<PAGE>
As filed with the Securities and Exchange Commission on December 30, 1994
Registration No. __-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------
J.B. HUNT TRANSPORT SERVICES, INC.
(Exact name of Registrant as specified in its charter)
Arkansas 71-0335111
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
(501) 820-0000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
J.B. Hunt Transport Services, Inc. Employee Retirement Plan
(Full Title of the Plan)
Kirk Thompson Copies of Communications to:
President and Chief Executive Officer Charles C. Price, Esq.
615 J.B. Hunt Corporate Drive Wright, Lindsey & Jennings
P.O. Box 130 200 West Capitol, Suite 2200
Lowell, Arkansas 72745 Little Rock, Arkansas 72201
(501) 820-0000 (501) 371-0808
(Name, address, and telephone number,
including area code, of Agent for Service)
------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================
Title of
Securities Amount Proposed Proposed Amount of
to be to be Maximum Offering Maximum Aggregate Registration
Registered(1) Registered(2) Price Per Share Offering Price Fee(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 400,000 $15.375 $6,150,000 $2,120.69
================================================================================
</TABLE>
(1) The shares of common stock being registered consist of shares to be
acquired by the Trustee pursuant to the plan for the accounts of individual
participants.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the plan described herein.
(3) Calculated pursuant to Rule 457(c) based upon the average of the high and
low prices for the common stock as reported on the NASDAQ/NMS on December
28, 1994.
<PAGE>
PART I.
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
* Omitted from this registration statement in accordance with Rule
428 under the Securities Act of 1933 and the Note to Part I of Form S-8.
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by J.B. Hunt Transport Services, Inc. (the
"Company") and the J.B. Hunt Transportation Services, Inc. Employee Retirement
Plan, as amended, (the "Plan") with the Securities and Exchange Commission are
incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993.
2. All other reports filed pursuant to Section 13(a) of the
Exchange Act since the end of the fiscal year covered by Form 10-K identified
above.
3. The description of the Company's common stock contained in the
Company's registration statement on Form 8-A dated March 27, 1984, including any
amendment or report filed for the purpose of updating such description.
In addition, all documents subsequently filed by the Company and the
Plan pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this registration statement and prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The consolidated financial statements, and schedules, of J.B. Hunt
Transport Services, Inc. as of December 31, 1993 and 1992, and for each of the
years in the three-year period ended December 31, 1993, have been incorporated
by reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
See "Undertakings, (d)" regarding IRS qualification of the Plan.
<PAGE>
Item 6. Indemnification of Directors and Officers.
The Company has adopted provisions in its Amended and Restated Articles
of Incorporation that limit the liability of its officers and directors and
provide for indemnification under certain circumstances. As permitted by the
1987 amendments to the Arkansas Business Corporation Act (the "Arkansas Act"),
articles of incorporation may provide for the limitation or elimination of a
director's liability to the corporation of its stockholders for monetary damages
for breach of fiduciary duty to the corporation or its stockholders. Such
limitation does not affect liability for (i) any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) distributions of the corporation's property in violation of the
Arkansas Act or the corporation's articles of incorporation, (iv) any
transaction from which the director derives an improper personal benefit, or (v)
any action, omission, transaction or breach of duty creating any third party
liability to any person or entity other than the corporation or its
stockholders.
As permitted by the Arkansas Act, the Amended and Restated
Articles of Incorporation of the Company permit indemnification of officers and
directors under certain circumstances. For any officer or director who is made a
party to a court or administrative proceeding by reason of his serving as an
officer or director of the Company, the board of directors shall reimburse such
person for any expenses, judgment, fines or settlement payments incurred as a
result of such proceeding, upon a determination that the officer or director
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Company, notwithstanding a judgment by the
court against such person. In an action brought on behalf of the Company,
however, such officer or director may not be reimbursed if the court finds him
liable for negligence or misconduct unless the court determines that liability
notwithstanding, such indemnification is proper. If reimbursement is approved it
must be (i) by majority vote of a quorum of the directors not parties to the
proceeding, (ii) by written opinion of independent legal counsel, or (iii) by
vote of the stockholders. To the extent that any officer or director
successfully defends any such court or administrative proceeding, the Company
must indemnify him for all necessary and reasonable expenses incurred in such
defense. In addition, the Arkansas Act permits the corporation to advance to
directors and officers their expenses incurred as a result of any action, suit
or proceeding against them to the extent they are entitled to indemnification.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
3 Articles of Incorporation
Incorporated by reference from Registration No. 33-64950
filed June 24, 1993 on Form S-3.
4 Articles and Bylaws of J.B. Hunt Transport Services, Inc.
Incorporated by reference from Registration No. 33-64950
filed June 24, 1993 on Form S-3.
5 Opinion of Wright, Lindsey & Jennings
2
<PAGE>
23a Consent of Wright, Lindsey & Jennings (included in Exhibit 5)
23b Consent of KPMG Peat Marwick LLP
24 Power of Attorney (included on signature page)
99 J.B. Hunt Transport Services, Inc. Employee Retirement Plan
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, reprsent a fundamental
change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(d) Registrant has submitted the Plan and will submit any amendment
thereto to the Internal Revenue Service ("IRS") in a timely
manner and has made or will make all changes required by the IRS
in order to qualify the Plan.
4
<PAGE>
APPENDIX A
REOFFER PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 28, 1994
J.B. HUNT TRANSPORT SERVICES, INC.
Common Stock
(Par Value $.01 Per Share)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus relates to __________ shares (the "Shares") of common
stock, $.01 par value per share ("Common Stock"), of J.B. Hunt Transport
Services, Inc. ("Company") which may be granted pursuant to the J.B. Hunt
Transport Services, Inc. Employee Retirement Plan, as amended ("Plan"), and such
additional shares as may be issuable as a result of anti-dilution provisions
applicable to the Plan.
The Shares may be sold from time to time by the selling shareholders, or
by pledgees, donees, transferees or other successors in interest. Such sales may
be made in the over-the-counter market, on any exchange (if the Common Stock is
listed for trading thereon), or otherwise, at prices and at terms then
prevailing or at prices related to the then-current market price, or in
negotiated transactions. The Shares may be sold in ordinary brokerage
transactions or privately negotiated transactions. In addition, any Shares that
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Company's Common Stock is traded on the National Association of
Securities Dealers' Automated Quotation National Market System ("NASDAQ/NMS")
under the symbol "JBHT." On December 16, 1994, the closing sale price per share,
as reported by the NASDAQ/NMS, was $15.625.
J.B. Hunt Transport Services, Inc.
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
The date of this Prospectus is
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION, OTHER THAN AS CONTAINED HEREIN, IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS IS NOT AN OFFER TO SELL, OR A SOLICITATION OR AN OFFER
TO BUY, IN ANY STATE IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF
THIS PROSPECTUS.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices at
26 Federal Plaza, New York, New York 10278, and Room 1204. Everett McKinley
Dickson Building, 219 South Dearborn Street, Chicago, Illinois 60604. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
This Prospectus does not contain all of the information set forth in the
Registration Statement of which this Prospectus is a part and which the Company
has filed with the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof, copies of which can
be inspected at or obtained at prescribed rates from the Public Reference
Section of the Commission at the address set forth above.
Additional updating information with respect to the Company and plan
covered herein may be provided in the future to participants in such plan by
means of appendices to the Prospectus. The Company's annual report, quarterly
reports and special reports, if any, as filed with the Securities and Exchange
Commission and its proxy statement and any documents incorporated by reference
are available without charge upon written or oral request from Mr. Kirk
Thompson, J.B. Hunt Transport Services, Inc., at the principal executive offices
of the company at 615 J.B. Hunt Corporate Drive, Lowell, Arkansas 72745,
telephone (501) 820-0000.
2
<PAGE>
The following documents filed with the Commission by the Company are
incorporated and made a part of this Prospectus by reference:
A. The Company's latest annual report filed pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, which contains,
either directly or by incorporation by reference, certain financial statements
for the Company's latest fiscal year for which such statements have been filed.
B. All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, since the end of the fiscal
year covered by the annual reports referred to in paragraph A above.
C. The Company's definitive proxy statement or information
statement, if any, filed pursuant to Section 14 of the Securities Exchange Act
of 1934 in connection with the latest annual meeting of its stockholders, and
any definitive proxy or information statements so filed in connection with any
subsequent annual or special meetings of its stockholders.
D. The description of the Company's capital stock contained in its
Exchange Act registration statement on Form 8-A dated March 27, 1984, or
amended.
E. All reports and other documents subsequently filed by the
Company pursuant to Sections 13, 14 or 15(d) of the Securities Exchange Act of
1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
3
<PAGE>
INTRODUCTION
J.B. Hunt Transport Services, Inc. ("Company") was incorporated under
the laws of Arkansas in 1969. The Company is an irregular route, full service
transportation company with operations throughout the continental United States
and in Mexico and Canada. The Company's principal executive offices are located
at 615 J.B. Hunt Corporate Drive, Lowell, Arkansas 72745.
This Prospectus is being distributed in connection with the sale by
certain shareholders of shares of the common stock, $.01 par value per share
("Common Stock"), acquired by them under the J.B. Hunt Transport Services, Inc.
Employee Retirement Plan, as amended ("Plan"), of the Company. A registration
statement with respect to shares to be issued under the Plan has been filed by
the Company on Form S-8 and became effective as of December __, 1994.
The Company believes that most, if not all, of the shares acquired by
the Plan Trustee will be purchased in the secondary market. As a result, the
Company will not receive any proceeds from the purchase or sale of these shares.
If the Trustee acquired shares directly from the Company the acquisition price
would be the current market price of the stock and the proceeds of such a sale
would be used for general corporate purposes. The Company does not expect the
Trustee to purchase shares directly from the Company and is not relying on the
Plan as a source of liquidity or capital for future operations.
The Common Stock of the Company is traded on the National Association of
Securities Dealers' Automated Quotation National Market System ("NASDAQ/NMS").
I. SELLING SHAREHOLDERS
The shareholders offering shares of the Common Stock pursuant to this
Prospectus ("Selling Shareholders") are officers and other "employees who may be
deemed affiliates" of the Company who have participated or may participate in
the Plan and who may reoffer the shares of Common Stock acquired pursuant to the
Plan.
The following table sets forth certain information regarding the
ownership of shares of the Common Stock by the Selling Shareholders as of
December __, 1994, the numbers of shares offered for sale by the Selling
Shareholders, and the ownership of the Common Stock by the Selling Shareholders
after the sale. Each of the following persons has sole voting and investment
power with respect to the shares of Common Stock set forth opposite his name.
4
<PAGE>
<TABLE>
<CAPTION>
Number of Number of
Shares of Shares of
Common Stock Common Stock
beneficially Number of beneficially Percentage
Selling Relationship owned prior to Shares owned after owned after this
Shareholder to Company this Offering Offered Offering Offering
----------- ---------- ------------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
J.B. Hunt Chairman of the (1)
Board of
Directors ______________
Kirk Thompson President, Chief (1) (2)
Executive
Officer, Director ______________
Johnelle Hunt Secretary, (1) (2)
Director ______________
Bryan Hunt Assistant (1) (2)
Secretary,
Director ______________
</TABLE>
(1) Assumes all shares offered hereby are sold.
(2) Assuming all shares offered hereby are sold, less than 1%.
II. PLAN OF DISTRIBUTION
The shares may be sold from time to time by the Selling Shareholders, or
by pledgees, donees, transferees or other successors in interest of the Selling
Shareholders. Such sales may be made on the over-the-counter market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions.
In general, the shares may be sold by one or more of the following
means: (a) a block trade in which the broker or dealer so engaged will attempt
to sell the securities as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) an exchange distribution in accordance with the
rules of such exchange (if the securities are then listed on an exchange); and
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended, in connection with such sales.
5
<PAGE>
III. ADDITIONAL INFORMATION
General Matters
The participation by employees in the Plan does not confer upon the
employee any right with respect to continuance of employment with the Company,
nor does it impair or restrict in any manner the right of the Company to
terminate such employment.
Description of Common Stock
As of September 30, 1994, the authorized capital stock of the Company
consisted of 100,000,000 shares of Common Stock, par value $.01 per share, of
which 38,635,541 shares were outstanding (including __________ treasury shares)
and held by approximately __________ shareholders of record.
Common Stock. Holders of Common Stock are entitled to one vote per share
on all matters submitted to a vote of the stockholders, including the election
of directors. The Company's Amended and Restated Certificate of Incorporation
provides for cumulative voting for the election of directors. Subject to the
preferential rights of any outstanding series of Preferred Stock, the holders of
Common Stock will be entitled to such dividends as may be declared from time to
time by the Board of Directors from funds available therefor, and will be
entitled to receive pro rata all assets of the Company available for
distributions to such holders upon liquidation. No shares of the Common Stock
have any preemptive, redemption or conversion rights, or the benefits of any
sinking fund. All outstanding shares of Common Stock are, and those offered
hereby will be, when issued or transferred out of the treasury, fully paid and
nonassessable.
Transfer Agent and Registrar
The transfer agents and registrar for the Company's Common Stock is
First Chicago Trust Company of New York, P.O. Box 2500, Jersey City, New Jersey
07303-2500, telephone 1-800-446-2617 for shareholder inquiries.
Indemnification
Arkansas Code Annotated Sections 4-27-850 and 4-27-1621 (1987) provide,
in summary, that the directors and officers of the Company are entitled, under
certain circumstances, to be indemnified by it against all expenses and
liabilities incurred by or imposed upon them as a result of suits brought
against them as such directors and officers, if they act in good faith and in a
manner they reasonably believe to be in or not opposed to the best interests of
the Company, and with respect to any criminal action or proceeding, have no
reasonable cause to believe their conduct was unlawful; provided, that no
indemnification shall be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable for negligence or
misconduct in the performance of their duties to the Company, unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, they are fairly and reasonably
entitled to indemnity of such expenses which such court shall deem proper. If
the corporation indemnifies or advances expenses to a director as described
above, the Company must notify the shareholders concurrently with, or before,
notice of the next shareholders meeting. Article 10 of the bylaws of the Company
authorized indemnification by the Company in a similar manner.
6
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
No dealer, salesman or other person has been authorized to give any
information or to make any representation in connection with this offering
other than those contained in the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or the Selling Shareholders. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of these securities
in any state to any person to whom it is unlawful to make such offer or
solicitation in such state. Neither the delivery of this Prospectus nor any sale
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof.
December __, 1994
7
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lowell, State of Arkansas, on December 21, 1994.
J.B. HUNT TRANSPORT SERVICES, INC.
By /s/ KIRK THOMPSON
---------------------------------------
Kirk Thompson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Kirk Thompson and Jerry W. Walton, or
either of them, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form S-8
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ J. B. HUNT Chairman of the December 21, 1994
- --------------------------- Board of Directors
J.B. Hunt
/s/ KIRK THOMPSON President, Chief Executive December 21, 1994
- --------------------------- Officer and Director
Kirk Thompson
<PAGE>
Signature Title Date
--------- ----- ----
/s/ JERRY W. WALTON Executive Vice President December 23, 1994
- ------------------------ and Chief Financial Officer
Jerry W. Walton
/s/ JOHNELLE HUNT Secretary and Director December 21, 1994
- ------------------------
Johnelle Hunt
________________________ Director December __, 1994
John A. Cooper
________________________ Director December __, 1994
Fred K. Darragh, Jr.
________________________ Director December __, 1994
Wayne Garrison
/s/ GENE GEORGE Director December 22, 1994
- ------------------------
Gene George
/s/ ROY GRIMSLEY Director December 22, 1994
- ------------------------
Roy Grimsley
/s/ J. BRYAN HUNT, JR. Assistant Secretary and December 21, 1994
- ------------------------ Director
J. Bryan Hunt, Jr.
/s/ LLOYD E. PETERSON Director December 22, 1994
- ------------------------
Lloyd E. Peterson
/s/ THOMAS L. HARDEMAN Director December 21, 1994
- ------------------------
Thomas L. Hardeman
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the trustees (or other person who administers the employee benefit plan) have
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Commonwealth of Pennsylvania, on
December 23, 1994.
PRUDENTIAL TRUST COMPANY, AS TRUSTEE
FOR THE J.B. HUNT TRANSPORT SERVICES, INC.
EMPLOYEE RETIREMENT PLAN
By /s/ DAVID A. MILLIKEN
---------------------------------------
(Signature and Title)
David A. Milliken, Vice President
and Assistant Secretary
-----------------------------------------
(Type or Print Name)
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit Page No.
- ----------- ---------------------- --------
<S> <C> <C>
3 Articles of Incorporation (incorporated by reference
from Registration No.
33-64950 filed June 24,
1993 on Form S-3)
5 Opinion of Wright, Lindsey &
Jennings
23a Consent of Wright, Lindsey &
Jennings (included in Exhibit 5)
23b Consent of KPMG Peat Marwick LLP
24 Power of Attorney (included on signature page)
99 J.B. Hunt Transport Services, Inc.
Employee Retirement Plan
</TABLE>
<PAGE>
EXHIBIT 5
FORM OF ATTORNEYS OPINION
[Date]
The Board of Directors of
J.B. Hunt Transport Services, Inc.
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
Re: J.B. Hunt Transport Services, Inc. Employee
Retirement Plan, Registration Statement on Form S-8
________________________________________________________________
Ladies and Gentlemen:
We have acted as counsel for J.B. Hunt Transport Services, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of the J.B. Hunt Transport Services, Inc. Employee Retirement Plan
("Plan").
It is our opinion that the common stock which is acquired by the Plan
has been duly and validly authorized by the Company and, when issued, and when
the certificates representing the shares are duly executed and delivered to the
Plan, will be validly and legally issued, fully paid and non-assessable shares
of the Company's Common Stock.
We hereby consent to the use of this opinion as an exhibit to the
referenced Registration Statement.
Very truly yours,
WRIGHT, LINDSEY & JENNINGS
<PAGE>
EXHIBIT 23b
FORM OF CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation by reference in Registration Statement No.
__________ on Form S-8 filed for the J.B. Hunt Transport Services, Inc. Employee
Retirement Plan of our report dated February 11, 1994, relating to the
consolidated balance sheets of J.B. Hunt Transport Services, Inc. and
subsidiaries as of December 31, 1993, and 1992, and the related consolidated
statements of earnings, stockholders' equity and cash flows for each of the
years in the three-year period ended December 31, 1993, and all related
schedules, which reports are incorporated by reference in the December 31, 1993
Annual Report on Form 10-K of J.B. Hunt Transport Services, Inc.
[SIGNATURE OF KPMG PEAT MARWICK LLP APPEARS HERE]
KPMG Peat Marwick LLP
Little Rock, Arkansas
December 28, 1994
<PAGE>
EXHIBIT 99
J.B. HUNT TRANSPORT SERVICES, INC.
EMPLOYEE RETIREMENT PLAN
AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 1995
J.B. HUNT TRANSPORT SERVICES, INC.
