As filed with the Securities and Exchange Commission on July 12, 1999
Registration No. 33-76650
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------
AMENDMENT NO. 1 TO FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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PAGING NETWORK, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2740516
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14911 Quorum Drive
Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
---------------------------------------
PAGENET EMPLOYEES SAVINGS PLAN
(Full title of the plan)
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Copy to:
John P. Frazee, Jr. Ruth Williams, Esq.
Chairman Senior Vice President
and Chief Executive Officer and General Counsel
Paging Network, Inc. Paging Network, Inc.
14911 Quorum Drive 14911 Quorum Drive
Dallas, Texas 75240 Dallas, Texas 75240
(972) 801-8000 (972) 801-8000
(Name, address and telephone number
including area code of agent for service)
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<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference in this registration
statement the following documents previously filed by the registrant with the
Securities and Exchange Commission (the "Commission"):
(1) The Registrant's Annual Report on Form 10-K filed with the
Commission for the fiscal year ended December 31, 1998;
(2) The Registrant's Quarterly Report on Form 10-Q filed with
the Commission for the three months ended March 31, 1999;
(3) The Plan's Annual Report on Form 11-K filed with the
Commission for the plan year ended December 31, 1998,
(4) The description of the Common Stock of the Registrant set
forth in the Registration Statement on Form 8-A filed with the
Commission pursuant to Section 12(g) of the Securities Exchange Act, as
amended (the "Exchange Act"), including any amendment or report filed
for the purpose of updating such description; and
All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of this registration statement shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of the filing of such documents
until such time as there shall have been filed a post-effective amendment that
indicates that all securities offered hereby have been sold or that deregisters
all securities remaining unsold at the time of such amendment.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
None.
- --------
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act and the Note to Part I of Form S-8.
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<PAGE>
Item 6. Indemnification of Directors and Officers.
The Restated Certificate of Incorporation of the Registrant provides
that the Registrant shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, investigative or
other, including appeals, by reason of the fact that he or she is or was a
director, officer, employee or other agent of the Registrant, or is or was
serving at the request of the Registrant as a director, officer, employee or the
agent of any corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or other agent, to the fullest extent authorized by the
Delaware General Corporation Law, against all expenses, liability and loss
(including attorney's fees, judgements, fines, ERISA excise taxes and penalties,
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith; provided, however, that except with respect
to proceedings seeking to enforce the rights to indemnification granted herein,
the Registrant shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
the proceeding (or part thereof) was authorized by the Board of Directors of the
Registrant.
The Registrant's Certificate of Incorporation also limits the liability
of directors, providing that no director of the Registrant shall be personally
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director. Such limitation of liability does not extend to
liability (i) for any breach of the director's duty loyalty to the Registrant or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, relating to prohibited dividends or
distributions or the repurchase or redemption of stock, or (iv) for any
transaction from which the director derives an improper personal benefit.
The Registrant's Bylaws provide for indemnification as follows:
"ARTICLE VI
INDEMNIFICATION OF OFFICERS AND OTHERS
--------------------------------------
Section 1. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he or she is or was an officer of the Corporation, or is
or was serving at the request of the Corporation as director or officer of
another Corporation, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action, suit or proceeding if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interest of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interest of the Corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Section 2. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he or she is or was
an officer of the Corporation, or is or was serving at the request of the
Corporation as director or officer of another Corporation, against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with defense or settlement of such action or suit if he or she acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interest of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
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, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
Section 3. To the extent that an officer of the Corporation or person
serving at the request of the Corporation as a director or officer of another
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 1 and 2 of this Article VI or
in defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection therewith.
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<PAGE>
Section 4. Any indemnification under Sections I and 2 of this Article
VI (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
officer or person serving at the request of the Corporation as a director or
officer of another Corporation is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Sections 1 and 2 of this
Article VI. Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable, if a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
Section 5. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the officer or person serving at the request of the Corporation
as a director or officer of another Corporation to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
Corporation as authorized in this Article VI.
Section 6. The indemnification and advancement of expenses provided by,
or granted pursuant to, the other subsections of this Article VI shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office.
Section 7. The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was an officer of the Corporation or
is or was serving at the request of the Corporation as a director or officer of
another Corporation against any liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his or her status
as such, whether or not the Corporation would have the. power to indemnify him
or her against such liability under the provisions of this Article VI.
Section 8. For purposes of this Article VI, references to 'the
Corporation' shall include, in addition to the resulting Corporation, any
constituent Corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors and officers so that any
person who is or was a director or officer of such constituent Corporation, or
is or was serving at the request of such constituent Corporation as a director
or officer of another Corporation shall stand in the same position under the
provisions of this Article VI with respect to the resulting or surviving
Corporation as he or she would have with respect to such constituent Corporation
if its separate existence had continued.
Section 9. The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be an officer,
employee or person serving at the request of the Corporation as a director or
officer of another Corporation and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 10. This Article VI may be amended or repealed only by the
affirmative vote of the holders of a majority of the Voting Stock; provided that
no such amendment or repeal shall adversely affect any right to indemnification
for any act or omission of any person referred to in Section 1 and 2 of this
Article VI which occurred or allegedly occurred prior to the effective date of
such amendment or repeal.
Section 11. If in any action, suit or other proceeding or
investigation, a Director of the Corporation is held not liable for monetary
damages because that Director is relieved of personal liability under Article
NINTH of the Certificate of Incorporation or otherwise, the Director shall be
deemed to have met the standards of conduct set forth above and to be entitled
to indemnification as provided above."
Pursuant to the provisions of Section 145 of the Delaware General
Corporation Law, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that he or
she is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses, judgments, fines and amounts paid in settlement and reasonably
incurred in connection with such action, suit or proceedings. The power to
indemnify applies only if such person acted in good faith and in a manner he or
she reasonably believed to be in the best interest, or not opposed to the best
interest, of the corporation and with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
II-3
<PAGE>
The power to indemnify applies to actions brought by or in the right of
the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication unless the court, in its
discretion, believes that in the light of all the circumstances indemnification
should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled, pursuant to Section 145, to indemnification as
described above.
The Registrant has entered into Indemnification Agreements with each of
its directors and the officers subject to Section 16 of the Exchange Act. Each
Indemnification Agreement provides for indemnification of directors of the
Registrant to the fullest extent permitted by law and additionally permits
advancing attorney's fees and all other costs, expenses, fees, fines and losses,
paid or incurred by a director or officer in connection with the investigation,
defense or other participation in any event or occurrence that is related to the
fact that the director or officer is or was a director or officer of the
Registrant or is serving at the request of the Registrant as a director or
officer in another corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, or by reason of any action taken or not taken
by the director or officer in any such capacity. The foregoing provisions are
subject to the condition that the Registrant's Board of Directors or any other
person or body appointed by the Board who is not a party to the particular claim
for which the director or officer is seeking indemnification has not determined
that the indemnification would not be permitted under applicable law. The
Indemnification Agreements further provide that in the event of a change in
control of the Registrant, then with respect to all matters arising concerning
the rights of directors to indemnification, such decisions will be made only by
independent legal counsel selected by the director and approved by the
Registrant.
Item 7. Exemption from Registration Claimed.
None.
Item 8. Exhibits.
(a) Exhibits.
The following documents are filed as a part of this regis-
tration statement.
Exhibit Description of Exhibit
------- ----------------------
4.1 Restated Certificate of Incorporation of the Registrant, as
amended and filed as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1 (No. 33-46483) and
incorporated herein by reference.
4.2 Amended and Restated Bylaws of the Registrant as adopted by
the Board of Directors of the Registrant effective as of
December 16, 1998 filed as Exhibit 3.3 to the Registrant's
Annual Report on Form 10-K (No. 0-19494) for the year ended
December 31, 1998 and incorporated herein by reference.
*4.3 PageNet Employees Savings Plan, effective as of January 1,
1993.
*4.4 PageNet Employees Savings Plan Trust Agreement, effective as
of January 1, 1993.
4.5 PageNet Employees Savings Plan as Amended and Restated effect-
ive January 1, 1997.
4.6 First Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective January 1,
1998.
4.7 Second Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective May 24,
1998.
4.8 Third Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective as of
October 10, 1998.
4.9 Fourth Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective as of
January 1, 1999.
II-4
<PAGE>
4.10 Fifth Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective as of
January 1, 1999.
4.11 Sixth Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective as of
January 1, 1999.
23.1 Consent of Ernst & Young LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
* Previously filed
(b) The Registrant hereby undertakes to submit, or has submitted, the
Plan and any amendments 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.
Item 9. Undertakings.
A. The 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
to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
(2) that, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(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 Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Dallas, Texas, on June 30, 1999.
PAGING NETWORK, INC.
By: /s/ John P. Frazee, Jr.
--------------------------------------------
John P. Frazee, Jr.
