.
For the purposes of this definition of "Highly Compensated Employee",
(a) the term "compensation" shall mean an Employee's
compensation (within the meaning of Section 415(c)(3) of
the Code determined without regard to Sections 125,
402(a)(8) and 402(h)(1)(B) of the Code),
(b) the term "top-paid group of Employees" shall mean that
group of Employees of the Controlled Group consisting of
the top 20 percent of such Employees when ranked on the
basis of compensation paid by the Controlled Group during
the Plan Year and
(c) the term "family" shall mean an Employee's spouse and
lineal ascendants and descendants and the spouses of such
lineal ascendants or descendants.
1.17 Hour of Service
Each hour, if any, that may be credited to a person in accordance
with the provisions of Article IX.
1.18 Investment Fund
Any investment fund maintained or established from time to time
under Article XI.
1.19 Matched Salary Deferral Contributions
A Participant's Salary Deferral Contributions that are not in
excess of 6% of his Compensation for the Plan Year, or such other
percentage as may be
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<PAGE>
established by the Company with respect to Eligible Employees from
time to time.
1.20 Nonhighly Compensated Employee
Any Employee who is not a Highly Compensated Employee.
1.21 Normal Retirement Age
The date a Participant attains age 65.
1.22 Participant
An Eligible Employee who fulfills the eligibility requirements as
provided in Article X and who continues to qualify as a Participant
in accordance with Section 10.03.
1.23 Plan
For periods on and after October 26, 1994, the ALLTEL Corporation
Thrift Plan, as set forth herein and as may be amended from time to
time. For periods prior to October 26, 1994, but on and after
January 27, 1992, the Thrift Plan for Employees of Systematics
Information Services, Inc. and Participating Employers, as amended
from time to time. For periods prior to January 27, 1992, the
Thrift Plan for Employees of Systematics, Inc., as amended from
time to time.
1.24 Plan Administrator
The Company, which shall serve pursuant to the terms of Article II.
The Company may allocate or delegate any or all of its authority
under the Plan to a Committee of no less than three persons.
1.25 Plan Year
The twelve-month period which begins on the first day of January
and which ends on the last day of December.
1.26 Prior Plan
Any other qualified plan that is merged into the Plan under Article
XX.
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<PAGE>
1.27 Reemployment Commencement Date
The date on which an Employee first performs an Hour of Service
following a termination of employment with the Controlled Group.
1.28 Rollover Contribution
Any rollover contribution to the Plan made by an Eligible Employee
pursuant to Section 12.08.
1.29 Salary Deferral Contribution
The amount contributed to the Plan on a Participant's behalf by his
Employer in accordance with his salary reduction agreement executed
pursuant to Article XII.
1.30 Separate Account
The separate account maintained by the Trustee in the name of a
Participant that reflects his interest in the Trust Fund and any
Sub-Accounts established thereunder, as provided in Article XI.
1.31 Settlement Date
The date on which a Participant's interest under the Plan becomes
distributable in accordance with Article XIV and Article XV
following his termination of service.
1.32 Special Loan Investment Fund
An Investment Fund described in Section 11.03.
1.33 Spouse
The person to whom a Participant is legally married at the time in
question.
1.34 Sub-Account
Any of the individual sub-accounts of a Participant's Separate
Account that is maintained as provided in Article XI.
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1.35 Total and Permanent Disability
Permanent incapacity resulting in the Participant's being unable to
engage in gainful employment at his usual occupation, or any other
occupation for which he is reasonably suited by education, training
and experience, by reason of any medically demonstrable physical or
mental condition, excluding, however, (i) incapacity contracted,
suffered or incurred while the Participant was engaged in, or which
resulted from having engaged in, a felonious enterprise; (ii)
incapacity resulting from or consisting of chronic alcoholism or
addiction to drugs of abuse; (iii) incapacity resulting from an
intentionally self-inflicted injury or illness; (iv) incapacity
contracted, suffered or incurred in the employment of other than
the Employer, including self-employment; (v) incapacity resulting
from injury or disease incurred while serving in the armed forces
of any country and for which a government disability benefit is
payable. Notwithstanding the foregoing, the incapacity of a
Participant who became an Employee prior to January 1, 1995, may be
determined in accordance with the definition of Total and Permanent
Disability in effect under the Plan prior to January 1, 1995 to the
extent that the definition is more favorable to the Participant.
1.36 Trust
The trust maintained by the Trustee under the Trust Agreement.
1.37 Trust Agreement
The agreement between the Company and the Trustee establishing or
maintaining the ALLTEL Corporation 401(k) Savings Trust, as amended
from time to time.
1.38 Trustee
The entity or individual or individuals designated under the Trust
Agreement and includes and denotes any successor or successor in
trust under the Trust Agreement, unless the context clearly
indicates a contrary intention.
1.39 Trust Fund
All cash, securities, real estate, or any other property held by
the Trustee pursuant to the terms of the Trust Agreement, together
with the income therefrom.
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1.40 Unmatched Salary Deferral Contributions
A Participant's Salary Deferral Contributions in excess of 6% of
his Compensation for the Plan Year, or such other percentage as may
be established with respect to Eligible Employees from time to
time.
1.41 Valuation Date
The last day of each calendar month and any other date or dates as
may be established from time to time by the Plan Administrator.
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ARTICLE II
ADMINISTRATION
2.01 Plan Administrator
The Company shall be the Plan Administrator and shall be the
administrator for purposes of ERISA and the plan administrator for
purposes of the Code.
2.02 Allocation of Authority and Responsibility Among Named Fiduciaries
The Company, the Plan Administrator, and the Trustee shall be
"named fiduciaries" as defined in Section 402(a)(2) of ERISA. The
Employers shall have the sole responsibility for making
contributions under the Plan as determined by the Company. The
Company shall have the sole responsibility for appointing one or
more trustees as the Trustee. The Plan Administrator shall have the
sole responsibility for the administration of the Plan as provided
herein. Except to the extent that an investment manager has been
appointed, the Trustee shall have the responsibility for the
administration and management of the Trust Fund, in accordance with
the provisions of the Trust Agreement. Each named fiduciary
warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of
the Plan, unless inconsistent with applicable law. Each named
fiduciary may rely on any direction, information or action of
another named fiduciary. It is intended under the Plan that each
named fiduciary shall be responsible for the proper exercise of its
own powers, duties, responsibilities and obligations under the Plan
and shall not be responsible for any act or failure to act of
another fiduciary (including named fiduciaries) if the
responsibility or authority of the act or failure to act was not
within the scope of the named fiduciary's authority or delegated
responsibility. No fiduciary guarantees the Trust Fund in any
manner against investment loss or depreciation in asset values.
2.03 Rights, Powers and Duties of the Plan Administrator
The Plan Administrator shall have all such powers and authority as
may be necessary to discharge its responsibilities under the Plan,
including the following rights, powers, and responsibilities:
(1) The Plan Administrator shall administer the plan
uniformly and consistently with respect to persons who
are similarly situated.
(2) The Plan Administrator shall direct the Trustee in
writing to make payments from the Trust Fund to persons
who qualify for such
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payments hereunder. Such written order to the Trustee
shall specify the name of the person, his address, and
the amount and frequency of such payments.
(3) The Plan Administrator shall have the sole responsibility
for the administration of the Plan; and, except as herein
expressly provided, the Plan Administrator shall have the
exclusive discretionary power and authority to interpret
and construe the provisions of the Plan and to determine
any question arising hereunder or in connection with the
administration of the Plan, including the remedying of
any omission, inconsistency or ambiguity, and its
decision or action in respect thereof shall be conclusive
and binding upon any and all Participants, Beneficiaries,
and their heirs, distributees, executors, administrators
and assigns.
(4) The Plan Administrator shall resolve all questions
relating to participation in the Plan and determine the
amount, manner, and timing of the payment of benefits
under the Plan.
(5) The Plan Administrator shall maintain such records as it
determines are necessary, appropriate, or convenient to
properly administer the Plan.
(6) The Plan Administrator may adopt rules and procedures for
the administration of the Plan that are consistent with
the terms of the Plan.
(7) The Plan Administrator may employ such counsel and agents
for administrative, clerical, legal, medical, accounting,
or other services as it may require in carrying out the
provisions of the Plan.
(8) The Plan Administrator shall prepare and distribute to
Participants or their Beneficiaries all information
required under federal law or by the other provisions of
the Plan.
(9) The Plan Administrator shall prepare and file all reports
or other information required by applicable law.
2.04 Discharge of Duties
Each fiduciary under the Plan shall discharge its duties solely in
the interest of Participants and their Beneficiaries in accordance
with the applicable provisions of Section 404 of ERISA.
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2.05 Indemnification
The Company shall indemnify any officer, director, or employee of a
member of the Controlled Group to whom any power, authority, or
responsibility is allocated or delegated for any liability actually
and reasonably incurred with respect to the exercise or failure to
exercise such power, authority, or responsibility, unless such
liability results from such person's own gross negligence or
willful misconduct.
2.06 Compensation and Expenses
No person who already receives full-time pay from a member of the
Controlled Group shall receive compensation from the Plan, except
for reimbursement of expenses properly and actually incurred.
2.07 Committee
(a) The Company, pursuant to authority of its Board of
Directors, may allocate or delegate any or all of its
powers, authority, or responsibilities as Plan
Administrator to a Committee of no less than three
persons. Nothing contained herein shall be construed to
prevent any Participant or any director, officer, or
employee of a member of the Controlled Group from serving
as a member of the Committee.
(b) Any action authorized, permitted, or required to be taken
by the Committee may be taken by a majority of its
members at the time acting hereunder, except that no
member of the Committee who is a Participant shall take
any part in any action relating solely to his
participation. The decision of the majority may be
expressed by a vote at a meeting of the Committee, or in
writing without a meeting. Any direction or certification
required or authorized to be given by the Committee shall
be in writing and signed by a majority of the members of
the Committee, or by such member as may be designated by
an instrument in writing signed by all of the members
thereof. The Committee shall keep a permanent record of
its meetings and actions.
(c) The Committee may from time to time allocate to one or
more of its members and may delegate to any other persons
or organizations any of its rights, powers, duties and
responsibilities with respect to the operation and
administration of the Plan that are permitted to be
delegated under ERISA unless delegation is expressly
prohibited by the terms of the Plan or the Trust
Agreement. Any such allocation or delegation will be made
in writing, will be reviewed periodically by the
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Committee, and will be terminable upon such notice as the
Committee in its discretion deems reasonable and proper
under the circumstances. Whenever a person or
organization has the power and authority under the Plan
to delegate discretionary authority respecting the
administration of the Plan to another person or
organization, the delegating party's responsibility with
respect to such delegation is limited to the selection of
the person to whom authority is delegated and the
periodic review of such person's performance and
compliance with applicable law and regulations. Any
breach of fiduciary responsibility by the person to whom
authority has been delegated which is not proximately
caused by the delegating party's failure to properly
select or supervise, and in which breach the delegating
party does not otherwise participate, will not be
considered a breach by the delegating party, to the
extent permitted by law.
(d) The Company, pursuant to authority of its Board of
Directors, may from time to time remove members of the
Committee and add members thereto. A member of the
Committee may, at any time, notify the Company in writing
of his intent to resign from the Committee, and such
resignation shall be effective as of the date such
written notification is received by the Company, unless a
later date is specified therein. Vacancies occurring in
the Committee whether by reason of resignation, removal,
death or otherwise, shall be filled pursuant to authority
of the Board of Directors.
(e) The Committee may from time to time formulate such rules
and regulations for its organization and the transaction
of its business as it deems suitable and as are
consistent with the provisions of the Plan and the Trust
Agreement.
2.08 Administrative Expenses
The Plan Administrator may, in its discretion, direct the Trustee
to pay from the Trust Fund all administrative expenses of the Plan
and Trust, including the compensation of all persons employed by
the Plan Administrator. To the extent such expenses are not paid
from the Trust Fund, they shall be paid directly by the Company.
Any expenses to be paid by the Trustee out of the Trust Fund shall
be approved by the Plan Administrator before payment by the
Trustee.
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ARTICLE III
GENERAL PROVISIONS
3.01 Adoption of the Plan by Other Employers
Any member of the Controlled Group may, with the consent of the
Company, adopt the Plan and thereby become an Employer hereunder by
executing an instrument evidencing such adoption on the order of
its board of directors or other organizational authority. Such
instrument shall specify the effective date of the adoption.
3.02 No Contract of Employment
Nothing herein contained shall be construed to constitute a
contract of employment between the Employer and any Employee nor
shall the maintenance of the Plan affect the Employer's right to
discharge or otherwise discipline Employees. The employment records
of the Employer and the Trustee's records shall be final and
binding upon all Employees as to eligibility and participation.
3.03 Restrictions Upon Assignments and Creditor's Claims
(a) Except as may be otherwise provided in the Plan, no
Participant or Beneficiary shall have any power to
assign, pledge, encumber or transfer any interest in the
Trust Fund while the same shall be in the possession of
the Trustee. Any such attempt at alienation shall be
void. No such interest shall be subject to attachment,
garnishment, execution, levy or any other legal or
equitable proceeding or process and any attempt to so
subject such interest shall be void. The foregoing
provisions of this subsection (a), however, shall not
preclude (i) the enforcement of a Federal tax levy made
pursuant to Section 6331 of the Code or (ii) the
collection by the United States on a judgment resulting
from an unpaid tax assessment.