LOWELL, ARKANSAS
<PAGE>
J.B. HUNT TRANSPORT SERVICES, INC. EMPLOYEE RETIREMENT PLAN
-----------------------------------------------------------
TABLE OF CONTENTS
-----------------
ARTICLE/SECTION PAGE
- --------------- ----
PREAMBLE................................................................. v
ARTICLE I - DEFINITIONS.................................................. 1
Section 1.01 - Non-Gender Clause................................. 1
Section 1.02 - Accounts.......................................... 1
Section 1.03 - Affiliate......................................... 1
Section 1.04 - Age............................................... 1
Section 1.05 - Beneficiary....................................... 1
Section 1.06 - Board of Directors................................ 1
Section 1.07 - Break in Service.................................. 2
Section 1.08 - Code.............................................. 2
Section 1.09 - Company........................................... 2
Section 1.10 - Compensation...................................... 2
Section 1.11 - Deductible Employee Contribution Account.......... 3
Section 1.12 - Deductible Employee Contributions................. 3
Section 1.13 - Effective Date.................................... 3
Section 1.14 - Employee.......................................... 3
Section 1.15 - Employer or Employers............................. 4
Section 1.16 - Employer Matching Contribution Account............ 4
Section 1.17 - Employer Matching Contributions................... 4
Section 1.18 - Employment (or Reemployment) Commencement Date.... 4
Section 1.19 - ERISA or Act...................................... 4
Section 1.20 - Forfeiture........................................ 4
Section 1.21 - Hour of Service................................... 4
Section 1.22 - Normal Retirement Age............................. 6
Section 1.23 - Participant....................................... 6
Section 1.24 - Plan.............................................. 6
Section 1.25 - Plan Administrator................................ 6
Section 1.26 - Plan Year......................................... 6
Section 1.27 - Retirement Committee.............................. 6
Section 1.28 - Rollover Account.................................. 6
Section 1.29 - Rollover Contributions............................ 6
Section 1.30 - Salary Reduction Contribution Account............. 6
Section 1.31 - Salary Reduction Contributions.................... 7
Section 1.32 - Termination of Employment or Terminates Employment 7
Section 1.33 - Totally and Permanently Disabled or Total and
Permanent Disability.............................. 7
Section 1.34 - Trust or Trust Agreement.......................... 7
Section 1.35 - Trust Fund........................................ 7
Section 1.35 - Trustee........................................... 7
Page i
<PAGE>
Section 1.37 - Valuation Date................................... 7
Section 1.38 - Years of Eligibility Service..................... 7
Section 1.39 - Years of Vesting Service......................... 8
ARTICLE II - PARTICIPATION IN THE PLAN.................................. 9
Section 2.01 - Eligibility to Participate....................... 9
Section 2.02 - Administrative Procedures........................ 9
Section 2.03 - Plan and Trust Binding........................... 10
Section 2.04 - Duration of Participation........................ 10
ARTICLE III - CONTRIBUTIONS............................................. 11
Section 3.01 - Additional Definitions........................... 11
Section 3.02 - Salary Reduction Contributions................... 16
Section 3.03 - Employer Matching Contributions and Forfeitures.. 17
Section 3.04 - Rollover Contributions........................... 19
Section 3.05 - Change/Suspension of Contributions............... 20
Section 3.06 - Maximum Deductible Contributions; Mistaken and
Non-Deductible Contributions..................... 20
Section 3.07 - Maximum Annual Additions......................... 20
Section 3.08 - Corrective Adjustments........................... 21
Section 3.09 - Mathematical Nondiscrimination Test for
Employer Matching Contributions; Disposition
of Excess Amounts................................ 21
Section 3.10 - Mathematical Nondiscrimination Test for Salary
Reduction Contributions; Disposition of Excess
Amounts.......................................... 23
ARTICLE IV - ACCOUNTS OF PARTICIPANTS................................... 27
Section 4.01 - Trust Fund Valuation............................. 27
Section 4.02 - Adjustment of Accounts........................... 27
Section 4.03 - Trustee's and Retirement Committee's
Determinations Binding........................... 27
Section 4.04 - Investment of Accounts........................... 27
ARTICLE V - DISTRIBUTIONS UNDER THE PLAN................................ 31
Section 5.01 - Valuation of Accounts for Distribution........... 31
Section 5.02 - Distributable Events; Vesting; Forfeitures....... 31
Section 5.03 - Forms of Distribution............................ 34
Section 5.04 - Cash-Out of Benefits; Consent Requirement for
Immediately Distributable Benefits............... 34
Section 5.05 - Restoration by the Employers..................... 35
Section 5.06 - Withdrawals by Participants...................... 36
Section 5.07 - Loans to Participants............................ 38
Section 5.08 - Limitation on Timing of Distributions............ 41
Section 5.09 - Required Distributions........................... 41
Section 5.10 - Alternate Payment of Death Benefits.............. 42
Section 5.11 - Distributions Under Qualified Domestic Relations
Orders........................................... 42
Section 5.12 - Transfer of Interest............................. 43
Page ii
<PAGE>
ARTICLE VI - THE PLAN ADMINISTRATOR AND RETIREMENT COMMITTEE............ 45
Section 6.01 - Plan Administrator and Retirement Committee...... 45
Section 6.02 - Term and Compensation of Retirement Committee.... 45
Section 6.03 - Claims Procedure................................. 45
Section 6.04 - Powers and Duties of the Retirement Committee.... 46
Section 6.05 - Directing Payments............................... 47
Section 6.06 - Non-Discrimination............................... 47
Section 6.07 - Legal Counsel.................................... 47
Section 6.08 - Indemnification.................................. 47
Section 6.09 - Required Vote; Records........................... 47
ARTICLE VII - THE TRUST FUND AND THE TRUSTEE............................ 49
Section 7.01 - Trust Agreement.................................. 49
Section 7.02 - Trust Fund....................................... 49
Section 7.03 - Non-Reversion; Exclusive Benefit Clause.......... 49
Section 7.04 - Removal of Trustee............................... 49
Section 7.05 - Powers of Trustee................................ 49
Section 7.06 - Trust Agreement Part of Plan..................... 49
Section 7.07 - Trustee's Settlement of Accounts................. 49
ARTICLE VIII - AMENDMENT AND TERMINATION................................ 50
Section 8.01 - Amendment........................................ 50
Section 8.02 - Termination; Discontinuance of Contributions;
Partial Termination.............................. 50
Section 8.03 - Distribution of Accounts Upon Termination;
Discontinuance of Contributions; Partial
Termination...................................... 50
Section 8.04 - Amendment to Vesting Schedule.................... 51
ARTICLE IX - MISCELLANEOUS PROVISIONS................................... 52
Section 9.01 - Plan Merger, Consolidation or Transfer of Assets. 52
Section 9.02 - Spendthrift Clause............................... 52
Section 9.03 - Plan Voluntary................................... 52
Section 9.04 - Reservation of Right to Suspend or Discontinue
Contributions.................................... 52
Section 9.05 - Non-Guarantee of Employment...................... 52
Section 9.06 - Governing Law.................................... 53
Section 9.07 - Facility of Payment.............................. 53
Section 9.08 - Fiduciaries...................................... 53
Section 9.09 - Allocation of Fiduciary Responsibilities......... 53
Section 9.10 - Successor Employers.............................. 53
Section 9.11 - Missing Persons.................................. 54
Section 9.12 - Severability Clause.............................. 54
Section 9.13 - Text of Plan Document Controls................... 54
Section 9.14 - Plan and Trust Expenses.......................... 54
Page iii
<PAGE>
ARTICLE X - PARTICIPATION BY AFFILIATES OF THE COMPANY.................. 55
Section 10.01 - Adoption by Affiliates.......................... 55
Section 10.02 - Amendment....................................... 55
ARTICLE XI - TOP HEAVY PROVISIONS....................................... 56
Section 11.01 - Additional Definitions.......................... 56
Section 11.02 - Application..................................... 58
Section 11.03 - Special Vesting Rule............................ 59
Section 11.04 - Special Minimum Contributions................... 60
SIGNATURES.............................................................. 61
Page iv
<PAGE>
J.B. HUNT EMPLOYEE RETIREMENT PLAN
----------------------------------
PREAMBLE
--------
Effective January 1, 1980, the Board of Directors of J.B. Hunt Transport, Inc.
established the J.B. Hunt Employee Profit Sharing Plan (hereinafter referred to
as the "Original Plan").
Effective January 1, 1987 (and effective November 1, 1987 with respect to
provisions pertaining to the new Internal Revenue Code section 401(k) cash or
deferred arrangement), J.B. Hunt Transport, Inc. amended and restated the
Original Plan in its entirety to be known as the J.B. Hunt Employee Retirement
Plan (the "Second Plan").
Effective January 1, 1989, J.B. Hunt Transport, Inc. amended and restated the
Second Plan in its entirety, which plan continued to be known as the J.B. Hunt
Employee Retirement Plan (the "Prior Plan").
J.B. Hunt Transport, Inc. has since adopted Amendment No. One to the Prior Plan,
effective January 1, 1989.
On or about September 1, 1990, J.B. Hunt Transport Services, Inc. (hereinafter
referred to as the "Company" or as an "Employer") assumed the role of Plan
Sponsor.
By this agreement, generally effective January 1, 1995, the Company is adopting
an amendment and restatement in its entirety of the Prior Plan which shall
continue to be known as the J.B. Hunt Employee Retirement Plan (hereinafter
referred to as the "Plan").
The purpose of the Plan is to provide additional incentive and retirement
security for eligible employees of the company by permitting contributions to
the Plan that are tax-deferred under section 401(k) of the Internal Revenue Code
which will also be matched by contributions made by the employers.
It is intended that the Plan shall be approved and qualified by the Internal
Revenue Service as a profit sharing plan which satisfies the pertinent
requirements of the Internal Revenue Code with respect to employee plans and
trusts (i) so that certain contributions made under the Plan shall be tax
deferred under section 401(k) of the Internal Revenue Code, (ii) so that the
employers may deduct for federal income tax purposes their contributions to the
Trust Fund, (iii) so that the employer contributions so made and the income of
the Trust Fund will not be taxable to the Participants as income until received,
and (iv) so that the income of the Trust Fund shall be exempt from federal
income tax.
It is also intended that the Plan, together with the Trust Agreement, shall
satisfy any applicable requirements of the Employee Retirement Income Security
Act of 1974, as amended by the Tax Equity and Fiscal Responsibility Act of 1982,
the Tax Reform Act of 1984, the Retirement Equity
Page v
<PAGE>
Act of 1984, the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act
of 1986, the Omnibus Budget Reconciliation Act of 1987, the Technical and
Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act of
1989, the Omnibus Budget Reconciliation Act of 1990, the Unemployment
Compensation Amendments Act of 1992 and the Omnibus Budget Reconciliation Act
of 1993, and the Plan and Trust Agreement shall be interpreted, wherever
possible, to comply with the terms of such acts and the applicable regulations
and rulings issued thereunder.
Page vi
<PAGE>
ARTICLE I - DEFINITIONS
-----------------------
The following terms, as used in the Plan, shall have the meaning specified in
this Article I, unless a different meaning is clearly required by the context in
which it is used:
SECTION 1.01 - NON-GENDER CLAUSE Any words herein used in the masculine
- --------------------------------
shall read and be construed in the feminine where they would so apply. Words in
the singular shall be read and construed as though used in the plural in all
cases where they would so apply.
SECTION 1.02 - ACCOUNTS The term "Accounts" shall mean the Participant's
- ----------------------- --------
Deductible Employee Contribution Account, Employer Matching Contribution
Account, Rollover Account and Salary Reduction Contribution Account.
SECTION 1.03 - AFFILIATE The term "Affiliate" shall mean any corporation or
- ------------------------
unincorporated trade or business which is a member, as is the Company, of the
same controlled group of corporations, the same group of trades or businesses
under common control, or the same affiliated service group (within the meaning
of Code sections 414(b), 414(c) or 414(m), respectively). Affiliate shall also
include any other entity required to be aggregated with an Employer pursuant to
regulations issued under section 414(o) of the Code.
SECTION 1.04 - AGE The term "Age" shall mean the age, in years (and a
- ------------------ ---
partial year, as applicable), of a Participant as of the last anniversary of his
date of birth.
SECTION 1.05 - BENEFICIARY The term "Beneficiary" shall mean the spouse of
- -------------------------- -----------
the Participant, or, in the event that either:
(i) the Participant has no spouse at his death or the spouse cannot be located,
or
(ii) his spouse to whom he is married to at his death upon proper notification
agreed, in a writing witnessed by a notary public or authorized
representative of the Retirement Committee acknowledging the effect of such
election, to the designation of another Beneficiary and/or contingent
Beneficiary, which could not be changed without spousal consent (or the
consent of the spouse expressly permits designations by the Participant
without further consent by the spouse),
the term Beneficiary shall mean the person or persons designated as such by the
Participant in the latest written notice to the Retirement Committee on a form
approved by the Retirement Committee. If any Beneficiary so designated
predeceases the Participant, the provisions of Section 5.10 herein shall apply.
The Participant shall have the right to change his Beneficiary from time to time
in the manner hereinabove described.
SECTION 1.06 - BOARD OF DIRECTORS The term "Board of Directors" shall mean
- --------------------------------- ------------------
the Board of Directors of the Company unless in the context in which it is used,
it clearly means the Board of Directors of another Employer.
Page 1
<PAGE>
SECTION 1.07 - BREAK IN SERVICE The term "Break in Service" shall mean any
- ------------------------------- ----------------
Plan Year during which an Employee (regardless of any period of exclusion
contained in Section 1.14) or former Employee is not credited with more than
five hundred (500) Hours of Service.
Notwithstanding the above, a Participant shall not incur a Break in Service in
the first Plan Year that he is not credited with more than five hundred (500)
Hours of Service because of a "maternity or paternity absence" as defined in
sections 410(a)(5)(E) and 411(a)(6)(E) of the Code, i.e., because of:
(i) pregnancy of an Employee;
(ii) birth of a child of an Employee;
(iii) placement of a child for adoption with an Employee; or
(iv) caring for a child during the period immediately following such a birth
or placement.
To the extent not already credited under the Plan, in the case of a maternity or
paternity absence, solely for purposes of determining whether or not an Employee
has incurred a Break in Service, Hours of Service shall be credited to each such
Employee hereunder based on the Hours of Service he would otherwise have been
credited but for such absence, or in the case of which such hours cannot be
determined, on the basis of eight (8) hours per day of such absence. The Hours
of Service credited under this paragraph shall be credited (1) in the Plan Year
in which the maternity or paternity absence begins if necessary to prevent a
Break in Service in that period, or (2) in all other cases, in the following
Plan Year.
SECTION 1.08 - CODE The term "Code" shall mean the Internal Revenue Code of
- ------------------- ----
1986, as amended from time to time.
SECTION 1.09 - COMPANY The term "Company" shall mean J.B. Hunt Transport
- ---------------------- -------
Services, Inc., an Arkansas corporation, whose principal place of business is
located in Lowell, Arkansas.
SECTION 1.10 - COMPENSATION The term "Compensation" shall mean, except as
- --------------------------- ------------
otherwise provided herein, the total salary or wages including bonuses, overtime
and commissions for which a Participant is paid or entitled to be paid by an
Employer for the performance of duties during the Plan Year, and the amount of
any contributions made by an Employer to the Plan and to a Code section 125 plan
for the Employee's benefit on a salary reduction basis. Compensation as defined
in this section shall exclude (even if includable in income) (i) disability pay,
(ii) reimbursements or other expense allowances, (iii) cash and noncash fringe
benefits including, but not limited to, club dues, personal use of corporate
owned automobiles, car allowances, excess group-term life insurance, etc., (iv)
moving expenses, (v) deferred compensation (at the time of the deferral), and
(vi) welfare benefits.
Effective January 1, 1994, notwithstanding the definition of Compensation above
to the contrary, the aggregate Compensation of any Participant which is in
excess of one hundred fifty thousand dollars ($150,000) for any Plan Year shall
not be recognized by the Plan in computing contributions
Page 2
<PAGE>
or benefits. Such one hundred fifty thousand dollar ($150,000) limit shall be
adjusted for cost-of-living increases as provided in Code sections 401(a)(17)
and 415(d).
IMPORTANT FAMILY MEMBER RULE FOR $150,000 COMPENSATION CAP: For purposes of
applying the $150,000 limitation in the immediately preceding paragraph, in
determining the Compensation of a Participant who is a Highly Compensated
Employee [as defined in Section 3.01(h)] by reason of being a Five Percent (5%)
Owner [as defined in Section 3.01(g)] or a member of the group consisting of the
ten (10) Highly Compensated Employees paid the greatest Total Compensation [as
defined in Section 3.01(k)] during the Plan Year, Compensation of such Employee
shall include the Compensation of "family members" who are Participants.
"Family members" as used herein shall mean the spouse of the Participant and any
lineal descendants of the Participant who have not attained Age nineteen (19)
before the close of the year. If such aggregated Compensation for the year
exceeds the dollar limit, then the dollar limit applicable to each of the
aggregated Participants' Compensation for such year will be $150,000, adjusted
for cost-of-living increases, multiplied by a fraction, the numerator of which
is such Participant's unlimited Compensation for such year and the denominator
of which is the sum of all of the aggregate Participants' unlimited Compensation
for such year.
SECTION 1.11 - DEDUCTIBLE EMPLOYEE CONTRIBUTION ACCOUNT The term "Deductible
- ------------------------------------------------------- ----------
Employee Contribution Account shall mean the account established on behalf of a
- -----------------------------
Participant which shall be credited with (i) the amount of any Deductible
Employee Contributions made pursuant to the terms of the Original Plan or Second
Plan, as applicable (attributable to periods) prior to January 1, 1987, and (ii)
the account's proportionate share of any net investment gains, determined in
accordance with Section 4.02(a) hereof. There shall be deducted from the
account its proportionate share of any net investment losses as determined in
accordance with Section 4.02(a) hereof, and any benefit payments or withdrawals.
The value of an Employee's Deductible Employee Contribution Account shall be
nonforfeitable at all times.
SECTION 1.12 - DEDUCTIBLE EMPLOYEE CONTRIBUTIONS The term "Deductible
- ------------------------------------------------ ----------
Employee Contributions" shall mean the "qualified voluntary employee
- ----------------------
contributions or QVEC's" a Participant has made as provided under the terms of
the Original Plan and Second Plan, as applicable, (attributable to periods)
prior to January 1, 1987.
SECTION 1.13 - EFFECTIVE DATE The term "Effective Date" shall mean January
- ----------------------------- --------------
1, 1995 with respect to the Plan. See the Preamble for the respective effective
dates of the Original Plan, Second Plan and Prior Plan.
SECTION 1.14 - EMPLOYEE The term "Employee" shall mean each employee of an
- ----------------------- --------
Employer excluding, however, (i) any "leased employee" as defined in section
414(n)(2) of the Code, (ii) non-resident aliens who receive no earned income
from an Employer which constitutes income from sources within the United States,
and (iii) any employee that is a part of a collective bargaining unit, provided,
there is evidence that retirement benefits were the subject of good faith
bargaining between the employee representatives and the Employer, unless the
Employer and the collective bargaining unit have agreed to coverage hereunder.
Page 3
<PAGE>
SECTION 1.15 - EMPLOYER OR EMPLOYERS The term "Employer" or "Employers"
- ------------------------------------ -------- ---------
shall mean, either collectively or severally according to the context in which
it is used, the Company and any Affiliate which adopts the Plan, and subject to
the provisions of Article IX, any corporation or other entity into which an
Employer shall be merged or consolidated or to which all or substantially all of
its assets may be transferred.
SECTION 1.16 - EMPLOYER MATCHING CONTRIBUTION ACCOUNT The term "Employer
- ----------------------------------------------------- --------
Matching Contribution Account" shall mean the account established on behalf of a
- -----------------------------
Participant which shall be credited with (i) the amount of any Employer Matching
Contributions allocated to the Participant pursuant to Sections 3.03(a) and
3.03(b) hereof, (ii) the amount of the Participant's "employer profit sharing
account" as defined under the Prior Plan (which shall be merged into this
account as of the close of business on December 31, 1994), and (iii) the
account's proportionate share of any net investment gains, determined in
accordance with Section 4.02(a) hereof. There shall be deducted from the
account its proportionate share of any net investment losses as determined in
accordance with Section 4.02(a) hereof, and any benefit payments or reductions
due to a foreclosure or offset against the Participant's outstanding loan.
SECTION 1.17 - EMPLOYER MATCHING CONTRIBUTIONS The term "Employer Matching
- ---------------------------------------------- -----------------
Contributions" shall mean the contributions the Employers may make as provided
- -------------
in Sections 3.03(a) and 3.03(b) hereof.
SECTION 1.18 - EMPLOYMENT (OR REEMPLOYMENT) COMMENCEMENT DATE The term
- -------------------------------------------------------------
"Employment (or Reemployment) Commencement Date" shall mean the date an Employee
----------------------------------------------
(or reemployed Employee) first performs an Hour of Service for an Employer.
SECTION 1.19 - ERISA OR ACT The term "ERISA" or "Act" shall mean Public Law
- --------------------------- ----- ---
No. 93-406, the Employee Retirement Income Security Act of 1974, as amended from
time to time.
SECTION 1.20 - FORFEITURE The term "Forfeiture" shall mean the nonvested
- ------------------------- ----------
percentage of the Employer Matching Contribution Account of a Participant who
has Terminated Employment for all Employers and other Affiliates. The
disposition of such amounts shall be as set forth in Section 3.03(c) hereof.
SECTION 1.21 - HOUR OF SERVICE The term "Hour of Service" shall mean any
- ------------------------------ ---------------
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by an Employer:
(i) for the performance of duties for an Employer;
(ii) for other reasons not requiring the performance of duties, such as
vacation, holiday, illness, incapacity (including disability), jury duty,
or a paid leave of absence; or
(iii) as a result of a back pay award (irrespective of mitigation of damages),
which has been awarded or agreed to by an Employer.
Page 4
<PAGE>
Hours of Service for the performance of duties shall be credited as of the date
the duties were performed; Hours of Service for other reasons not requiring the
performance of duties shall be credited to the period of periods for which the
payment was made; Hours of Service resulting from a back pay award, to the
extent not previously credited, shall be credited for the period or periods to
which the award or agreement pertains.
The Hours of Service to be credited to an Employee under clause (i) and/or
clause (iii) of the first paragraph of this section for which duties were
performed shall be based upon the actual number of Hours of Service for which he
is directly or indirectly compensated as hereinabove provided. In the case of
Employees who are "drivers" (as defined in the employee records of the
Employers), if such an Employee receives credit for at least one (1) Hour of
Service during a week, in lieu of actual hours credited as determined herein, he
shall be given a credit for forty-five (45) Hours of Service for each such week.
The number of Hours of Service to be credited to an Employee under clause (ii)
and/or clause (iii) of the first paragraph of this section for which no duties
were performed shall be calculated on the basis of the number of hours regularly
scheduled for the performance of duties during the period of time for which he
received compensation or a back pay award. In the case of the preceding
sentence, if an Employee has no regular work schedule, the number of Hours of
Service shall be calculated on the basis of an eight (8) hour day or forty (40)
hour week. If an Employee receives direct or indirect compensation under clause
(ii) and/or clause (iii) of the first paragraph of this section for which no
duties were performed that was not based upon "units of time," the Hours of
Service to be credited shall be calculated pursuant to Department of Labor
Regulation 2530.200b-2(b) and (c) or any successor thereto which may be
promulgated by the Internal Revenue Service pursuant to the ERISA Reorganization
Plan of 1978.
Hours of Service shall be credited for employment with other members of an
affiliated service group (under section 414(m) of the Code), a controlled group
of corporations (under section 414(b) of the Code), or a group of trades or
businesses under common control (under 414(c) of the Code), of which the
adopting Employer is a member. Hours of Service will also be credited for any
individual considered a "leased employee" under section 414(n) of the Code.
Notwithstanding the foregoing:
(I) no more than five hundred one (501) Hours of Service shall be credited
under clause (ii) and/or clause (iii) of the first paragraph of this
section for any single continuous period during which no duties were
performed for direct or indirect compensation by the Employee;
(II) no Hours of Service shall be credited under clause (ii) of the first
paragraph of this section if the indirect compensation was paid pursuant
to worker's compensation, unemployment compensation or disability
insurance laws; and
(III) no Hours of Service shall be credited for any payment to an Employee
which solely reimburses the Employee for medical or medically related
expenses.