Chairman of the Board of Directors and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints John P. Frazee, Jr. and Ruth Williams and
each of them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same with all exhibits, thereto, and all documents in connection
therewith, with the SEC, granting unto each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents or his
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.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ John P. Frazee, Jr. Chairman and Chief Executive Officer June 30, 1999
- ------------------------------- (Principal Executive Officer)
John P. Frazee, Jr.
/s/ Julian Castelli Senior Vice President and Chief Financial Officer June 30, 1999
- ------------------------------- (Principal Financial Officer)
Julian Castelli
Director June ___, 1999
- -------------------------------
Jeffrey M. Cunningham
/s/ Robert J. Miller Director June 30, 1999
- -------------------------------
Robert J. Miller
/s/ Carl D. Thoma Director June 30, 1999
- -------------------------------
Carl D. Thoma
/s/ Richard C. Alberding Director June 30, 1999
- -------------------------------
Richard C. Alberding
Director June ___, 1999
- -------------------------------
Hermann Buerger
<PAGE>
Director June ___, 1999
- -------------------------------
Gary J. Fernandes
/s/ John P. Frazee, Jr. Director June 30, 1999
- -------------------------------
John P. Frazee, Jr.
/s/ John S. Llewelyn, Jr. Director June 30, 1999
- -------------------------------
John S. Llewelyn, Jr.
/s/ Lee M. Mitchell Director June 30, 1999
- -------------------------------
Lee M. Mitchell
</TABLE>
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933,
as amended, the Plan has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on June 30, 1999.
PAGENET EMPLOYEE SAVINGS PLAN (the Plan)
By: Paging Network, Inc.
By: /s/ Ruth Williams
------------------------------------------
Name: Ruth Williams, Senior Vice President and
General Counsel
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Sequential
Exhibit Page
Number Document Description Number
------- -------------------- ----------
<S> <C> <C>
4.5 PageNet Employee Savings Plan as Amended and Restated effective
as of January 1, 1997.
4.6 First Amendment to PageNet Employees Savings Plan as Amended and
Restated effective January 1, 1997, effective January 1, 1998.
4.7 Second Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective May 24, 1998.
4.8 Third Amendment to PageNet Employees Savings Plan as Amended and
Restated effective January 1, 1997, effective as of October 10,
1998.
4.9 Fourth Amendment to PageNet Employees Savings Plan as Amended
and Restated effective January 1, 1997, effective as of January
1, 1999.
4.10 Fifth Amendment to PageNet Employees Savings Plan as Amended and
Restated effective January 1, 1997, effective as of January 1,
1999.
4.11 Sixth Amendment to PageNet Employees Savings Plan as Amended and
Restated effective January 1, 1997, effective as of January 1,
1999.
23.1 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on the signature page of this Regis-
tration Statement)
</TABLE>
PAGENET EMPLOYEES SAVINGS PLAN
As Amended and Restated
Effective January 1, 1997
<PAGE>
PAGENET EMPLOYEES SAVINGS PLAN
<TABLE>
<CAPTION>
Table of Contents
-----------------
<S> <C> <C>
ARTICLE I- NATURE OF PLAN..................................................................................1
ARTICLE II- DEFINITIONS AND CONSTRUCTION....................................................................2
2.1 Definitions............................................................................2
2.2 Service for Predecessor or Related Employer...........................................15
2.3 Word Usage............................................................................15
2.4 Calculation of Time...................................................................16
ARTICLE III- ELIGIBILITY AND PARTICIPATION.......................................................................17
3.1 Eligibility...........................................................................17
3.2 Participation Following Termination of Employment.....................................17
3.3 Change in Employment Classification...................................................17
3.4 Notice of Participation...............................................................17
ARTICLE IV- EMPLOYER AND EMPLOYEE CONTRIBUTIONS..................................................................18
4.1 Employer Contributions................................................................18
4.2 Employer Contribution Limitation and Treatment of Forfeitures.........................18
4.3 Determination of Contribution.........................................................18
4.4 Time and Method of Payment of Employer Contributions..................................18
4.5 Return of Employer Contributions......................................................19
4.6 Rollover Contributions................................................................19
4.7 Employer Matching Contribution........................................................19
4.8 Limitations on Employer Matching Contributions........................................20
ARTICLE V- PARTICIPANT DEFERRALS OF COMPENSATION.................................................................24
5.1 Election to Defer Compensation........................................................24
5.2 Limitation on Employer Salary Reduction Contributions for
Highly Compensated Employees..........................................................24
5.3 Distribution of Excess Deferrals......................................................28
ARTICLE VI- ACCOUNTS AND ALLOCATIONS.............................................................................29
6.1 Participant's Accounts................................................................29
6.2 Segregated Accounts During Repayment of Distribution..................................29
6.3 Charging of Payments, Distributions and Specific Items................................29
6.4 Allocation of Trust Fund Income, Expenses, Gains and Losses...........................29
6.5 Allocation of Employer Contributions..................................................29
6.6 Forfeitures...........................................................................30
6.7 Dates Contributions Considered Made...................................................31
6.8 Accrual of Benefits...................................................................31
i
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6.9 Valuation.............................................................................31
6.10 Equitable Allocations.................................................................31
6.11 Limitation on Annual Additions........................................................31
6.12 Allocation Does Not Create Rights.....................................................33
ARTICLE VII- TERMINATION OF SERVICE - PARTICIPANT VESTING........................................................34
7.1 Normal Retirement.....................................................................34
7.2 Disability............................................................................34
7.3 Death.................................................................................34
7.4 Termination of Service Prior to Normal Retirement Age.................................34
7.5 Vesting - Termination of Service and Re-employment....................................35
7.6 Occurrence of Forfeitures.............................................................35
7.7 Restoration of Forfeitures............................................................35
7.8 Termination, Partial Termination, or Complete Discontinuance of
Employer Contributions................................................................35
ARTICLE VIII- TIME AND METHOD OF PAYMENT OF BENEFITS.............................................................37
8.1 Time of Payment.......................................................................37
8.2 Method of Payment.....................................................................38
8.3 Lump Sum Cashout and Special Limitation on Involuntary Payment
of Benefits...........................................................................38
8.4 Deferral of Payments..................................................................39
8.5 Hardship Withdrawal for Employer Salary Reduction Contributions.......................39
8.6 Loans.................................................................................41
8.7 Payment in the Event of Legal Disability..............................................42
8.8 Accounts Charged......................................................................43
8.9 Payments Only from Trust Fund.........................................................43
8.10 Unclaimed Account Procedure...........................................................43
8.11 Qualified Domestic Relations Orders...................................................44
ARTICLE IX- TOP HEAVY PLAN PROVISIONS............................................................................45
9.1 Top Heavy Rules Applied...............................................................45
9.2 Additional Definitions................................................................45
9.3 Additional Limitation - Defined Benefit Plan..........................................47
9.4 Minimum Benefit.......................................................................47
ARTICLE X- EMPLOYER ADMINISTRATIVE PROVISIONS....................................................................49
10.1 Information...........................................................................49
10.2 No Liability..........................................................................49
10.3 Indemnity.............................................................................49
ARTICLE XI- COMMITTEE PROVISIONS.................................................................................50
11.1 Appointment of Committee..............................................................50
11.2 Term..................................................................................50
11.3 Compensation..........................................................................50
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11.4 Powers of Committee...................................................................50
11.5 Manner of Action......................................................................51
11.6 Authorized Representative.............................................................51
11.7 Nondiscrimination.....................................................................52
11.8 Interested Member.....................................................................52
11.9 Individual Statement..................................................................52
11.10 Books and Records.....................................................................52
ARTICLE XII- PARTICIPANT ADMINISTRATIVE PROVISIONS...............................................................53
12.1 Beneficiary Designation...............................................................53
12.2 No Beneficiary Designation............................................................53
12.3 Personal Data to Committee............................................................53
12.4 Address for Notification..............................................................53
12.5 Assignment or Alienation..............................................................54
12.6 Litigation Against the Trust..........................................................54
12.7 Information Available.................................................................55
12.8 Beneficiary's Right to Information....................................................55
12.9 Claims Procedure......................................................................55
12.10 Appeal Procedure for Denial of Benefits...............................................55
12.11 Place of Payment and Proof of Continued Eligibility...................................56
12.12 No Rights Implied.....................................................................57
12.13 Participant Direction of Investment...................................................57
12.14 Exercise of Voting Rights.............................................................58
ARTICLE XIII- FIDUCIARIES DUTIES.................................................................................60
13.1 Fiduciaries...........................................................................60
13.2 Allocation of Responsibilities........................................................60
13.3 Procedures for Delegation and Allocation of Responsibilities..........................61
13.4 General Fiduciary Standards...........................................................61
13.5 Liability Among Co-Fiduciaries........................................................62
ARTICLE XIV- DISCONTINUANCE, AMENDMENT, AND TERMINATION..........................................................63
14.1 Discontinuance........................................................................63
14.2 Amendment.............................................................................63
14.3 Termination...........................................................................64
14.4 Procedure on Termination..............................................................65
14.5 Merger................................................................................65
14.6 Notice of Change in Terms.............................................................65
14.7 Reversion of Suspense Account.........................................................65
14.8 Restrictions on Distribution of Employer Salary Reduction Contribution
Accounts.......................................................................................65
ARTICLE XV- EMPLOYER PARTICIPATION...............................................................................67
15.1 Adoption by Employers.................................................................67
15.2 Withdrawal by Employer................................................................67
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15.3 Adoption Contingent Upon Initial and Continued Qualification..........................67
15.4 No Joint Venture Implied..............................................................68
15.5 Continuation by Employer's Successor..................................................68
ARTICLE XVI- THE TRUST...........................................................................................69
16.1 Purpose of the Trust Fund.............................................................69
16.2 Appointment of Trustee................................................................69
16.3 Exclusive Benefit of Participants.....................................................69
16.4 Benefits Supported Only By the Trust Fund.............................................69
ARTICLE XVII- MISCELLANEOUS......................................................................................70
17.1 Execution of Receipts and Releases....................................................70
17.2 No Guarantee of Interests.............................................................70
17.3 Payment of Expenses...................................................................70
17.4 Employer Records......................................................................70
17.5 Interpretations and Adjustments.......................................................70
17.6 Uniform Rules.........................................................................70
17.7 Evidence..............................................................................70
17.8 Severability..........................................................................70
17.9 Notice................................................................................71
17.10 Waiver of Notice......................................................................71
17.11 Application to Multiple Employers.....................................................71
17.12 Successors............................................................................71
17.13 Headings..............................................................................71
17.14 Governing Law.........................................................................71
17.15 USERRA Amendment......................................................................71
EXHIBIT A........................................................................................................73
</TABLE>
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ARTICLE I
NATURE OF PLAN
--------------
Effective January 1, 1993, Paging Network, Inc. (the "Company")
established the PageNet Employees Savings Plan (the "Plan"), to help eligible
Employees accumulate capital for their future economic security, to encourage
eligible Employees to remain in the Service of the Employer, and to provide
additional incentive for Employee performance on behalf of the Employer. The
Plan was subsequently amended and restated in its entirety as of its original
effective date and amended by the First and Second Amendments thereto to comply
with the Tax Reform Act of 1986, as amended, and subsequent legislation,
including the Omnibus Budget Reconciliation Act of 1993, and make certain other
design changes to the Plan.