(b) Notwithstanding the foregoing, this Section 3.03 shall
not apply to a qualified domestic relations order, as
defined in Section 414(p) of the Code. The Plan
Administrator shall establish a procedure to determine
the qualified status of domestic relations orders and to
administer distributions under such qualified orders. The
Plan Administrator shall promptly notify the Participant
and each alternate payee of the receipt of any State
domestic relations order and the procedure which the Plan
Administrator will follow in determining whether the
order constitutes a
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qualified domestic relations order, as defined in Section
414(p) of the Code.
3.04 Facility of Payment
If any person to whom a benefit under the Plan is payable is unable
to care for his affairs because of illness or accident, any payment
due may be paid, in the discretion of the Plan Administrator, to
the Spouse, child, brother or sister of such person, or to any
other persons deemed by the Plan Administrator to be maintaining or
responsible for the maintenance of such person (unless prior claim
therefor shall have been made by a duly qualified guardian or other
legal representative). Any payment made in accordance with the
provisions of this Section 3.04 shall be a complete discharge of
any liabilities of the Plan with respect to the benefit so paid.
3.05 Restriction of Claims Against Trust
The Trust and the corpus and income thereof shall not be subject to
the rights or claims of any creditor of the Employer or Controlled
Group. Neither the establishment of the Trust, the modification of
the Trust Agreement, the creation of any fund or account, nor the
payment of any benefits shall be construed as giving any
Participant or any other person any legal or equitable rights
against the Controlled Group or any of its officers, employees,
directors, or shareholders, or the Trustee unless the same shall be
specifically provided for in the Plan.
3.06 Benefits Payable from Trust
All benefits payable under the Plan shall be paid or provided for
solely from the Trust.
3.07 Merger and Transfer of Assets or Liabilities
The Plan shall not be merged or consolidated with any other plan,
nor shall any assets or liabilities of the Plan be transferred to
another plan, unless, immediately after such merger, consolidation,
or transfer of assets, each Participant would receive a benefit
having a value equal to or greater than the benefit he would have
received if the Plan had terminated immediately prior to the
merger, consolidation or transfer.
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3.08 Applicable Law
To the extent not preempted by federal law, the provisions of the
Plan shall be construed, regulated, and administered in accordance
with the laws of the State of Delaware. The invalidity or
illegality of any provision of the Plan shall not affect the
legality or validity of any other part thereof.
3.09 Reversion of Employer Contributions
At no time shall any part of the corpus or income of the Trust Fund
be used for or diverted to purposes other than for the exclusive
benefit of Participants and their Beneficiaries. Notwithstanding
the foregoing, if a contribution to the Trust is made by the
Employer by a mistake in fact, such contribution shall be returned
to the Employer within one year after the payment of the
contribution to the Trust if the Employer so directs. If a
contribution by the Employer is conditioned on initial
qualification of the Plan under Section 401 of the Code, and if the
Plan does not qualify, then such contribution shall be returned to
the Employer within one year after the date of denial of
qualification of the Plan. If a contribution to the Trust is not
fully deductible by the Employer under Section 404 of the Code,
then, to the extent the deduction is disallowed, such a
contribution may be returned to the Employer if the Employer so
directs within one year after the disallowance of the deduction.
Unless otherwise specified in writing, contributions made by the
Employer to the Trust shall be deemed to be conditioned upon the
initial and continued qualification of the Plan under Section
401(a) of the Code, the exempt status of the Trust under Section
501(a) of the Code, and the deductibility of the contribution under
Section 404 of the Code.
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ARTICLE IV
CLAIMS PROCEDURES
4.01 Claim for Benefits
If any claim for benefits filed by any person under the Plan (the
"claimant") is denied in whole or in part, the Plan Administrator
shall issue a written notice of such decision to the claimant. The
notice shall be issued to the claimant as soon as possible but in
no event later than 90 days from the date the claim for benefits
was filed. The notice issued by the Plan Administrator shall be
written in a manner calculated to be understood by the claimant,
and shall include the following:
(1) the specific reason or reasons for any denial of benefits;
(2) the specific Plan provisions on which any denial is based;
(3) a description of any further material or information
which is necessary for the claimant to perfect his claim
and an explanation of why the material or information is
needed; and
(4) an explanation of the Plan's claim review procedure.
If the Plan Administrator fails to respond to a claim for benefits,
such claim shall be deemed to have been denied.
4.02 Review
If the Plan Administrator denies a claim for benefits in whole or
in part, or the claim is otherwise deemed to have been denied, the
claimant or his duly authorized representative may submit to the
Plan Administrator a written request for review of the claim denial
within 60 days of the mailing of the notice or deemed denial of his
claim. The claimant or his duly authorized representative may:
(1) review pertinent documents; and
(2) submit issues and comments in writing to which the Plan
Administrator shall respond.
The Plan Administrator shall furnish a written decision on review
not later than 60 days after receipt of the written request for
review of the claim denial,
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<PAGE>
unless special circumstances require an extension of the time for
processing the appeal. If an extension of time for review is
required because of special circumstances, written notice of the
extension shall be furnished to the claimant prior to the
commencement of the extension, and the Plan Administrator shall
furnish a written decision on review not later than 120 days after
receipt of the written request for review of the claim denial. If a
written decision on review is not furnished within 60 days (or 120
days, if applicable) after receipt of the written request for
review of the claim denial, the claim shall be deemed denied on
review. The decision on review shall be in writing and shall
include specific reasons for the decision, shall be written in a
manner calculated to be understood by the claimant, and shall
contain specific references to the pertinent Plan provisions on
which the decision is based.
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<PAGE>
ARTICLE V
AMENDMENT AND TERMINATION
5.01 Amendment and Termination of the Plan
The Company expressly reserves the right, at any time and from time
to time, by action of or pursuant to authority of its Board of
Directors:
(1) to terminate the Plan in whole or in part; and/or
(2) to amend the Plan in any respect.
A Participant's accrued benefit shall not be decreased by an
amendment to the Plan, except as may be permitted under Section
411(d)(6) of the Code.
Any termination or amendment shall be evidenced by an instrument
executed on behalf of the Company by an authorized officer. No
termination or amendment shall increase the duties or
responsibilities of a Trustee without its consent thereto in
writing.
Promptly after any amendment of the Plan has become effective, the
Company shall cause a copy of such amendment to be filed with the
Plan Administrator and with the Trustee.
5.02 Procedure Upon Termination
Upon termination of the Plan, the following actions shall be taken
for the benefit of Participants and Beneficiaries:
(a) As of the termination date, the Trust Fund shall be
valued and all Separate Accounts and sub-accounts shall
be adjusted in the manner provided in Article XI, with
any unallocated Employer Contributions or Forfeitures
being allocated as of the termination date in the manner
otherwise provided in the Plan. The termination date
shall become a Valuation Date for purposes of Article XI.
In determining the net worth of the Trust Fund, there
shall be included as a liability such amounts as shall be
necessary to pay all expenses in connection with the
termination of the Trust and the liquidation and
distribution of the property of the Trust, as well as
other expenses, whether or not accrued, and shall include
as an asset all accrued income.
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(b) All Separate Accounts shall then be distributed to or for
the benefit of each Participant or Beneficiary in
accordance with the provisions of Article XIV as if the
termination date were a termination of his employment
with all members of the Controlled Group.
(c) Notwithstanding the provisions of paragraph (b) of this
Section 5.02, no distribution shall be made to a
Participant of any portion of the balance of his Salary
Deferral Contributions Sub-Account prior to his
separation from service (other than a distribution made
in accordance with Article XIX or required in accordance
with Section 401(a)(9) of the Code) unless (i) neither
his Employer nor any other member of the Controlled Group
establishes or maintains another defined contribution
plan (other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code, a tax credit
employee stock ownership plan as defined in Section 409
of the Code, or a simplified employee pension as defined
in Section 408(k) of the Code) either at the time the
plan is terminated or at any time during the period
ending 12 months after distribution of all assets from
the Plan; provided, however, that this provision shall
not apply if fewer than two percent of the Eligible
Employees under the Plan were eligible to participate at
any time in such other defined contribution plan during
the 24-month period beginning 12 months before the Plan
termination, and (ii) the distribution the Participant
receives is a "lump sum distribution" as defined in
Section 402(d)(4) of the Code, without regard to clauses
(i), (ii), (iii), and (iv) of sub-paragraph (A),
sub-paragraph (B), or sub-paragraph (H) thereof.
5.03 Non-Forfeitability Upon Termination of Plan
Upon termination or partial termination of the Plan or the complete
discontinuance of contributions to the Plan, the rights of all
affected Participants to the amounts credited to the Participants'
Separate Accounts shall be nonforfeitable.
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5.04 Reorganization
The merger, consolidation, or liquidation of a member of the
Controlled Group that has adopted the Plan with or into any other
member of the Controlled Group shall not constitute a termination
of the Plan as to such adopting member of the Controlled Group. If
an Employer disposes of substantially all of the assets used by the
Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment
but continues in employment with the purchaser of the assets or
with such subsidiary, no distribution from the Plan shall be made
to any such Participant prior to his separation from service (other
than a distribution made in accordance with Article XIX or required
in accordance with Section 401(a)(9) of the Code), except that a
distribution shall be permitted to be made in such a case, subject
to the Participant's consent (to the extent required by law), if
(i) the distribution would constitute a "lump sum distribution" as
defined in section 402(d)(4) of the Code, without regard to clauses
(i), (ii), (iii), or (iv) of sub-paragraph (A), sub-paragraph (B),
or sub-paragraph (H) thereof, (ii) the Employer continues to
maintain the Plan after the disposition, (iii) the purchaser does
not maintain the Plan after the disposition, and (iv) the
distribution is made by the end of the second calendar year after
the calendar year in which the disposition occurred.
5.05 Withdrawal of an Employer
A member of the Controlled Group that has adopted the Plan, other
than the Company, may withdraw from the Plan (a "withdrawing
employer") at any time upon notice in writing to the Plan
Administrator and shall thereupon cease to be an adopting employer
for all purposes of the Plan. A member of the Controlled Group that
has adopted the Plan shall be deemed automatically to withdraw from
the Plan in the event of its complete discontinuance of
contributions or, subject to Section 5.03 and unless the Company
otherwise directs, it ceases to be a member of the Controlled
Group. The withdrawal of a member of the Controlled Group shall be
treated as a termination of the Plan with respect to Participants
who at the time are employed by such withdrawing employer. In the
event of any such withdrawal of an adopting employer, the action
specified in Section 5.02 shall be taken as of the withdrawal date,
as on a termination of the Plan, but with respect only to
Participants who are employed solely by the withdrawing employer,
and who, upon such withdrawal, are neither transferred to nor
continued in employment with any other member of the Controlled
Group. The interest of any Participant employed by the withdrawing
employer who is transferred to or continues in employment with any
other member of the Controlled Group, and the interest
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of any Participant employed solely by a member of the Controlled
Group other than the withdrawing employer, shall remain unaffected
by such withdrawal; no adjustment to his Separate Account shall be
made by reason of the withdrawal; and he shall continue as a
Participant hereunder subject to the remaining provisions of the
Plan.
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ARTICLE VI
TRUST AGREEMENT AND TRUST FUND
6.01 Trust Agreement and Trust Fund
The Company shall execute one or more Trust Agreements
(collectively referred to as the "Trust Agreement") with a trustee
or trustees selected by the Company under the terms of which a
Trust Fund will be established for the purpose of receiving or
holding contributions made to the Plan, as well as interest and
other income on investments of such funds, and for the purpose of
paying benefits provided by the Plan. The Company may amend the
Trust Agreement from time to time to accomplish the purposes of the
Plan, may remove any Trustee, and may select any successor trustee.
The Trust Agreement and the Trust maintained thereunder shall be
deemed to be a part of the Plan as if fully set forth herein and
the provisions of the Trust Agreement are hereby incorporated by
reference into the Plan.
6.02 Irrevocability
The Trust Fund shall be used to pay benefits as provided in the
Plan. No part of the principal or income of the Trust Fund shall be
used for, or diverted to, purposes other than those provided in the
Plan, and no part of the Trust Fund shall revert to the Company or
any member of the Controlled Group except as may be otherwise
specifically provided under the Plan, the Trust Agreement, or both.
6.03 Benefits Payable Only from Trust Fund
All benefits paid under the Plan shall be paid from the Trust Fund
or from any insurance contract established under Section 6.04, and
the Employer shall not be otherwise liable for benefits payable
under the Plan.
6.04 Optional Provision for Benefits
The Company reserves the right to change at any time the means
through which the benefits under the Plan shall be provided,
including the substitution of a contract or contracts with an
insurance company or companies, and may thereupon make suitable
provision for the use of assets of the Trust Fund to provide for
the payment of benefits under such insurance contract or contracts.
No such change shall constitute a termination of the Plan or result
in the diversion to the Employer of any funds previously
contributed hereunder.
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6.05 Commingling Authorized
As permitted in the Trust Agreement, the Trust Fund held under the
Plan may be commingled with any trust funds held under other
employee benefit plans of the Controlled Group, provided such other
funds qualify as tax exempt under the applicable provisions of the
Code.