Page 5
<PAGE>
SECTION 1.22 - NORMAL RETIREMENT AGE The term "Normal Retirement Age" shall
- ------------------------------------ ---------------------
mean a Participant's sixty-fifth (65th) birthday.
SECTION 1.23 - PARTICIPANT The term "Participant" shall mean an Employee who
- -------------------------- -----------
has met the requirements of Article II for participation hereunder.
SECTION 1.24 - PLAN The term "Plan" shall mean the J.B. Hunt Transport
- ------------------- ----
Services, Inc. Employee Retirement Plan as set forth herein. See the Preamble
for the definitions of "Original Plan," "Second Plan" and "Prior Plan."
------------- ----------- ----------
SECTION 1.25 - PLAN ADMINISTRATOR The term "Plan Administrator" shall mean
- --------------------------------- ------------------
the Company or other such person or entity designated by the Company from time
to time.
SECTION 1.26 - PLAN YEAR The term "Plan Year" shall mean the twelve (12)
- ------------------------ ---------
month period commencing each January 1 and ending on the following December 31.
SECTION 1.27 - RETIREMENT COMMITTEE The term "Retirement Committee" shall
- ----------------------------------- --------------------
mean the Retirement Committee as provided in Article VI hereof.
SECTION 1.28 - ROLLOVER ACCOUNT The term "Rollover Account" shall mean the
- ------------------------------- ----------------
account established on behalf of an Employee which shall be credited with (i)
the value of any amounts rolled over into the Plan in accordance with the
provisions of Section 3.04 hereof, and (ii) the account's proportionate share of
any net investment gains, determined in accordance with Section 4.02(a) hereof.
There shall be deducted from the account its proportionate share of any net
investment losses as determined in accordance with Section 4.02(a) hereof, and
any benefit payments, withdrawals or reductions due to a foreclosure or offset
against the Participant's outstanding loan. The value of an Employee's Rollover
Account shall be nonforfeitable at all times.
SECTION 1.29 - ROLLOVER CONTRIBUTIONS The term "Rollover Contributions"
- ------------------------------------- ----------------------
shall mean the contributions an Employee may make or the Plan may receive on his
behalf as provided in Section 3.04 hereof.
SECTION 1.30 - SALARY REDUCTION CONTRIBUTION ACCOUNT The term "Salary
- ---------------------------------------------------- ------
Reduction Contribution Account" shall mean the account (and, if determined
- ------------------------------
necessary by the Retirement Committee, separate subaccounts) established on
behalf of a Participant which shall be credited with (i) the amount of any
Salary Reduction Contributions made pursuant to Section 3.02(a) hereof, (ii) any
special nonelective contributions made pursuant to the terms of Sections 3.09-
3.10 hereof, and (iii) the account's (and/or subaccount's) proportionate share
of any net investment gains, determined in accordance with Section 4.02(a)
hereof. There shall be deducted from the account (and/or subaccount) its
proportionate share of any net investment losses as determined in accordance
with Section 4.02(a) hereof, and any benefit payments, withdrawals or reductions
due to a foreclosure or offset against the Participant's outstanding loan. The
value of a Participant's Salary Reduction Contribution Account shall be
nonforfeitable at all times.
Page 6
<PAGE>
SECTION 1.31 - SALARY REDUCTION CONTRIBUTIONS The term "Salary Reduction
- --------------------------------------------- ----------------
Contributions" shall mean the contributions made by the Employers as provided in
- -------------
Section 3.02(a) hereof.
SECTION 1.32 - TERMINATION OF EMPLOYMENT OR TERMINATES EMPLOYMENT The term
- -----------------------------------------------------------------
"Termination of Employment" or "Terminates Employment" shall mean the severance
------------------------- ---------------------
of an Employee's employment relationship with the Employers and all other
Affiliates.
SECTION 1.33 - TOTALLY AND PERMANENTLY DISABLED OR TOTAL AND PERMANENT
- ----------------------------------------------------------------------
DISABILITY The term "Totally and Permanently Disabled" or "Total and Permanent
- ---------- -------------------------------- -------------------
Disability" shall mean a physical or mental condition of a Participant which, in
- ----------
the opinion of the Retirement Committee, based on evidence satisfactory to the
Retirement Committee, including medical evidence, renders him unfit to perform
the duties of an employee. Any decision of the Retirement Committee shall be
supported by an opinion of a physician appointed by the Company. Such judgments
shall be uniformly applied to all employees similarly situated.
SECTION 1.34 - TRUST OR TRUST AGREEMENT The term "Trust" or "Trust
- --------------------------------------- ----- -----
Agreement" shall mean the trust established to hold, administer and invest the
contributions made under the Plan.
SECTION 1.35 - TRUST FUND The term "Trust Fund" shall mean all cash,
- ------------------------- ----------
securities and any other property held by the Trustee pursuant to the terms of
the Trust Agreement, together with any income therefrom.
SECTION 1.35 - TRUSTEE The term "Trustee" shall mean the Trustee or Trustees
- ---------------------- -------
named under the Trust Agreement or any successor Trustee or Trustees named
thereunder.
SECTION 1.37 - VALUATION DATE The term "Valuation Date" shall mean the close
- ----------------------------- --------------
of business each business day.
SECTION 1.38 - YEARS OF ELIGIBILITY SERVICE The term "Years of Eligibility
- ------------------------------------------- --------------------
Service" shall mean the number of years of an Employee's employment with the
- -------
Employers (regardless of the exclusions contained in Section 1.14) which is
recognized in determining whether the Employee is eligible to become a
Participant in the Plan. For this purpose, an Employee shall earn one (1) Year
of Eligibility Service if he is credited with at least one thousand (1,000)
Hours of Service within the twelve (12) consecutive month period beginning with
his Employment (or Reemployment) Commencement Date, or in any Plan Year,
including the Plan Year that begins during such initial twelve (12) consecutive
month period.
Notwithstanding the above, periods of employment with an Affiliate or other
entity which is acquired or merged into an Employer or other Affiliate which
would have constituted a Year of Eligibility Service had the Participant been
employed by the Employers, shall be included as if such periods had been
performed for the Employers. If a business entity becomes an Affiliate or is
acquired or merged into an Employer after the Effective Date of the Plan,
whether service with such entity prior to affiliation shall be considered for
purposes of this Section 1.38 shall be determined by the Board of Directors in
their sole and absolute discretion. A determination to grant such past
Page 7
<PAGE>
service credit shall be evidenced by affixing such Board of Directors'
resolution to the Plan as an Appendix hereto.
SECTION 1.39 - YEARS OF VESTING SERVICE The term "Years of Vesting Service"
- --------------------------------------- ------------------------
shall mean the number of years of a Participant's employment with the Employers
for which he is given credit for the purpose of determining his vested
percentage under the Plan. As of any date a Participant's Years of Vesting
Service shall be equal to the number of years determined in accordance with
Section 1.39(a), subject to the provisions of Section 1.39(b) and Section
1.39(c), if applicable.
Section 1.39(a) Years of Vesting Service shall be the total number of
---------------
Plan Years during each of which the Employee (regardless of any period
of exclusion contained in Section 1.14) is credited with at least one
thousand (1,000) Hours of Service with an Employer. Years of Vesting
Service before the Effective Date of the Plan shall be counted.
Section 1.39(b) If a Participant Terminates Employment and is
---------------
reemployed, his Years of Vesting Service as of the date of his earlier
Termination of Employment shall be disregarded hereunder if he
Terminated Employment prior to becoming vested hereunder and, as of the
date of his reemployment, he has incurred consecutive Breaks in Service
which equal or exceed the greater of (i) five (5) years, or (ii) his
Years of Vesting Service as of the date of his earlier Termination of
Employment. Prior to January 1, 1985, such clause (i) shall not apply
provided such service can be disregarded by such date.
Section 1.39(c) Notwithstanding the above, periods of employment with an
---------------
Affiliate or other entity which is acquired or merged into an Employer
or other Affiliate which would have constituted a Year of Vesting
Service had the Participant been employed by the Employers shall be
included as if such periods had been performed for the Employers. If a
business entity becomes an Affiliate or is acquired or merged into an
Employer after the Effective Date of the Plan, whether service with such
entity prior to affiliation shall be considered for purposes of this
Section 1.39 shall be determined by the Board of Directors in their sole
and absolute discretion. A determination to grant such past service
credit shall be evidenced by affixing such Board of Directors'
resolution to the Plan as an Appendix hereto.
Page 8
<PAGE>
ARTICLE II - PARTICIPATION IN THE PLAN
--------------------------------------
SECTION 2.01 - ELIGIBILITY TO PARTICIPATE Each Employee of the Employers
- -----------------------------------------
shall participate in the Plan upon satisfying the requirements set forth in this
Section 2.01.
Section 2.01(a) - Prior Plan Participation Each Participant in the Prior
------------------------------------------
Plan on December 31, 1994 shall continue to participate in the Plan as
of January 1, 1995.
Section 2.01(b) - Initial Participation On and after the Effective
---------------------------------------
Date, each current Employee of the Employers and any future Employee of
the Employers may participate in the Plan as of the first day of the
payroll period coincident with or immediately following the date he has
completed one (1) Year of Eligibility Service.
Section 2.01(c) - Subsequent Participation for Salary Reduction
---------------------------------------------------------------
Contributions An eligible Employee who at any time declines to make
-------------
Salary Reduction Contributions to the Plan may elect to do so as of the
first day of any following payroll period provided such eligible
Employee makes a timely and proper election to participate.
Section 2.01(d) - Participation upon Reemployment of a Former Employee
----------------------------------------------------------------------
A terminated Participant who resumes employment with an Employer may
reenter the Plan on his Reemployment Commencement Date.
A terminated Employee who satisfied the eligibility requirements for
Plan participation before he Terminated Employment (but who Terminated
Employment before he became a Participant) and who is reemployed by an
Employer as an Employee shall be eligible to become a Participant on his
Reemployment Commencement Date or the first day of the payroll period
when he would have otherwise been eligible to become a Participant,
whichever is later.
A terminated Employee who had not satisfied the eligibility requirements
set forth in this Section 2.01 and who resumes his employment with an
Employer shall be eligible to become a Participant in the Plan on the
first day of the payroll period coincident with or next following the
date he satisfies such requirements.
SECTION 2.02 - ADMINISTRATIVE PROCEDURES Each eligible Employee shall be
- ----------------------------------------
furnished a summary of the Plan, enrollment form and salary reduction agreement.
The Employee shall complete the enrollment form and salary reduction agreement
and file it with the Retirement Committee. The Employee shall indicate on such
form and agreement (i) the percentage rate of Salary Reduction Contributions to
be made by his Employer pursuant to the salary reduction agreement, and (ii) his
election of investment funds under Section 4.04 hereof. Also, the Employee may
name (with consent of his spouse, if applicable) a Beneficiary to whom benefits
should be paid in the event of his death.
Page 9
<PAGE>
SECTION 2.03 - PLAN AND TRUST BINDING Upon becoming a Participant, a
- -------------------------------------
Participant shall be bound then and thereafter by the terms of the Plan and
Trust, including any amendments that may hereafter be made.
SECTION 2.04 - DURATION OF PARTICIPATION A Participant shall continue to be
- ----------------------------------------
such until the later of:
(i) his Termination of Employment; or
(ii) the date all Accounts, if any, to which he is entitled hereunder have been
distributed to him from the Trust Fund.
Page 10
<PAGE>
ARTICLE III - CONTRIBUTIONS
----------------------------
SECTION 3.01 - ADDITIONAL DEFINITIONS
- -------------------------------------
Section 3.01(a) - Annual Additions The term "Annual Additions" shall
---------------------------------- ----------------
mean for any Employee in any Limitation Year with respect to all plans
of the Employers (as modified by Code section 415(h)), the sum of:
(i) Salary Reduction Contributions;
(ii) Employer Matching Contributions;
(iii) any special nonelective contributions pursuant to Sections
3.09-3.10; and
(iv) amounts allocated to separate medical accounts under Code
sections 415(l) and 419(A)(d)(2).
Annual Additions above are determined without regard to any Rollover
Contributions to the Plan or to another qualified plan. Repayments of
cash-outs and account restorations as provided under Section 5.05 hereof
are not Annual Additions.
Section 3.01(b) - Annual Compensation The term "Annual Compensation"
------------------------------------- -------------------
shall mean the following:
(i) the Participant's wages, salaries, fees for professional services
and other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually rendered
in the course of employment with an employer maintaining the Plan
to the extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements, and other expense allowances under a
nonaccountable plan (as described in Treasury Regulation section
1.62-2(c));
(ii) in the case of a Participant who is an employee within the
meaning of Code section 401(c)(1) and the regulations thereunder,
the Participants earned income (as described in Code section
401(c)(2) and the regulations thereunder));
(iii) amounts described in Code sections 104(a)(3), 105(a) and 105(h),
but only to the extent that these amounts are includable in the
gross income of the employee;
(iv) amounts paid or reimbursed by the employer for moving expenses
incurred by an employee, but only to the extent that at the time
of payment it is reasonable to believe that these amounts are not
deductible by the employee under Code section 217;
Page 11
<PAGE>
(v) the value of a nonqualified stock option granted to an employee
by the employer, but only to the extent that the value of the
option is includable in the gross income of the employee for the
taxable year in which granted; and
(vi) the amount includable in the gross income of an employee upon
making the election described in Code section 83(b).
Annual Compensation shall exclude:
(I) (a) contributions made by the employer to a plan of deferred
compensation to the extent that, before the application
of the Code section 415 limitations to that plan, the
contributions are not includable in the gross income of
the employee for the taxable year in which contributed,
(b) employer contributions made on behalf of an employee to
a simplified employee pension plan described in Code
section 408(k) to the extent such contributions are
excludable from the employee's gross income, and
(c) any distributions from a plan of deferred compensation
regardless of whether such amounts are includable in the
gross income of the employee when distributed except any
amounts received by an employee pursuant to an unfunded,
nonqualified plan to the extent such amounts are
includable in the gross income of the employee;
(II) amounts realized from the exercise of a nonqualified stock
option or when restricted stock (or property) held by an
employee either becomes freely transferrable or is no longer
subject to a substantial risk of forfeiture;
(III) amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(IV) other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent
that the premiums are not includable in the gross income of the
employee), or contributions made by the employer (whether or not
under a salary reduction agreement) towards the purchase of any
annuity contract described in Code section 403(b) (whether or
not the contributions are excludable from the gross income of
the employee).
For the purposes of this section, the determination of Annual
Compensation shall be made by not including amounts that would otherwise
be excluded from a Participant's gross income by reason of the
application of Code sections 125, 402(a)(8) and 402(h)(1)(B).
Annual Compensation for any Limitation Year is the compensation actually
paid or made available to an employee for such year.
Page 12
<PAGE>
Section 3.01(c) - Average Contribution Percentage or ACP The term "Average
-------------------------------------------------------- -------
Contribution Percentage" or "ACP" as used herein shall have the same
----------------------- ---
meaning as "actual contribution percentage" as defined in section 401(m)(3)
of the Code counting only Employer Matching Contributions to the Plan, to
wit; the average of the ratios (calculated separately for each considered
Employee in such group) of:
(i) the amount of Employer Matching Contributions actually paid over to
the Trust Fund on behalf of such considered Employee for the Plan
Year, to
(ii) the considered Employee's Total Compensation for such portion of the
Plan Year that he is considered a Participant hereunder.
IMPORTANT FAMILY MEMBER RULE FOR DETERMINING ACTUAL CONTRIBUTION PERCENTAGE
OF THE PARTICIPANT: For purposes of determining the actual contribution
percentage of a Highly Compensated Employee who is a Five Percent (5%)
Owner or a member of the group consisting of the ten (10) Highly
Compensated Employees paid the greatest Total Compensation during the Plan
Year, Employer Matching Contributions and Total Compensation of such
Employee shall include the Employer Matching Contributions and Total
Compensation of Family Members, and such Family Members shall be
disregarded in determining the actual contribution percentage for Non-
Highly Compensated Employees.
Notwithstanding the above provisions of this Section 3.01(c), in accordance
with the eighth (third to last) paragraph of Section 3.09 hereof, if Salary
Reduction Contributions are employed in the mathematical nondiscrimination
test for Employer Matching Contributions, then any Salary Reduction
Contributions on behalf of each Participant so used shall be included with
Employer Matching Contributions in determining the respective Participant's
actual contribution percentage hereunder.
For purposes of this section, the ratio calculated for any Employee who is
a Highly Compensated Employee for the Plan Year and who is eligible to have
employee contributions or employer matching contributions allocated to his
account under two or more plans described in section 401(a) of the Code
that are maintained by an Employer or an Affiliate shall be determined as
if all such contributions were made under a single plan. The preceding
sentence shall not apply if such plans are not permitted to be aggregated
by reason of Treasury Regulation section 1.401(m)-1(b)(3)(ii). Further, in
the event that this Plan satisfies the requirements of section 401(a)(4) or
410(b) (other than section 410(b)(2)(A)(ii)) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of sections 401(a)(4) or 410(b) (other than section
410(b)(2)(A)(ii)) of the Code only if aggregated with this Plan, then the
Average Contribution Percentage shall be determined by calculating the
ratio for each Employee as if all such plans were a single plan. If two or
more plans (including the Plan) are aggregated for purposes of Code section
401(m), the aggregated plans must also satisfy Code sections 401(a)(4) and
410(b) as though they were a single plan.
Page 13
<PAGE>
Section 3.01(d) - Average Deferral Percentage or ADP The term "Average
---------------------------------------------------- -------
Deferral Percentage" or "ADP" as used herein shall have the same meaning
------------------- ---
as "actual deferral percentage" as defined in section 401(k)(3)(B) of
the Code counting only Salary Reduction Contributions made on behalf of
a Participant by his Employer to the Plan, to wit; the average of the
ratios (calculated separately for each considered Employee in such
group) of:
(i) the amount of Salary Reduction Contributions actually paid over to
the Trust Fund on behalf of such considered Employee for the Plan
Year, to
(ii) the considered Employee's Total Compensation for such portion of the
Plan Year that he is considered a Participant hereunder.
IMPORTANT FAMILY MEMBER RULE FOR DETERMINING ACTUAL DEFERRAL PERCENTAGE
OF THE PARTICIPANT: For purposes of determining the actual deferral
percentage of a Highly Compensated Employee who is a Five Percent (5%)
Owner or a member of the group consisting of the ten (10) Highly
Compensated Employees paid the greatest Total Compensation during the
Plan Year, Salary Reduction Contributions and Total Compensation of such
Employee shall include the Salary Reduction Contributions and Total
Compensation of Family Members, and such Family Members shall be
disregarded in determining the actual deferral percentage for Non-Highly
Compensated Employees.
For purposes of this section, the ratio calculated for any Employee who
is a Highly Compensated Employee for the Plan Year and who is eligible
to have salary reduction contributions allocated to his account under
two or more plans or arrangements described in section 401(k) of the
Code that are maintained by an Employer or an Affiliate shall be
determined as if all such contributions were made under a single
arrangement. The preceding sentence shall not apply if such plans are
not permitted to be aggregated under Treasury Regulation section
1.401(k)-1(b)(3)(ii)(B) except as otherwise provided in Treasury
Regulation section 1.401(m)-2(b)(1). Further, in the event that this
Plan satisfies the requirements of section 401(a)(4) or 410(b) (other
than section 410(b)(2)(A)(ii)) of the Code only if aggregated with one
or more other plans, the Average Deferral Percentage shall be determined
by calculating the ratio for each Employee as if all such plans were a
single plan. If two or more plans (including the Plan) are aggregated
for purposes of Code section 401(k), the aggregated plans must also
satisfy Code sections 401(a)(4) and 410(b) as though they were a single
plan.
Section 3.01(e) - Family Member The term "Family Member" as used herein
------------------------------- -------------
shall mean with respect to any employee, such employee's spouse and
lineal ascendants or descendants and the spouses of such lineal
ascendants or descendants.
Section 3.01(f) - Five Percent (5%) Owner The term "Five Percent (5%)
----------------------------------------- -----------------
Owner" shall have the same meaning as is specified in section 416(i) of
-----
the Code, to wit:
(i) if an Employer (for purposes of this paragraph without regard to
sections 414(b), 414(c) and 414(m) of the Code) is a corporation,
any person who owns or is
Page 14
<PAGE>
considered as owning within the meaning of section 318 of the Code)
more than five percent (5%) of the outstanding stock of the
corporation or stock possessing more than five percent (5%) of the
total combined voting power of the corporation, or
(ii) if an Employer is not a corporation, any person who owns more than
five percent (5%) of the capital or profits interest in such
Employer.
Section 3.01(g) - Highly Compensated Employee The term "Highly
--------------------------------------------- ------
Compensated Employee" shall mean any employee who during the Plan Year
--------------------
or preceding Plan Year:
(i) was at any time a Five Percent (5%) Owner of the Employers;
(ii) received Total Compensation from the Employers in excess of
seventy-five thousand dollars ($75,000) (or such amount as
adjusted pursuant to section 415(d) of the Code);
(iii) received Total Compensation from the Employers in excess of fifty
thousand dollars ($50,000) (or such amount as adjusted pursuant to
section 415(d) of the Code) and was in the top-paid group
consisting of the top twenty percent (20%) of the employees
(considering all employees of the Employers) when ranked on the
basis of Total Compensation during such year; or
(iv) was at any time an officer and received Total Compensation greater
than fifty percent (50%) of the amount in effect under section
415(b)(1)(A) of the Code for such Plan Year. No more than fifty
(50) employees - or if lesser, the greater of three (3) employees
or ten percent (10%) of the employees, shall be treated as
officers. If, for any Plan Year, no officer of the Employers is
described by this clause (iv), the highest paid officer of the
Employers for such Plan Year shall be treated as an officer
hereunder.