By this instrument the Company desires to again amend and restate the
Plan to comply with subsequent legislation, to reflect certain modifications in
the investment arrangements applicable to amounts contributed herein, and to
make certain other design changes to the Plan. Except as otherwise provided
herein or required by law, the Plan, as amended and restated herein, shall be
effective January 1, 1997. The Company intends that the Plan, as so amended and
restated, will continue to constitute a qualified cash or deferred profit
sharing plan, within the meaning of sections 401(a) and 401(k) of the Internal
Revenue Code of 1986, as amended.
- ------------------------
End of Article I
1
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ARTICLE II
DEFINITIONS AND CONSTRUCTION
----------------------------
2.1 Definitions. For the purpose of this Plan, the following
definitions shall apply unless the context requires otherwise:
(a) "Accounts" means the separate accounts maintained to
record the interests of Participants under the Plan. The following terms
designate the Accounts under the Plan and are defined as provided below in this
Subsection 2.1(a):
(i) "Employer Matching Contribution Account" means
the individual account of a Participant consisting of Employer Matching
Contributions made by the Employer pursuant to Subsection 4.1(b) and
allocated to the Participant pursuant to Subsection 6.5(e), together
with the income, gain and losses allocated thereto and less
distributions therefrom.
(ii) "Employer Salary Reduction Contribution Account"
means the individual account of a Participant consisting of Employer
Salary Reduction Contributions made in accordance with Subsection
4.l(a) and allocated to the Participant pursuant to Subsection 6.5(d),
together with the income, gain, and losses allocated thereto and less
distributions made therefrom.
(iii) "Rollover Contribution Account" means the
individual account of a Participant consisting of Rollover
Contributions (as defined in Subsection 2.1(ss) below) and made by a
Participant or Employee in accordance with Section 4.6, together with
the income, gain, and losses allocated thereto, and less distributions
made therefrom.
(b) "Accrued Benefit" means the amounts credited to a
Participant's Accounts as of any date.
(c) "Act" means the Employee Retirement Income Security Act of
1974, as amended, and any regulations or rulings issued thereunder.
(d) "Actual Deferral Percentage" means for a specified group
of Eligible Employees (who have satisfied the eligibility requirements of
Article III, the average (arithmetic mean) of the ratios (calculated separately
for each Eligible Employee in such group) of:
(i) The amount of all Employer Salary Reduction
Contributions actually contributed to the Trust on behalf of such
Employee and allocated to his or her Employer Salary Reduction
Contribution Account for such Plan Year (unreduced in the case of any
highly compensated employee by distributions of Excess Deferrals
pursuant to Section 5.3 hereof) and, in accordance with regulations
promulgated by the Secretary of the Treasury, such Employer Matching
Contributions, if any, as may be designated by the Committee as
includable in this computation for the Plan Year to; and
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<PAGE>
(ii) The Employee's Compensation, such average of
ratios being multiplied by one hundred (100).
To the extent that the Committee elects, pursuant to the above
paragraph, to take Employer Matching Contributions into account in computing the
Actual Deferral Percentage, the Actual Matching Percentage tests under Section
4.8 must still be computed and satisfied separately, and in doing so the
Employer shall disregard the Employer Matching Contributions used in computing
the Actual Deferral Percentage for such Plan Year.
For purposes of this Subsection 2.1(d), the ratio calculated for any
Eligible Employee who is a Highly Compensated Employee for the Plan Year and who
is eligible to have Employer Salary Reduction Contributions allocated to his or
her accounts under two or more plans or arrangements described in Code section
401(k) are maintained by an Employer or a Related Employer shall be determined
as if all such contributions were made under a single arrangement. Further, in
the event that this Plan satisfies the requirements of Code sections 401(a)(4)
or 410(b) (other than Code section 410(b)(2)(A)(ii)) only if aggregated with one
or more other plans, or if one or more other plans satisfy the requirements of
Code sections 401(a)(4) or 410(b) (other than Code section 410(b)(2)(A)(ii))
only if aggregated with this Plan, then the Actual Deferral Percentage shall be
determined by calculating the ratio for each Eligible Employee as if all such
plans were a single plan.
(e) "Actual Matching Percentage" means, for a specified group
of Eligible Employees (who have satisfied the eligibility requirements of
Article III), the average (arithmetic mean) of the ratios (calculated separately
for each Eligible Employee in such group) of
(i) The amount of all Employer Matching Contributions
actually contributed to the Trust on behalf of such Employee and
allocated to his or her Accounts for such Plan Year, after reduction
for forfeited Employer Matching Contributions pursuant Subsection
5.2(c)(ii), and, in accordance with regulations promulgated by the
Secretary of the Treasury, such Employer Salary Reduction
Contributions, if any, as may be designated by the Committee as
includable in this computation for the Plan Year to; and
(ii) The Employee's Compensation, such average of
ratios being multiplied by one hundred (100).
To the extent the Committee elects, pursuant to the above paragraph, to
take Employer Salary Reduction Contributions into account in computing the
Actual Matching Percentage, the Actual Deferral Percentage tests under Section
5.2 must still be computed and satisfied separately, and in doing so the
Employer shall disregard the Employer Salary Reduction Contributions used in
computing the Actual Matching Percentage for such Plan Year.
For purposes of this Subsection 2.1(e), the ratio calculated for any
Eligible Employee who is a Highly Compensated Employee for the Plan Year and who
is eligible to have Employer Matching Contributions allocated to his or her
account number under two or more plans described in Code section 401(m) are
maintained by an Employer or a Related Employer shall be determined as if all
such contributions were made under a single plan. Further, in the event that
this Plan satisfies the
3
<PAGE>
requirements of Code sections 404(a)(4) or 410(b) (other than Code section
410(b)(2)(A)(ii)) only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of Code sections 401(a)(4) or 410(b)
(other than Code section 410(b)(2)(A)(ii)) only if aggregated with this Plan,
then the Actual Matching Percentage shall be determined by calculating the ratio
for each Eligible Employee as if all such plans were a single plan.
(f) "Annual Addition" means the sum of the following
Participant's Accounts for the Limitation Year:
(i) Employer contributions;
(ii) Employee contributions excluding any Rollover
Contributions;
(iii) Forfeitures, if applicable; plus
(iv) Contributions during the Limitation Year
allocated to any individual medical benefit account (within the meaning
of Code sections 415(l) and 419A(d)(2)) that is established for the
Participant and that is part of a defined benefit plan (within the
meaning of Code section 414(j)).
The term "Annual Addition" shall not include amounts repaid or restored under
Section 7.7.