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ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.01 Definitions
For purposes of this Article VII, the following terms have the
following meanings:
(a) The "actual deferral percentage" with respect to a
Participant for a particular Plan Year means the ratio of
the Salary Deferral Contributions made on his behalf for
the Plan Year to his test compensation for the Plan Year;
provided, however, that contributions made on a
Participant's behalf for a Plan Year shall be included in
determining his actual deferral percentage for such Plan
Year only if the contributions are made to the Plan prior
to the end of the 12-month period immediately following
the Plan Year to which the contributions relate. The
determination and treatment of the actual deferral
percentage amounts for any Participant shall satisfy such
other requirements as may be prescribed by the Secretary
of the Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of
the greater of the average contribution percentage for
Participants other than Highly Compensated Employees or
the average actual deferral percentage for Participants
other than Highly Compensated Employees and (ii) the
lesser of 200 percent or two plus the lesser of such
average contribution percentage or average actual
deferral percentage, or, if it would result in a larger
aggregate limit, the sum of (iii) 125 percent of the
lesser of the average contribution percentage for
Participants other than Highly Compensated Employees or
the average actual deferral percentage for Participants
other than Highly Compensated Employees and (iv) the
lesser of 200 percent or two plus the greater of such
average contribution percentage or average actual
deferral percentage.
(c) The "annual addition" with respect to a Participant for a
limitation year means the sum of the Salary Deferral
Contributions and Employer Contributions allocated to his
Separate Account for the limitation year (including any
excess contributions that are distributed pursuant to
this Article VII), the employer contributions, employee
contributions, and forfeitures allocated to his accounts
for the limitation year under any other qualified defined
contribution plan (whether or not terminated) maintained
by an Employer or any other member of the Controlled
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Group, and amounts described in Sections 415(l)(2) and
419A(d)(2) of the Code allocated to his account for the
limitation year.
(d) The "Code Section 402(g) limit" means the dollar limit
imposed by Section 402(g)(1) of the Code or established
by the Secretary of the Treasury pursuant to Section
402(g)(5) of the Code in effect on January 1 of the
calendar year in which a Participant's taxable year
begins.
(e) The "contribution percentage" with respect to a
Participant for a particular Plan Year means the ratio of
the matching contributions made to the Plan on his behalf
for the Plan Year to his test compensation for such Plan
Year, except that, to the extent permitted by regulations
issued under Section 401(m) of the Code, the Company may
elect to take into account in computing the numerator of
each Participant's contribution percentage the Salary
Deferral Contributions made to the Plan on his behalf for
the Plan Year; provided, however, that any Salary
Deferral Contributions that were taken into account in
computing the numerator of a Participant's actual
deferral percentage may not be taken into account in
computing the numerator of his contribution percentage;
and provided, further, that contributions made by or on a
Participant's behalf for a Plan Year shall be included in
determining his contribution percentage for such Plan
Year only if the contributions are made to the Plan prior
to the end of the 12-month period immediately following
the Plan Year to which the contributions relate. The
determination and treatment of the contribution
percentage amounts for any Participant shall satisfy such
other requirements as may be prescribed by the Secretary
of the Treasury.
(f) An "elective contribution" means any employer
contribution made to a plan maintained by an Employer or
any other member of the Controlled Group on behalf of a
Participant in lieu of cash compensation pursuant to his
written election to defer under any qualified cash or
deferred arrangement as described in Section 401(k) of
the Code, any simplified employee pension cash or
deferred arrangement as described in Section 402(h)(1)(B)
of the Code, any eligible deferred compensation plan
under Section 457 of the Code, or any plan as described
in Section 501(c)(18) of the Code, and any contribution
made on behalf of the Participant by an Employer or any
other member of the Controlled Group for the purchase of
an annuity contract under Section 403(b) of the Code
pursuant to a salary reduction agreement.
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(g) An "excess deferral" with respect to a Participant means
that portion of a Participant's Salary Deferral
Contributions that, when added to amounts deferred under
other plans or arrangements described in Sections 401(k),
408(k), or 403(b) of the Code, would exceed the Code
Section 402(g) limit and is includable in the
Participant's gross income under Section 402(g) of the
Code.
(h) A "family member" of an Employee means the Employee's
spouse, his lineal ascendants, his lineal descendants,
and the spouses of such lineal ascendants and
descendants.
(i) A "limitation year" means the Plan Year or such other
12-month period designated as such by the Company.
(j) A "matching contribution" means any employer contribution
allocated to a Participant's account under the Plan or
any other plan of an Employer or any other member of the
Controlled Group solely on account of elective
contributions made on his behalf or employee
contributions made by him.
(k) The "test compensation" of a Participant for a Plan Year
means compensation as defined in Section 414(s) of the
Code and regulations issued thereunder, limited, however,
to $150,000 (subject to adjustment annually at the same
time and in the same manner as under Section 415(d) of
the Code as modified by Section 401(a)(17) of the Code;
provided, however, that the dollar increase in effect on
January 1 of any calendar year is effective for Plan
Years beginning in such calendar year). If the test
compensation of a Participant is determined over a period
of time that contains fewer than 12 calendar months, then
the annual compensation limitation described above shall
be adjusted with respect to that Participant by
multiplying the annual compensation limitation in effect
for the Plan Year by a fraction the numerator of which is
the number of full months in the period and the
denominator of which is 12; provided, however, that no
proration is required for a Participant who is covered
under the Plan for less than one full Plan Year if the
formula for allocations is based on Compensation for a
period of at least 12 months. In determining the test
compensation, for purposes of applying the annual
compensation limitation described above, of a Participant
who is a five-percent owner or among the ten Highly
Compensated Employees receiving the greatest test
compensation for the limitation year, the test
compensation of the Participant's spouse and of his
lineal descendants who have not attained age 19 as of the
close of the limitation year
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shall be included as test compensation of the Participant
for the limitation year. If as a result of applying the
family aggregation rule described in the preceding
sentence the annual compensation limitation would be
exceeded, the limitation shall be prorated among the
affected family members in proportion to each member's
test compensation as determined prior to application of
the family aggregation rules.
7.02 Code Section 402(g) Limit
In no event shall the amount of the Salary Deferral Contributions
made on behalf of a Participant for his taxable year, when
aggregated with any elective contributions made on behalf of the
Participant under any other plan of an Employer or any other member
of the Controlled Group for his taxable year, exceed the Code
Section 402(g) limit. In the event that the Plan Administrator
determines that the reduction percentage elected by a Participant
will result in his exceeding the Code Section 402(g) limit, the
Plan Administrator may adjust the reduction authorization of such
Participant by reducing the percentage of his Salary Deferral
Contributions to such smaller percentage that will result in the
Code Section 402(g) limit not being exceeded. If the Plan
Administrator determines that the Salary Deferral Contributions
made on behalf of a Participant would exceed the Code Section
402(g) limit for his taxable year, the Salary Deferral
Contributions for such Participant shall be automatically suspended
for the remainder, if any, of such taxable year.
7.03 Distribution of Excess Deferrals
If an Employer notifies the Plan Administrator that the Code
Section 402(g) limit has been exceeded by a Participant for his
taxable year, the excess deferrals plus any income and minus any
losses attributable thereto, shall be distributed to the
Participant no later than the April 15 immediately following such
taxable year. Any Salary Deferral Contributions that are
distributed to a Participant in accordance with this Section 7.03
shall not be taken into account in computing the Participant's
actual deferral percentage for the Plan Year in which the Salary
Deferral Contributions were made, unless the Participant is a
Highly Compensated Employee. If an amount of Salary Deferral
Contributions is distributed to a Participant in accordance with
this Section 7.03, matching contributions that are attributable
solely to the distributed Salary Deferral Contributions, plus any
income and minus any losses attributable thereto, shall be
distributed to the Participant as provided in Section 7.07.
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Notwithstanding any other provision of the Plan to the contrary, if
a Participant notifies the Plan Administrator in writing no later
than the March 1 following the close of the Participant's taxable
year (1) that excess deferrals have been made on his behalf under
the Plan and any other plan for such taxable year and (2) the
amount of such excess deferrals which are to be allocated to the
Plan, the excess deferrals, plus any income and minus any losses
attributable thereto, may be distributed to the Participant no
later than the April 15 immediately following such taxable year.
Any Salary Deferral Contributions that are distributed to a
Participant in accordance with this Section 7.03 shall nevertheless
be taken into account in computing the Participant's actual
deferral percentage for the Plan Year in which the Salary Deferral
Contributions were made. If an amount of Salary Deferral
Contributions is distributed to a Participant in accordance with
this Section 7.03, matching contributions that are attributable
solely to the distributed Salary Deferral Contributions, plus any
income and minus any losses attributable thereto, shall be
distributed to the Participant as provided in Section 7.07.
7.04 Limitation on Salary Deferral Contributions of Highly
Compensated Employees
Notwithstanding any other provision of the Plan to the contrary,
the Salary Deferral Contributions made with respect to a Plan Year
on behalf of Participants who are Highly Compensated Employees may
not result in an average actual deferral percentage for such
Participants that exceeds the greater of:
(a) a percentage that is equal to 125 percent of the average
actual deferral percentage for all other Participants; or
(b) a percentage that is not more than 200 percent of the
average actual deferral percentage for all other
Participants and that is not more than two percentage
points higher than the average actual deferral percentage
for all other Participants.
In order to assure that the limitation contained herein is not
exceeded with respect to a Plan Year, the Plan Administrator is
authorized to suspend completely further Salary Deferral
Contributions on behalf of Highly Compensated Employees for any
remaining portion of a Plan Year or to adjust the projected actual
deferral percentages of Highly Compensated Employees by reducing
their percentage elections with respect to Salary Deferral
Contributions for any remaining portion of a Plan Year to such
smaller percentages that will result in the limitation set forth
above not being exceeded. In the event of any such suspension or
reduction, Highly Compensated Employees affected thereby shall
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be notified of the reduction or suspension as soon as possible and
shall be given an opportunity to make a new Salary Deferral
Contribution election to be effective the first day of the next
following Plan Year. In the absence of such an election, the
election in effect immediately prior to the suspension or
adjustment described above shall be reinstated as of the first day
of the next following Plan Year.
For purposes of applying the limitation contained in this Section
7.04, the Salary Deferral Contributions and test compensation of
any Participant who is a family member of another Participant who
is a five percent owner or among the ten Highly Compensated
Employees receiving the greatest test compensation for the Plan
Year shall be aggregated with the Salary Deferral Contributions and
test compensation of such other Participant, and such family member
shall not be considered a Participant for purposes of determining
the average actual deferral percentage for all other Participants.
In determining the actual deferral percentage for any Participant
who is a Highly Compensated Employee for the Plan Year, elective
contributions made to his accounts under any other plan of an
Employer or any other member of the Controlled Group shall be
treated as if all such contributions were made to the Plan;
provided, however, that if such a plan has a plan year different
from the Plan Year, any such contributions made to the Highly
Compensated Employee's accounts under the plan for the plan year
ending with or within the same calendar year as the Plan Year shall
be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be
treated as if they were made to the Plan if regulations issued
under Section 401(k) of the Code do not permit such plan to be
aggregated with the Plan.
If one or more plans of an employer or any other member of the
Controlled Group are aggregated with the Plan for purposes of
satisfying the requirements of Section 401(a)(4) or 410(b) of the
Code, then actual deferral percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were a
single plan. Plans may be aggregated to satisfy Section 401(k) of
the Code only if they have the same plan year.
The Plan Administrator shall maintain records sufficient to show
that the limitation contained in this Section 7.04 was not exceeded
with respect to any Plan Year.
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7.05 Distribution of Excess Salary Deferral Contributions
Notwithstanding any other provision of the Plan to the contrary, in
the event that the limitation contained in Section 7.04 is exceeded
in any Plan Year, the Salary Deferral Contributions made with
respect to a Highly Compensated Employee that exceed the maximum
amount permitted to be contributed to the Plan on his behalf under
Section 7.04, plus any income and minus any losses attributable
thereto, shall be distributed to the Highly Compensated Employee
prior to the end of the next succeeding Plan Year. If excess
amounts are attributable to Participants aggregated under the
family aggregation rules described in Section 7.04, the excess
shall be allocated among family members in proportion to the Salary
Deferral Contributions made with respect to each family member. If
such excess amounts are distributed more than 2 1/2 months after
the last day of the Plan Year for which the excess occurred, an
excise tax may be imposed under Section 4979 of the Code on the
Employer maintaining the Plan with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on a
Highly Compensated Employee's behalf under Section 7.04 shall be
determined by reducing Salary Deferral Contributions made on behalf
of Highly Compensated Employees in order of their actual deferral
percentages beginning with the highest of such percentages. The
determination of the amount of excess Salary Deferral Contributions
shall be made after application of Section 7.03, if applicable.
If an amount of Salary Deferral Contributions is distributed to a
Participant in accordance with this Section 7.05, matching
contributions that are attributable solely to the distributed
Salary Deferral Contributions, plus any income and minus any losses
attributable thereto, shall be distributed to the Participant as
provided in Section 7.07.
7.06 Limitation on Matching Contributions of Highly Compensated Employees
Notwithstanding any other provision of the Plan to the contrary,
the matching contributions made with respect to a Plan Year on
behalf of Participants who are Highly Compensated Employees may not
result in an average contribution percentage for such Participants
that exceeds the greater of:
(a) a percentage that is equal to 125 percent of the average
contribution percentage for all other Participants; or
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(b) a percentage that is not more than 200 percent of the
average contribution percentage for all other
Participants and that is not more than two percentage
points higher than the average contribution percentage
for all other Participants.
For purposes of applying the limitation contained in this Section
7.06, the matching contributions, Salary Deferral Contributions (to
the extent that such Salary Deferral Contributions are taken into
account in computing contribution percentages), and test
compensation of any Participant who is a family member of another
Participant who is a five percent owner or among the ten Highly
Compensated Employees receiving the greatest test compensation for
the Plan Year shall be aggregated with the matching contributions,
Salary Deferral Contributions, and test compensation of such other
Participant, and such family member shall not be considered a
Participant for purposes of determining the average contribution
percentage for all other Participants.