An employee shall not be considered a Highly Compensated Employee for
purposes of clauses (ii), (iii) and (iv) above if they were a Highly
Compensated Employee in the current Plan Year but they were not
described in clause (ii), (iii) or (iv) for the preceding Plan Year
(without regard to this paragraph) unless such employee is a member of
the group consisting of the one hundred (100) employees paid the
greatest Total Compensation during the Plan Year for which such
determination is being made.
The following employees shall be excluded for purposes of determining
who is in the top-paid group under clause (iii) above or the number of
officers taken into account under clause (iv) above:
(I) employees who have not completed six (6) months of service;
(II) employees who normally work less than seventeen and one-half (17-
1/2) hours per week;
Page 15
<PAGE>
(III) employees who normally work during not more than six (6) months
during any year;
(IV) employees who have not attained Age twenty-one (21); and
(V) employees who are included in a collective bargaining agreement
between employee representatives and an Employer.
In addition, employees who are nonresident aliens and who receive no
earned income (within the meaning of section 911(d)(2) of the Code) from
an Employer which constitutes income from sources within the United
States (within the meaning of section 861(a)(3) of the Code) shall be
excluded for purposes of determining who is a Highly Compensated
Employee herein.
Any former employee shall be treated as a Highly Compensated Employee if
the employee was a Highly Compensated Employee when (i) he Terminated
Employment, or (ii) attained Age fifty-five (55). In addition, as
prescribed by the Secretary, an employee who performs only de minimis
service for the Employer may be treated as separated from service for
purposes of determining whether the employee is a Highly Compensated
Employee.
Except as otherwise provided in this Section 3.01(g), the "Employers"
referenced hereunder shall be aggregated under Code sections 414(b),
(c), (m), and (o) and treated as a single employer.
Section 3.01(h) - Limitation Year The term "Limitation Year" shall mean
--------------------------------- ---------------
a twelve (12)-month period adopted for all plans of the Employers. The
Limitation Year for the Plan shall be January 1 through December 31.
Section 3.01(i) - Non-Highly Compensated Employee The term "Non-Highly
------------------------------------------------- ----------
Compensated Employee" shall mean any employee who is not a Highly
--------------------
Compensated Employee.
Section 3.01(j) - Total Compensation The term "Total Compensation" as
------------------------------------ ------------------
used herein shall have the same meaning as "Compensation" as defined in
Code section 414(s).
Notwithstanding the definition of Total Compensation above to the
contrary, the aggregate Total Compensation of any Participant which is
in excess of one hundred fifty thousand dollars ($150,000) for any Plan
Year shall not be recognized by the Plan in computing the ACP and ADP
tests. The "family member" rules as set forth in Section 1.10 shall
apply to Total Compensation of the Participant. Such one hundred fifty
thousand dollar ($150,000) limit shall be adjusted for cost-of-living
increases as provided in Code sections 415(d) and 401(a)(17).
SECTION 3.02 - SALARY REDUCTION CONTRIBUTIONS Each Employee who becomes a
- ---------------------------------------------
Participant in the Plan may elect to have his Employer make Salary Reduction
Contributions as set forth herein. Any Salary Reduction Contributions shall be
paid by the Employers to the Trustee as soon as administratively practicable
following the payroll date on which such sum is withheld, and each
Page 16
<PAGE>
Participant's Compensation shall be reduced by an identical amount. Such Salary
Reduction Contributions shall be deducted in approximately equal amounts over
the covered pay periods during the Plan Year.
Section 3.02(a) - Salary Reduction Contributions Each Participant may
------------------------------------------------
authorize his Employer to contribute to the Plan on his behalf Salary
Reduction Contributions with respect to each Plan Year. Such Salary
Reduction Contributions shall not be less than one percent (1%) nor more
than sixteen percent (16%) of his Compensation (in increments of whole
percentages) earned during the time he has elected to make Salary
Reduction Contributions hereunder. Any Salary Reduction Contributions
hereunder shall be allocated to the Participant's Salary Reduction
Contribution Account.
Section 3.02(b) - Aggregate Dollar Limitations The aggregate amount
----------------------------------------------
determined in the preceding Section 3.02(a) shall be further limited to
seven thousand dollars ($7,000) (or such amount as may hereafter be
adjusted pursuant to section 402(g)(5) and section 415(d) of the Code)
in any taxable year of the Participant. If at the close of the taxable
year of the Participant it is determined that Salary Reduction
Contributions for such year on his behalf exceed the seven thousand
dollar ($7,000) limit herein (or such adjusted amount pursuant to the
first sentence of this paragraph), such "excess amounts," plus
investment earnings thereon, shall be returned to the affected
Participant in accordance with Code section 402(g)(2)(A). Any excess
amounts determined in this section which are to be returned shall be
reduced by any excess contributions previously distributed for the Plan
Year beginning in the taxable year under consideration.
In the event that a Participant is also a participant in (i) another
qualified cash or deferred arrangement [as defined in Code section
401(k)], (ii) a simplified employee pension [as defined in Code section
408(k)], or (iii) a salary reduction arrangement [within the meaning of
Code section 3121(a)(5)(D)], and the elective deferrals [as defined in
Code section 402(g)(3)] made under such other arrangement(s) and this
Plan cumulatively exceed seven thousand dollars ($7,000) (as adjusted)
for the Participant's taxable year, the Participant may, no later than
March 1 following the close of his taxable year, notify the Retirement
Committee in writing of such excess and request that his Salary
Reduction Contributions be reduced by an amount specified by the
Participant. The amount of the reduction shall be returned to the
Participant as set forth above.
In the event excess Salary Reduction Contributions are returned to the
Participant, the corresponding Employer Matching Contributions, if any,
shall be forfeited and applied as provided in Section 3.03(c) hereof. To
this end, the vesting provisions of the Plan applied to contributions of
the Employers are conditioned on such Salary Reduction Contributions
being permissible Salary Reduction Contributions.
SECTION 3.03 - EMPLOYER MATCHING CONTRIBUTIONS AND FORFEITURES Employer
- --------------------------------------------------------------
contributions shall be made and allocated in accordance with Sections 3.03(a)-
(b) hereof. Forfeitures arising during the Plan Year shall be allocated in
accordance with the provisions of Section 3.03(c). Any Employer contributions
hereunder shall be paid to the Trustee by the Employers as soon as reasonably
Page 17
<PAGE>
practicable after the close of the Plan Year for which the contribution is to
apply but not later than the time prescribed by law for the filing of the
Employers' federal income tax returns plus any extensions thereof.
Section 3.03(a) - Employer Matching Contributions The Employers will
-------------------------------------------------
make Employer Matching Contributions for the Plan Year (as of each
payroll period) in an amount equal to the "applicable matching
percentage" of each Participant's Salary Reduction Contributions for
such Plan Year, provided, however, such contributions with respect to
each Participant shall be further limited to matching against the first
three percent (3%) of each such Participant's Salary Reduction
Contributions for the Plan Year when such Salary Reduction Contributions
are expressed as a percentage of the Participant's Compensation. Any
Employer Matching Contributions hereunder shall be allocated to the
respective Participant's Employer Matching Contribution Account.
For purposes of this section, the term "applicable percentage" shall
mean the percentage amount listed below:
<TABLE>
<CAPTION>
PARTICIPANT'S SALARY REDUCTION APPLICABLE MATCHING
CONTRIBUTION AMOUNT PERCENTAGE
------------------------------ -------------------
<S> <C>
First 1% 100%
Second 1% 50%
Third 1% 50%
</TABLE>
Section 3.03(b) - Additional Matching Contributions The Employers may,
---------------------------------------------------
in their sole and absolute discretion, authorize additional Employer
Matching Contributions for the Plan Year in an amount equal to the
"applicable additional matching percentage" of each Participant's Salary
Reduction Contributions for such Plan Year; provided, however, such
additional Employer Matching Contributions with respect to each
Participant shall be further limited to matching against the "applicable
dollar amount" of each such Participant's Salary Reduction Contributions
for the Plan Year. To be considered "eligible" to receive any additional
Employer Matching Contributions, the Participant must be employed by the
Employers on the last day of the Plan Year under consideration. For
purposes of this section, the terms "applicable additional matching
percentage" and "applicable dollar amount" shall mean the percentage
amount and dollar amount, as applicable and, if any, determined by the
Board of Directors of the Company in their sole and absolute discretion
following the close of each Plan Year. Any additional Employer Matching
Contributions hereunder shall be allocated to the Participant's Employer
Matching Contribution Account as of the Plan Year for which they are
made.
Section 3.03(c) - Forfeitures Any Forfeitures of Employer Matching
-----------------------------
Contribution Accounts arising during the Plan Year shall be first used
to restore a reemployed Participant's nonvested percentage in his
Employer Matching Contribution Account as provided in
Page 18
<PAGE>
Section 5.05 hereof. Next, any remaining Forfeitures shall be used to
offset Employer Matching Contributions for the next following Plan Year.
SECTION 3.04 - ROLLOVER CONTRIBUTIONS With the consent of the Retirement
- -------------------------------------
Committee, amounts may be transferred to the Plan from another qualified plan by
an Employee, provided that the trust from which such funds are transferred
permits the transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or Trust or create adverse tax consequences for the
Employers. The amounts transferred shall be set up in a separate account herein
referred to as a Participant's "Rollover Account." Such account shall be fully
vested at all times and shall not be subject to forfeiture for any reason.
Amounts in a Participant's Rollover Account shall be held by the Trustee
pursuant to the provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in
Article V.
At Normal Retirement Age, or such other date when the Participant or his
Beneficiary shall be entitled to receive benefits, the fair market value of the
Participant's Rollover Account shall be used to provide additional benefits to
the Participant or his Beneficiary. Any distribution of amounts held in a
Participant's Rollover Account shall be made in a manner which is consistent
with and satisfies the provisions of Article V, including, but not limited to,
all notice and consent requirements of Code section 411(a)(11) and the
regulations thereunder. Furthermore, such amounts shall be considered as part
of a Participant's benefit in determining whether a cash-out of benefits without
the Participant's consent may be made.
All amounts allocated to a Participant's Rollover Account may be treated as a
directed investment pursuant to Section 4.04.
For purposes of this section, the term "qualified plan" shall mean any tax
qualified plan under Code section 401(a). The term "amounts transferred from
other qualified plans" shall mean: (i) distributions from another qualified plan
which are eligible rollover distributions and which are either transferred by
the Employee to this Plan within sixty (60) days following his receipt thereof
or are transferred pursuant to a direct rollover; (ii) amounts transferred to
this Plan from a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified plan as a lump-sum
distribution, (B) were eligible for tax-free rollover to a qualified plan, and
(C) were deposited in such conduit individual retirement account within sixty
(60) days of receipt thereof and other than earnings on said assets; and (iii)
amounts distributed to the Employee from a conduit individual retirement account
meeting the requirements of clause (ii) above, and transferred by the Employee
to this Plan within sixty (60) days of his receipt thereof from such conduit
individual retirement account.
Prior to accepting any rollovers to which this section applies, the Retirement
Committee may require the Employee to establish that the amounts to be
transferred to this Plan meet the requirements of this section and may also
require the Employee to provide an opinion of counsel satisfactory to the
Employer that the amounts to be transferred meet the requirements of this
section.
Page 19
<PAGE>
SECTION 3.05 - CHANGE/SUSPENSION OF CONTRIBUTIONS A Participant may, by
- -------------------------------------------------
filing a written notice with the Retirement Committee in such form or media as
the Retirement Committee may select or otherwise require, elect to (i) change
the rate of his Salary Reduction Contributions made by an Employer on his
behalf, to be effective as soon as administratively possible, or (ii) suspend
any Salary Reduction Contributions, effective as soon as administratively
possible. If a Participant requests an Employer to suspend his Salary Reduction
Contributions, he may request that further Salary Reduction Contributions be
made on his behalf as soon as administratively possible following the date upon
which such suspension commenced. A Participant who resumes contributions shall
file a request with the Retirement Committee in such form or media as the
Retirement Committee may select or otherwise require.
SECTION 3.06 - MAXIMUM DEDUCTIBLE CONTRIBUTIONS; MISTAKEN AND NON-DEDUCTIBLE
- ----------------------------------------------------------------------------
CONTRIBUTIONS The contributions of the Employers computed in accordance with
- -------------
the provisions of Sections 3.02-3.03 above (or special nonelective contributions
under Sections 3.09-3.10 hereof) shall be subject to the following limitations:
(i) in no event shall an Employer be obligated to make a contribution for a
Plan Year in excess of the maximum amount deductible under section
404(a)(3)(A) of the Code, or any statute or rule of similar import except,
however, to the extent necessary to provide the top heavy minimum
allocations, the Employers shall make a contribution even if it exceeds the
amount that is deductible under Code section 404(a)(3)(A); and
(ii) notwithstanding any other provisions of the Plan or the Trust Agreement,
each contribution hereunder is conditioned upon the deductibility of such
contribution under section 404 of the Code and shall be returned to the
Employers within one (1) year if such deduction is disallowed (to the
extent of the disallowance). If an Employer makes a contribution due to a
good faith mistake of fact, the Employer reserves the right to withdraw any
such contribution, provided, such withdrawal occurs within one (1) year of
the mistaken contribution.
If an Employer does not choose to withdraw any mistaken contribution amount, it
shall be applied as an Employer Matching Contribution for the next Plan Year for
which such Employer would otherwise make a contribution hereunder.
SECTION 3.07 - MAXIMUM ANNUAL ADDITIONS Notwithstanding any provisions
- ---------------------------------------
contained herein to the contrary, the total Annual Addition credited to any
Participant's Accounts for any Limitation Year when combined with any similar
Annual Additions credited the Participant for the same period from another
qualified defined contribution plan maintained by the Employers, shall not
exceed the lesser of (i) thirty thousand dollars ($30,000) or the specific
dollar amount set forth in section 415(c)(1)(A) of the Code, as amended, or, if
greater, one-fourth (1/4) of the defined benefit dollar limitation set forth in
section 415(b)(1) of the Code in effect for the Limitation Year, or (ii) twenty-
five percent (25%) of the Participant's Annual Compensation received from the
Employers during the Limitation Year.
Page 20
<PAGE>
SECTION 3.08 - CORRECTIVE ADJUSTMENTS In the event that as of any Valuation
- -------------------------------------
Date corrective adjustments in the Annual Additions to any Participant's
Accounts are required because of the limitations contained in Section 3.07, such
adjustments shall be made to the applicable year's contribution allocation by
returning to the Participant all or part of his Salary Reduction Contributions
(and earnings, if required by law or regulations) to the Plan.
SECTION 3.09 - MATHEMATICAL NONDISCRIMINATION TEST FOR EMPLOYER MATCHING
- ------------------------------------------------------------------------
CONTRIBUTIONS; DISPOSITION OF EXCESS AMOUNTS Notwithstanding any of the
- --------------------------------------------
provisions of the Plan to the contrary, in each Plan Year the Employer Matching
Contributions made to the Plan shall be subject to the mathematical
nondiscrimination test set forth in section 401(m)(2)(A) of the Code: that is,
the Average Contribution Percentage of the eligible (participating and non-
participating) Highly Compensated Employees in each Plan Year shall not exceed
the Average Contribution Percentage of the eligible (participating and non-
participating) Non-Highly Compensated Employees for such Plan Year by more than
the amount permitted in accordance with the following table.
<TABLE>
<CAPTION>
IF THE AVERAGE CONTRIBUTION THE AVERAGE CONTRIBUTION
PERCENTAGE OF THE NON-HIGHLY PERCENTAGE OF THE HIGHLY
COMPENSATED EMPLOYEE IS COMPENSATED EMPLOYEES CAN BE
<S> <C>
Less than 2% Up to the ACP of the eligible Non-Highly Compensated Employees
multiplied by 2
2% but not more than 8% Up to the ACP of the eligible Non-Highly Compensated Employees
plus 2%
More than 8% Up to the ACP of the eligible Non-Highly Compensated Employees
multiplied by 1.25
</TABLE>
For purposes of this section, an "eligible" Highly Compensated Employee and
"eligible" Non-Highly Compensated Employee is any such Employee who is directly
or indirectly eligible to receive an allocation of matching contributions or to
make employee contributions (if permitted under the Plan) and includes: (1) an
Employee who would be a Plan Participant but for the failure to make required
contributions; (2) an Employee whose right to make employee contributions or
receive matching contributions has been suspended because of an election (other
than certain one-time elections) not to participate; and (3) an Employee who
cannot make an employee contribution or receive a matching contribution because
Code section 415(c)(1) or Code section 415(e) prevents the employee from
receiving additional annual additions. In the case of an eligible Employee who
makes no employee contributions and who receives no matching contributions, the
contribution ratio that is to be included in determining the ACP is zero.
SEE SECTION 3.10 FOR THE SPECIAL PROHIBITED MULTIPLE USE RULE.
Page 21
<PAGE>
During each Plan Year, the Retirement Committee shall monitor the Average
Contribution Percentages of the eligible Highly Compensated Employees and
eligible Non-Highly Compensated Employees for such Plan Year. Further,
notwithstanding the provisions of Section 3.03 hereof to the contrary, if
necessary, the Employers shall have the sole and absolute discretion to declare
a special nonelective contribution to the Plan allocable only to the
participating Non-Highly Compensated Employees in the ratio that each such
Participant's Compensation for the Plan Year bears to the total Compensation of
all such Participants for the Plan Year. In the event that as of the close of
the Plan Year "excess contributions" remain, the Retirement Committee,
consistent with regulations published by the Secretary of the Treasury or its
delegate, shall distribute the excess vested Employer Matching Contributions,
plus earnings thereon (for the applicable Plan Year and the "gap period" as
determined in the following four paragraphs), to the participating Highly
Compensated Employees as may be necessary to meet the Average Contribution
Percentage test herein. In distributing vested Employer Matching Contributions,
first, the actual contribution ratio of the Highly Compensated Employee with the
highest ratio is reduced to the extent necessary to satisfy the ACP test or, if
not satisfied, to cause such ratio to equal the actual contribution ratio of the
Highly Compensated Employee with the next highest ratio. Second, this process
is repeated until the ACP test is satisfied. The determination and correction
of excess contributions of a Highly Compensated Employee whose actual
contribution ratio is determined under the family aggregation rules of Section
3.01(c), is accomplished by reducing the actual contribution ratio as required
under this paragraph and allocating the excess contributions for the family
group among the Family Members in proportion to the contributions of each Family
Member that are combined herein to determine the actual contribution ratio. Any
nonvested excess Employer Matching Contributions and earnings thereon shall be
treated as a "forfeiture" and applied under Section 3.03(c) hereof for the Plan
Year in which such excess nonvested Employer Matching Contribution arises;
provided, however, that any forfeitures hereunder shall not inure to the benefit
of a Highly Compensated Employee affected by a reduction in his contributions by
reason of the operation of this section.
The Retirement Committee may use any reasonable method for computing the income
(or loss) allocable to excess contributions, provided that the method does not
violate Code section 401(a)(4), is used consistently for all Participants and
for all corrective distributions under the Plan for the Plan Year, and is used
by the Plan (under Section 4.02 hereof) for allocating income to Participants'
Accounts.
If the method in the preceding paragraph is not used, the Plan may allocate
income to excess contributions by multiplying the income for the Plan Year (and
the "gap period" -- the period between the end of the Plan Year and the date of
distribution of the excess contributions) allocable to the excess contributions
by a fraction. The numerator of the fraction is the excess contributions for
the Participant for the Plan Year. The denominator of the fraction is equal to
the sum of:
(1) the total account balance of the Participant attributable to or Employer
Matching Contributions as of the beginning of the Plan Year; plus
(2) the Employee's Employer Matching Contributions for the Plan Year and for
the gap period if gap period income is allocated.
Page 22
<PAGE>
Notwithstanding the preceding paragraph, the Retirement Committee may choose to
follow a safe harbor method for calculating gap income. Under this method,
income on excess contributions for the gap period is equal to ten percent (10%)
of the income allocable to excess contributions for the Plan Year (calculated
under the method described in the foregoing paragraph), multiplied by the number
of calendar months that have elapsed since the end of the Plan Year. For
purposes of calculating the number of calendar months that have elapsed under
the safe harbor method, a corrective distribution that is made on or before the
fifteenth (15th) day of the month is treated as made on the last day of the
preceding month. A distribution made after the fifteenth (15th) day of the
month is treated as made on the first (1st) day of the next month.
The income allocable to excess contributions, for purposes of this section shall
include all earnings and appreciation, including such items as interest,
dividends, rent, royalties, gains from the sale of property, appreciation in the
value of stock, bonds, annuity and life insurance contracts, and other property,
without regard to whether or not such appreciation has been realized.
Notwithstanding the above provisions of this section to the contrary, to the
extent considered appropriate by the Retirement Committee, for any Plan Year it
may employ any or all "excess" Salary Reduction Contributions under the Plan to
be considered in the mathematical nondiscrimination test set forth herein
provided the requirements of Treasury Regulation section 1.401(k)-1(b)(4)(ii)
and section 1.401(m)-1(b)(5)(i)-(v) are satisfied.
Failure to correct excess contributions by the close of the Plan Year following
the Plan Year for which they were made will cause the Plan to fail to satisfy
the requirements of Code section 401(a)(4) for the Plan Year for which the
excess contributions were made and for all subsequent years they remain
uncorrected. Also, the Employers will be liable for a ten percent (10%) excise
tax on the amount of excess contributions unless they are corrected within 2 1/2
months after the close of the Plan Year for which they were made.