(g) "Alternate Payee" means any spouse, former spouse, child,
or other dependent of a Participant who is recognized by a Domestic Relations
Order as having a right to receive all, or a portion of, the benefits payable
under the Plan with respect to such Participant.
(h) "Anniversary Date" means the last day of the Plan Year.
(i) "Beneficiary" means any person or fiduciary designated by
a Participant who is or may become entitled to a benefit under the Plan
following the death of the Participant; provided, that in the case of a married
Participant the Participant's Beneficiary shall be the Participant's surviving
spouse unless:
(i) The Participant's spouse consents in writing to
the designation of another party as Beneficiary of all or a part of the
benefit to which the Participant may become entitled under the Plan;
(ii) Such election designates a Beneficiary (or a
form of benefits) which may not be changed without the further consent
of the Participant's spouse unless the spouse's consent expressly
permits designations by the Participant without the spouse's further
consent;
(iii) The spouse's consent acknowledges the effect of
such election; and
4
<PAGE>
(iv) Such consent is witnessed by a notary public or
a member of the Committee.
Such spousal consent shall not be required if it is established to the
satisfaction of the Committee that such consent cannot be obtained because the
spouse cannot be located or because of such other circumstances as the Secretary
of the Treasury may prescribe by regulations. Any consent by a spouse hereunder
shall be effective only with respect to that spouse.
(j) "Board of Directors" means the Board of Directors of the
Company, unless otherwise indicated or the context otherwise requires.
(k) "Break in Service" means any three hundred and sixty-five
(365) day period following an Employee's or Participant's separation from
Service during which an Employee or Participant does not complete at least one
(1) Hour of Service.
(l) "Claimant" means a Participant or Beneficiary who has
filed a claim for benefits under the Plan.
(m) "Code" means the Internal Revenue Code of 1986, as
amended, and any regulations or rulings issued thereunder.
(n) "Company" means Paging Network, Inc., a Delaware
corporation, or any successor thereto which adopts this Plan.
(o) "Compensation" means all wages, salaries, and fees for
professional services and other amounts received (without regard to whether or
not an amount is paid in cash) during the Plan Year for personal services
actually rendered in the course of employment with the Employer 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 and reimbursements or other expense allowances under a nonaccountable
plan as described in section 1.62-2(c) of the Treasury Regulations), plus any
amounts contributed by the Employer pursuant to a salary reduction agreement
that are not includable in gross income of the Employee under Code section 125
(regarding contributions to a cafeteria plan), Code section 402(a)(8) (regarding
contributions to a 401(k) plan), Code section 402(h) (regarding contributions to
a simplified employee pension plan), Code section 403(b) (regarding
contributions to an annuity contract) or Code section 408(p)(2)(A)(i) (regarding
contributions to "simple" retirement accounts). However, solely for purposes of
Section 6.11 (regarding limitations on Annual Additions), the deferrals
described in the final clause of the preceding sentence shall not be considered
"Compensation" prior to January 1, 1998. In addition, for all purposes (except
as otherwise provided below) Compensation in excess of One Hundred Sixty
Thousand Dollars ($160,000) (as adjusted as provided under Code section
401(a)(17)) shall be disregarded and none of the following shall be included:
(i) Employer contributions to a plan of deferred
compensation to the extent that before the application of the limits
under Code section 415 to the Plan, the
5
<PAGE>
contributions are not includable in the Employee's gross income for
federal income tax purposes in the taxable year of the Employee in
which the contributions are made;
(ii) Employer contributions under a simplified
employee pension plan described in Code section 408(k), to the extent
that such contributions are not considered as compensation for the
taxable year of the Employee in which the contributions are made;
(iii) Any distributions from a plan of deferred
compensation (regardless of whether such amounts are includable in
gross income of the Employee for federal income tax purposes in the
taxable year of distribution);
(iv) Amounts realized from the exercise of a non-
qualified stock option;
(v) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(vi) Amounts realized when restricted stock (or
property) held by the Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture;
(vii) 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 arrangement) towards the purchase of an
annuity contract described in Code section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee).
(viii) Solely for purposes of determining the amount
of Salary Reduction Contributions under Subsection 5.2(a) and to the
extent not already excluded under the preceding clauses, any prizes,
awards, automobile allowances, stock options, relocation expenses or
severance pay.
(p) "Disabled" or "Disability" means that, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or to be of long, continued, and indefinite duration, a
Participant is incapable of performing (i) his or her normal and customary
duties with the Employer, or (ii) any other position that the Employer has
available and is reasonable considering the Participant's education, training,
and prior experience. The Committee may make, but shall not be obligated to
make, a determination of a Participant's Disability based on such medical and
other evidence as the Committee deems necessary. In that connection, the
Committee may require a Participant to submit to a medical examination to
confirm Disability. Any such determination by the Committee shall be binding on
all parties interested in the outcome of such determination.
(q) "Domestic Relations Order" means any judgment, decree or
order (including one that approves a property settlement agreement) that relates
to the provision of child support,
6
<PAGE>
alimony rights or marital property rights of a spouse, former spouse, child or
other dependent of a Participant and is rendered under a state (within the
meaning of Code section 7701(a)(10)) domestic relations law (including a
community property law).
(r) "Effective Date" means January 1, 1997, the effective date
of this amended and restated Plan, except where otherwise expressly provided
herein.
(s) "Eligible Employee" means each Employee except:
(i) Leased employees (within the meaning of Code
section 414(n)(2)); and
(ii) Non-resident aliens.
(t) "Eligible Retirement Plan" means, for a Participant, an
individual retirement account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an annuity plan described
in Code section 403(a), or a qualified plan described in Code section 401(a)
that accepts direct transfers. In the case of a distribution to the
Participant's surviving spouse, an Eligible Retirement Plan shall mean an
individual retirement account or individual retirement annuity.
(u) "Employee " means any person which the Employer elects to
pay through its payroll whose wages from the Employer are treated by the
Employer as subject to withholding for purposes of Federal income taxes and for
purposes of the Federal Insurance Contributions Act. In addition, the term
Employee shall include any leased employee (within the meaning of Code section
414(n)(2)) that Code section 414(n) requires the Employer to treat as an
Employee.
(v) "Employer" means the Company and any Related Employer that
duly adopts the Plan with the approval of the Committee as provided in Article
XV hereof. A list of the Related Employers who have adopted the Plan as of the
Effective Date is attached hereto as Exhibit A.
(w) "Employer Contributions" means any of the following types
of contributions made by the Employer under Section 4.1.
(i) "Employer Matching Contribution" means a
contribution made by the Employer pursuant to the provisions of
Subsection 4.1(b).
(ii) "Employer Salary Reduction Contribution" means a
contribution made by the Employer pursuant to the provisions of
Subsection 4.1(a).
(x) "Employment Commencement Date" means the date on which an
Employee first performs an Hour of Service for the Employer.
(y) "Employment Year" means any consecutive 12-month period
beginning on the Employee's Employment Commencement Date, or an anniversary
thereof.
7
<PAGE>
(z) "Forfeiture" means the portion of a Participant's Employer
Matching Contribution Account that, in accordance with the provisions of Section
7.5, does not become part of the Participant's Vested Accrued Benefit when his
or her participation in the Plan ends, as provided in Section 7.6.
(aa) "Highly Compensated Employee" means an Employee of the
Company or a Related Employer who (i) was at any time during the current or
preceding Plan Year a five percent (5%) owner of the Company or a Related
Employer (as defined in Code section 416(i)(1)), (ii) for the preceding Plan
Year received "compensation" from the Company or a Related Employer in excess of
Eighty Thousand Dollars $80,000 (as adjusted pursuant to rulings or Regulations
issued by the Secretary of the Treasury) and, if the Committee elects in
accordance with applicable rulings or Regulations issued by the Secretary of
Treasury to apply this clause, was in the top twenty percent (20%) of Employees
of the Company and all Related Employers when ranked on the basis of
"compensation" paid during such Plan Year (the "Top Paid Group"), or (iii) is a
Highly Compensated Former Employee. For purposes of determining the number of
Employees in the Top Paid Group under this Subsection 2.1(aa) for a Plan Year,
the following employees, as described in Code sections 414(q)(8) and (11), shall
be excluded:
(a) Those who have not completed six (6) months of service;
(b) Those who normally work less than seventeen and one-half
(17-1/2) hours per week;
(c) Those who normally work not more than six (6) months during
any year;
(d) Those who have not attained age twenty-one (21);
(e) Those subject to a collective bargaining agreement; and
(f) Nonresident aliens who receive no earned income from sources
within the United States.
The term "compensation" for purposes of this Subsection 2.1(aa) shall mean
Compensation as defined in Subsection 2.1(o) of the Plan determined without
regard to Code section 125 (regarding contributions to a cafeteria plan), Code
section 402(a)(8) (regarding contributions to a 401(k) plan), and Code section
402(h)(1)(B) (regarding contributions to a simplified employee pension plan),
and in the case of Employer Contributions made pursuant to a salary reduction
agreement, without regard to Code section 403(b) (regarding annuity contracts).