In determining the contribution percentage for any Participant who
is a Highly Compensated Employee for the Plan Year, matching
contributions, employee contributions, and elective contributions
(to the extent that elective contributions are taken into account
in computing contribution percentages) made to his accounts under
any other plan of an Employer or any other member of the Controlled
Group shall be treated as if all such contributions were made to
the Plan; provided, however, that if such a plan has a plan year
different from the Plan Year, any such contributions made to the
Highly Compensated Employee's accounts under the plan for the plan
year ending with or within the same calendar year as the Plan Year
shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be
treated as if they were made to the Plan if regulations issued
under Section 401(m) of the Code do not permit such plan to be
aggregated with the Plan.
If one or more plans of an Employer or any other member of the
Controlled Group are aggregated with the Plan for purposes of
satisfying the requirements of Section 401(a)(4) or 410(b) of the
Code, the contribution percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were a
single plan. Plans may be aggregated to satisfy Section 401(m) of
the Code only if they have the same plan year.
The Plan Administrator shall maintain records sufficient to show
that the limitation contained in this Section was not exceeded with
respect to any Plan Year and the amount of the elective
contributions taken into account in computing contribution
percentages for any Plan Year.
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7.07 Distribution of Excess Contributions
Notwithstanding any other provision of the Plan to the contrary, in
the event that the limitation contained in Section 7.06 is exceeded
in any Plan Year, the matching contributions made on behalf of a
Highly Compensated Employee that exceed the maximum amount
permitted to be contributed to the Plan on behalf of such Highly
Compensated Employee under Section 7.06, plus any income and minus
any losses attributable thereto, shall be distributed prior to the
end of the next succeeding Plan Year as hereinafter provided. If
excess amounts are attributable to Participants aggregated under
the family aggregation rules described in Section 7.05, the excess
shall be allocated among family members in proportion to the
matching contributions made with respect to each family member. If
such excess amounts are distributed more than 2 1/2 months after
the last day of the Plan Year for which the excess occurred, an
excise tax may be imposed under Section 4979 of the Code on the
Employer maintaining the Plan with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on
behalf of a Highly Compensated Employee under Section 7.06 shall be
determined by reducing matching contributions made on behalf of
Highly Compensated Employees in order of their contribution
percentages beginning with the highest of such percentages.
The determination of the amount of excess matching contributions
shall be made after application of Section 7.03, if applicable, and
after application of Section 7.05, if applicable.
7.08 Multiple Use Limitation
Notwithstanding any other provision of the Plan to the contrary,
the following multiple use limitation as required under Section
401(m) of the Code shall apply: the sum of the average actual
deferral percentage for Eligible Employees who are Highly
Compensated Employees and the average contribution percentage for
Participants who are Highly Compensated Employees may not exceed
the aggregate limit. In the event that, after satisfaction of
Section 7.05 and Section 7.07, it is determined that contributions
under the Plan fail to satisfy the multiple use limitation
contained herein, the multiple use limitation shall be satisfied by
further reducing the contribution percentages of Participants who
are Highly Compensated Employees (beginning with the highest such
percentage) to the extent necessary to eliminate the excess, with
such further reductions to be treated as excess contributions and
disposed of as provided in Section 7.07.
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7.09 Determination of Income or Loss
The income or loss attributable to excess contributions that are
distributed pursuant to this Article VII shall be determined for
the preceding Plan Year under the method otherwise used for
allocating income or loss to Participants' Separate Accounts.
7.10 Code Section 415 Limitations on Crediting of Contributions and
Forfeitures
Notwithstanding any other provision of the Plan to the contrary,
the annual addition with respect to a Participant for a limitation
year shall in no event exceed the lesser of (i) the greater of
$30,000 or 25 percent of the defined benefit dollar limitation set
forth in Section 415(b)(1) of the Code in effect for the limitation
year or (ii) 25 percent of the Participant's compensation, as
defined in Section 415(c)(3) of the Code and regulations issued
thereunder. If the annual addition to the Separate Account of a
Participant in any limitation year would otherwise exceed the
amount that may be applied for his benefit under the limitation
contained in this Section 7.10, because of the allocation of
forfeitures, a reasonable error in estimating a Participant's
annual compensation, a reasonable error in determining the amount
of elective deferrals that may be made with respect to any
Participant under the limits of Section 415 of the Code, or other
limited facts and circumstances that justify the availability of
the provisions set forth below, the amount of the Unmatched Salary
Deferral Contributions made on behalf of the Participant for the
limitation year, that would exceed the limitation herein, shall be
reduced to the extent necessary to eliminate such excess and the
amount of any such reduction of Unmatched Salary Deferral
Contributions shall be returned to the Participant. If the
limitation contained in this Section 7.10 would still be exceeded
after application of the preceding sentence, the amount of the
Matched Salary Deferral Contributions made on behalf of the
Participant for the limitation year and that portion of the
Employer Contribution that would be allocated to the Participant
based thereon, but that would exceed the limitation herein, shall
be reduced (applying the same percentage reduction with respect to
both Matched Salary Deferral Contributions and Employer
Contributions) to the extent necessary to eliminate such excess.
The amount of any such reduction of Matched Salary Deferral
Contributions shall be returned to the Participant and the amount
of any such reduction of Employer Contributions shall be deemed a
forfeiture for the limitation year and held unallocated in a
suspense account. The suspense account shall be allocated in the
same manner as Employer Contributions in the next limitation year,
and each succeeding limitation year if necessary.
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If a suspense account is in existence at any time during a
limitation year, all amounts in the suspense account must be
allocated to Participants' Separate Accounts (subject to the
limitations contained herein) before any further Employer
Contributions may be made to the Plan on behalf of Participants. If
a suspense account is in existence at any time during a limitation
year, it shall not share in any increase or decrease in the net
worth of the Trust Fund.
7.11 Coverage Under Other Qualified Defined Contribution Plan
If a Participant is covered by any other qualified defined
contribution plan (whether or not terminated) maintained by an
Employer or any other member of the Controlled Group, and if the
annual addition for the limitation year would otherwise exceed the
amount that may be applied for the Participant's benefit under the
limitation contained in Section 7.10, the excess shall be
eliminated by reducing Salary Deferral Contributions and Employer
Contributions under the Plan to the extent necessary, as provided
in Section 7.10. If the limitation in Section 7.10 would still be
exceeded after applying the provisions of Section 7.10, the excess
shall be reduced in the manner specified in such other plan. In the
event that a Participant is covered by a qualified defined benefit
plan, the procedure specified in Section 7.12 shall be implemented
prior to effecting any reduction in the benefit of the Participant
under the defined contribution plans.
7.12 Coverage Under Qualified Defined Benefit Plan
If a Participant in the Plan is also covered by a qualified defined
benefit plan (whether or not terminated) maintained by an Employer
or any other member of the Controlled Group, in no event shall the
sum of the defined benefit plan fraction (as defined in Section
415(e)(2) of the Code) and the defined contribution plan fraction
(as defined in Section 415(e)(3) of the Code) exceed 1.0 in any
limitation year. If, before October 3, 1973, the Participant was an
active participant in a qualified defined benefit plan maintained
by an Employer or any other member of the Controlled Group and
otherwise satisfies the requirements of Section 2004(d)(2) of
ERISA, then for purposes of applying this Section 7.12, the defined
benefit plan fraction shall not exceed 1.0. In the event the
special limitation contained in this Section 7.12 is exceeded, the
benefits otherwise payable to the Participant under any such
qualified defined benefit plan shall be reduced to the extent
necessary to meet such limitation.
If a Participant was a participant in one or more defined
contribution plans maintained by the employer which were in
existence on July 1, 1982, the numerator of the defined
contribution plan fraction (as defined in Section 415(e)(3) of the
Code) will be adjusted if the sum of this fraction and
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the defined benefit plan fraction (as defined in Section 415(e)(2)
of the Code) would otherwise exceed 1.0 under the terms of the
Plan. Under this adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from
the numerator of the defined contribution plan fraction (as defined
in Section 415(e)(3) of the Code). The adjustment is calculated
using the fractions as they would be computed as of the later of
the end of the last limitation year beginning before January 1,
1983, or September 30, 1983. This adjustment also will be made if
at the end of the last limitation year beginning before January 1,
1984, the sum of the fractions exceeds 1.0 because of accruals or
additions that were made before the limitations of this Article VII
became effective as to any plans of the employer in existence on
July 1, 1982.
7.13 Scope of Limitations
The limitations contained in Sections 7.10, 7.11, and 7.12 shall be
applicable only with respect to benefits provided pursuant to
defined contribution plans and defined benefit plans described in
Section 415(k) of the Code.
7.14 Separate Testing
The Plan Administrator may elect for any Plan Year to apply Section
410(b) of the Code separately to that portion of the Plan that
benefits Participants who do not have a year of service with the
Controlled Group, in accordance with the provisions of Sections
1.410(b)-6(b)(3) and 1.410(b)-7(b)(3) of the Treasury Regulations.
In which case, the requirements of Sections 401(k)(3), 401(m)(2),
and 401(m)(9) of the Code shall be applied separately with respect
to such portion of the Plan.
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ARTICLE VIII
TOP-HEAVY PROVISIONS
8.01 Definitions
For purposes of this Article VIII, the following terms have the
following meanings:
(a) The "compensation" of a Participant means compensation as
defined in Section 415 of the Code and regulations issued
thereunder. In no event, however, shall the compensation
of a Participant taken into account under the Plan for
any Plan Year exceed (1) $200,000 for Plan Years
beginning prior to January 1, 1994, or (2) $150,000 for
Plan Years beginning on or after January 1, 1994 (subject
to adjustment annually as provided in Section
401(a)(17)(B) and Section 415(d) of the Code. If the
compensation of a Participant is determined over a period
of time that contains fewer than 12 calendar months, then
the annual compensation limitation described above shall
be adjusted with respect to that Participant by
multiplying the annual compensation limitation in effect
for the Plan Year by a fraction the numerator of which is
the number of full months in the period and the
denominator of which is 12. In determining the
compensation, for purposes of applying the annual
compensation limitation described above, of a Participant
who is a five-percent owner or one of the ten Highly
Compensated Employees receiving the greatest compensation
for the Plan Year, the compensation of the Participant's
spouse and of his lineal descendants who have not
attained age 19 as of the close of the Plan Year shall be
included as compensation of the Participant for the Plan
Year. If as a result of applying the family aggregation
rule described in the preceding sentence the annual
compensation limitation would be exceeded, the limitation
shall be prorated among the affected family members in
proportion to each member's compensation as determined
prior to application of the family aggregation rules.
(b) The "determination date" with respect to any Plan Year
means the last day of the preceding Plan Year, except
that the determination date with respect to the first
Plan Year of the Plan, shall mean the last day of such
Plan Year.
(c) A "key employee" means any Employee or former Employee
who is a key employee pursuant to the provisions of
Section 416(i)(1) of the Code and any Beneficiary of such
Employee or former Employee.
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(d) A "non-key employee" means any Employee or former
Employee who is a not a key employee and any Beneficiary
of such Employee or former Employee.
(e) A "permissive aggregation group" means those plans
included in the Employer's required aggregation group
together with any other plan or plans of the Employer, so
long as the entire group of plans would continue to meet
the requirements of Sections 401(a)(4) and 410 of the
Code.
(f) A "required aggregation group" means the group of
tax-qualified plans maintained by a member of the
Controlled Group consisting of each plan in which a key
employee participates and each other plan that enables a
plan in which a key employee participates to meet the
requirements of Section 401(a)(4) or Section 410 of the
Code, including any plan that terminated within the
five-year period ending on the relevant determination
date.
(g) A "super top-heavy group" with respect to a particular
Plan Year means a required or permissive aggregation
group that, as of the determination date, would qualify
as a top-heavy group under the definition in subsection
(i) of this Section 8.01 with "90 percent" substituted
for "60 percent" each place where "60 percent" appears in
the definition.
(h) A "super top-heavy plan" with respect to a particular
Plan Year means a plan that, as of the determination
date, would qualify as a top-heavy plan under the
definition in subsection (j) of this Section 8.01 with
"90 percent" substituted for "60 percent" each place
where "60 percent" appears in the definition. A plan is
also a "super top-heavy plan" if it is part of a super
top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan
Year means a required or permissive aggregation group if
the sum, as of the determination date, of the present
value of the cumulative accrued benefits for key
employees under all defined benefit plans included in
such group and the aggregate of the account balances of
key employees under all defined contribution plans
included in such group exceeds 60 percent of a similar
sum determined for all employees covered by the plans
included in such group.
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(j) A "top-heavy plan" with respect to a particular Plan Year
means (i), in the case of a defined contribution plan
(including any simplified employee pension plan), a plan
for which, as of the determination date, the aggregate of
the accounts (within the meaning of Section 416(g) of the
Code and the regulations and rulings thereunder) of key
employees exceeds 60 percent of the aggregate of the
accounts of all participants under the plan, with the
accounts valued as of the relevant valuation date and
increased for any distribution of an account balance made
in the five-year period ending on the determination date,
(ii), in the case of a defined benefit plan, a plan for
which, as of the determination date, the present value of
the cumulative accrued benefits payable under the plan
(within the meaning of Section 416(g) of the Code and the
regulations and rulings thereunder) to key employees
exceeds 60 percent of the present value of the cumulative
accrued benefits under the plan for all employees, with
the present value of accrued benefits to be determined
under the accrual method uniformly used under all plans
maintained by the Employer or, if no such method exists,
under the slowest accrual method permitted under the
fractional accrual rate of Section 411(b)(1)(C) of the
Code and including the present value of any part of any
accrued benefits distributed in the five-year period
ending on the determination date, and (iii) any plan
included in a required aggregation group that is a
top-heavy group. For purposes of this subsection, the
accounts and accrued benefits of any Employee who has not
performed services for a member of the Controlled Group
during the five-year period ending on the determination
date shall be disregarded. Notwithstanding the foregoing,
if a plan is included in a required or permissive
aggregation group that is not a top-heavy group, such
plan shall not be a top-heavy plan.