Any special nonelective contributions made pursuant to the terms of this section
shall be allocated to a special subaccount of the Participant's Salary Reduction
Contribution Account and shall be subject to the special vesting requirements
and withdrawal limitations as set forth in Treasury Regulation section 1.401(k)-
1(g)(13)(iii) and this Plan.
SECTION 3.10 - MATHEMATICAL NONDISCRIMINATION TEST FOR SALARY REDUCTION
- -----------------------------------------------------------------------
CONTRIBUTIONS; DISPOSITION OF EXCESS AMOUNTS Notwithstanding any of the
- --------------------------------------------
provisions of the Plan to the contrary, in each Plan Year the Salary Reduction
Contributions made on behalf of a Participant to the Plan shall be subject to
the mathematical nondiscrimination test set forth in section 401(k)(3)(A) of the
Code: that is, the Average Deferral Percentage of the eligible (participating
and non-participating) Highly Compensated Employees in each Plan Year shall not
exceed the Average Deferral Percentage of the eligible (participating and non-
participating) Non-Highly Compensated Employees for such Plan Year by more than
the amount permitted in accordance with the following table.
Page 23
<PAGE>
<TABLE>
<CAPTION>
IF THE AVERAGE DEFERRAL THE AVERAGE DEFERRAL PERCENTAGE
PERCENTAGE OF THE NON-HIGHLY OF THE HIGHLY COMPENSATED
COMPENSATED EMPLOYEE IS EMPLOYEES CAN BE
<S> <C>
Less than 2% Up to the ADP of the eligible Non-Highly Compensated Employees
multiplied by 2
2% but not more than 8% Up to the ADP of the eligible Non-Highly Compensated Employees
plus 2%
More than 8% Up to the ADP of the eligible Non-Highly Compensated Employees
multiplied by 1.25
</TABLE>
For purposes of this section, an "eligible" Highly Compensated Employee is any
such Employee who is directly or indirectly eligible to make Salary Reduction
Contributions under the Plan for all or a portion of a Plan Year and includes:
(1) an Employee who would be a Plan Participant but for the failure to make
required contributions; (2) an Employee whose eligibility to make Salary
Reduction Contributions has been suspended because of an election (other than
certain one-time elections) not to participate, a distribution, or a loan; and,
(3) an employee who cannot defer because of the Code section 415 limits on
annual additions. In the case of an eligible Employee who makes no Salary
Reduction Contributions the deferral ratio that is to be included in determining
the ADP is zero.
SPECIAL PROHIBITED MULTIPLE USE RULE: Notwithstanding the ADP limitations set
forth in the above table, in the event of "multiple use," certain additional ADP
limitations may apply as set forth in this paragraph. Before application of the
multiple use rule herein, the ADP and ACP of the Highly Compensated Employees
are determined after any corrections required to meet the ADP and ACP tests as
otherwise set forth in Section 3.09 and this section. Multiple use occurs if
both the ADP and ACP of the Highly Compensated Employees exceeds 1.25 multiplied
by the ADP and ACP of the Non-Highly Compensated Employees, respectively. If
multiple use occurs and if the sum of the ADP and ACP of the eligible Highly
Compensated Employees exceeds the "Aggregate Limit," then the ADP of the Highly
Compensated Employees shall be reduced hereunder (beginning with such Highly
Compensated Employee whose ADP is the highest) so that the Aggregate Limit is
not exceeded. The amount by which each Highly Compensated Employee's deferral
percentage is reduced shall be treated as an excess contribution and distributed
in accordance with the provisions of the following paragraph. For purposes of
this paragraph, the term "Aggregate Limit" shall mean the greater of:
(i) the sum of (1) 1.25 times the greater of the ADP or the ACP of the eligible
Non-Highly Compensated Employees for the Plan Year, and (2) two (2)
percentage points plus the lesser of the ADP or the ACP of the eligible
Non-Highly Compensated Employees for the Plan Year (but in no event,
however, may this amount exceed twice the lesser of the ADP or the ACP of
the eligible Non-Highly Compensated Employees for the Plan Year); or
Page 24
<PAGE>
(ii) the sum of (1) 1.25 times the lesser of the ADP or the ACP of the eligible
Non-Highly Compensated Employees for the Plan Year, and (2) two (2)
percentage points plus the greater of the ADP or the ACP of the eligible
Non-Highly Compensated Employees for the Plan Year (but in no event,
however, may this amount exceed twice the greater of the ADP or the ACP of
the eligible Non-Highly Compensated Employees for the Plan Year).
During each Plan Year, the Retirement Committee shall monitor the Average
Deferral Percentages of the eligible Highly Compensated Employees and eligible
Non-Highly Compensated Employees for such Plan Year and may make prospective
adjustments in the Salary Reduction Contributions of the eligible Highly
Compensated Employees as may be necessary to meet the Average Deferral
Percentage test herein. Further, notwithstanding the provisions of Section 3.03
hereof to the contrary, if necessary, the Employers shall have the sole and
absolute discretion to declare a special nonelective contribution to the Plan
allocable only to the participating Non-Highly Compensated Employees in the
ratio that each such Participant's Compensation for the Plan Year bears to the
total Compensation of all such Participants for the Plan Year. In the event
that as of the close of the Plan Year "excess contributions" remain, the
Retirement Committee, consistent with regulations published by the Secretary of
the Treasury or its delegate, shall cause a distribution of the excess Salary
Reduction Contributions, including earnings thereon (for the applicable Plan
Year and the "gap period" as determined in the following four paragraphs), to
the participating Highly Compensated Employees as may be necessary to meet the
Average Deferral Percentage test herein. In returning any excess Salary
Reduction Contributions, first, the actual deferral ratio of the Highly
Compensated Employee with the highest ratio is reduced to the extent necessary
to satisfy the ADP test or, if not satisfied, to cause such ratio to equal the
actual deferral ratio of the Highly Compensated Employee with the next highest
ratio. Second, this process is repeated until the ADP test is satisfied. The
determination and correction of excess contributions of a Highly Compensated
Employee whose actual deferral ratio is determined under the family aggregation
rules of section 3.01(d) is accomplished by reducing the actual deferral ratio
as required under this paragraph and allocating the excess contributions for the
family group among the Family Members in proportion to the Salary Reduction
Contributions of each Family Member that is combined to determine the actual
deferral ratio. Further, in the event any excess Salary Reduction Contributions
are returned to the Participant which have been matched by Employer Matching
Contributions, such Salary Reduction Contributions and Employer Matching
Contributions shall be reduced proportionately until the ADP test is satisfied.
Any Employer Matching Contributions arising under the preceding sentence shall
be forfeited and applied under Section 3.03(c) hereof. To the extent excess
deferrals have been returned to the affected Highly Compensated Employee under
Section 3.02(b) hereof for the taxable year ending in the Plan Year under
consideration, any excess Salary Reduction Contributions on behalf of the Highly
Compensated Employee to be returned under this paragraph shall be reduced
accordingly.
The Retirement Committee may use any reasonable method for computing the income
(or loss) allocable to excess contributions, provided that the method does not
violate Code section 401(a)(4), is used consistently for all Participants and
for all corrective distributions under the Plan for the Plan Year, and is used
by the Plan (under Section 4.02 hereof) for allocating income to Participants'
Accounts.
Page 25
<PAGE>
If the method in the preceding paragraph is not used, the Plan may allocate
income to excess contributions by multiplying the income for the Plan Year (and
the "gap period" -- the period between the end of the Plan Year and the date of
distribution of the excess contribution) allocable to the excess contributions
by a fraction. The numerator of the fraction is the excess contributions for
the Participant for the Plan Year. The denominator of the fraction is equal to
the sum of:
(1) the total account balance of the Participant attributable to Salary
Reduction Contributions as of the beginning of the Plan Year; plus
(2) the Employee's Salary Reduction Contributions for the Plan Year and for the
gap period if gap period income is allocated.
Notwithstanding the preceding paragraph, the Retirement Committee may choose to
follow a safe harbor method for calculating gap income. Under this method,
income on excess contributions for the gap period is equal to ten percent (10%)
of the income allocable to excess contributions for the Plan Year (calculated
under the method described in the foregoing paragraph), multiplied by the number
of calendar months that have elapsed since the end of the Plan Year. For
purposes of calculating the number of calendar months that have elapsed under
the safe harbor method, a corrective distribution that is made on or before the
fifteenth (15th) day of the month is treated as made on the last day of the
preceding month. A distribution made after the fifteenth (15th) day of the
month is treated as made on the first (1st) day of the next month.
The income allocable to excess contributions, for purposes of this section,
shall include all earnings and appreciation, including such items as interest,
dividends, rent, royalties, gains from the sale of property, appreciation in the
value of stock, bonds, annuity and life insurance contracts, and other property,
without regard to whether such appreciation has been realized.
Failure to correct excess contributions by the close of the Plan Year following
the Plan Year for which they were made will cause the cash of deferred
arrangement to fail to satisfy the requirements of Code section 401(k)(3) for
the Plan Year for which the excess contributions were made and for all
subsequent years they remain in the Trust. Also, the Employers will be liable
for a ten percent (10%) excise tax on the amount of excess contributions unless
they are corrected with 2 1/2 months after the close of the Plan Year for which
they were made.
Any special nonelective contributions made pursuant to the terms of this section
shall be allocated to a special subaccount of the Participant's Salary Reduction
Contribution Account and shall be subject to the special vesting requirements
and withdrawal limitations as set forth in Treasury Regulation section 1.401(k)-
1(g)(13)(iii) and this Plan.
Page 26
<PAGE>
ARTICLE IV - ACCOUNTS OF PARTICIPANTS
-------------------------------------
SECTION 4.01 - TRUST FUND VALUATION Periodically, and at least one time per
- -----------------------------------
year, the Trustee shall determine the fair market value of the Trust Fund and
the Retirement Committee shall cause the fair market value of the Accounts of
each Participant to be determined in balance with the Trust Fund. In determining
the "fair market value" of the Trust Fund, the Trust Fund shall be valued in
accordance with usual and customary practices. Assets of the Trust Fund which
are traded regularly on established markets shall be valued at the last sale
price, or if no sale is quoted on such date then at the bid price last quoted on
or prior to the close of business on such date.
SECTION 4.02 - ADJUSTMENT OF ACCOUNTS As of each Valuation Date the Accounts
- -------------------------------------
of each Participant shall be adjusted so that the investment earnings (or
losses, if such computation is negative) of each investment fund within the
Trust Fund are allocated to each account and "subaccount" within an investment
fund. For the purposes of carrying out the allocation of this Section 4.02,
the term "subaccount" shall mean that portion of the Participant's Accounts that
----------
are invested in the particular investment fund under consideration.
Any payment of interest on a Participant loan shall be allocated to the
subaccount or account, as applicable, of the Participant to whom the loan was
made in accordance with the proportionate reduction in their Accounts in order
to fund said loan.
The Accounts of each affected Participant shall be increased by the periodic
allocation of any Salary Reduction Contributions, Employer Matching
Contributions, Rollover Contributions and any special nonelective contributions
made pursuant to the respective provisions of Sections 3.02, 3.03, 3.04, 3.09
and 3.10 hereof.
SECTION 4.03 - TRUSTEE'S AND RETIREMENT COMMITTEE'S DETERMINATIONS BINDING
- --------------------------------------------------------------------------
In determining the value of the Trust Fund and each Participant's Accounts, the
Trustee and the Retirement Committee shall exercise their best judgment and all
such determinations (in the absence of bad faith) shall be binding upon all
Participants and their Beneficiaries.
SECTION 4.04 - INVESTMENT OF ACCOUNTS There shall be established within the
- -------------------------------------
Trust Fund two (2) or more separate investment funds as determined by the
Retirement Committee from time to time in its sole and absolute discretion
(herein collectively called "investment funds"). As of the Effective Date of
the Plan, there are seven (7) funds which shall be communicated to Participants
as is necessary to complete the election process. The investment
classifications of the funds are generally described as follows each of which
may be held directly, or indirectly through any mutual fund, collective
investment trust or other vehicle:
(i) J.B. Hunt Stock Fund, consisting primarily of J.B. Hunt common stock and
such amount of cash as, in the Trustee's sole discretion, is too small to
be reasonably invested in such stock. The Trustee is hereby explicitly
authorized to acquire and hold J.B. Hunt common stock. Any and all
investments, reinvestments or purchases shall be made at prices not in
excess of the current fair market value of the J.B. Hunt common stock at
the time of such purchase or investment;
Page 27
<PAGE>
(ii) Equity Funds, consisting primarily of investment in common stock and
other equity securities; and
(iii) GIC funds, consisting primarily of guaranteed investment contracts
issued by insurance carriers, but may also consist from time to time of
bank investment contracts, interest bearing accounts, certificates of
deposit, or bonds, debentures and other evidences of indebtedness issued
by corporations and governmental units;
(iv) Bond Funds, consisting primarily of investment in corporate bonds,
debentures, trust certificates, acceptances, bills of exchange, U.S.
Treasury Bills, U.S. Treasury Notes, U.S. Treasury Bonds, U.S.
Government obligations, commercial paper, notes, mortgages, bank
investment contracts and/or guaranteed investment contracts;
(v) Balanced Funds, consisting primarily of investment in common or capital
stocks, preferred stocks, preferred stocks convertible into common or
capital stocks, equity instruments which represent ownership in real
estate properties including investment limited partnerships,
international (or foreign) equities, gold related equities, corporate
bonds, debentures, U.S. Treasury Notes, U.S. Treasury Bonds, U.S.
Government obligations, notes, mortgages, bank investment contracts
and/or guaranteed investment contracts;
(vi) Money Market Funds, consisting primarily of investment in master notes,
federal or state chartered bank or savings association certificates of
deposit (both domestic and Eurodollar), U.S. Treasury Bills, U.S.
Treasury Notes, U.S. Government agency obligations, commercial paper,
bank investment contracts and guaranteed investments contracts; and
(vii) International Funds, consisting primarily of investment in diversified
equity securities of foreign issuers, but may also from time to time be
invested in U.S. domestic common stocks or foreign and U.S. domestic
bonds and debentures.
All current contributions and Accounts shall be partitioned as hereinafter
provided.
Section 4.04(a) - Initial Investment Fund Directions for Future
---------------------------------------------------------------
Contributions When an Employee becomes a Participant in the Plan, he may
-------------
direct in the aggregate the investment of his Employer Matching
Contributions, Rollover Contributions and Salary Reduction
Contributions, if any, in any combination of one (1) or more of the
investment funds in increments of one percent (1%) so that the total of
his investment directions to the investment funds equal one hundred
percent (100%).
Any such direction shall be made within the time frame, and in such
manner or other method as determined appropriate by the Retirement
Committee and communicated to each Employee prior to his eligibility for
participation in the Plan. Such direction shall be subject to any
applicable securities laws and regulations thereunder or rules and
procedures set forth by the Company to comply with applicable securities
laws. In the absence of any proper direction, all contributions shall at
all times be invested in the Guaranteed Interest Account.
Page 28
<PAGE>
Any special nonelective contributions pursuant to Sections 3.09-3.10
shall be invested in the same manner (and percentage) as Salary
Reduction Contributions.
Section 4.04(b) - Change of Investment of Current Accounts and Future
---------------------------------------------------------------------
Contributions A Participant may change in the aggregate the investment
-------------
of his then current Deductible Employee Contribution Account, Employer
Matching Contribution Account, Rollover Account and Salary Reduction
Contribution Account, if any (subject to any future liquidity and/or
transfer restrictions imposed by any investment fund (or the underlying
investments thereunder)), in increments of one percent (1%) so that the
total of his investment directions to the investment funds equal one
hundred percent (100%).
A Participant may change in the aggregate the investment of his future
Employer Matching Contributions, Rollover Contributions and Salary
Reduction Contributions, if any, in increments of one percent (1%) so
that the total of his investment directions to the investment funds
equal one hundred percent (100%).
Any such change pursuant to this section shall be made within the time
frame, and in such manner or other method as determined appropriate by
the Retirement Committee, and communicated in advance to each
Participant. Such direction shall be subject to any applicable
securities laws and regulations thereunder or rules and procedures set
forth by the Company to comply with applicable securities laws.
Section 4.04(c) - J.B. Hunt Common Stock
----------------------------------------
(1) Acquisition of Stock by Trustee The Trustee shall acquire shares
-------------------------------
of J.B. Hunt common stock pursuant to Participants' elections in
accordance with the provisions of Sections 4.04(a)-(b) hereof at
such times and in such quantities as the Trustee deems advisable
in the open market or, in the Trustee's discretion, from private
sources (including an Employer but excluding directors or
officers thereof), at not more than the market price then
prevailing.
(2) Restriction on Stock Acquisition Notwithstanding any other
--------------------------------
provisions hereof, it is specifically provided that the Trustee
shall not purchase J.B. Hunt common stock during any period in
which such purchase is, in the opinion of counsel for the
Company or the Plan, restricted by any law or regulation
applicable thereto. During such period, amounts that would
otherwise be invested in J.B. Hunt common stock shall be
invested in the Guaranteed Interest Account.
(3) Stock Rights, Stock Splits and Stock Dividends No Participant or
----------------------------------------------
Beneficiary shall have any right of request, direction or demand
upon the Retirement Committee or the Trustee to exercise in his
behalf rights or privileges to acquire, convert into, or
exchange for J.B. Hunt common stock or other securities. The
Trustee, in its discretion, may exercise or sell any such rights
or privileges. Each affected Participant's Accounts shall be
appropriately credited. J.B. Hunt common stock received by the
Trustee by reason of a stock split, stock dividend or
recapitalization
Page 29
<PAGE>
shall be appropriately allocated to the Accounts of the affected
Participant or Beneficiary.
(4) Voting of J.B. Hunt Common Stock Unless otherwise provided under
--------------------------------
ERISA and consistent with the Trust Agreement, at each annual
meeting and special meeting of the stockholders of the Company, the
Trustee shall vote all shares of J.B. Hunt common stock in such
form or manner as it determines to be in the best interest of
Participants and Beneficiaries.
Page 30
<PAGE>
ARTICLE V - DISTRIBUTIONS UNDER THE PLAN
-----------------------------------------
SECTION 5.01 - VALUATION OF ACCOUNTS FOR DISTRIBUTION When a Participant's
- -----------------------------------------------------
Accounts become distributable pursuant to Section 5.02, the following provisions
shall apply.
Section 5.01(a) - Termination of Employment; Required Distributions In
-------------------------------------------------------------------
the event of a Participant's Termination of Employment, he may elect to
receive payment of his vested Accounts calculated at their value as of
the Valuation Date immediately preceding the date of distribution on
account of such distributable event. Any distribution determined under
this Section 5.01(a) shall take into consideration any previous
distributions, an offset against outstanding Participant loans or other
amounts owed to the Plan by the Participant.
Any required distribution under Section 5.09 hereof shall be based on
the Valuation Date immediately preceding the date of distribution.
Section 5.01(b) - Retirement, Total and Permanent Disability and Death
----------------------------------------------------------------------
In the event of a Participant's retirement, Total and Permanent
Disability or death, he, or his Beneficiary, may elect to receive
payment of his Accounts calculated at their value as of the Valuation
Date immediately preceding the date of distribution on account of such
distributable event. Any distribution determined under this Section
5.01(b) shall take into consideration any previous distributions, an
offset against outstanding Participant loans or other amounts owed to
the Plan by the Participant.
SECTION 5.02 - DISTRIBUTABLE EVENTS; VESTING; FORFEITURES The following
- ---------------------------------------------------------
provisions shall apply.
Section 5.02(a) - Vesting If a Participant (i) retires on or after
-------------------------
attaining his Normal Retirement Age, (ii) dies, or (iii) Terminates
Employment due to Total and Permanent Disability, one hundred percent
(100%) of the value of his Accounts shall become distributable to him,
or, in the case of his death shall become distributable to his
Beneficiary, valued as of the applicable Valuation Date set forth in
Section 5.01 hereof. If a Participant Terminates Employment for any
other reason on or after being credited with at least five (5) Years of
Vesting Service (seven (7) Years of Vesting Service prior to January 1,
1995), one hundred percent (100%) of the value of his Accounts shall
become distributable to him, valued as of the applicable Valuation Date
set forth in Section 5.01 hereof. If a Participant Terminates Employment
with less than five (5) Years of Vesting Service (seven (7) Years of
Vesting Service prior to January 1, 1995), one hundred percent (100%) of
the value of his Rollover Account and Salary Reduction Contribution
Account, if any, shall become distributable to him valued as of the
applicable Valuation Date set forth in Section 5.01 plus the vested
percentage, if any, of his Employer Matching Contribution Account as
determined from the following vesting schedule, as applicable (based on
his Years of Vesting Service), as of the date of his Termination of
Employment valued as of the applicable Valuation Date set forth in
Section 5.01 hereof:
Page 31
<PAGE>
APPLICABLE TO PARTICIPANTS WHO HAVE AN HOUR OF SERVICE ON OR AFTER
------------------------------------------------------------------
JANUARY 1, 1995:
---------------
<TABLE>
<CAPTION>
YEARS OF VESTING SERVICE VESTED PERCENTAGE
---------------------------------------------- ------------------
<S> <C>
Less than 3 0%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
APPLICABLE TO PARTICIPANTS WHO DO NOT HAVE AN HOUR OF SERVICE
---------------------------------------------------------------
AFTER DECEMBER 31, 1994:
---------------------------------------------------------------
YEARS OF VESTING SERVICE VESTED PERCENTAGE
---------------------------------------------- -----------------
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
</TABLE>
Notwithstanding the above vesting schedule, a Participant's Employer
Matching Contribution Account will become one hundred percent (100%)
vested and nonforfeitable when he reaches his Normal Retirement Age,
provided he is still employed by the Employers on that date.