(bb) "Highly Compensated Former Employee" means a former
Employee who separated from Service from the Company or a Related Employer prior
to the beginning of the Plan Year and who was a Highly Compensated Employee for
either:
(i) The Employee's year of separation from Service;
or
8
<PAGE>
(ii) Any Plan Year ending on or after the employee's
fifty-fifth (55th) birthday.
For purposes of this Subsection 2.1(bb), Employees who perform no
services for the Company or a Related Employer during the Plan Year shall be
treated as former Employees.
(cc) "Hour of Service" means
(i) Each hour for which the Employee or Participant
is either directly or indirectly paid or entitled to payment by the
Company or a Related Employer for the performance of duties. Hours of
Service will be credited to the Employee or participant under this
Subsection 2.1(cc)(i) for the compensation period in which the duties
are performed.
(ii) Each hour for which an Employee or participant
is either directly or indirectly paid or entitled to payment by the
Company or a Related Employer for reasons (such as vacation, holiday,
sickness, incapacity, layoff, jury duty, military duty, or leave of
absence) other than for the performance of duties (irrespective of
whether the employment relationship has terminated). No more than five
hundred and one (501) Hours of Service shall be credited to any
Employee or Participant during any twelve (12) month period for any
single, continuous period during which the Employee or Participant
performs no duties. Hours of Service to be credited to an Employee or
Participant because of his or her being entitled to payment for reasons
other than for the performance of duties shall be determined in
accordance with section 2530.200b-2(b) of the Department of Labor
Regulations.
(iii) Each hour for which back pay, irrespective of
mitigation of damages, has been awarded to the Employee or Participant
or agreed to by the Company or Related Employer. The same Hours of
Service will not be credited both under Subsection 2.1(cc)(i) or
Subsection 2.1(cc)(ii), as the case may be, and under this Subsection
2.1(cc)(iii). Hours of Service credited under this Subsection
2.1(cc)(iii) shall be credited to the Employee or Participant for the
computation period or periods to which the award or agreement pertains
rather than the computation period in which the award, agreement or
payment is made.
An Hour of Service performed for a Related Employer shall be considered
an Hour of Service performed for the Employer.
Solely for purposes of determining whether a Break in Service has
occurred, a Participant who incurs a Parental Absence shall be credited with the
Hours of Service that otherwise would normally have been credited to the
Participant but for such absence. The Hours of Service credited to a Participant
as a result of a Parental Absence shall be credited in the Plan Year in which
such Parental Absence commences if such crediting is necessary to prevent a
Break in Service during such Plan Year; otherwise such Hours of Service shall be
credited for the Plan Year immediately following the Plan Year in which the
Parental Absence commences.
9
<PAGE>
The Committee shall resolve any ambiguity with respect to the crediting
of an Hour of Service in favor of the Employee.
(dd) "Investment Funds" means the PageNet Stock Fund and any
additional funds selected by the Committee in which Participants may direct the
investment of their Accounts pursuant to Section 12.13.
(ee) "Leave of Absence" means a period of one (1) year or less
granted by the Employer to an Employee for sickness, accident, temporary
reduction in work force or other appropriate cause under rules established by it
and uniformly applied by it to all individuals similarly situated. Additionally,
a Leave of Absence shall mean any period of absence from the active employment
of the Employer due to compulsory service in the Armed Forces of the United
States if the Employee returns to active Service with the Employer within the
time his or her employment rights are protected by federal law, or within sixty
(60) days after of his or her discharge from military service if no federal law
is applicable.
If the Employee does not return to active Service with the Employer on
or before the termination of his or her Leave of Absence, he or she will be
deemed to have terminated Service as of the earlier of
(i) The date on which his or her Leave of Absence
terminated;
(ii) The first anniversary of the last date on which
he or she performed at least one (1) Hour of Service as a Participant;
or
(iii) The date on which he or she resigned or was
discharged.
(ff) "Limitation Year" means the calendar year or any other
consecutive twelve (12) month period adopted pursuant to a written resolution
adopted by the Board of Directors.
(gg) "Normal Retirement Age" means age sixty-five (65).
(hh) "PageNet Savings Plan Committee" or "Committee" means the
committee appointed by the Board of Directors as described in Section 11.1.
Prior to January 1, 1997, the Committee was known as the Investment Committee.
(ii) "PageNet Stock Fund" means a fund invested in the Company
stock to the extent Company stock is available for purchase by the PageNet Stock
Fund. To the extent Company stock is not available for purchase, or the
Committee determines it is prudent to do so, or cash is needed for distributions
or administrative expenses, assets of the PageNet Stock Fund shall be
temporarily invested in short-term investments in the Committee's discretion.
All purchases of Company stock shall be for no more than the fair market value
of the stock as determined in good faith by the Trustee or Committee, and except
in the case of purchases in the open market no commission shall be charged with
respect to any such purchase. All investments in the PageNet Stock Fund shall
constitute a general investment of the Trust Fund and the Participants shall not
10
<PAGE>
own any of the shares of Company Stock purchased by the PageNet Stock Fund in
which their Accounts are invested pursuant to Section 12.13.
(jj) "Parental Absence" means any period of absence from the
active Service of the Employer:
(i) By reason of the pregnancy of the Employee;
(ii) By reason of the birth of a child of the
Employee;
(iii) By reason of the placement of a child with the
Employee in connection with the adoption of such child by the Employee;
or
(iv) For purposes of caring for such child for a
period beginning immediately following such birth or placement.
(kk) "Participant" means an Employee or former Employee who
has an Account balance under the Plan; provided that an Employee or former
Employee who becomes a Participant by virtue of making a Rollover Contribution,
but who has not at the time he or she makes such Rollover Contribution satisfied
the requirements of Section 3.1 or Section 3.3, shall not be eligible to:
(i) Elect pursuant to Section 5.1 to defer any
portion of his or her Compensation; or
(ii) Receive an allocation of Employer Contributions
or Forfeitures pursuant to Section 6.5 until such individual satisfies
the requirements of Section 3.1 or Section 3.3.
(ll) "Plan" means the PageNet Employees Savings Plan, as
embodied herein and as the same may be amended from time to time.
(mm) "Plan Entry Date" means the first day of each quarter of
the Plan Year (i.e., January 1, April 1, July 1, and October 1).
(nn) "Plan Year" means the consecutive twelve (12) month
period beginning on January 1 and ending on December 31 of each year.
(oo) "Qualified Domestic Relations Order" means a Domestic
Relations Order that:
(i) Creates or recognizes the existence of an
Alternate Payee's right to, or assigns to an Alternate Payee the right
to receive all or a portion of the benefits payable with respect to a
Participant under the Plan;
11
<PAGE>
(ii) Does not require the Plan to provide any type or
form of benefit, or any option, not otherwise provided under the Plan;
(iii) Does not require the Plan to provide increased
benefits (determined on the basis of actuarial value);
(iv) Does not require the payment of benefits to an
Alternate Payee that are required to be paid to another Alternate Payee
under another order previously determined to be a Qualified Domestic
Relations Order; and
(v) Clearly specifies:
(A) The name and last known mailing address
of the Participant and the name and mailing address of each
Alternate Payee covered by the order (unless such addresses
are reasonably available to the Committee);
(B) The amount or percentage of the
Participant's benefits to be paid by the Plan to each such
Alternate Payee, or the manner in which such amount or
percentage is to be determined;
(C) The number of payments or payment
periods to which such order applies; and
(D) That it is applicable with respect to
this Plan.
In the case of any payment before a Participant has separated from
Service, a Domestic Relations Order received on or after January 1, 1994, will
not be treated as failing to be a Qualified Domestic, Relations Order solely
because such order requires the payment of benefits be made to an Alternate
Payee:
(i) on or after the date on which the Participant
could begin receiving benefits under Article VI if the Participant
separated from Service;
(ii) As if the Participant had retired on the date on
which payment is to commence under such order (taking into account only
the present value of benefits actually accrued as of such date); and
(iii) In any form in which such benefits may be paid
under the Plan to the Participant (other than in the form of a joint
and survivor annuity with respect to the Alternate Payee and his or her
subsequent spouse).
(pp) "Related Employer" means:
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<PAGE>
(i) Any corporation that is, along with the Company,
a member of a controlled group of corporations (as defined by Code
section 414(b), as modified by Code section 415(h) thereof);
(ii) Any other trade or business (whether or not
incorporated) that is under common control with the Company (as defined
by Code section 414(c), as modified by Code section 415(h));
(iii) Any service organization that is, along with
the Company, a member of an affiliated service group (as defined by
Code section 414(m));
(iv) Any other entity required to be aggregated with
the Company under regulations promulgated under Code section 414(o);
and
(v) Any other entity in which the Company, directly
or indirectly, has a significant equity position and which the
Committee identifies as an additional Related Employer.
(qq) "Related Plan" means any other defined contribution plan
(as defined in Code section 415(k)) maintained by the Company or any Related
Employer.