(k) The "valuation date" with respect to any determination
date means the most recent Valuation Date occurring
within the 12-month period ending on the determination
date.
8.02 Applicability
Notwithstanding any other provision of the Plan to the contrary,
the provisions of this Article VIII shall be applicable during any
Plan Year in which the Plan is determined to be a top-heavy plan.
If the Plan is determined to be a top-heavy plan and upon a
subsequent determination date is determined no longer to be a
top-heavy plan, the vesting provisions of Article XVI shall again
become applicable as of such subsequent determination date;
provided, however, that if the prior vesting provisions do again
become applicable, any Employee with
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three or more Years of Vesting Service may elect in accordance with
the provisions of Article XVI, to continue to have his vested
interest in his Separate Account determined in accordance with the
vesting schedule specified in Section 8.06.
8.03 Minimum Employer Contribution
If the Plan is determined to be a top-heavy plan, the Employer
Contributions and Forfeitures allocated to the Separate Account of
each non-key employee who is a Participant and who is employed by a
member of the Controlled Group on the last day of such top-heavy
Plan Year shall be no less than the lesser of (i) three percent of
his compensation or (ii) the largest percentage of compensation
that is allocated as an Employer Contribution, Salary Deferral
Contribution, or both for such Plan Year to the Separate Account of
any key employee; except that, in the event the Plan is part of a
required aggregation group, and the Plan enables a defined benefit
plan included in such group to meet the requirements of Section
401(a)(4) or 410 of the Code, the minimum allocation of Employer
Contributions to each such non-key employee shall be three percent
of the compensation of such non-key employee. Any minimum
allocation to a non-key employee required by this Section 8.03
shall be made without regard to any social security contribution
made on behalf of the non-key employee, his number of hours of
service, his level of compensation, or whether he declined to make
elective or mandatory contributions.
8.04 Coordination with Other Plans
If the Plan is a top-heavy plan, each non-key employee who is a
Participant and who is employed by a member of the Controlled Group
on the last day of a top-heavy Plan Year and who is also covered
under any other top-heavy plan or plans maintained by the Employer
will receive the top-heavy benefits provided under such other
defined contribution plan, or, if not covered under such other
defined contribution plan, under such other defined benefit plan,
in lieu of the minimum top-heavy allocation under the Plan.
8.05 Adjustments to Section 415 Limitations
If the Plan is determined to be a top-heavy plan and the Employer
maintains a defined benefit plan covering some or all of the
Participants that are covered by the Plan, the defined benefit plan
fraction and the defined contribution plan fraction, described in
Article VII, shall be determined as provided in Section 415 of the
Code by substituting "1.0" for "1.25" each place where "1.25"
appears, except that such substitutions shall not be applied to the
Plan if (i) the Plan is not a super top-heavy plan, (ii) the
Employer Contribution for such
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top-heavy Plan Year for each non-key employee who is to receive a
minimum top-heavy benefit hereunder is not less than four percent
of such non-key employee's compensation, and (iii) the minimum
annual retirement benefit accrued by a non-key employee who
participates under one or more defined benefit plans of the
Employer or any other member of the Controlled Group for such
top-heavy Plan Year is not less than the lesser of three percent
times years of service with the Employer or any other member of the
Controlled Group or thirty percent of his compensation.
8.06 Accelerated Vesting
If the Plan is determined to be a top-heavy plan, unless the Plan
provides for more rapid vesting, a Participant's vested interest in
his Separate Account shall be determined in accordance with the
following vesting schedule:
Years of Vesting Service Vested Interest
less than 3 0%
3 or more 100%
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ARTICLE IX
SERVICE
9.01 Hour of Service
An Hour of Service shall mean:
(1) Each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer
(including any predecessor business of an Employer
conducted as a corporation, partnership or
proprietorship) or any other member of the Controlled
Group for the performance of duties;
(2) Each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer
(including any predecessor business of an Employer
conducted as a corporation, partnership or
proprietorship) or any other member of the Controlled
Group (irrespective of whether the employment
relationship has terminated) for reasons other than the
performance of duties (such as vacation, holidays,
sickness, jury duty, disability, lay-off, military duty,
or leave of absence) for the period in which such duties
were performed or in which occurred the period during
which no duties were performed; and
(3) Each hour for which back pay is awarded or agreed to by
the Employer or any other member of the Controlled Group
without regard to mitigation of damages (provided that
the same Hours of Service shall not be credited under
both this paragraph (3) and paragraph (1) or (2) above).
9.02 Department of Labor Rules
The provisions of Department of Labor Regulations Sections
2530.200b-2(b) and (c) are incorporated herein by reference.
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ARTICLE X
ELIGIBILITY AND PARTICIPATION
10.01 Eligibility
Each Eligible Employee shall become a Participant on the later of
the date on which he becomes an Eligible Employee or the date on
which he attains age 21, provided that his service has not
terminated and he remains an Eligible Employee on such date.
10.02 Participation
Each Participant may elect to become an Active Participant in the
Plan as of the date on which he is first eligible by making an
application for participation in the Plan, in the manner and with
such advance notice period as the Plan Administrator shall
prescribe, and electing to have his Compensation reduced and to
have Salary Deferral Contributions made on his behalf. Each
Participant who does not become an Active Participant in the Plan
as of the date on which he is first eligible may become an Active
Participant in the Plan as of the first day of any subsequent
payroll period by making an application in the manner specified in
the foregoing provisions of this Section 10.02.
10.03 Termination and Rehiring
A Participant whose service terminates and who is subsequently
rehired by the Employer shall be eligible to participate in the
Plan on his Reemployment Commencement Date.
An Eligible Employee whose service terminates before he has met the
eligibility requirements of Section 10.01 and who is subsequently
rehired as an Eligible Employee shall be eligible to participate in
the Plan on the date he meets the requirements of Section 10.01.
10.04 Duration of Participation
Once an Eligible Employee becomes a Participant, he shall remain a
Participant (1) while he is an Employee, for so long as a portion
of the Trust is credited to his Separate Account whether or not he
continues to be an Eligible Employee, or (2) while he is not an
Employee, for so long as a portion of the Trust is credited to his
Separate Account or, if earlier, until his death. If a Participant
ceases to be an Eligible Employee (other than by reason of his
retirement, death, or Total and Permanent Disability), no further
Salary Deferral
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Contributions may be made on his behalf and no further Employer
Contributions shall be allocated to his Separate Account, except as
provided in clause (3) of the first paragraph of Section 13.03. A
Participant who is on an Authorized Leave of Absence shall continue
as a Participant but no Salary Deferral Contributions or Employer
Contributions shall be made to his Separate Account for any Plan
Year during which he does not receive Compensation from an
Employer.
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ARTICLE XI
INVESTMENT FUNDS, ACCOUNTING, AND SEPARATE ACCOUNTS
11.01 Investment Funds
The Trust Fund shall be comprised of separate Investment Funds for
the investment of the contributions made hereunder, as provided in
the Trust Agreement, and the Special Loan Investment Fund as
provided in Section 11.03.
11.02 Participant Loans
If a loan from the Plan to a Participant is approved in accordance
with the provisions of Article XVIII, the loan shall be an
earmarked investment of a portion of the Participant's Separate
Account. Notwithstanding any other provision of the Plan to the
contrary, repayments received with respect to a loan shall be
allocated as provided in Article XVIII.
11.03 Special Loan Investment Fund
A Special Loan Investment Fund shall be maintained in the Trust
Fund for the investment of loans made to Participants (and
Beneficiaries) prior to January 1, 1991. The assets held in the
Special Loan Investment Fund as of December 31, 1990, shall be
equal to the value of the notes and security agreements evidencing
the outstanding loans under the Plan as of December 31, 1990,
together with interest and principal payments thereon. The Special
Loan Investment Fund shall consist of investments in loans to
Participants (and Beneficiaries) that were made prior to January 1,
1991, and a cash account, which shall be invested in interest
bearing securities. An amount equal to the value of the Special
Loan Investment Fund as of December 31, 1990, shall be allocated to
all Active Participants in the Plan who were entitled to an
allocation of Employer Contributions for the Plan Year ending
December 31, 1990.
11.04 Participant Investment Elections
Each Participant shall make an investment election, in the manner
and with such advance notice period as the Plan Administrator shall
prescribe, directing the manner in which his Salary Deferral
Contributions, Employer Contributions, and Rollover Contributions
shall be invested. A Participant's investment election shall
specify the percentage, in such percentage increments as the Plan
Administrator shall prescribe, of such contributions that shall be
allocated to one or more of the Investment Funds with the sum of
such percentages
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equaling 100%. A Participant's investment elections shall remain in
effect until his entire interest under the Plan is distributed in
accordance with the provisions of the Plan or until he files a
change of investment election with the Plan Administrator, as
provided in Section 11.05. If a Participant fails to make an
investment election, he shall be deemed to have elected, but with
respect only to the applicable type or types of contributions for
which an investment election was not made, to have 100% of such
contributions invested in the Investment Fund with the least amount
of risk to principal, as determined by the Plan Administrator.
11.05 Change of Investment Elections
A Participant may change his investment elections, subject to the
provisions of Section 11.04, with respect to future Salary Deferral
Contributions and Employer Contributions, with such frequency, at
such times, and in the manner and with such advance notice period
as the Plan Administrator shall prescribe. Notwithstanding the
foregoing, a Participant may not make an investment election with
respect to amounts invested in the Special Loan Investment Fund,
and such amounts shall be invested on and after December 31, 1990
solely in the Special Loan Investment Fund.
11.06 Transfers Among Investment Funds
A Participant may elect to transfer investments with respect to one
or more types of contributions from any Investment Fund to any one
or more other Investment Funds, with such frequency, at such times,
and in the manner and with such advance notice period as the Plan
Administrator shall prescribe. Notwithstanding the foregoing, a
Participant may not make an investment election to transfer any
amount into or out of the Special Loan Investment Fund or any other
Investment Fund for which transfers in or out are not permitted. A
Participant's transfer election shall specify a percentage, in such
percentage increments as the Plan Administrator may prescribe, of
the amount eligible for transfer that is to be transferred, which
percentage may not exceed 100 percent. A transfer election may be
made at such times, and in the manner and with such advance notice
period as the Plan Administrator shall prescribe, subject to any
restrictions pertaining to a particular Investment Fund. The Plan
Administrator shall authorize the Trustee to make the necessary
transfers among the Investment Funds to reflect the elections of
the Participants.
11.07 Allocation of Earnings or Losses to Separate Accounts
As of each current Valuation Date and prior to the allocation of
Salary Deferral Contributions and Employer Contributions
attributable to the period beginning
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with the day following the preceding Valuation Date and ending with
such current Valuation Date, there shall be allocated to each
Participant's Separate Account, by credit to or deduction
therefrom, as the case may be, a portion of the increase or
decrease in the value of the Investment Fund or Investment Funds in
which the Participant's Separate Account is invested since the
preceding Valuation Date attributable to interest, dividends,
changes in market value, expenses, and gains and losses realized
from the sale of assets. In determining the value of the Investment
Fund or Investment Funds, the Trustee shall value the assets at
their fair market value as of the Valuation Date. Allocations with
respect to each Investment Fund shall be made in the proportion
that each such Participant's Separate Account or percentage thereof
as of the preceding Valuation Date, reduced by any distributions
from the Participant's Separate Account attributable to such
Investment Fund since such date, bears to the total of all such
Separate Accounts or percentages thereof which are invested in the
particular Investment Fund as of the preceding Valuation Date,
reduced by any distributions from all Participants' Separate
Accounts attributable to such Investment Fund since such date.
11.08 Separate Accounts
A Separate Account shall be established in the name of each
Participant reflecting his interest in the Trust Fund. Each
Separate Account shall be maintained and administered for each
Participant and Beneficiary in accordance with the provisions of
the Plan. The balance of each Separate Account shall be the balance
of the account after all credits and charges thereto, for and as of
such date, have been made as provided herein.
11.09 Sub-Accounts
A Participant's Separate Account shall be divided into such
Sub-Accounts as are necessary or appropriate to reflect a
Participant's interest in the Trust Fund.
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ARTICLE XII
SALARY DEFERRAL CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS
12.01 Salary Deferral Contributions
Effective as of the date he becomes a Participant, or the beginning
of any subsequent payroll period, each Participant may elect, in
the manner and with such advance notice period as the Plan
Administrator shall prescribe, to become an Active Participant and
to have Salary Deferral Contributions made to the Plan on his
behalf by his Employer as hereinafter provided. A Participant's
election shall include his authorization for his Employer to reduce
his Compensation and to make Salary Deferral Contributions on his
behalf and his election as to the investment of his contributions
in accordance with Article XI. Salary Deferral Contributions on
behalf of an Active Participant shall commence with the first
payroll period beginning on or after the date on which his election
is effective.
12.02 Amount of Salary Deferral Contributions
The amount of Salary Deferral Contributions to be made to the Plan
on behalf of an Active Participant by his Employer shall be an
integral percentage of his Compensation for the applicable payroll
period of not less than 1% nor more than 10%. An Active
Participant's Compensation shall be reduced for each payroll period
by the percentage he elects to have contributed on his behalf to
the Plan in accordance with the terms of his currently effective
salary reduction agreement.