If a Participant who has Terminated Employment is reemployed as an
Employee prior to his Normal Retirement Age and prior to receiving a
distribution hereunder, then he shall resume standing to his Accounts
(as set forth in the third paragraph of Section 5.05) and shall not be
entitled to a distribution under the Plan on account of his earlier
Termination of Employment.
Furthermore and notwithstanding the above provisions of this section,
upon termination of this Plan without establishment or continued
maintenance of a successor defined contribution plan (other than an ESOP
or simplified employee pension plan as defined in Code section 408(k)),
within the period ending twelve (12) months after distribution of all
assets from the Plan, the provisions of Section 8.02 and 8.03 shall
apply and distribution may be made hereunder on account of such event.
Upon (i) the sale by an Employer or an Affiliate of substantially all of
the assets (within the meaning of section 409(d)(2) of the Code) used by
such Employer or Affiliate in a trade or business with respect to a
Participant who continues employment with the corporation acquiring such
assets, or (ii) the sale by an Employer (or an Affiliate) of the
Employer's (or Affiliate's) interest in a subsidiary (within the meaning
of section 409(d)(3) of the Code) with respect to a Participant who
continues employment with such subsidiary, if the seller continues the
Plan (and the purchaser does not
Page 32
<PAGE>
maintain the Plan after disposition), for distribution purposes herein
the affected Participant shall be considered to have Terminated
Employment and his Accounts shall be paid to him at such time and in
such manner as provided under this section and Section 5.01. The
operation of this paragraph shall in no way prohibit the Retirement
Committee or Company from making a determination that there has been a
partial termination of the Plan as set forth in Section 8.03 hereof.
Section 5.02(b) - Forfeitures Any nonvested percentage of a
-----------------------------
Participant's Employer Matching Contribution Account shall become a
Forfeiture upon the earlier of (i) the last day of the Plan Year in
which he first incurs five (5) consecutive Breaks in Service as the
result of the Termination of his Employment, or (ii) at the time in
which he receives a distribution of his entire vested Accounts,
including the portion thereof derived from Employer Matching
Contributions (and "employer profit sharing contributions" and
"forfeitures" under the terms of the Prior Plan) as the result of his
Termination of Employment (provided such distribution, if any, is made
not later than the close of the second Plan Year following the
Participant's Termination of Employment). If only one (1) of the events
identified in clause (i) and clause (ii) of the immediately preceding
sentence occurs, the event that occurs shall be deemed the first to
occur. The Retirement Committee shall determine a Participant's
Forfeiture, if any, solely by reference to the vesting schedule above.
Forfeitures herein shall then be applied in accordance with the
provisions of Section 3.03(c) hereof. If such Participant herein resumes
employment with the Employers, the repayment and restoration provisions
of Section 5.05 hereof shall apply.
If a Participant Terminates Employment and is zero percent (0%) vested in
his Employer Matching Contribution Account, such Participant shall be
deemed to be "cashed-out" immediately upon such Termination of Employment
and the provisions of clause (ii) of the immediately preceding paragraph
shall apply whereupon the Participant's Employer Matching Contribution
Account shall become a Forfeiture. If such Participant resumes employment
with the Employers prior to incurring five (5) consecutive Breaks in
Service, the restoration provisions of Section 5.05 hereof shall apply.
Section 5.02(c) - Separate Accounts If a Participant incurs five (5)
-----------------------------------
consecutive Breaks in Service (resulting in a Forfeiture of his nonvested
Employer Matching Contribution Account) and subsequently reenters the
Plan prior to the time that he has received a distribution hereunder
equal to one hundred percent (100%) of his vested Accounts, determined as
of the last day of the Plan Year in which he incurred the last of such
five (5) consecutive Breaks in Service, the Retirement Committee shall
maintain, or cause to be maintained, a separate Employer Matching
Contribution Account for the Participant's pre-five (5) consecutive
Breaks in Service vested Employer Matching Contribution Account and a
separate Employer Matching Contribution Account for his post-five (5)
year consecutive Breaks in Service vested Employer Matching Contribution
Account unless the Participant's Employer Matching Contribution Account
was one hundred percent (100%) vested and nonforfeitable at the time he
incurs the last of such five (5) consecutive Breaks in Service. Any
subsequent distribution hereunder to the Participant as a result of his
later Termination of Employment shall include one hundred percent (100%)
of the amount of his
Page 33
<PAGE>
separate pre-five (5) consecutive Breaks in Service Employer Matching
Contribution Account.
SECTION 5.03 - FORMS OF DISTRIBUTION Except as otherwise provided herein,
- ------------------------------------
any distribution pursuant to a distributable event in Section 5.02 hereof shall
be paid as a lump sum distribution in cash. In the case of a Participant, any
payment hereunder shall be subject to the consent requirement, if applicable, of
Section 5.04 hereof.
A Participant who has part or all of his Accounts invested in the J.B. Hunt
Stock Fund may, in lieu of receiving a lump sum cash payment, elect to receive
all amounts payable from such fund in whole shares of J.B. Hunt common stock.
The value of any partial shares will be paid in cash.
SECTION 5.04 - CASH-OUT OF BENEFITS; CONSENT REQUIREMENT FOR IMMEDIATELY
- -------------------------------------------------------------------------
DISTRIBUTABLE BENEFITS Notwithstanding any provisions contained herein to
- ----------------------
the contrary, upon a Participant's Total and Permanent Disability, Termination
of Employment or retirement, his benefits under the Plan may be paid or
distributed subject to the following limitations.
Section 5.04(a) If the value of a Totally and Permanently Disabled,
---------------
terminating or retiring Participant's vested percentage in his Accounts
is not more than three thousand five hundred dollars ($3,500), the
Retirement Committee will direct, without the consent of the
Participant, that such amounts be paid in a lump sum cash payment.
The provisions of Sections 5.01(a) or 5.01(b), as applicable, shall
apply to determine the value of the Participant's distributable
Accounts.
Section 5.04(b) If the value of the Totally and Permanently Disabled,
---------------
terminating or retiring Participant's vested percentage in his Accounts
is more than three thousand five hundred dollars ($3,500), except as
otherwise provided in this Section 5.04(b) and consistent with the
provisions hereof, the Participant may not be paid without his written
consent.
Any distribution to a Participant who has a benefit which exceeds, or
has ever exceeded, three thousand five hundred dollars ($3,500) shall
require such Participant's consent if such distribution occurs prior to
his Normal Retirement Age. With regard to this required consent:
(i) no consent shall be valid unless the Participant has received a
general description of the material features and an explanation
of the relative values of the optional forms of benefit
available under the Plan that would satisfy the notice
requirements of Code section 417;
(ii) the Participant must be informed of his right to defer receipt
of the distribution. If a Participant fails to consent, it shall
be deemed an election to defer the commencement of payment of
any benefit. However, any election to defer the receipt of
benefits shall not apply with respect to distributions which are
required under Section 5.09 hereof;
Page 34
<PAGE>
(iii) notice of the rights specified under this paragraph shall be
provided no less than thirty (30) days and no more than ninety
(90) days before the first day on which all events have occurred
which entitle the Participant to such benefit;
(iv) written consent of the Participant to the distribution must not
be made before the Participant receives the notice and must not
be made more than ninety (90) days before the first day on which
all events have occurred which entitle the Participant to such
benefit; and
(v) no consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution.
Prior to Normal Retirement Age, if the Participant (who is no longer an
employee) makes a valid election under this section, he shall receive
payment of his vested Accounts in accordance with the timing of such
election as set forth in Section 5.01(a). If the Participant (who is no
longer an employee) attains Normal Retirement Age and has not received a
complete distribution of his vested Accounts, the provisions of Section
5.01(b) shall apply to cause a distribution to the Participant as soon
as reasonably practicable.
Notwithstanding the above provisions of this Section 5.04(b), if a
distribution hereunder is one to which sections 401(a)(11) and 417 of
the Code do not apply, such distribution may commence less than thirty
(30) days after the notice required under section 1.411(a) - 11(c) of
the Income Tax Regulations is given, provided that:
(1) the Retirement Committee clearly informs the Participant that
the Participant has a right to a period of at least thirty (30)
days after receiving the notice to consider the decision of
whether or not to elect a direct rollover of his distribution,
and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
SECTION 5.05 - RESTORATION BY THE EMPLOYERS If a Participant who Terminated
- -------------------------------------------
Employment without being one hundred percent (100%) vested in his Employer
Matching Contribution Account (and "employer profit sharing contribution
account" before January 1, 1995, if any) received a distribution qualifying
under Section 5.02(b)(ii) hereof, and is subsequently reemployed prior to
incurring five (5) consecutive Breaks in Service and again becomes a Participant
in the Plan, he may elect to repay the Trust Fund the exact amount of his vested
percentage in his Employer Matching Contribution Account (and "employer profit
sharing contribution account," if any) previously distributed to him hereunder;
provided, any such repayment shall be made before the earlier of (i) the end of
a period consisting of five (5) consecutive Breaks in Service since the date of
distribution from the Plan, or (ii) five (5) years after his reemployment date
which gives rise to the application of this section.
In such event, the amounts that were credited to his Employer Matching
Contribution Account (and "employer profit sharing contribution account," if
any) which were treated as a Forfeiture shall be reinstated (no later than the
December 31 Valuation Date of the Plan Year in which his repayment
Page 35
<PAGE>
occurs) by the Employers first using any Forfeitures available under Section
3.03(c) hereof, and then by paying to the Trustee such sums as shall be
necessary to restore his Employer Matching Contribution Account (and "employer
profit sharing contribution account," if any) to its value as of the date of the
Forfeiture reallocation (i.e., the Valuation Date considered in the Plan Year in
which he received the qualifying distribution).
If a Participant who Terminated Employment is reemployed prior to receiving a
distribution from his Employer Matching Contribution Account (and "employer
profit sharing contribution account," if any) qualifying under Section
5.02(b)(ii) hereof, and prior to incurring five (5) consecutive Breaks in
Service which permit a Forfeiture under Section 5.02(b)(i) hereof, and who again
becomes a Participant in the Plan, then, in such event, he shall resume standing
to his Employer Matching Contribution Account.
If a zero percent (0%) vested Participant who Terminated Employment is
reemployed prior to incurring five (5) consecutive Breaks in Service, and who
previously incurred a Forfeiture under Section 5.02(b)(ii) hereof, and who again
becomes a Participant in the Plan, then, in such event, he shall be restored to
his Employer Matching Contribution Account (no later than the Valuation Date
ending with the Plan Year in which his reemployment occurs) valued as of the
Valuation Date considered for distribution upon his Termination of Employment,
such restoration to occur by the Employers first using any Forfeitures available
under Section 3.03(c) hereof, and then by paying to the Trustee such sums as
shall be necessary to restore such Account to its value as of such date.
SECTION 5.06 - WITHDRAWALS BY PARTICIPANTS Upon receipt of a request in such
- ------------------------------------------
form as the Retirement Committee shall prescribe, a Participant may at any time
request a withdrawal in accordance with the provisions of this section.
WITHDRAWALS SHALL BE BASED ON THE VALUATION DATE AS SET FORTH IN EACH RESPECTIVE
SUBSECTION BELOW AND SHALL CONSIDER ANY PREVIOUS WITHDRAWALS AND, IF APPLICABLE,
THE APPROPRIATE COLLATERAL FOR ANY OUTSTANDING PARTICIPANT LOANS. Any
withdrawal shall cause the affected account's underlying investment funds to be
liquidated on a pro rata basis according to each investment fund's value when
compared to the total value of all investment funds of such Account.
Section 5.06(a) - Deductible Employee Contribution Account Withdrawal A
---------------------------------------------------------------------
Participant may request a one-time withdrawal of the entire portion of
the value of his Deductible Employee Contribution Account calculated as
of the Valuation Date immediately preceding the date of distribution on
account of such request.
Amounts withdrawn pursuant to this Section 5.06(a) may not be repaid to
the Trust Fund.
Section 5.06(b) - Rollover Account Withdrawal A Participant may request
---------------------------------------------
a withdrawal of up to the entire portion of the value of his Rollover
Account calculated as of the Valuation Date immediately preceding the
date of distribution on account of such request.
Amounts withdrawn pursuant to this Section 5.06(b) may not be repaid to
the Trust Fund.
Page 36
<PAGE>
Section 5.06(c) - Salary Reduction Contribution Account Hardship
----------------------------------------------------------------
Withdrawal A Participant may at any time and to the extent his
----------
Deductible Employee Contribution Account and Rollover Account have been
exhausted (or as otherwise restricted herein), submit a request for a
hardship withdrawal from his Salary Reduction Contribution Account
provided the hardship withdrawal is on account of "extreme financial
hardship" (as hereinafter defined). A HARDSHIP WITHDRAWAL MAY ONLY BE
MADE FROM SALARY REDUCTION CONTRIBUTIONS AND NOT FROM EARNINGS ON SUCH
SALARY REDUCTION CONTRIBUTIONS. Any hardship withdrawal hereunder shall
be based on the value of the Participant's Salary Reduction Contribution
Account calculated as of the Valuation Date immediately preceding the
date of distribution on account of such request.
The Retirement Committee shall authorize a hardship withdrawal only upon
a finding that the withdrawal is necessary to enable the Participant to
meet unusual or special situations in his financial affairs which result
in an immediate and heavy financial need. Further, any distribution
hereunder may not exceed the amount required to meet the immediate
financial need created and that such amount is not available from other
resources reasonably available to the Participant. Upon such finding,
the Retirement Committee shall direct the Trustee to make the
appropriate distribution in a lump sum as soon as practicable.
An "extreme financial hardship" shall only be recognized with respect to
a Participant as necessary to enable the Participant to meet unusual or
special situations which result in an immediate and heavy financial need
if the withdrawal request is on account of:
(i) medical expenses described in Code section 213(d) incurred by
the Participant, the Participant's spouse, or any dependents of
the Participant (as defined in Code section 152) or necessary
for those persons to obtain medical care described in Code
section 213(d);
(ii) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
(iii) payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, his or her spouse, children, or dependents (as
defined in Code section 152);
(iv) payments necessary to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage on
the Participant's principal residence; or
(v) such other events as may be determined by Commissioner of
Internal Revenue Service through revenue rulings, notices or
other documents of general applicability.
The Retirement Committee shall make a determination on the basis of all
relevant facts and circumstances that the distribution is of an amount
necessary to satisfy the immediate and heavy financial need and that it
is not available from other resources of the Participant. For purposes
of this paragraph, the Participant's resources are deemed to include
those assets of
Page 37
<PAGE>
the Participant's spouse and minor children that are reasonably
available to the Participant. Thus, for example, a vacation home owned
by the Participant and the Participant's spouse, whether as community
property, joint tenants, tenants by the entirety or tenants in common,
generally will be deemed a resource of the Participant. However,
property held for the Participant's child under an irrevocable trust or
under the Uniform Gifts to Minors Act is not treated as a resource of
the Participant. The amount of an immediate and heavy financial need may
include any amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the
distribution.
A distribution will be recognized as necessary to satisfy an immediate
and heavy financial need only if, in the judgment of the Retirement
Committee, all of the following requirements are met:
(1) the distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of an
immediate and heavy financial need may include any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the
distribution;
(2) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available from all plans maintained by the Employers;
(3) the Plan, by the terms of this paragraph, suspends a
Participant's right to make Salary Reduction Contributions to
the Plan for twelve (12) months after receipt of the hardship
distribution. The Plan, by the terms of this paragraph, shall
suspend a Participant's right to make Salary Reduction
Contributions to the Plan until the first payroll period
following twelve (12) months after receipt of the hardship
distribution. The Retirement Committee shall determine that a
similar suspension is imposed by all other plans maintained by
the Employers. In the event more than one (1) distribution is
made hereunder within a twelve (12) month period, the suspension
period shall not be tacked to the remaining portion of the prior
suspension period but rather shall start anew; and
(4) the Plan, by the terms of this paragraph, restricts a
Participant's right to make Salary Reduction Contributions to
the Plan in the taxable year following the taxable year of the
hardship distribution to an amount equal to the applicable limit
under Code section 402(g) reduced by the Participant's Salary
Reduction Contributions in the taxable year of the hardship
distribution. The term "taxable year" as used hereunder means
the Participant's taxable year. Further, the Retirement
Committee shall determine that a similar restriction is imposed
by all other plans maintained by the Employers.
Amounts withdrawn pursuant to this Section 5.06(d) may not be repaid to
the Trust Fund.
SECTION 5.07 - LOANS TO PARTICIPANTS Upon proper application of a
- ------------------------------------
Participant who is an Employee currently receiving regular pay from the
Employers (or as otherwise determined eligible for the
Page 38
<PAGE>
Participant loan program by the Retirement Committee) in such manner or
method as determined appropriate by the Retirement Committee and
communicated to the Participant, the Retirement Committee will direct
the Trustee to make a loan to the Participant from the Trust Fund. Each
Participant loan shall be treated as an allocated investment of the
Participant's Accounts. The application, and the resulting loan, must
meet the terms and conditions specified in the following provisions of
this Section 5.07.
Section 5.07(a) A loan shall not be made that exceeds, or that together
---------------
with any other outstanding loans made pursuant to this Section 5.07,
would exceed the lesser of (i) fifty thousand dollars ($50,000) minus
the excess, if any, of (a) the highest outstanding balance of loans to
the Participant during the one (1) year period ending on the day before
the date the loan is made, over (b) the outstanding balance of loans to
the Participant from the Plan on the date the loan is made, or (ii)
fifty percent (50%) of the Participant's Rollover Account, Salary
Reduction Contribution Account and the vested percentage of his Employer
Matching Contribution Account determined as of the Valuation Date
coincident with or immediately preceding the date the loan application
is received and approved by the Retirement Committee or its delegate.
When a loan is made hereunder, funding for the loan will be made by
utilizing the Participant's Accounts in the following order:
(i) Rollover Account;
(ii) Employer Matching Contribution Account; and
(iii) Salary Reduction Contribution Account.
Furthermore, to the extent necessary to fund said loan, the
Participant's directed investment funds for which his Accounts are
invested pursuant to Section 4.04 hereof shall be liquidated first from
the fund with the least amount of principal risk and then from the
remaining investment funds, if necessary. For purposes of allocating
investment earnings (or losses) under Section 4.02(a), such loan shall
be treated as a withdrawal during the calendar quarter and weighted
accordingly.
Section 5.07(b) Only one (1) loan may be outstanding at any one time and
---------------
the minimum loan that may be made shall be one thousand dollars
($1,000).
Section 5.07(c) The term of repayment for the loan shall be that
---------------
determined by the Participant, but shall not exceed the maximum term
established by formal rules adopted by the Retirement Committee. Except
for a loan for the purchase of a primary residence which may extend the
term of the loan to twenty (20) years, the Retirement Committee's formal
rules shall not allow a term in excess of five (5) years for any loan.
Such formal rules shall be reduced to writing and shall be made
available, upon request and free of charge, to any Participant.
Page 39
<PAGE>
Section 5.07(d) The Participant may authorize his Employer to deduct, or
---------------
shall otherwise make, approximately equal payments consisting of
principal and interest (not less frequently than quarterly) from his
compensation in the case of payroll deduction or personal resources
where there is no payroll deduction, in such an amount as would permit
the loan to be fully amortized over its term. The Employer shall
transfer any such payroll deductions or payments to the Trustee as soon
as reasonably practicable.
Section 5.07(e) A Participant may repay, at any time, the total amount
---------------
of the then outstanding principal balance of his loan, together with
accrued interest, without premium or penalty.
Section 5.07(f) The loan shall be made against the assignment of
---------------
collateral of up to fifty percent (50%) of the Participant's vested
Accounts (excluding his Deductible Employee Contribution Account, if
any) determined at the time the loan is made evidenced by the
Participant's promissory note and a security interest in other
collateral as deemed appropriate by the Retirement Committee for the
amount of such loan, including interest, payable to the order of the
Trustee. Such note shall be held by the Trustee as an asset of the Trust
Fund allocated only to the Participant to whom the loan is granted.
Notwithstanding the provisions of Section 4.02(a) hereof, payments by a
Participant representing interest shall be considered as investment
income of the Trust Fund applicable only to the Participant.
All payments by a Participant representing principal shall be debited
against the outstanding balance of the loan. Such principal payments,
and any interest payments hereunder, shall be credited to the Accounts
of the Participant in proportion to the original funding of the loan
from said Accounts and invested in the investment fund with the least
amount of principal risk in proportion to the original funding of the
loan from said Accounts.
Section 5.07(g) The loan shall bear interest at prime rate plus one (1)
---------------
of at least three (3) major banks (rounded to the next highest one-
fourth of one percent (.025%). In order to receive a loan, the
Participant shall pay, or cause to be paid, a fifty-dollar ($50) loan
origination fee. In the case of a loan conversion initiated by the
Participant upon Termination of Employment, he shall pay or cause to be
paid a one-hundred-dollar ($100) conversion fee.
Section 5.07(h) The terms of the promissory note for said loan shall
---------------
provide that if the Participant defaults on the loan by not making
payments when due, and if the entire balance due, including interest, is
not paid by the Participant within thirty (30) days following
notification to the Participant of the default, the Trustee, upon advice
of such default from the Retirement Committee, shall execute upon the
security of the Participant's Accounts (subject to the limitations in
Section 5.07(f) above and limitations on distributions from a
Participant's Salary Reduction Contribution Account or other Accounts as
provided by law prior to Termination of Employment) in satisfaction of
the unpaid debt.
Page 40
<PAGE>
Section 5.07(i) No distribution under Sections 5.02, 5.09 and 5.10 shall
---------------
be made to any Participant or Beneficiary unless and until all unpaid
loans, including accrued interest, have been repaid (which may be offset
from any benefit payment thereunder).