(rr) "Required Commencement Date" means April 1 of the
calendar year following the calendar year in which the Participant (i) attains
the age seventy and one-half (70 1/2) or, if later, (ii) separates from Service.
Clause (ii) shall not apply in the case of any Participant who was a five
percent (5%) or more owner (within the meaning of Code section 416) in the Plan
Year in which he attained age seventy and one-half (70 1/2).
(ss) "Rollover Contribution" means a contribution to the Plan
or a direct trustee-totrustee transfer (which satisfied the requirements of Code
section 401(a)(31)) to the Plan, of all or a portion of the balance to the
credit of the Employee from a trust described in Code section 401(a) that is
exempt from tax under Code section 501(a) thereof. The term "Rollover
Contribution" shall also include a contribution to the Plan of a distribution
from an individual retirement account or individual retirement annuity which
satisfies the requirements of Code section 408(d)(3).
(tt) "Service" means employment with the Company or a Related
Employer. Service will begin on the date an Employee first performs one (1) Hour
of Service for the Company or a Related Employer. Service will end on the
earlier of:
(i) The date the Employee quits;
(ii) The date the Employee retires;
(iii) The date the Employee dies;
13
<PAGE>
(iv) The second anniversary of the date the Employee
is absent from service by reason of a Parental Absence;
(v) The first anniversary of the date the Employee is
absent from Service for any other reason other than a Parental Absence
(e.g., disability, vacation, Leave of Absence or layoff).
Subject to any applicable rules of the Committee (which rules will be uniformly
applicable to Employees similarly situated), Service includes:
(A) Periods of vacation;
(B) Periods of absence whether or not the
Employee is paid, not to exceed twelve (12) calendar months,
authorized by the Employer for sickness, temporary disability
or personal reasons;
(C) Periods of service in the Armed Forces
of the United States, if and to the extent required by the
Military Selective Services Act, as amended, or any other
federal law of similar import; provided that the Employee
returns to Service with the Company or a Related Employer
within the time his or her employment rights are protected by
such law; and
(D) Any period of twelve (12) consecutive
months or less, beginning on the first day of a month after an
Employee terminates employment and ending on the last day of
the month preceding the Employee's reemployment date, if the
Employee performs at least one (1) Hour of Service within the
first month of reemployment.
If an Employee is on a Leave of Absence, other than a Parental Absence
for more than twelve (12) months, the Employee will be deemed to have quit and
terminated Service as of the end of such twelve (12) month period. If an
Employee is on a Parental Absence, the Employee will be deemed to have quit and
terminated service on the second anniversary of the date on which such Parental
Absence commenced. An Employee who is on a Parental Absence shall be credited
with Service for the period between the initial date of the Parental Absence and
the first anniversary of such date, but shall not be credited with Service for
the period between the first anniversary of the Initial date of the Parental
Absence and the second anniversary of such date. If an Employee retires, dies or
terminates employment while on Leave of Absence, vacation, holiday or jury duty
or while disabled or sick, his or her Service will terminate on the earlier of:
(i) The date of such retirement, death or termina-
tion; or
(ii) Twelve (12) months after the start of a leave,
vacation or holiday or onset of disability or sickness.
14
<PAGE>
All Service will be aggregated, whether or not such Service is
performed consecutively, and every partial month will be deemed to be one (1)
full month of Service, unless the Employee or Participant incurs a Break in
Service.
An Employee's Period of Service will be determined by the Committee and
such determination will be conclusive and binding on all persons.
(uu) "Suspense Account" means the account established pursuant
to Section 6.5.
(vv) "Trust" means the trust established to hold, administer,
and invest the contributions made under the Plan.
(ww) "Trust Agreement" means the agreement between the Company
and the Trustee or any successor Trustee establishing the PageNet Employees
Savings Plan Trust and specifying the duties of the Trustee.
(xx) "Trustee" means the person(s) or entity from time to time
appointed as Trustee under the Trust Agreement.
(yy) "Trust Fund" means all property of every kind held or
acquired by the Trustee under the Trust Agreement.
(zz) "Valuation Date" means each business day of the Plan
Year.
(aaa) "Vested Accrued Benefit" means the percentage of a
Participant's Accrued Benefit to which he or she becomes entitled upon
termination of his or her participation in the Plan determined in accordance
with Section 7.5.
(bbb) "Year of Service" means a twelve (12) month period in
which the Participant has Service under Subsection 2.1(tt). Years of Service are
determined under the elapsed time method of crediting service. For purposes of
determining a Participant's vested Accrued Benefit under Section 7.1, a
Participant's Years of Service before January 1, 1992, shall be disregarded. A
Participant's Years of Service will be determined by the Committee and such
determination will be conclusive and binding on all persons.
2.2 Service for Predecessor or Related Employer. The Plan shall treat
service of an Employee with a predecessor employer or Related Employer as
Service with the Employer.
2.3 Word Usage. Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of the Plan dictates, the plural
shall be read as the singular and the singular as the plural. The words
"herein," "hereof," "hereinafter" and other conjunctive uses of the word "here"
shall be construed as a reference to another portion of this agreement setting
forth the provisions of the Plan. The terms "Section" or "Article" when used as
a cross-reference shall refer to other Sections or Articles contained in the
Plan and not to another instrument, document or publication unless specifically
stated otherwise.
15
<PAGE>
2.4 Calculation of Time. In determining time within which an event or
action is to take place for purposes of the Plan, no fraction of a day shall be
considered, and any act, the performance of which would fall on a Saturday,
Sunday, holiday or other nonbusiness day, may be performed on the next following
business day.
- -------------------------
End of Article II
16
<PAGE>
ARTICLE III
ELIGIBILITY AND PARTICIPATION
-----------------------------
3.1 Eligibility. Each Eligible Employee who was a Participant
immediately prior to the Effective Date shall continue as a Participant as of
the Effective Date, subject to the remainder of this Article III. Each other
Employee shall become a Participant in the Plan immediately upon becoming an
Eligible Employee, provided he or she is then at least twenty-one (21) years of
age, and otherwise on the date he or she attains age twenty-one (21) provided he
or she is still then an Eligible Employee.
3.2 Participation Following Termination of Employment. An Employee who
has satisfied the eligibility requirements in Section 3.1 but who separates from
Service prior to the Plan Entry Date and who is reemployed by the Employer as an
Eligible Employee shall enter the Plan as a Participant immediately upon
returning to the employ of the Employer.
A Participant who separates from Service and who is reemployed by the
Employer as an Eligible Employee, shall enter the Plan as a Participant
immediately upon returning to the employ of the Employer.
3.3 Change in Employment Classification. If an Employee who is not an
Eligible Employee becomes an Eligible Employee after attaining age twenty-one
(21) and completing six months of Service, such Employee will begin to
participate in the Plan [as of the first Plan Entry Date thereafter, provided he
or she is still then an Eligible Employee].
If a Participant becomes ineligible to participate in the Plan because
he is no longer an Eligible Employee, he will recommence participation in the
Plan upon his return to employment as an Eligible Employee.
3.4 Notice of Participation. Within a reasonable time following the
date upon which an Eligible Employee becomes eligible to become a Participant,
but prior to his or her Plan Entry Date, the Committee shall give such Eligible
Employee reasonable notice of his pending commencement of participation in the
Plan. Such notice shall include a summary description of the Plan as well as
forms on which the Eligible Employee may make the election provided in Section
5.1 of this Plan. By his participation, a Participant shall be deemed to have
agreed to abide by the provisions of the Plan.
- ----------------------------
End of Article III
17
<PAGE>
ARTICLE IV
EMPLOYER AND EMPLOYEE CONTRIBUTIONS
-----------------------------------
4.1 Employer Contributions. For each Limitation Year, the Employer
shall
(a) Make Employer Salary Reduction Contributions equal to the
aggregate amount by which Participants have elected, in accordance with the
provisions of Section 5.1, to reduce their Compensation for payroll periods
ending in such Year, and
(b) Make an Employer Matching Contribution in the amount set
forth in Section 4.7.
4.2 Employer Contribution Limitation and Treatment of Forfeitures.
Notwithstanding the provisions of Section 4.1, the aggregate amount of Employer
Salary Reduction Contributions, Employer Matching Contributions and Forfeitures
for each Plan Year shall not exceed either the total amount deductible under
Code section 404 or the sum of:
(a) The aggregate limitation prescribed by Section 6.11 for
all Participants entitled to share in the allocation of such Employer
Contributions under Section 6.5; and
(b) The sum of any amounts that have been erroneously
forfeited or erroneously unallocated with respect to Employees or Participants
who were or would have been entitled to share in the allocation of Employer
Contributions but for the failure to credit such Employees or Participants with
Service that is determined during the Plan Year to be creditable pursuant to
Subsection 2.1(tt), to the extent such contribution was not made in a preceding
Plan Year, and the amount, if any, to be allocated to restore prior Forfeitures
pursuant to Subsection 6.5(b).