12.03 Changes in Salary Reduction Agreement
An Active Participant may change the percentage of his future
Compensation that his Employer contributes on his behalf as Salary
Deferral Contributions by at such time or times, and in the manner
and with such advance notice period as the Plan Administrator shall
prescribe. An Active Participant who changes his reduction
authorization shall be limited to selecting a percentage of his
Compensation that is otherwise permitted under Section 12.02.
Salary Deferral Contributions shall be made on behalf of such
Active Participant by his Employer pursuant to his amended
reduction authorization filed in accordance with this Section 12.03
commencing with Compensation paid to the Active Participant on or
after the date such filing is effective, until otherwise altered or
terminated in accordance with the Plan.
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12.04 Suspension of Salary Deferral Contributions
An Active Participant may have his Salary Deferral Contributions
suspended at any time in the manner and with such advance notice
period as the Plan Administrator shall prescribe. Any such
voluntary suspension shall take effect commencing with Compensation
paid to such Active Participant after the expiration of the
required notice period and shall remain in effect until Salary
Deferral Contributions are resumed as hereinafter set forth.
12.05 Resumption of Salary Deferral Contributions
A Participant who has voluntarily suspended his Salary Deferral
Contributions in accordance with Section 12.04 shall not be
considered an Active Participant during such period of suspension
and may not resume such contributions and again become an Active
Participant until the beginning of a payroll period that is at
least six months following the effective date of the suspension.
Notwithstanding the foregoing, a Participant whose Salary Deferral
Contributions are suspended during an unpaid Authorized Leave of
Absence may elect to resume such contributions upon his return to
active employment with the Employer. At such time as the
Participant is eligible to resume Salary Deferral Contributions, he
may have such contributions resumed in the manner and with such
advance notice period as the Plan Administrator shall prescribe. A
Participant who resumes Salary Deferral Contributions shall be
limited to selecting a percentage of his Compensation that is
otherwise permitted under Section 12.02.
12.06 Delivery of Salary Deferral Contributions
As soon as practicable after the date an amount would otherwise be
paid to an Employee as it can reasonably be separated from Employer
assets, each Employer shall cause to be delivered to the Trustee in
cash all Salary Deferral Contributions attributable to such
amounts, but in no event later than such time as is required by
regulations under Section 401(k) of the Code.
12.07 Limitations on Salary Deferral Contributions
Salary Deferral Contributions are subject to all applicable
limitations contained in Article VII.
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12.08 Rollover Contributions
Subject to the approval of the Plan Administrator, an Eligible
Employee who was a participant in a plan qualified under Section
401 of the Code and who receives a cash distribution from such plan
that he elects either (i) to roll over immediately to a qualified
retirement plan or (ii) to roll over into a conduit IRA from which
he receives a later cash distribution, may elect to make a Rollover
Contribution to the Plan if he is entitled under Section 402(c)(1)
or Section 408(d)(3)(A) of the Code to roll over such distribution
to another qualified retirement plan. The Plan Administrator may
require an Eligible Employee to provide it with such information as
it deems necessary or desirable to show that he is entitled to roll
over such distribution to another qualified retirement plan. An
Eligible Employee shall make a Rollover Contribution to the Plan by
delivering, or causing to be delivered, to the Trustee the cash
that constitutes the Rollover Contribution amount within 60 days of
receipt of the distribution from the plan or from the conduit IRA
in accordance with procedures established by the Plan
Administrator. The Eligible Employee shall also deliver to the Plan
Administrator his election as to the investment of his
contributions in accordance with Article XI.
An Eligible Employee need not be a Participant in order to make a
Rollover Contribution to the Plan and any Eligible Employee who
makes a Rollover Contribution prior to the date on which he becomes
a Participant shall become a Participant as of the date the
Rollover Contribution is accepted but his benefits under the Plan
prior to the date on which he becomes an Active Participant shall
be limited to amounts credited to his Rollover Contribution
Account.
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ARTICLE XIII
EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
13.01 Employer Contributions
For each Plan Year, each Employer may, in its sole discretion, make
an Employer Contribution or more than one Employer Contribution
under the Plan in an amount or amounts that the Company shall
determine.
Employer Contributions shall be reduced, if necessary, by any
amount held in a suspense account pursuant to Section 7.10.
13.02 Timing of Employer Contributions
The Employer Contributions which are to be made for a Plan Year
shall be paid to the Trust from time to time as deemed advisable by
the Employer but in no event later than the earlier of (i) the time
prescribed by law for filing the Employer's Federal income tax
return for its applicable taxable year, including extensions
thereof, or (ii) such time as is required by regulations under
Section 401(k) and/or Section 401(m) of the Code, as applicable. In
no event shall the total amount of Employer Contributions under
this Article XIII exceed the maximum amount deductible in such
year, under the provisions of the Code and applicable Treasury
Regulations thereunder.
13.03 Allocation of Employer Contributions
A person shall be eligible to share in the allocation of the
Employer Contribution, if any, for a Plan Year if he is an Active
Participant in the Plan at any time during the Plan Year and
either:
(1) is in the active service of the Employer as an Eligible
Employee on the last Valuation Date of the Plan Year
(i.e., whose service has not terminated prior to the last
business day of the Plan Year),
(2) is not in active service because of termination of
service during the Plan Year after attaining age 65,
because of Total and Permanent Disability, or death, or,
for Plan Years beginning on or after January 1, 1995,
because of termination of service after meeting the age
and service requirements for early retirement under the
ALLTEL Corporation Pension Plan or the ALLTEL Corporation
Profit-Sharing Plan (if he had been a participant
thereunder), or
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(3) became ineligible by reason of transfer of employment to
a Controlled Group Member that is not an Employer and who
would be an Eligible Employee after such transfer of
employment but for the fact that his employer is not an
Employer (provided that he remains an Eligible Employee
but for the fact that his employer is not an Employer or
would otherwise be eligible for an allocation of the
Employer Contribution as a former Eligible Employee by
reason of termination of service on or after the age of
65 years, Total and Permanent Disability, death, or, for
Plan Years beginning on or after January 1, 1995, meeting
the age and service requirements for early retirement
under the ALLTEL Corporation Pension Plan or the ALLTEL
Corporation Profit-Sharing Plan (if he had been a
participant thereunder).
A Participant described in clause (3) above shall be ineligible to
share in further allocations of Employer Contributions after the
Plan Year in which his transfer of employment occurs unless he
again becomes an Eligible Employee and an Active Participant.
As of the last Valuation Date of each Plan Year, after making the
credits or debits to Participants' Separate Accounts required by
Section 11.07, an amount equal to the Employer Contribution(s) for
the Plan Year shall be allocated and credited to the Employer
Contribution Accounts of those Participants in the Plan who are
eligible to share in the allocation of the Employer Contribution(s)
for the Plan Year. The allocation of the Employer Contribution(s)
for a Plan Year shall be in the proportion which the Matched Salary
Deferral Contributions for the Plan Year made on behalf of a
Participant eligible to share in the allocation of the Employer
Contribution(s) for the Plan Year bear to the aggregate Matched
Salary Deferral Contributions made during the Plan Year for all
Participants who are eligible to share in the allocation of the
Employer Contribution(s) for the Plan Year.
Notwithstanding the foregoing, but with respect only to Plan Years
beginning after December 31, 1994: If specified by the Company by
written notice to the Plan Administrator with respect to any
Employer Contribution under Section 13.01 before the date of
payment of such Employer Contribution to the Trust, such Employer
Contribution shall not be allocated and credited in the manner
described in the immediately preceding paragraph, but instead shall
be allocated and credited in the manner described in the
immediately preceding paragraph but only to the Employer
Contribution Accounts of a group of Participants otherwise eligible
to share in the allocation of Employer Contribution(s) for the Plan
Year, which group of Participants shall be specified in such
written notice of the Company to the Plan Administrator.
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A Participant who is on an Authorized Leave of Absence on the last
Valuation Date of a Plan Year or a Participant who is employed by
any other member of the Controlled Group on the last Valuation Date
of the Plan Year in which his employment transferred to such other
member of the Controlled Group shall be deemed to be actively
employed by an Employer on the last Valuation Date of such Plan
Year for purposes of this Section 13.03.
13.04 Limitations on Employer Contributions
Employer Contributions are subject to all applicable limitations
contained in Article VII.
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ARTICLE XIV
DISTRIBUTIONS
14.01 Distributions
A Participant whose Settlement Date occurs shall receive
distribution of the value of his Separate Account in a form of
payment provided in Article XV as soon as reasonably practicable
following the date on which his Settlement Date occurs or the date
his application for distribution is filed with the Plan
Administrator, if later.
14.02 Distributions to Beneficiaries
If a Participant dies after the date distribution of his Separate
Account has commenced in the form of installment payments, his
Beneficiary shall receive distribution of the remainder of the
installment payments beginning as soon as reasonably practicable
following the Participant's date of death; except that, a
Participant's Beneficiary may elect to receive a single sum payment
of the Participant's remaining Separate Account in lieu of any
further installment payments.
If a Participant dies prior to the date distribution of his
Separate Account has commenced, his Beneficiary shall receive
distribution of the value of the Participant's Separate Account in
a form of payment provided under Article XV beginning as soon as
reasonably practicable following the date the Beneficiary's
application for distribution is filed with the Plan Administrator.
If a Participant dies prior to the date distribution of his
Separate Account has been made or commenced and distribution of his
Separate Account is to be made to his surviving Spouse,
distribution to the surviving Spouse must be made or commenced no
later than the end of the first calendar year beginning after the
Participant's death or the end of the calendar year in which the
Participant would have reached age 70 1/2, whichever is later.
If a Participant dies prior to the date distribution of his
Separate Account has been made or commenced and distribution of his
Separate Account is to be made to a Beneficiary who is not his
surviving Spouse in a single sum payment, distribution to such
Beneficiary must be made no later than the end of the fifth
calendar year beginning after the Participant's death.
If a Participant dies prior to the date distribution of his
Separate Account has been made or commenced and distribution of his
Separate Account is to be
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made to a Beneficiary who is not his surviving Spouse in
installment payments, distribution to such Beneficiary must
commence no later than the end of the first calendar year beginning
after the Participant's death.
If distribution is to be made to a Participant's surviving Spouse,
it shall be made available within a reasonable period of time after
the Participant's death that is no less favorable than the period
of time applicable to other distributions.
14.03 Provision Pursuant to Section 401(a)(9) of the Code
Notwithstanding anything to the contrary contained in the Plan, a
Participant's benefits shall be distributed to him not later than
April 1 of the calendar year following the later of (1) the
calendar year in which he attains age 70-1/2, or (2) the calendar
year in which he retires provided the Participant was not a "five
percent owner" (as defined in Section 416 of the Code) at any time
during the five-Plan-Year period ending in the calendar year in
which he attains age 70-1/2. If a Participant becomes a "five
percent owner" during any subsequent Plan Year, his benefits shall
be distributed to him not later than April l of the calendar year
following the calendar year in which such subsequent Plan Year
ends.
Unless applicable law permits (or requires) otherwise, for Plan
Years beginning on and after January 1, 1989, a Participant's
benefits shall be distributed to him not later than April 1 of the
calendar year following the calendar year in which he attains age
70-1/2. However, if a Participant attains age 70-1/2 by January 1,
1988 and if such Participant was not a "five percent owner" in the
five-Plan-Year period ending with or within the calendar year in
which he attained age 70-1/2 or any subsequent year, such
Participant's benefits need not be distributed until his actual
retirement.
If distribution is required to commence pursuant to this Section
14.03 to a Participant whose service has not been terminated,
distributions shall commence in a form of payment provided under
Article XV and shall be made in accordance with Section 401(a)(9)
of the Code and the regulations thereunder, the provisions of which
are incorporated herein by reference.
14.04 Provision Pursuant to Section 401(a)(14) of the Code
Unless a Participant elects a later date (subject to the provisions
of Section 14.03), payments shall be made or commenced not later
than sixty days after the latest of the close of the Plan Year in
which:
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(1) occurs the date on which the Participant attains age 65;
(2) occurs the 10th anniversary of the year the Participant
commenced participation in the Plan; or
(3) the Participant's employment terminates with the Employer
and all other members of the Controlled Group.
14.05 Administrative Powers Relating to Payments
If a Participant or Beneficiary is under a legal disability or, by
reason of illness or mental or physical disability, is in the
opinion of the Plan Administrator unable properly to attend to his
personal financial matters, the Trustee may make such payments in
such of the following ways as the Plan Administrator shall direct:
(a) directly to such Participant or Beneficiary;
(b) to the legal representative of such Participant or
Beneficiary; or
(c) to some relative by blood or marriage, or friend, for the
benefit of such Participant or Beneficiary.
Any payment made pursuant to this Section 14.05 shall be in
complete discharge of the obligation under the Plan.
14.06 Reemployment
If a Participant whose Settlement Date has occurred is reemployed
by an Employer or any other member of the Controlled Group, he
shall lose his right to any distribution or further distributions
from the Trust Fund arising from his prior Settlement Date with
respect to amounts other than amounts attributable to Salary
Deferral Contributions and his interest in the Trust Fund with
respect to such amounts shall thereafter be treated in the same
manner as that of any other Participant whose Settlement Date has
not occurred, and his prior election, if any, of a form of payment
hereunder shall become ineffective. Such a Participant shall retain
his right to any distribution or further distributions from the
Trust Fund arising from his prior Settlement Date with respect to
amounts attributable to Salary Deferral Contributions, and his
prior election, if any, of a form of payment hereunder shall remain
in effect with respect to such amounts.