If a loan to a Participant is outstanding on the date of his Termination
of Employment, he may continue to keep the loan in force subject to the
other limitations of this section and the terms of the loan. In the
event the terminated Participant requests a distribution from the Plan,
he may either pay the loan off completely or direct that the portion of
his Account or Accounts equal to the outstanding balance of principal
and interest on the loan be distributed in kind by distribution of the
actual loan note.
SECTION 5.08 - LIMITATION ON TIMING OF DISTRIBUTIONS Unless a Participant
- ----------------------------------------------------
cannot be located by the Retirement Committee after reasonable efforts, any
payment of Plan benefits to the Participant hereunder shall begin not later than
sixty (60) days after the close of the Plan Year in which occurs the later of:
(i) his Normal Retirement Age; or
(ii) his Termination of Employment.
SECTION 5.09 - REQUIRED DISTRIBUTIONS Except as otherwise provided in the
- -------------------------------------
next following paragraph, in no event shall a Participant's Plan benefits be
paid later than the first day of April of the calendar year immediately
following the calendar year during which he reaches Age seventy and one-half
(70 1/2).
Notwithstanding the above provisions of this section to the contrary, in the
case of a Participant who reaches Age seventy and one-half (70 1/2) before
January 1, 1988, such Participant can defer the commencement of his benefit
payment under the Plan until retirement (and Termination of Employment),
provided such Participant is not a "five percent (5%) owner" of an Employer (as
defined in section 416(i) of the Code) at any time during the calendar year in
which he reaches Age sixty-six and one-half (66 1/2), or in any preceding Plan
Year.
All distributions under the Plan shall satisfy Code section 401(a)(9) and
regulations issued pursuant thereto.
A Participant's required distribution under this Section 5.09 shall commence in
the same manner as if he retired under Sections 5.02-5.03 hereof. Plan benefits
shall be paid in the payment form prescribed under Section 5.03 hereof. If the
Participant's Accounts increase due to additional Employer Matching
Contributions, Salary Reduction Contributions and investment earnings, his
distributable amount shall be the balance of his accounts and his future payment
of benefits shall be the form of payment provided for under Section 5.03.
If a Participant dies before receiving the entire value of his Accounts, any
remaining value of his Accounts shall be payable to his Beneficiary or
contingent Beneficiary as provided under Section 1.05 and Section 5.10 hereof.
Page 41
<PAGE>
SECTION 5.10 - ALTERNATE PAYMENT OF DEATH BENEFITS If, at the time of a
- --------------------------------------------------
Participant's death while benefits are still outstanding, his Beneficiary does
not survive him, his Accounts shall be paid (in the form of distribution
provided under Section 5.03 hereof) to his contingent Beneficiary. If a
deceased Participant is not survived by either a Beneficiary or contingent
Beneficiary (or if no Beneficiary was effectively named), the benefits shall be
paid in a single lump sum to the person or persons in the first of the following
classes of successive preference beneficiaries then surviving: the Participant's
(i) spouse, (ii) children, per capita, (iii) parents, (iv) brothers and sisters,
or (v) executors and administrators. If the Beneficiary or contingent
Beneficiary is living at the death of the Participant, but such person dies
prior to receiving the entire death benefit, the remaining portion of such
benefit (if any) shall be paid in a single lump sum to the estate of such
deceased Beneficiary or contingent Beneficiary. If the Retirement Committee
cannot locate any Beneficiary or contingent Beneficiary entitled to receive any
death benefit payable hereunder within two (2) years, such Beneficiary or
contingent Beneficiary shall be deemed to have not survived the Participant and
the above provisions of this Section 5.10 shall apply. At any time prior to a
Participant's death, a Participant may change his designation of Beneficiary or
contingent Beneficiary by filing a properly executed beneficiary designation
form with the Retirement Committee which meets the requirements of Section 1.05
hereof.
Notwithstanding any provision in the Plan to the contrary, distributions upon
the death of the Participant shall be made in accordance with the following
requirements and shall otherwise comply with Code section 401(a)(9) and
regulations prescribed thereunder. If a Participant dies after receiving
partial distribution of his Accounts, the balance will continue to be
distributed at least as rapidly as under the method applicable to the
Participant at his death. If a Participant dies before his distribution
commences and the Beneficiary was not designated by the Participant, the balance
of his Accounts must be distributed within five (5) years of his death. If the
Beneficiary was designated by the Participant, the balance must be distributed
to such Beneficiary over a period not greater than the Beneficiary's life
expectancy, commencing not later than the end of the calendar year following the
calendar year in which the Participant died [or, if the designated Beneficiary
is the surviving spouse of the Participant, commencing not later than the end of
the calendar year in which the Participant would have attained age seventy and
one-half (70 1/2)].
SECTION 5.11 - DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS
- ----------------------------------------------------------------------
Nothing contained in this Plan shall prevent the Trustee, in accordance with the
direction of the Retirement Committee, from complying with the provisions of a
"Qualified Domestic Relations Order" (as defined in section 414(p) of the Code).
This Plan specifically permits distribution to an alternate payee under a
Qualified Domestic Relations Order at any time, irrespective of whether the
Participant has attained the earliest retirement age under the Plan. To the
extent permitted by applicable law, a distribution to an alternate payee prior
to the Participant's attainment of his earliest retirement age is available
only:
(i) if the order specifies distribution at an earlier date than the
Participant's earliest retirement age or permits an agreement between
the Plan and the alternate payee to authorize an earlier distribution;
and
Page 42
<PAGE>
(ii) if when the present value of the alternate payee's benefits under the
Plan exceeds three thousand five hundred dollars ($3,500), and if the
order requires, the alternate payee consents to any distribution
occurring prior to the Participant's attainment of his earliest
retirement age.
Nothing in this section shall permit the alternate payee to receive a form of
payment not permitted under the Plan.
The Retirement Committee shall establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Retirement Committee promptly shall notify the Participant
and any alternate payee named in the order, in writing, of the receipt of the
order and the Plan's procedures of determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic
relations order, the Retirement Committee shall determine the qualified status
of the order and shall notify the Participant and each alternate payee, in
writing, of the determination. The Retirement Committee shall provide notice
under this paragraph by mailing to the individual's address specified in the
domestic relations order.
If any portion of the Participant's benefit is payable during the period the
Retirement Committee is making its determination of the qualified status of the
domestic relations order, the Retirement Committee shall direct the Trustee to
make a separate accounting of the amounts payable. If the Retirement Committee
determines the order is a Qualified Domestic Relations Order within eighteen
(18) months of the date amounts first are payable following receipt of the
order, the Retirement Committee shall direct the Trustee to distribute the
payable amounts in accordance with the order. If the Retirement Committee does
not make its determination of the qualified status of the order within the
eighteen (18) month determination period, the Retirement Committee shall direct
the Trustee to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and shall apply the order prospectively if
the Retirement Committee later determines the order is a Qualified Domestic
Relations Order.
SECTION 5.12 - TRANSFER OF INTEREST The following provisions shall apply to
- -----------------------------------
distributions made under the Plan.
Section 5.12(a) - Direct Rollover Option Notwithstanding any provision
----------------------------------------
of the Plan to the contrary that would otherwise limit a distributee's
election under this Section 5.12, a distributee may elect, at the time
and in the manner prescribed by the Retirement Committee, to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
Section 5.12(b) - Definitions 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
Page 43
<PAGE>
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specific 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 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 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.
Page 44
<PAGE>
ARTICLE VI - THE PLAN ADMINISTRATOR AND RETIREMENT COMMITTEE
------------------------------------------------------------
SECTION 6.01 - PLAN ADMINISTRATOR AND RETIREMENT COMMITTEE The Company shall
- ----------------------------------------------------------
be the Plan Administrator for the purposes of the Act and shall be considered
the Retirement Committee hereunder unless the Company appoints one (1) or more
persons to serve as members of the Retirement Committee to administer the Plan
on behalf of the Plan Administrator. In the latter event, the Company shall
notify the Trustee of the names of the members of the Retirement Committee and
of any changes in membership that may take place from time to time.
SECTION 6.02 - TERM AND COMPENSATION OF RETIREMENT COMMITTEE Any individual
- ------------------------------------------------------------
members of the Retirement Committee shall serve at the pleasure of the Company
or until his earlier resignation, and vacancies shall be filled in the same
manner as the original appointments. No compensation shall be paid to the
members of the Retirement Committee for services on such Retirement Committee.
SECTION 6.03 - CLAIMS PROCEDURE Subject to the limitations of the Plan the
- -------------------------------
Retirement Committee shall from time to time establish rules for the transaction
of its business and for the administration of the Plan. Without limiting the
generality of the preceding sentence, it is specifically provided that the
Retirement Committee shall set forth in writing, available for inspection by any
interested party, the procedures to be followed in presenting claims for
benefits under the Plan. In case of any factual dispute hereunder, the
Retirement Committee shall resolve such dispute giving due weight to all
evidence available to it. The Retirement Committee shall interpret the Plan and
shall determine all questions arising in the administration, interpretation, and
application of the Plan. All such determinations shall be final, conclusive and
binding except to the extent that they are appealed under the following claims
procedure.
In the event that the claim of any person to all or any part of any payment or
benefit under the Plan shall be denied, the Retirement Committee shall provide
to the claimant, within ninety (90) days after receipt of such claim (or, if an
extension of time is required, not more than one hundred eighty (180) days after
receipt of such claim), a written notice setting forth, in a manner calculated
to be understood by the claimant, (i) the specific reason or reasons for the
denial, (ii) specific references to the pertinent Plan provisions on which the
denial is based, (iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation as to why
such material or information is necessary, and (iv) an explanation of the Plan's
claim procedure. In the event an extension of time is necessary in which to
respond to the claim, the claimant shall be given written notice before the
expiration of the initial ninety (90) day period setting forth the reasons for
the extension and the date the Retirement Committee expects to render its
decision.
Within sixty (60) days after receipt of the above material, the claimant shall
have a reasonable opportunity to appeal the claim denial to the Retirement
Committee for a full and fair review. The claimant or his duly authorized
representative may (i) request a review upon written notice to the Retirement
Committee, (ii) review pertinent documents, and (iii) submit issues and comments
in writing.
Page 45
<PAGE>
A decision by the Retirement Committee shall be made no later than sixty (60)
days after receipt of a request for review, unless special circumstances require
an extension of time for processing, in which event a decision should be
rendered as soon as reasonably practicable, but in no event later than one
hundred twenty (120) days after such receipt. If an extension of time is
necessary, the claimant must be given written notification. The Retirement
Committee's decision on review shall be written and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, with specific references to the pertinent Plan provisions on which the
decision is based.
SECTION 6.04 - POWERS AND DUTIES OF THE RETIREMENT COMMITTEE The Retirement
- ------------------------------------------------------------
Committee shall have such powers and duties, including, but not necessarily
limited to, the following, which it deems necessary to discharge all of its
responsibilities hereunder:
(i) to calculate and notify the Participants of the balance in their
Accounts as of each Valuation Date;
(ii) to administer the Participant loan program under the Plan which shall
incorporate all of the powers and duties enumerated herein as they would
so apply to the administration of Participant loans;
(iii) consistent with the provisions of Section 5.07 hereof, to establish
procedures from time to time which will enable the Retirement Committee
to administer the Participant loan program;
(iv) to have complete and final discretionary authority to construe and
interpret the Plan, control over the operation and administration of the
Plan, including interpretation of all plan documents, decisions
concerning all questions of eligibility to participate and the
determination of the amount, manner and time of payment of any benefits
hereunder and without limitation, the determination of all related or
nonrelated questions and matters that arise under the Plan;
(v) to prescribe procedures to be followed by Participants or Beneficiaries
filing applications for benefits;
(vi) to prepare and distribute in such manner as the Retirement Committee
determines to be appropriate, information explaining the Plan;
(vii) to receive from the Participants such information as shall be
necessary for the proper administration of the Plan;
(viii) to receive, review and keep on file (as is deemed convenient and proper)
reports of benefit payments by the Trustee and reports of disbursements
for expenses directed by the Retirement Committee;
Page 46
<PAGE>
(ix) to receive and to appoint others to receive from the Trustee or
investment manager reports of each transaction involving assets of the
Plan, as well as a quarterly report of assets and a quarterly record of
transactions;
(x) to receive process in legal actions against the Plan; and
(xi) to appoint or employ individuals to assist in the administration of the
Plan and any other agents it deems advisable, including accountants,
legal counsel, recordkeeping and other consultants, and to delegate to
such agents any powers and duties as the Retirement Committee may deem
expedient or appropriate.
The Retirement Committee shall have no power to add to, subtract from or modify
any of the terms of the Plan, or to change or add to any benefits provided by
the Plan, or to waive or fail to apply any requirements of eligibility for a
benefit under the Plan.
SECTION 6.05 - DIRECTING PAYMENTS The persons authorized by the Retirement
- ---------------------------------
Committee shall direct the Trustee in writing to make payments from the Trust
Fund to Participants or Beneficiaries who qualify for such payments hereunder.
Such written order to the Trustee shall specify the name of the Participant, his
address, his Social Security number, and the amount and form of his benefit
payments.
SECTION 6.06 - NON-DISCRIMINATION The Retirement Committee shall not take
- ---------------------------------
action or direct the Trustee to take any action with respect to any of the
benefits provided hereunder or otherwise in pursuance of the powers conferred
herein upon the Retirement Committee which would be discriminatory in favor of
Participants or Employees who are officers, or highly-compensated employees of
an Employer, or which would result in benefiting one Participant, or group of
Participants, at the expense of another.
SECTION 6.07 - LEGAL COUNSEL The Retirement Committee may consult with legal
- ----------------------------
counsel (who may also be legal counsel to an Employer) concerning any question
which may arise with reference to its duties under the Plan and the opinion of
such legal counsel shall be full and complete protection with respect to any
action taken or suffered by the Retirement Committee hereunder in good faith and
in accordance with the opinion of such legal counsel.
SECTION 6.08 - INDEMNIFICATION The Employers shall indemnify and save
- ------------------------------
harmless the Retirement Committee and any other fiduciary who is also an
officer, director or employee of an Employer, and hold each of them harmless
from and against all claims, loss, damages, expense and liability arising from
their responsibilities in connection with the administration of the Plan which
is not otherwise paid or reimbursed by insurance, unless the same shall result
from their own willful misconduct.
SECTION 6.09 - REQUIRED VOTE; RECORDS Except as otherwise specifically
- -------------------------------------
provided in the Plan, every decision and action of the Retirement Committee
shall be valid if concurred in by a majority of the members then in office,
which concurrence may be had without a formal meeting. The Retirement Committee
shall select a Secretary, who may or may not be a Participant of the Plan or a
member of the Retirement Committee, and any other officers deemed necessary, and
shall adopt
Page 47
<PAGE>
rules governing its procedures not inconsistent herewith. The Retirement
Committee shall keep a permanent record of its meetings and actions.
Page 48
<PAGE>
ARTICLE VII - THE TRUST FUND AND THE TRUSTEE
--------------------------------------------
SECTION 7.01 - TRUST AGREEMENT The Company has entered into a Trust
- ------------------------------
Agreement with the Trustee to hold the funds set aside pursuant to the Plan.
SECTION 7.02 - TRUST FUND The Trustee shall maintain the Trust Fund to hold
- -------------------------
the assets of the Accounts of the Plan Participants. The Trustee shall have all
the powers and duties enumerated in the Trust Agreement and shall keep separate
records reflecting the investment earnings (or losses), receipts, disbursements,
purchases, sales and list of holdings of such assets. The investment earnings
(or losses) of the Trust Fund shall be allocated by the Retirement Committee to
the Participant Accounts pursuant to Section 4.02(a) hereof.
SECTION 7.03 - NON-REVERSION; EXCLUSIVE BENEFIT CLAUSE The Trust Fund shall
- ------------------------------------------------------
be received, held in trust and disbursed by the Trustee in accordance with the
provisions of the Trust Agreement and the Plan. Except as provided in Section
3.06 hereof with respect to mistaken contributions and non-deductible
contributions, no part of the Trust Fund shall be used for or diverted to
purposes other than for the exclusive benefit of Participants or their
Beneficiaries under the Plan. No person shall have any interest in, or right
to, the Trust Fund or any part thereof, except as specifically provided for in
the Plan or the Trust Agreement.
SECTION 7.04 - REMOVAL OF TRUSTEE The Company may remove the Trustee at any
- ---------------------------------
time upon the notice required by the terms of the Trust Agreement and upon such
removal or resignation, the Company shall appoint a successor Trustee.
SECTION 7.05 - POWERS OF TRUSTEE Except as otherwise provided in the Trust
- --------------------------------
Agreement and the Plan, the Trustee shall have such powers to hold, invest,
reinvest, control and disburse the funds.
SECTION 7.06 - TRUST AGREEMENT PART OF PLAN The Trust Agreement shall be
- -------------------------------------------
deemed to form a part of the Plan and the rights of Participants or others under
the Plan shall be subject to the provisions of the Trust Agreement.
SECTION 7.07 - TRUSTEE'S SETTLEMENT OF ACCOUNTS The Trust Agreement may
- -----------------------------------------------
contain provisions granting authority to the Company to settle the accounts of
the Trustee on behalf of all persons having or claiming interest in the Trust
Fund.
Page 49
<PAGE>
ARTICLE VIII - AMENDMENT AND TERMINATION
----------------------------------------
SECTION 8.01 - AMENDMENT The Company hereby reserves the right at any time,
- ------------------------
by action of its Board of Directors, to modify or amend, in whole or in part,
any or all of the provisions of the Plan, including specifically the right to
make any such amendment effective retroactively, if necessary, to bring the Plan
into conformity with any governmental regulations which must be complied with so
that the Plan and Trust Fund shall qualify under section 401(a) of the Code. No
modification or amendment shall make it possible for the Trust assets to be used
for or diverted to purposes other than the exclusive benefit of Participants and
their Beneficiaries except as provided in Section 3.06 hereof with respect to
mistaken contributions and nondeductible contributions.
Except as otherwise permitted by law, it is further provided that no such
amendment or modification shall have the effect of decreasing, either directly
or indirectly, any Participant's Plan benefits hereunder. This prohibition
against any reduction includes certain early retirement benefits, a retirement
type subsidy and certain optional forms of benefits as further defined in
section 411(d)(6) of the Code and regulations issued thereunder.
SECTION 8.02 - TERMINATION; DISCONTINUANCE OF CONTRIBUTIONS; PARTIAL
- --------------------------------------------------------------------
TERMINATION The Company may, by action of its Board of Directors, unilaterally
- -----------
terminate the Plan at any time as applicable to all Employers under the Plan.
Any Employer may, by action of its Board of Directors, terminate its
participation in the Plan at any time. After a unilateral termination by the
Company, notwithstanding any provisions of the Plan to the contrary, (i) no
Employee shall become a Participant, (ii) no contributions shall be made (unless
they are pursuant to a receivable), (iii) any then existing Accounts of a former
Employee which have not become a Forfeiture shall be nonforfeitable, and (iv)
the Accounts of each Participant in the employ of an Employer at the time of
such termination shall be nonforfeitable.
The Company may, by action of its Board of Directors, direct the complete
discontinuance of all contributions by all Employers and Participants under the
Plan. In such event, notwithstanding any provisions of the Plan to the
contrary, (i) no Employee shall become a Participant after such discontinuance,
(ii) any then existing Accounts of a former Employee which have not become a
Forfeiture shall be nonforfeitable, and (iii) the Accounts of each Participant
in the employ of an Employer at the time of such discontinuance shall be
nonforfeitable. This section is not applicable if one Employer discontinues its
contributions while one or more other Employers continue to make contributions.
If there is a partial termination of the Plan, either by operation of law, by
amendment of the Plan or for any other reason, which partial termination shall
be confirmed by the Retirement Committee, notwithstanding any provisions of the
Plan to the contrary, the Accounts of each Participant with respect to whom the
partial termination applies shall be nonforfeitable.
SECTION 8.03 - DISTRIBUTION OF ACCOUNTS UPON TERMINATION; DISCONTINUANCE OF
- ---------------------------------------------------------------------------
CONTRIBUTIONS; PARTIAL TERMINATION If the Company terminates the Plan, or there
- ----------------------------------
is a complete discontinuance of contributions, or there is a partial termination
of the Plan, the Retirement Committee shall compute the value of the Accounts of
the affected Participants (as of a specially called Valuation Date, or at
Page 50
<PAGE>
the next scheduled Valuation Date). The Accounts of each such Participant
shall, at the discretion of the Company, be either (i) distributed in the manner
otherwise provided in Section 5.03 hereof in cash, or (ii) continue to be held
in the Trust Fund to be distributed upon each Participant's retirement, death,
Total and Permanent Disability or Termination of Employment.
In the event of a distribution upon plan termination as provided above, such
distribution shall be made in accordance with Sections 1.05, 5.02, 5.03, 5.04,
5.09, 5.10 and 5.11 of the Plan and the remaining operative provisions of the
Plan shall control.
SECTION 8.04 - AMENDMENT TO VESTING SCHEDULE Although the Company reserves
- --------------------------------------------
the right to amend the vesting schedule in Section 5.02 hereof at any time, the
Company shall not amend the vesting schedule (and no amendment shall be
effective) if the amendment would reduce the nonforfeitable percentage of any
Participant's Accounts (determined as of the later of the date the Company
adopts the amendment, or the date the amendment becomes effective) to a
percentage less than the nonforfeitable percentage computed under the Plan
without regard to the amendment.