Forfeitures arising during the Plan Year shall be used to reduce the
Employer Matching Contribution and shall be allocated to Participants' Accounts
in the manner provided in Subsection 6.5(b) and Section 6.6. If Forfeitures for
a Plan Year that have arisen under Section 7.6 exceed the aggregate limitation
prescribed by Section 6.11 for all Participants entitled to share the allocation
of Employer Contributions for the Limitation Year ending with the Plan Year,
plus any amounts described in Subsection 4.2(b), the amount by which such
Forfeitures exceed the aggregate limitation and the amount described in
Subsection 4.2(b), shall be credited and held unallocated in a Suspense Account
until the next Valuation Date that coincides with the end of a Plan Year when
such Forfeitures shall be deemed to be Forfeitures arising under Section 7.6.
4.3 Determination of Contribution. The Employer, from its records,
shall determine the amount of any contributions to be made by it to the Trust
under the terms of the Plan.
4.4 Time and Method of Payment of Employer Contributions. The Employer
shall pay Employer Salary Reduction Contributions attributable to Compensation
deferred pursuant to Section 5.1 to the Trustee as soon as administratively
possible after the end of the payroll period to which the deferral of
Compensation relates. The Employer shall pay the Employer Matching Contribution
for each month in the Limitation Year on or as soon as practicable after the
last day of such Limitation
18
<PAGE>
Year, but not later than the time prescribed by law for filing the Employer's
Federal income tax return (including extensions thereof) for its taxable year
that ends with or within such Limitation Year. If such Matching Contribution is
on account of the Employer's preceding taxable year, the Matching Contribution
shall be accompanied by the Employer's signed statement to the Trustee that
payment is on account of such taxable year. Contributions shall be paid in cash.
All contributions for each Limitation Year, shall be deemed to be paid as of the
earlier of the actual date of payment or the last day of such Limitation Year.
4.5 Return of Employer Contributions. Notwithstanding any provision
herein to the contrary, upon the Employer's request, a contribution which was
made upon a mistake of fact or conditioned upon deductibility of the
contribution under Code section 404 shall be returned to the Employer within one
(1) year after payment of the contribution or disallowance of the deduction (to
the extent disallowed), as the case may be; provided, however, that the amount
returned shall be the excess of the amount contributed over the amount which
would have been contributed if there had been no mistake of fact or a mistake in
determining the amount of the deduction. Any earnings on the excess contribution
amount shall not be returned to the Employer, although any losses thereon shall
reduce the amount so returned. In addition, if the Internal Revenue Service
determines during the remedial amendment period (as defined in Code section
401(b)) that the Plan initially does not qualify under the Code, and the Company
does not wish to amend the Plan so that it does qualify, the value of all assets
will be distributed by the Trustee to the Employer within one (1) year after the
date such initial qualification is denied. Thereafter, the Employer's
participation in this Plan shall be considered rescinded and of no force or
effect.
4.6 Rollover Contributions. Any Participant or Eligible Employee, with
the Committee's written consent and after filing with the Trustee the form
prescribed by the Committee, may make a Rollover Contribution to the Plan which
shall be credited to such person's Rollover Contribution Account. The Committee
shall allocate and credit a Rollover Contribution to the contributing person's
Rollover Contribution Account as of the Valuation Date coinciding with or next
following the date the Rollover Contribution is made. All Rollover Contributions
shall be fully vested and their value shall be paid to the Participant in the
manner the Participant elects upon attainment of age fifty-nine and one-half (59
1/2), retirement, termination, Disability, or death. Before accepting a Rollover
Contribution, the Committee may require a Participant to furnish satisfactory
evidence that the proposed transfer is in fact a Rollover Contribution which the
Code permits an employee to make to a plan qualified under Code section 401(a).
4.7 Employer Matching Contribution. The Employer shall make an Employer
Matching Contribution to the Plan for each calendar month in an amount equal to
fifty percent (50%) of each qualified Participant's allocated share of any
Employer Salary Reduction Contributions for such month, to the extent it does
not exceed six percent (6%) of the Participant's Compensation for such month.
The Employer Matching Contribution will be reduced by any Forfeitures allocated
as matching contributions pursuant to Section 6.6. For this purpose, a
Participant shall be qualified to receive allocations of matching contributions
only subsequent to the first of calendar quarter following his or her completion
of six (6) months of Service.
19
<PAGE>
No Employer Matching Contribution shall be made to a Participant for a
month unless he or she:
(i) Is actively employed or on an approved Leave of
Absence on the Last day of such month; or
(ii) Retires, dies or becomes Disabled during the
month.
4.8 Limitations on Employer Matching Contributions.
(a) Limitations. Notwithstanding the provisions of Section
4.1, the Actual Matching Percentage for the Highly Compensated Employees with
respect to any Plan Year shall not exceed the greater of (i) or (ii):
(i) The Actual Matching Percentage for the preceding
Plan Year for the Eligible Employees who are not Highly Compensated
Employees multiplied by one and one-fourth (1.25); or
(ii) The Actual Matching Percentage for the preceding
Plan Year for the Eligible Employees who are not Highly Compensated
Employees multiplied by two (2.0); provided, however, that the Actual
Matching Percentage for the Highly Compensated Employees may not exceed
the Actual Matching Percentage for the preceding Plan Year for the
Eligible Employees who are not Highly Compensated Employees by more
than two (2.0) percentage points, but subject to the aggregate
limitation rules of Subsection 4.8(b).
At the election of the Committee made in accordance with rulings or Regulations
issued by the Secretary of Treasury, the determinations under clauses (i) and
(ii) above may be based on the current rather than the preceding Plan Year.
Unless applicable law requires otherwise, to the extent the initial application
of the limitations of this Subsection 4.8(a) as to a Plan Year results in a
refund of Excess Contributions (hereinafter defined), these limitations shall be
deemed satisfied as to such year and reapplication of the limitations for the
same Plan Year shall not be required.
(b) Aggregate Limit. If one or more Highly Compensated
Employees are eligible for contributions that are tested under both this Section
4.8 and Section 5.2 and the Actual Matching Percentage for such Employees
exceeds the amount specified in Subsection 4.8(a)(i) and the Actual Deferral
Percentage for such Employees exceeds the amount specified in Subsection
5.2(a)(i), multiple use of the Actual Matching Percentage alternative limit set
forth in Subsection 4.8(a)(ii) shall be limited so that the aggregated Actual
Deferral Percentage and Actual Matching Percentage of such Highly Compensated
Employees does not exceed the aggregate limit. Except as provided in this
Section, the "aggregate limit" is the greater of the following:
(i) The sum of
(A) One and one-fourth (1.25) multiplied by
the greater of (1) the Actual Deferral Percentage of the group
of Participants who are not Highly
20
<PAGE>
Compensated Employees for the Plan Year, or (2) the Actual
Matching Percentage of the group of Participants who are not
Highly Compensated Employees for the Plan Year, and
(B) Two (2.0) percentage points plus the
lesser of (1) or (2) in the immediately preceding paragraph;
provided, however, that this amount shall not exceed two (2.0)
multiplied by the lesser of (1) or (2) above; or
(ii) The sum of
(A) One and one-fourth (1.25) multiplied by
the lesser of (1) the Actual Deferral Percentage of the group
of Participants who are not Highly Compensated Employees for
the Plan Year, or (2) the Actual Matching Percentage for the
group of Participants who are not Highly Compensated Employees
for the Plan Year, and
(B) Two (2.0) percentage points plus the
greater of (1) or (2) in the immediately preceding paragraph;
provided, however, that this amount shall not exceed two (2.0)
multiplied by the greater of (1) or (2) above.
Amounts in excess of the aggregate limit shall be treated as "Excess
Contributions" and adjusted as provided in Subsection 4.8(c). For purposes of
applying this multiple use limit, the Actual Matching Percentage and the Actual
Deferral Percentage shall be determined after any required distributions of
Excess Contributions under Subsections 4.8(c) and 5.2(c) and excess deferrals
under Section 5.3.
(c) Adjustments for Excess Contributions.
(i) Prospective Reduction of Employer Matching
Contributions. If at any time during the Plan Year the Actual Matching
Percentage for the Highly Compensated Employees is reasonably expected
by the Committee to exceed the amounts allowed under Subsection 4.8(a),
as limited by Subsection 4.8(b), then the Committee, in its sole and
absolute discretion, may reduce the Employer Matching Contributions
that would otherwise be made pursuant to Section 4.7 to some or all of
the Highly Compensated Employees on such basis as the Committee in its
sole discretion deems equitable and likely to result in an Actual
Matching Percentage for the Plan Year within the limitations of this
Section 4.8.