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ARTICLE XV
FORMS OF PAYMENT
15.01 Method of Distribution
On and after a Participant's Settlement Date, after all adjustments
to his Separate Account required as of that date shall have been
made, distribution of his Separate Account shall be made as soon
after such date as is administratively practicable, to the
Participant, or, if the Participant has died, to his Beneficiary,
by any one of the following methods as elected by the Participant
or, if applicable, his Beneficiary:
(1) by payments in cash in a series of installments over a
period not exceeding the life expectancy of the
Participant, or the Participant's Beneficiary, if the
Participant has died, or a period not exceeding the joint
life and last survivor expectancy of the Participant and
his Beneficiary. Each installment shall be equal in
amount except as necessary to adjust for any changes in
the value of the Participant's Separate Account. The
determination of life expectancies shall be made on the
basis of the expected return multiples in Table V and VI
of Section 1.72-9 of the Treasury regulations and shall
be calculated once at the time installment payments
begin.
(2) by payment in cash of a single-sum amount; or
(3) a combination of (1) and (2) above.
15.02 Consent and Timing
Any distribution to the Participant that commences prior to his
attainment of the age of 65 years shall require the written consent
of the Participant within 90 days of the date of any such
distribution if the value of the Participant's Separate Account at
the time of such distribution exceeds $3,500 (or such other amount
as is established by the Secretary of the Treasury pursuant to
Section 411(a)(7)(B)(i) of the Code) (or exceeded such amount at
the time of any prior distribution).
A Participant with respect to whom there may be an allocation of
Employer Contributions following the Participant's termination of
service because of his retirement, death, Total and Permanent
Disability, or termination of service after meeting the age and
service requirements for early retirement under the ALLTEL
Corporation Pension Plan or the ALLTEL Corporation Profit-Sharing
Plan (if he had been a participant thereunder) (or his Beneficiary)
and whose account
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balance exceeds $3,500 (or such other amount as is established by
the Secretary of the Treasury pursuant to Section 411(a)(7)(B)(i)
of the Code) on the date of his termination of service (or exceeded
such amount at the time of any prior distribution), shall be
entitled to elect to defer any distribution until the Employer
Contribution for the Plan Year that includes the date of such
termination of service is made, or to elect a distribution of the
Participant's Separate Account prior to the additional allocation
and a subsequent distribution of any additional allocation.
If the Participant elects and is receiving distribution in a series
of cash installments, he may subsequently elect a different method
that satisfies the requirements of Section 15.01 and this Section
15.02.
15.03 Notice Regarding Distribution
Within the 60 day period ending 30 days prior to the date
distribution of a Participant's Separate Account is to be made or
commenced, the Plan Administrator shall provide him with a written
explanation of the forms of payment available under the Plan, his
right to make a direct rollover, and, except as otherwise provided
in Section 15.04, the Participant's right to defer distribution of
his Separate Account until a date not later than the April 1
following the close of the calendar year in which the Participant
attains age 70 1/2. Notwithstanding the foregoing, distribution may
be made or commenced less than 30 days after the notice required by
this Section 15.03 is given to the Participant, provided that:
(1) the Plan Administrator clearly informs the Participant
that he has a right to a period of at least 30 days after
receiving the notice to consider the decision ofwhether
or not to elect a distribution and, if applicable, a
particular distribution option, and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
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15.04 Small Benefit Cash-Out
Notwithstanding the preceding provisions of this Article XV, the
Separate Account of a Participant shall be distributed in a single
sum payment as soon as practicable following his separation from
service with the Controlled Group if the value of his vested
Separate Account as of the Valuation Date coinciding with or
immediately preceding his Settlement Date is (or at the time of any
prior distribution was) $3,500 (or such other amount as is
established by the Secretary of the Treasury pursuant to Section
411(a)(7)(B)(i) of the Code) or less; provided, however, that no
such payment shall be made after benefits have commenced in
installments. Notwithstanding the above, a distributee the value of
whose Separate Account does not exceed $3,500 (or such other amount
as is established by the Secretary of the Treasury pursuant to
Section 411(a)(7)(B)(i) of the Code) as of the date on which he
would otherwise receive distribution of such Separate Account and
with respect to whom there may be an additional allocation under
Section 13.03 following the Participant's separation from service
due to retirement, death, or Total and Permanent Disability shall
be entitled to elect in writing, in accordance with the procedures
established by the Plan Administrator, to defer such payment or
commencement of payment until the Employer Contribution for the
Plan Year that includes the date of such separation from service is
made, in which case the determination of the value of his Separate
Account for purposes of the amount and form of distribution
hereunder shall be made as of the Valuation Date as of which the
Employer Contribution for the Plan Year that includes the date of
such separation from service is allocated if distribution is made
or commenced to the Participant prior to the next Valuation Date,
and, otherwise, as of the Valuation Date coinciding with or
immediately preceding the date as of which distribution is made or
commenced.
15.05 Payment to Estate
Notwithstanding any other provision of the Plan to the contrary, if
a Participant's Beneficiary is his estate, the executor or other
personal representative of the Participant may elect on the
estate's behalf to receive any benefit which may become payable
under the Plan upon the death of the Participant, or in lieu of any
installment payments remaining unpaid at the death of the
Participant, a single sum payment.
15.06 Direct Rollover Requirements
(a) This Section 15.06 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that
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would otherwise limit a distributee's election under this
Section 15.06, a distributee may elect, at the time and
in the manner prescribed by the Plan Administrator to
have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) For purposes of this Section 15.06, the following
definitions shall apply:
(i) Eligible rollover distribution: An eligible
rollover distribution is any distribution of
all or any portion of the balance to the
credit of the distributee, except that an
eligible rollover distribution does not
include: any distribution that is one of a
series of substantially equal periodic
payments (not less frequently than annually)
made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's Beneficiary, or for a specified
period of ten years or more; any distribution
to the extent such distribution is required
under Section 401(a)(9) of the Code; and the
portion of any distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to Employer
securities).
(ii) 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.
(iii) 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.
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(iv) Direct rollover: A direct rollover is a
payment by the Plan to the eligible retirement
plan specified by the distributee.
15.07 Valuation Date
A Participant's vested interest in the balance of his Separate
Account shall be determined as of the Valuation Date coinciding
with or immediately preceding the date as of which distribution is
to be made or commenced.
15.08 Form of Election
All elections under Article XIV and this Article XV shall be in
writing on the form prescribed by the Plan Administrator from time
to time and must be filed on a timely basis.
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ARTICLE XVI
VESTING
16.01 Full Vesting
A Participant shall at all times have a fully vested and
nonforfeitable interest in his Separate Account.
16.02 Election of Former Vesting Schedule
If the Company adopts an amendment to the Plan that directly or
indirectly affects the computation of a Participant's vested
interest in his Separate Account, any Participant with three or
more Years of Vesting Service shall have a right to have his vested
interest in his Separate Account continue to be determined under
the vesting provisions in effect prior to the amendment rather than
under the new vesting provisions, unless the vested interest of the
Participant in his Separate Account under the Plan as amended is
not at any time less than such vested interest determined without
regard to the amendment. A Participant shall exercise his right
under this Section 16.02 by giving written notice of his exercise
thereof to the Administrator within 60 days after the latest of (i)
the date he receives notice of the amendment from the Plan
Administrator, (ii) the effective date of the amendment, or (iii)
the date the amendment is adopted. Notwithstanding the foregoing, a
Participant's vested interest in his Separate Account on the
effective date of such an amendment shall not be less than his
vested interest in his Separate Account immediately prior to the
effective date of the amendment.
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ARTICLE XVII
BENEFICIARIES
17.01 Designation of Beneficiary
Subject to the provisions of Section 17.02, each Participant shall
have the right to designate, by filing a written designation with
the Plan Administrator on such form as the Plan Administrator may
prescribe, a person or persons or entity to receive any benefit
which may become payable upon the death of such Participant or any
installment payments remaining unpaid at the death of the
Participant. A married Participant's Beneficiary shall be his
Spouse, unless the Spouse has consented in the manner provided in
Section 17.02 to the Participant's designation of a Beneficiary
other than his Spouse. A non-Spouse Beneficiary designation made by
a Participant and consented to by his Spouse may be revoked by the
Participant in writing at any time, without the consent of his
Spouse. Any new Beneficiary designation must again comply with the
requirements of Section 17.02.
17.02 Spousal Consent Requirements
Any written spousal consent given pursuant to this Article XVII
shall acknowledge the effect of the action taken, shall
specifically acknowledge any non-spouse Beneficiary designated by
the Participant, and shall be witnessed by a Plan representative or
a notary public. Such spousal consent shall be valid only with
respect to the Spouse who signs the consent. Notwithstanding any
other provision of the Plan to the contrary, written spousal
consent shall not be required if the Participant establishes to the
satisfaction of the Plan Administrator that such consent cannot be
obtained because the Spouse cannot be located or because of other
circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder.
17.03 No Beneficiary
If no Beneficiary has been designated pursuant to Section 17.01, if
a designation is for any reason illegal or ineffective, or if no
Beneficiary survives the Participant and he has no surviving
Spouse, then the Beneficiary under the Plan shall be the
Participant's estate. If a Beneficiary dies after becoming entitled
to receive a distribution under the Plan but before distribution is
made to him in full, and if no other Beneficiary has been
designated to receive the balance of the distribution in that
event, the estate of the deceased Beneficiary shall be the
Beneficiary as to the balance of the distribution.
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17.04 Reliance
In determining a Participant's Beneficiary, the Plan Administrator
may act and rely upon any information it deems reliable upon
reasonable inquiry, and upon any affidavit, certificate, or other
paper believed by it to be genuine, and upon any evidence believed
by it to be sufficient.
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ARTICLE XVIII
LOANS
18.01 Application for Loan
A Participant or a Beneficiary who is a party in interest may make
written application to the Plan Administrator for a loan from his
Separate Account. Loans shall be made in accordance with written
loan rules and procedures prescribed by the Plan Administrator,
which include, but are not limited to, limitations on the purposes
or reasons for which a Participant or Beneficiary may be granted a
loan, and which rules and procedures are hereby incorporated into
and made a part of the Plan. As collateral for any loan granted
hereunder, the Participant shall grant to the Plan a security
interest in up to 50 percent of his vested interest under the Plan
determined as of the date as of which the loan is originated in
accordance with Plan provisions and, in the case of a Participant
who is an active employee, also shall enter into an agreement to
repay the loan by payroll withholding. No loan in excess of 50
percent of the Participant's vested interest under the Plan shall
be made from the Plan. Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other employees.
A loan shall not be granted unless the Participant consents in
writing to the charging of his Separate Account in accordance with
the provisions of Section 18.05 for unpaid principal and interest
amounts in the event the loan is declared to be in default.
18.02 Reduction of Account Upon Distribution
Notwithstanding any other provision of the Plan, the amount of a
Participant's Separate Account that is distributable to the
Participant or his Beneficiary under Article XIV or XIX shall be
reduced by the portion of his vested interest that is held by the
Plan as security for any loan outstanding to the Participant,
provided that the reduction is used to repay the loan. If
distribution is made because of the Participant's death prior to
the commencement of distribution of his Separate Account and less
than 100 percent of the Participant's vested interest in his
Separate Account (determined without regard to the preceding
sentence) is payable to his surviving spouse, then the balance of
the Participant's vested interest in his Separate Account shall be
adjusted by reducing the vested account balance by the amount of
the security used to repay the loan, as provided in the preceding
sentence, prior to determining the amount of the benefit payable to
the surviving spouse.
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18.03 Requirements to Prevent a Taxable Distribution
Notwithstanding any other provision of the Plan to the contrary,
the following terms and conditions shall apply to any loan made to
a Participant under this Article XVIII:
(a) The interest rate on any loan to a Participant shall be a
reasonable interest rate commensurate with current
interest rates charged for loans made under similar
circumstances by persons in the business of lending
money.
(b) The amount of any loan to a Participant (when added to
the outstanding balance of all other loans to the
Participant from the Plan or any other plan maintained by
an Employer or a Related Company) shall not exceed the
lesser of:
(i) $50,000, reduced by the highest outstanding
balance of any other loan to the Participant
from the Plan or any other plan maintained by
an Employer or a Related Company during the
preceding 12-month period; or
(ii) 50 percent of the vested portions of the
Participant's Separate Account and his vested
interest under all other plans maintained by
an Employer or a Related Company.
(c) The term of any loan to a Participant shall be no greater
than five years, except in the case of a loan used to
acquire any dwelling unit which within a reasonable
period of time is to be used (determined at the time the
loan is made) as a principal residence of the
Participant.
(d) Except as otherwise permitted under Treasury regulations,
substantially level amortization shall be required over
the term of the loan with payments made not less
frequently than quarterly.
18.04 Administration of Loans
Any loan approved by the Plan Administrator shall be an ear-marked
investment of the Participant's Separate Account. All principal and
interest paid by the Participant on a loan made under this Article
XVIII shall be deposited to his Separate Account and shall be
allocated upon receipt among the Investment Funds in accordance
with the Participant's currently effective investment election.
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18.05 Default
If a Participant fails to make or cause to be made, any payment
required under the terms of the loan within 60 days following the
date on which such payment shall become due, the Plan Administrator
may direct the Trustee to declare the loan to be in default, and
the entire unpaid balance of such loan, together with accrued
interest, shall be immediately due and payable. In any such event,
if such balance and interest thereon is not then paid, the Trustee
shall charge the Separate Account of the borrower with the amount
of such balance and interest as of the earliest date a distribution
may be made from the Plan to the borrower without adversely
affecting the tax qualification of the Plan or of the cash or
deferred arrangement.