In the event the vesting schedule of the Plan is amended, any Participant who
has completed three (3) Years of Vesting Service, may elect to have the vested
percentage of his Accounts determined under Section 5.02 hereof, computed under
the Plan without regard to such amendment by notifying the Retirement Committee
in writing during the election period hereinafter described. The election
period shall begin on the date such amendment is adopted and shall end no
earlier than the latest of the following dates:
(i) the date which is sixty (60) days after the day such amendment is
adopted;
(ii) the date which is sixty (60) days after the day such amendment becomes
effective; or
(iii) the date which is sixty (60) days after the day the Participant is given
written notice of such amendment by the Retirement Committee.
Any election made pursuant to this Section 8.04 shall be irrevocable. The
Retirement Committee, as soon as practicable, shall forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment, and notice of the time within which the
Participant must make an election to remain under the prior vesting schedule.
Page 51
<PAGE>
ARTICLE IX - MISCELLANEOUS PROVISIONS
-------------------------------------
SECTION 9.01 - PLAN MERGER, CONSOLIDATION OR TRANSFER OF ASSETS In the case
- ---------------------------------------------------------------
of any merger, consolidation, or transfer of assets or liabilities to any other
plan, such plan shall provide that each Participant would, if the plan
terminated immediately after the merger, consolidation or transfer, receive a
benefit which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer if
the Plan had then terminated.
SECTION 9.02 - SPENDTHRIFT CLAUSE Except for the portion of a Participant's
- ---------------------------------
Accounts held as collateral by the Plan against Participant loans under Section
5.07 hereof, none of the benefits under the Plan are subject to the claims of
creditors of Participants or their Beneficiaries nor are they subject to
attachment, garnishment or any other legal process. Neither a Participant nor
his Beneficiary may assign, sell, borrow on or otherwise encumber his beneficial
interest in the Plan and Trust Fund, nor shall any such benefits be in any
manner liable for or subject to the deeds, contracts, liabilities, engagements
or torts of any Participant or Beneficiary. Notwithstanding the above and
consistent with the provisions of Section 5.11, this Section 9.02 does not
preclude the Trustee from complying with a "Qualified Domestic Relations Order"
as defined in section 414(p) of the Code. If any court of competent jurisdiction
orders the Retirement Committee to do anything inconsistent with the provisions
of this section, unless and until the order is set aside, annulled, withdrawn or
otherwise released or satisfied, the Retirement Committee (i) shall upon receipt
of the order, give written notice to the Participant or his Beneficiary as
appropriate, of the service of the order, the contents of the order and the
Retirement Committee's intent to comply subject to the provisions of this
section; and (ii) may refrain from taking any action that may prevent it from
complying with the order at the appropriate time; provided, however, that
notwithstanding anything contained in the Plan to the contrary, benefits not
payable to a Participant under the terms of the Plan at the time the order
becomes effective shall not be subject to attachment. If any Participant or
Beneficiary shall become bankrupt or attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit prior to actually being
received by the Participant, the Trustee shall recognize the anticipation,
alienation, sell, transfer, assignment, pledge, encumbrance or charge only to
the extent permitted by ERISA and, to the extent not preempted by ERISA,
applicable local law.
SECTION 9.03 - PLAN VOLUNTARY Although it is the intention of the Company
- -----------------------------
and the Employers that the Plan shall be continued and contributions made
regularly, the Plan is entirely voluntary on the part of the Company and the
Employers and the continuance of the Plan and any payments hereunder are not
assumed as a contractual obligation of the Company and the Employers.
SECTION 9.04 - RESERVATION OF RIGHT TO SUSPEND OR DISCONTINUE CONTRIBUTIONS
- ---------------------------------------------------------------------------
The Company and Employers specifically reserve the right in their sole and
uncontrolled discretion and by their official and authorized acts to modify,
suspend (in whole or in part) at any time or from time to time and for any
period or periods or to discontinue at any time their contributions under the
Plan.
SECTION 9.05 - NON-GUARANTEE OF EMPLOYMENT Nothing contained in the Plan
- ------------------------------------------
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Company or an Employer or to interfere with the right of the
Company or an Employer to discharge any Participant
Page 52
<PAGE>
or Employee at any time regardless of the effect which such discharge shall have
upon such individual as a Participant in the Plan.
SECTION 9.06 - GOVERNING LAW The Plan shall be construed in accordance with
- ----------------------------
the laws of the State of Arkansas except where such laws are superseded by the
Act or the Code, in which case the Act or the Code, as the case may be, shall
control.
SECTION 9.07 - FACILITY OF PAYMENT In making any distribution to or for the
- ----------------------------------
benefit of any minor or incompetent Participant or Beneficiary, the Retirement
Committee, in its sole, absolute and uncontrolled discretion may, but need not,
order the Trustee to make such distribution to a legal or natural guardian of
such minor or incompetent and any such guardian shall have full authority and
discretion to expend such distribution for the use and benefit of such minor or
incompetent and the receipt of such guardian shall be a complete discharge to
the Trustee without any responsibility on its part or on the part of the
Retirement Committee to see to the application thereof.
SECTION 9.08 - FIDUCIARIES For the purposes of Part 4 of Title I of the Act,
- --------------------------
the Company, each Employer, the Trustee and the Retirement Committee, shall each
be named fiduciaries. All actions by named fiduciaries shall be in accordance
with the terms of the Plan and Trust insofar as this document is consistent with
the provisions of Title I of the Act. Each named fiduciary shall act solely in
the interest of Participants and Beneficiaries and for the exclusive purpose of
providing benefits and defraying reasonable administrative expenses. Each named
fiduciary shall discharge his respective duties hereunder with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. Without
limiting the generality of the above, it is specifically provided that the
appointment and retention of the Retirement Committee are duties of the Company.
SECTION 9.09 - ALLOCATION OF FIDUCIARY RESPONSIBILITIES The Company shall be
- -------------------------------------------------------
responsible for the administration and management of the Plan except for those
duties herein specifically allocated to the Employers, the Trustee or the
Retirement Committee. The Trustee shall have exclusive responsibility for the
management and control of the assets of the Plan except as otherwise provided in
the Plan and Trust Agreement. The Retirement Committee shall have exclusive
responsibility for all matters specifically delegated to it by the Company or
the Employers in the Plan. Each named fiduciary shall be responsible only for
the specific duties assigned above and shall not be directly or indirectly
responsible for the duties assigned to another fiduciary.
SECTION 9.10 - SUCCESSOR EMPLOYERS In the event of a merger or consolidation
- ----------------------------------
of an Employer or transfer of all or substantially all of its assets to any
other corporation, partnership or association, provision may be made by such
successor corporation, partnership or association, at its election, for the
continuance of this agreement and the retirement plan created hereunder by such
successor entity. Such successor shall, upon its election to continue the Plan,
be substituted in place of such Employer by an instrument duly authorizing such
substitution and duly executed by such Employer and its successor. Upon notice
of such substitution accompanied by a certified copy of the resolutions of the
governing board of such Employer and its successor authorizing such substitution
and delivered
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<PAGE>
to the Trustee, the Trustee and all Participants hereunder shall be authorized
to recognize such successor in the place of such former Employer.
SECTION 9.11 - MISSING PERSONS The Retirement Committee shall direct the
- ------------------------------
Trustee to make a reasonable effort to locate all persons entitled to benefits
under the Plan; however, notwithstanding any provision in the Plan to the
contrary, if, after a period of five (5) years from the date such benefits shall
be due, any such persons entitled to benefits have not been located, their
rights under the Plan shall be construed as if the Employee had died. Before
this provision becomes operative, the Trustee (or the Retirement Committee)
shall send a certified letter to all such persons at their last known address
advising them that their interest or benefits under the Plan shall be so
construed. Any such amounts shall be held by the Trustee for a period of three
(3) additional years (or a total of eight (8) years from the time the benefits
first become payable). If no distributee can be found, then, any unclaimed
benefits shall be considered a "forfeiture" and applied in accordance with
Section 3.03(c) hereof in the Plan Year in which the forfeiture occurs. If the
Participant ever makes a claim thereafter, his benefit previously forfeited
shall be reinstated.
While payment is pending, the Retirement Committee shall direct the Trustee to
hold the Participant's benefits in a segregated account which shall be invested
in U.S. Government obligations, certificates of deposit, or other obligations
providing a stated rate of return. The segregated account shall be entitled to
all income it earns and shall bear all expense or loss it incurs. Any payment
made pursuant to the power herein conferred upon the Retirement Committee shall
operate as a complete discharge of all obligations of the Trustee and the
Retirement Committee, to the extent of the distributions so made.
SECTION 9.12 - SEVERABILITY CLAUSE In the event any provisions of the Plan
- ----------------------------------
document shall be held illegal or invalid for any reasons, the illegality or
invalidity shall not affect the remaining provisions of the Plan document, which
shall be fully severable and the Plan document shall be construed and enforced
as if the illegal or invalid provision had never been inserted herein.
SECTION 9.13 - TEXT OF PLAN DOCUMENT CONTROLS Titles of Articles in the Plan
- ---------------------------------------------
are inserted for convenience of reference only and in the event of any conflict,
the text of this instrument, rather than such titles, shall control.
SECTION 9.14 - PLAN AND TRUST EXPENSES To the extent not paid out of the
- --------------------------------------
Trust as authorized by the Company, all Plan and Trust expenses shall be paid by
the Employers.
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<PAGE>
ARTICLE X - PARTICIPATION BY AFFILIATES OF THE COMPANY
------------------------------------------------------
SECTION 10.01 - ADOPTION BY AFFILIATES Any corporation or other business
- --------------------------------------
entity which is an Affiliate (as defined in Article I) which includes the
Company, may, with the consent of the Company, adopt the Plan for its Employees.
Such adoption shall be made by resolution of such corporation's governing board
and an instrument executed by its officers pursuant thereto. The provisions of
the Plan shall apply to each Employer severally, except as (i) provided in the
instrument adopting the Plan and Trust, and (ii) otherwise specifically provided
herein.
SECTION 10.02 - AMENDMENT If the Plan and Trust are amended by the Company
- -------------------------
after they are adopted by an Affiliate, unless otherwise expressly provided,
they shall be treated as so amended by such Affiliate without the necessity of
any action on its part.
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<PAGE>
ARTICLE XI - TOP HEAVY PROVISIONS
---------------------------------
SECTION 11.01 - ADDITIONAL DEFINITIONS The following definitions shall apply
- --------------------------------------
as used herein and elsewhere in the Plan.
Section 11.01(a) - Aggregation Group The term "Aggregation Group" means
------------------------------------ -----------------
either a "Required Aggregation Group" or a "Permissive Aggregation
-------------------------- ----------------------
Group" as hereinafter determined.
-----
(i) Required Aggregation Group In determining a Required Aggregation
--------------------------
Group hereunder, each plan of the Employers in which a Key
Employee is a Participant, and each other plan of the Employers
which enables any plan in which a Key Employee participates to
meet the requirements of section 401(a)(4) or section 410 of the
Code, will be required to be aggregated. Such group shall be
known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(ii) Permissive Aggregation Group The Employers may also include any
----------------------------
other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of section
401(a)(4) and section 410 of the Code. Such group shall be known
as a Permissive Aggregation Group.
No plan in the Permissive Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is not a Top
Heavy Group.
(iii) Included Plans Only those plans of the Employers in which the
--------------
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top
Heavy Plans.
(iv) Terminated Plans An Aggregation Group shall include any
----------------
terminated plan of the Employers if it was maintained within the
last five (5) years ending on the Determination Date.
Section 11.01(b) - Determination Date The term "Determination Date"
------------------------------------- ------------------
shall mean (i) the last day of the preceding Plan Year, or (ii) in the
case of the first Plan Year, the last day of such Plan Year.
Section 11.01(c) - Key Employee The term "Key Employee" shall have the
------------------------------- ------------
same meaning as is specified in section 416(i) of the Code, to wit:
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<PAGE>
(i) an officer of the Employers (including an employer required to
be aggregated under Code sections 414(b), (c), (m) and (o))
having Top Heavy Compensation for the Plan Year greater than
fifty percent (50%) of the amount in effect under Code section
415(b)(1)(A) for the calendar year in which such Plan Year ends.
Further, for these purposes, after aggregating all employees
required to be aggregated under Code sections 414(b), (c), (m),
(n) and (o), no more than fifty (50) employees - or if lesser,
the greater of three (3) employees or ten percent (10%) of the
employees - shall be treated as officers. For purposes of
determining the number of officers taken into account, employees
described in Code section 414(q)(8) shall be excluded.
Determination of who is an officer shall be made by the
Retirement Committee based on all the facts and circumstances,
including, but not limited to, the source of authority, the
term, the nature and extent or limits of duty. Generally, the
term means an administrative executive in regular and continuous
service. A partner of a partnership will not be treated as an
officer merely because he owns a capital or profits interest in
the partnership, exercises his voting rights as a partner and
may for limited purposes be authorized to and does in fact act
as an agent of the partnership;
(ii) one (1) of the ten (10) employees having Top Heavy Compensation
from the Employers for the Plan Year, in excess of the
limitation in effect under Code section 415(c)(1)(A) for the
calendar year in which the Plan Year ends, owning (or considered
as owning within the meaning of Code section 318, as modified by
Code section 416(i)(1)(B)(iii)(I)) both more than a one-half
---------
percent (1/2%) ownership interest and the largest interests in
--- -------
the Employers. If two (2) or more employees have the same
percentage interest during the testing period, the employee
having greater Top Heavy Compensation from the Employers for the
Plan Year during any part of which that ownership interest
existed, shall be treated as having a larger interest (see
Internal Revenue Service Regulations 1.416-1, T-19);
(iii) A "five percent (5%) owner" of an Employer which means any
person who owns (or is considered as owning within the meaning
of Code section 318, as modified by Code section
416(i)(1)(B)(iii)(I)) more than five percent (5%) of the
outstanding stock of an Employer or stock possessing more than
five percent (5%) of the total combined voting power of all
stock of an Employer (if an Employer is not a corporation, any
person who owns more than five percent (5%) of the capital or
profits interest in the Employer). In determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code sections 414(b), (c), (m) and (o) shall be
treated as separate employers; and
(iv) A "one percent (1%) owner" of an Employer having Top Heavy
Compensation from an Employer of more than one hundred fifty
thousand dollars ($150,000). "One percent (1%) owners" means any
person who owns (or is considered as owning within the meaning
of Code section 318 as modified by Code section
416(i)(1)(B)(iii)(I)) more than one percent (1%) of the
outstanding stock of an Employer or stock possessing more than
one percent (1%) of the total combined voting power of all stock
of an Employer (if an Employer is not a corporation, any
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<PAGE>
person who owns more than one percent (1%) of the capital or
profits interest in the Employer). In determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code sections 414(b), (c), (m) and (o) shall be
treated as separate employers. However, in determining whether
an individual has Top Heavy Compensation of more than one
hundred fifty thousand dollars ($150,000), Top Heavy
Compensation from the Employers required to be aggregated under
Code sections 414(b), (c), (m) and (o) shall be taken into
account.
The term Key Employee as of any Determination Date shall be
applied to any Participant, former Participant or retired
Participant (or his spouse or Beneficiary) who was a Key
Employee during the Plan Year (ending with such Determination
Date) or in any of the four (4) immediately preceding Plan Years
(the "testing period").
Section 11.01(d) - Non-Key Employee The term "Non-Key Employee" shall
----------------------------------- ----------------
mean an employee who is not a Key Employee.
Section 11.01(e) - Top Heavy Compensation Except as used in Section
-----------------------------------------
11.04, the term "Top Heavy Compensation" shall mean "compensation" as
----------------------
defined in section 414(q)(7) of the Code. For purposes of Section 11.04
herein, the term "Top Heavy Compensation" shall mean "compensation" as
defined in Treasury Regulation section 1.415-2(d).
Section 11.01(f) - Top Heavy Group The term "Top Heavy Group" shall mean
---------------------------------- ---------------
an Aggregation Group in which, as of the Determination Date, the sum of:
(i) the accounts of Key Employees under all defined contribution
plans included in the group, and
(ii) the present value of accrued benefits of Key Employees under all
defined benefit plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
SECTION 11.02 - APPLICATION The Plan shall be a "Top Heavy Plan" for any
- --------------------------- --------------
Plan Year commencing after December 31, 1983, in which, as of the Determination
Date, (i) the sum of accounts of Key Employees, and (ii) the present value of
the accrued benefits of Key Employees under the Plan and all plans of an
Aggregation Group exceed sixty percent (60%) of the accounts and sixty percent
(60%) of the present value of accrued benefits of all Key Employees and Non-Key
Employees under the Plan and all plans of such Aggregation Group. Furthermore,
each plan of the Employers (which may include the Plan) which is part of a
Required Aggregation Group that is a Top Heavy Group shall be treated as a Top
Heavy Plan.
If any Participant is a Non-Key Employee for any Plan Year, but such Participant
was a Key Employee for any prior Plan Year, such Participant's accounts and/or
present value of accrued benefits shall not be taken into account for purposes
of determining whether the Plan is a Top Heavy
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<PAGE>
Plan (or whether any Required Aggregation Group which includes the Plan is a Top
Heavy Group). In addition, for Plan Years beginning after December 31, 1984, if
a Participant or former Participant has not performed services for any Employer
maintaining the Plan at any time during the five (5) year period ending on the
Determination Date, the accounts and/or present value of accrued benefits for
such Participant or former Participant shall not be taken into account for the
purposes of determining whether the Plan is a Top Heavy Plan.
In the case of a defined contribution plan, any accounts established on behalf
of a Key Employee or Non-Key Employee shall be considered using the fair market
value of such accounts as determined under the provisions of the applicable plan
(including the Plan) upon the most recent valuation date occurring within a
twelve (12) month period ending on the Determination Date. Any distributions or
benefit payments from the Plan and all plans of an Aggregation Group made within
the Plan Year that includes the Determination Date or within the four (4)
preceding Plan Years shall be included in such calculations. In the case of a
defined benefit plan, the present value of accrued benefits as of any
Determination Date must be determined as of the most recent plan valuation date
which is within a twelve (12) month period ending on the Determination Date.
For this purpose, the valuation date must be the same valuation date for
computing plan costs for minimum funding. The present value of accrued benefits
for purposes of computing the Top Heavy Plan percentages herein shall be
determined on the basis of the respective interest and mortality assumptions of
each plan, if applicable.
Notwithstanding the above provisions to the contrary, with respect to unrelated
rollovers and plan-to-plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one (1) employer to a plan
maintained by another employer), the Plan shall always consider such rollover or
plan-to-plan transfer as a distribution for the purposes of this section. If
this Plan is the plan accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan transfers accepted after
December 31, 1983, as part of the Participants aggregate account balance.
However, rollovers or plan-to-plan transfers accepted prior to January 1, 1984,
shall be considered as part of the Participant's aggregate account balance.
SECTION 11.03 - SPECIAL VESTING RULE Notwithstanding the provisions of
- ------------------------------------
Section 5.02 hereof to the contrary, if the Plan is a Top Heavy Plan, a
Participant shall be fully vested hereunder upon the completion of five (5)Years
of Vesting Service and shall be partially vested after two (2) Years of Vesting
Service as determined in accordance with the following schedule:
<TABLE>
<CAPTION>
YEARS OF VESTING SERVICE VESTED PERCENTAGE
------------------------ -----------------
<S> <C>
Less than 2 0%
2 but less than 3 20%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
</TABLE>
Page 59
<PAGE>
In the event the Plan is no longer deemed to be a Top Heavy Plan, then the
vesting schedule herein above provided shall no longer be applicable and the
vesting schedule in Section 5.02 shall again be applicable. However, upon the
reinstatement of Section 5.02, the following provisions shall become applicable:
(i) in no event will any Participant's vested Accounts, as of the date the
Plan ceases to be a Top Heavy Plan, be reduced as a result of such
change in the vesting schedule as hereinabove provided; and
(ii) each Participant who has completed at least three (3) Years of Vesting
Service at the time of such change shall be given the right, within a
reasonable period of time after the Plan ceases to be a Top Heavy Plan,
to remain under the vesting schedule in effect on the last day that the
Plan was deemed to be a Top Heavy Plan.
SECTION 11.04 - SPECIAL MINIMUM CONTRIBUTIONS During any Plan Year in which
- ---------------------------------------------
the Plan is a Top Heavy Plan, the Employers shall make a minimum contribution
for the benefit of each Participant who is a Non-Key Employee in an amount which
is equal to or exceeds the lesser of (i) three percent (3%) of such Non-Key
Employee Participant's Top Heavy Compensation, or (ii) a percentage of such Non-
Key Employee Participant's Top Heavy Compensation, such percentage being equal
to the percentage at which contributions are made under the Plan for the Plan
Year for the Key Employee for whom such percentage is highest.
For purposes of the minimum contributions herein, the percentage of any Key
Employee shall be equal to the ratio of the sum of the Salary Reduction
Contributions and Employer Matching Contributions allocated on behalf of the Key
Employee divided by the Top Heavy Compensation of such Key Employee.
For any Plan year in which this is a Top Heavy Plan, the minimum contribution
set forth above shall be allocated to the Employer Matching Contribution
Accounts of all Non-Key Employees who are Participants and who are employed by
the Employers on the last day of the Plan Year, including Non-Key Employees who
have (i) failed to complete a Year of Vesting Service, and (ii) declined to make
Salary Reduction Contributions to the Plan.
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<PAGE>
SIGNATURES
----------
IN WITNESS WHEREOF, the Company has caused the Plan to be executed this _____
day of _______________, 1994, to be effective as of January 1, 1995 unless
otherwise provided herein.
Attest: (SEAL) J.B. HUNT TRANSPORT SERVICES, INC.
the "Company"
BY:________________________ BY:______________________________________
TITLE:___________________________________
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