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ARTICLE XIX
IN-SERVICE WITHDRAWALS
19.01 Withdrawals While Still Employed
A Participant may, while still employed by a member of the
Controlled Group, make certain withdrawals from his Separate
Account, subject to the following restrictions:
(1) Withdrawals may be made only as of a Valuation Date after
all adjustments have been made to the accounts.
(2) All withdrawals are subject to the Participant having
filed a written application with the Plan Administrator
at least such number of days prior to the date on which
the withdrawal is to be made as the Plan Administrator
shall prescribe.
(3) All withdrawals shall be in the form of a single-sum cash
payment and the amounts withdrawn shall be debited from
the Participant's Separate Account as of the date the
payment is made.
(4) A Participant may make a withdrawal from his Salary
Deferral Contribution Account and/or Employer
Contribution Account only in the event that he furnishes
satisfactory evidence to the Plan Administrator that the
withdrawal is to alleviate his financial hardship and is
for one of the following reasons:
(a) expenses previously incurred by or necessary
to obtain for the Participant, the
Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the
Code) medical care described in Section 213(d)
of the Code;
(b) costs directly related to the purchase
(excluding mortgage payments) of a principal
residence for the Participant;
(c) payment of tuition and related educational
fees for the next 12 months of post-secondary
education for the Participant, the
Participant's spouse, or any dependent of the
Participant; or
(d) the need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the
Participant's principal residence.
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(5) For the purpose of (4) above, financial hardship shall
mean an immediate and heavy financial need that cannot be
met from other resources of the Participant. A
distribution will be deemed to be necessary to satisfy an
immediate and heavy financial need of the Participant if
all of the following requirements are satisfied:
(a) the distribution is not in excess of the
amount of the immediate and heavy financial
need of the Participant;
(b) the Participant has obtained all
distributions, other than hardship
distributions, and all nontaxable loans
currently available under all of the plans
maintained by the Employer and all other
members of the Controlled Group;
(c) the Participant's Salary Deferral
Contributions under the Plan and his employee
elective contributions and employee
contributions, other than mandatory employee
contributions to a Defined Benefit Plan, under
all other Employer maintained qualified and
nonqualified plans of deferred compensation,
except health or welfare benefit plans, are
suspended for 12 months after receipt of the
hardship distribution; and
(d) the Participant's Salary Deferral
Contributions for the Participant's taxable
year Immediately following the taxable year of
the hardship distribution may not exceed the
applicable limit under Section 402(g) of the
Internal Revenue Code for such next taxable
year less the amount of his Salary Deferral
Contributions for the taxable year of the
hardship distribution.
(6) The amount that a Participant may withdraw from his
Salary Deferral Contribution Account on and after January
1, 1989 shall not exceed the excess, if any, of (a) the
sum of (i) the net credit balance in his Salary Deferral
Contribution Account as of December 31, 1988 and (ii) the
aggregate of his Salary Deferral Contributions to the
Plan on and after January 1, 1989 over (b) the
withdrawals on and after January 1, 1989 from his Salary
Deferral Contribution Account and shall exclude any
amount invested in the Special Loan Investment Fund.
(7) The amount that a Participant may withdraw from his
Employer Contribution Account shall not exceed the net
credit balance in such account as of the effective date
of the withdrawal, exclusive of
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amounts attributable to Employer Contributions made to
the Plan for periods after December 31, 1994.
(8) The Plan Administrator shall establish such rules and
give such directions to the Trustee as shall be
appropriate to effectuate the withdrawal in accordance
with the terms hereof.
(9) In the event that a Participant has an outstanding loan
at the time of his withdrawal, the amount of the
withdrawal may not exceed the excess of (a) the amount
which he would otherwise be entitled to withdraw over (b)
the amount of any outstanding loan.
(10) Any withdrawal made under this Section 19.01 shall be
made first from any voluntary after-tax contributions
that the Participant may have made to a Prior Plan, then
from any rollover contributions eligible for withdrawal
for reasons other than hardship that the Participant may
have made to a Prior Plan, then from amounts attributable
to Employer Contributions made prior to January 1, 1995,
then from any other amounts eligible for withdrawal
(including hardship withdrawals), and then from amounts
attributable to Salary Deferral Contributions.
In the event that the actual date of payment of the amount of the
withdrawal from a Participant's Separate does not coincide with a
Valuation Date, the amounts credited to his subaccounts in the
applicable Investment Fund or Funds shall be adjusted, on the basis
of a policy established with respect to each Investment Fund by the
Plan Administrator (which policy may be changed with respect to
each such fund from time to time for application in the future),
based upon the latest data available to the Plan Administrator
immediately prior to its authorization of such payment, to reflect
investment gains or losses in the funds credited to his
sub-accounts in the applicable Investment Fund or Funds since the
last Valuation Date.
19.02 Certain Other Withdrawals
If a Participant has a termination of employment with all members
of the Controlled Group, but has not had a separation from service
permitting distribution under the Plan, the Participant may apply
for a withdrawal under the terms and conditions specified in
Section 19.01 (without regard to the requirement that the
Participant be employed by a member of the Controlled Group).
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ARTICLE XX
MERGER OF CERTAIN PLANS INTO THE PLAN
20.01 In General
This Article XX contains special provisions regarding Prior Plans
that have been merged into the Plan from time to time. Except as
may be expressly provided elsewhere in this Article XX, the forms
of payment or other rights available under a Prior Plan that may
not be eliminated under Section 411(d)(6) of the Code shall be
available under the Plan solely with respect to a Participant's
interest under a Prior Plan and not to the Participant's interest
under the Plan determined without regard to this Article XX. A
Participant may, however, elect to receive his entire interest
under the Plan in a form of payment provided under Article XV.
20.02 Merger of CP National Corporation Incentive Thrift Savings Plan
(a) Effective as of the beginning of business on January 1,
1995, the CP National Corporation Incentive Thrift
Savings Plan (the "CPN Plan") shall be merged into and
made a part of the Plan, and the trust fund maintained in
connection with the CPN Plan shall be added to the assets
of the Trust Fund to be disposed of under the terms,
conditions, and provisions of the Plan and the Trust. On
and after January 1, 1995, except as otherwise expressly
provided in this Article XX, the general provisions of
the Plan shall govern with respect to the interests under
the CPN Plan of all persons, to the extent not
inconsistent with any provision of the CPN Plan that may
not be eliminated under Section 411(d)(6) of the Code.
(b) As of January 1, 1995, Separate Accounts shall be
established in accordance with the provisions of Section
11.08 in the name of each person who as of the close of
business on December 31, 1994 was a participant or
beneficiary with an interest under the CPN Plan. In
addition to any credits or debits to the Separate Account
of the persons described in the immediately preceding
sentence on or after January 1, 1995 in accordance with
the Plan's general provisions, as of the date the assets
of the trust fund for the CPN Plan are received by the
Trustee and deposited in the Trust Fund there shall be
credited to each such Separate Account or Sub-Account, as
applicable, the value of such person's prior separate
account or sub-account of the corresponding type under
the CPN Plan as certified to the Plan Administrator by
the plan administrator of the CPN Plan.
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20.03 Merger of Houston Wire & Cable Company Combination Profit
Sharing and Salary Deferral Plan
(a) Effective as of the beginning of business on January 1,
1995, the Houston Wire & Cable Company Combination Profit
Sharing and Salary Deferral Plan (the "HWC Plan") shall
be merged into and made a part of the Plan, and the trust
fund maintained in connection with the HWC Plan shall be
added to the assets of the Trust Fund to be disposed of
under the terms, conditions, and provisions of the Plan
and the Trust. On and after January 1, 1995, except as
otherwise expressly provided in this Article XX, the
general provisions of the Plan shall govern with respect
to the interests under the HWC Plan of all persons, to
the extent not inconsistent with any provision of the HWC
Plan that may not be eliminated under Section 411(d)(6)
of the Code.
(b) As of January 1, 1995, Separate Accounts shall be
established in accordance with the provisions of Section
11.08 in the name of each person who as of the close of
business on December 31, 1994 was a participant or
beneficiary with an interest under the HWC Plan. In
addition to any credits or debits to the Separate Account
of the persons described in the immediately preceding
sentence on or after January 1, 1995 in accordance with
the Plan's general provisions, as of the date the assets
of the trust fund for the HWC Plan are received by the
Trustee and deposited in the Trust Fund there shall be
credited to each such Separate Account or Sub-Account, as
applicable, the value of such person's prior separate
account or sub-account of the corresponding type under
the HWC Plan as certified to the Plan Administrator by
the plan administrator of the HWC Plan.
20.04 Merger of Computer Power, Inc. Retirement Savings Plan
(a) Effective as of the beginning of business on January 1,
1995, the Computer Power, Inc. Retirement Savings Plan
(the "CPI Plan") shall be merged into and made a part of
the Plan, and the trust fund maintained in connection
with the CPI Plan shall be added to the assets of the
Trust Fund to be disposed of under the terms, conditions,
and provisions of the Plan and the Trust. On and after
January 1, 1995, except as otherwise expressly provided
in this Article XX, the general provisions of the Plan
shall govern with respect to the interests under the CPI
Plan of all persons, to the extent not inconsistent with
any provision of the CPI Plan that may not be eliminated
under Section 411(d)(6) of the Code.
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(b) As of January 1, 1995, Separate Accounts shall be
established in accordance with the provisions of Section
11.08 in the name of each person who as of the close of
business on December 31, 1994 was a participant or
beneficiary with an interest under the CPI Plan. In
addition to any credits or debits to the Separate Account
of the persons described in the immediately preceding
sentence on or after January 1, 1995, in accordance with
the Plan's general provisions, as of the date the assets
of the trust fund for the CPI Plan are received by the
Trustee and deposited in the Trust Fund there shall be
credited to each such Separate Account or Sub-Account, as
applicable, the value of such person's prior separate
account or sub-account of the corresponding type under
the CPI Plan as certified to the Plan Administrator by
the plan administrator of the CPI Plan.
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ARTICLE XXI
SPECIAL PROVISIONS AND EFFECTIVE DATES
21.01 Effective Date
This amended and restated Plan is effective as of January 1, 1994,
but with respect only to Participants whose employment terminates
on or after January 1, 1994, except as may otherwise be provided
herein.
21.02 Tax Reform Act of 1986 Effective Dates
With respect to any change made to the Plan to satisfy the
provisions of the Tax Reform Act of 1986 and any subsequent
legislation, including any regulations, rulings, or other published
guidance, such change shall be effective on the first day of the
first period (which may or may not be the first day of a Plan Year)
with respect to which such change became required because of such
provisions.
EXECUTED this 29th day of December, 1994.
ALLTEL CORPORATION
By /s/ John L. Comparin
Title: Vice President - Human Resources
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Exhibit 24
Securities and Exchange Commission
Washington, D.C. 20549
Re: ALLTEL Corporation
Commission File No. 1-4996-2
1934 Act Filings on Form 10-K
Authorized Representatives
Gentlemen:
The above Company is the issuer of securities registered under Section
12 of the Securities Exchange Act of 1934 (The "Act"). Each of the persons
signing his name below confirms, as of the date appearing opposite his
signature, that each of the "Authorized Representatives" named below is
authorized on his behalf to sign and submit to the Securities and Exchange
Commission such filings on Form 10-K as are required by the Act. Each person so
signing also confirms the authority of each of the Authorized Representatives to
do and perform on his behalf, any and all acts and things requisite or necessary
to assure compliance by the signing person with the Form 10-K requirements. The
authority confirmed herein shall remain in effect as to each person signing his
name below until such time as the Commission shall receive from such person a
written communication terminating or modifying the authority. Each person
signing his name below expressly revokes all authority heretofore given or
executed by him with respect to such filings under the Act.
Authorized Representatives
Dennis J. Ferra
Tom T. Orsini
Date: February 13, 1995
Lawrence L. Gellerstedt III
---------------------------
696
<PAGE>
Exhibit 24
Securities and Exchange Commission
Washington, D.C. 20549
Re: ALLTEL Corporation
Commission File No. 1-4996-2
1934 Act Filings on Form 10-K
Authorized Representatives
Gentlemen:
The above Company is the issuer of securities registered under Section
12 of the Securities Exchange Act of 1934 (The "Act"). Each of the persons
signing his name below confirms, as of the date appearing opposite his
signature, that each of the "Authorized Representatives" named below is
authorized on his behalf to sign and submit to the Securities and Exchange
Commission such filings on Form 10-K as are required by the Act. Each person so
signing also confirms the authority of each of the Authorized Representatives to
do and perform on his behalf, any and all acts and things requisite or necessary
to assure compliance by the signing person with the Form 10-K requirements. The
authority confirmed herein shall remain in effect as to each person signing his
name below until such time as the Commission shall receive from such person a
written communication terminating or modifying the authority. Each person
signing his name below expressly revokes all authority heretofore given or
executed by him with respect to such filings under the Act.
Authorized Representatives
Dennis J. Ferra
Tom T. Orsini
Date: February 20, 1995
John P. McConnell
---------------------------
697
<PAGE>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000065873
<NAME> ALLTEL CORPORATION
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<FISCAL-YEAR-END> DEC-31-1994
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<PERIOD-END> DEC-31-1994
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<BONDS> 1,846,150
<COMMON> 187,981
7,829
9,320
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<PAGE>
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