(ii) (A) Distribution of Excess Employer Matching
Contributions. If as of the end of any Plan Year, the Actual Matching
Percentage for the Highly Compensated Employees exceeds the amount
allowed under Subsection 4.8(a), as limited by Subsection 4.8(b), then
the Committee shall cause there to be distributed the portion of each
Highly Compensated Employee's Employer Matching Contribution that
constitutes a portion of the "Excess Contribution" (hereinafter
defined) for the Plan Year, plus earnings (or less losses) thereon for
the Plan Year, until the Actual Matching Percentage for the Highly
Compensated Employees equals (by rounding up) the greater of (i) or (h)
of Subsection 4.8(a), as limited
21
<PAGE>
by Subsection 4.8(b), with all refunds of a Participant's Employer
Matching Contribution Account to be charged against Employer Matching
Contributions for the calendar year that includes the first day of the
Plan Year. All distributions of such Excess Contributions shall be
distributed by the Trustee to the Highly Compensated Employees during
the following Plan Year.
For purposes of this Subsection 4.8(c)(ii)(A), "Excess
Contribution" shall mean, with respect to any Plan Year and in
aggregate, the excess of:
(i) The aggregate amount of Employer
Matching Contributions actually paid over to the Trust on
behalf of Highly Compensated Employees for such Plan Year;
over
(ii) The maximum amount of such Employer
Matching Contributions permitted under the limitations of
Subsection 4.8(a), as limited by Subsection 4.8(b), after
taking into account the adjustments provided for in Subsection
4.8(c)(i).
The aggregate Excess Contributions shall be determined by reducing the
Employer Matching Contributions made on behalf of Highly Compensated
Employees in order of the Actual Matching Percentages beginning with
the Highly Compensated Employees with the highest Actual Matching
Percentage at the time, and proportionately reducing their Actual
Matching Percentages until such percentages equal the next highest
group, and, if necessary, then reducing the Actual Matching Percentages
of the next highest group (including those Highly Compensated Employees
whose percentages were just reduced) and so forth, until the
limitations of Subsection 4.8(a), as limited by Subsection 4.8(b), are
satisfied. A total equal to the aggregate amount of Excess
Contributions identified by application of the preceding sentence shall
be distributed to the Highly Compensated Employees in proportion to
their respective amounts of Employer Matching Contributions for the
Plan Year. The provisions of this Subsection 4.8(c)(ii)(A) shall be
applied after the provisions of Subsection 4.8(c)(i) and any reductions
thereunder. Any distribution of Excess Contributions made pursuant to
this Subsection 4.8(c)(ii)(A) may be made notwithstanding any other
provision of this Plan.
(B) Determination of Earnings and Losses for Plan
Year. The earnings or losses allocable to Excess Contributions for the
applicable Plan Year shall be determined by multiplying the total
income (or loss) allocable to the Participant's Employer Matching
Contribution Account for the applicable Plan Year by a fraction, the
numerator of which is the Excess Contribution on behalf of the
Participant for the applicable Plan Year and the denominator of which
is the balance of the Participant's Employer Matching Contribution
Account on the last day of the applicable Plan Year (prior to any
refund of Excess Contributions) inclusive of the income for such Plan
Year.
(C) Income Allocable to Excess Contributions. The
income allocable to Excess Contributions for purposes of Subsection
4.8(c)(ii)(B) shall include all earnings and appreciation, including
such items as interest, dividends, rent, royalties, gains from the sale
22
<PAGE>
of property, appreciation in the value of stock, bonds, annuity and
fife insurance contracts, and other property, without regard to whether
or not such appreciation has been realized.
- --------------------------
End of Article IV
23
<PAGE>
ARTICLE V
PARTICIPANT DEFERRALS OF COMPENSATION
-------------------------------------
5.1 Election to Defer Compensation.
(a) Participant Election to Defer Compensation. Subject to the
provisions of Section 5.2, a Participant may elect, at such time and in such
form as the Committee shall in its sole and absolute discretion determine to
defer from one percent (1%) to fifteen percent (15%) of his or her Compensation
for the Plan Year (not to exceed Nine Thousand Five Hundred Dollars ($9,500) (as
adjusted pursuant to rulings or regulations issued by the Secretary of the
Treasury)) and have the Employer pay such amount to the Trust as an Employer
Salary Reduction Contribution for the Participant's benefit to be allocated to
such Participant's Employer Salary Reduction Contribution Account. Any amount a
Participant elects to defer under this Section 5.1 shall be contributed by the
Employer to the Trust as an Employer Salary Reduction Contribution in accordance
with Subsection 4.1(a) and Section 4.4.
(b) Effective Date of Election. Any election by a Participant
to defer the receipt of a portion of his or her Compensation pursuant to this
Section 5.1 shall become effective as of the first day of the calendar quarter
following the Committee's receipt of such election. No such election shall be
given retroactive effect.
(c) Modification or Revocation of Election. A Participant who
has no election to defer the receipt of a portion of his or her Compensation
pursuant to this Section 5.1 in effect at any time may enter into a new election
at any time. A Participant who has previously elected to defer amounts as
specified in Section 5.1 may modify such an election at any time. Any such new
election or modification must conform to the provisions of Subsection 5.1(a) and
shall be effective on the first Plan Entry Date (i.e., the first day of each
calendar quarter) after the Committee receives such election. A Participant who
has an election to defer the receipt of a portion of his or her Compensation
pursuant to this Section 5.1 in effect at any time may at any time revoke such
election, any such revocation to become effective as of the first day of the
earliest payroll period following the Committee's receipt of such revocation as
the Committee determines to be administratively possible. In any case, a
Participant's election to defer receipt of any portion of his or her
Compensation shall be automatically revoked at or as soon as administratively
possible following the Participant's termination of employment as to
Compensation payable thereafter. In all cases, the effectiveness of any new
election, or modification or revocation of an election shall be subject to such
advance notice requirements as the Committee may prescribe.
5.2 Limitation on Employer Salary Reduction Contributions for
Highly Compensated Employees.
(a) Limitations. Notwithstanding the provisions of Section
5.1, the Actual Deferral Percentage for the Highly Compensated Employees with
respect to any Plan Year shall not exceed the greater of (i) or (ii):
24
<PAGE>
(i) The Actual Deferral Percentage for the preceding
Plan Year for the Eligible Employees who are not Highly Compensated
Employees multiplied by one and one-fourth (1.25); or
(ii) The Actual Deferral Percentage for the preceding
Plan Year for the Eligible Employees who are not Highly Compensated
Employees multiplied by two (2.0); provided, however, that the Actual
Deferral Percentage for the Highly Compensated Employees may not exceed
the Actual Deferral Percentage for the preceding Plan Year for the
Eligible Employees who are not Highly Compensated Employees by more
than two (2.0) percentage points, subject to the aggregate limitation
rules of Subsection 5.2(b).
At the election of the Committee made in accordance with rulings or Regulations
issued by the Secretary of Treasury, the determinations under clauses (i) and
(ii) above may be based on the current rather than the preceding Plan Year.
Unless applicable law requires otherwise, to the extent the initial application
of the limitations of this Subsection 5.2(a) as to a Plan Year results in a
refund of Excess Contributions (hereinafter defined), these limitations shall be
deemed satisfied as to such Plan Year and reapplication of the limitations for
the same Plan Year shall not be required.
(b) Aggregate Limit. If one or more Highly Compensated
Employees are eligible for contributions that are tested under both Section 4.8
and this Section 5.2 and the Actual Matching Percentage for such Employees
exceeds the amount specified in Subsection 4.8(a)(i) and the Actual Deferral
Percentage for such Employees exceeds the amount specified in Subsection
5.2(a)(i), multiple use of the Actual Deferral Percentage alternative limit set
forth in Subsection 5.2(a)(ii) shall be limited so that the aggregated Actual
Deferral Percentage and Actual Matching Percentage of such Highly Compensated
Employees does not exceed the aggregate limit. For purposes of this Subsection
5.2(b), the "aggregate limit" is the greater of the following:
(i) The sum of
(A) One and one-fourth (1.25) multiplied by
the greater of (1) the Actual Deferral Percentage of the group
of Participants who are not Highly Compensated Employees for
the Plan Year, or (2) the Actual Matching Percentage of the
group of Participants who are not Highly Compensated Employees
for the Plan Year, and
(B) Two (2.0) percentage points plus the
lesser of (1) or (2) in the immediately preceding paragraph;
provided, however, that this amount shall not exceed two (2.0)
multiplied by the lesser of (1) or (2) above; or
(ii) The sum of:
(A) One and one-fourth (1.25) multiplied by
the lesser of (1) the Actual Deferral Percentage of the group
of Participants who are not Highly Compensated Employees for
the Plan Year, or (2) the Actual Matching Percentage
25
<PAGE>
for the group of Participants who are not Highly Compensated
Employees for the Plan Year, and
(B) Two (2.0) percentage points plus the
greater of (1) or (2) in the immediately preceding paragraph;
provided, however, that this amount shall not exceed two (2.0)
multiplied by the greater of (1) or (2) above.
Amounts in excess of the aggregate limit shall be treated as "Excess
Contributions" and adjusted as provided in Subsection 5.2(c). For purposes of
applying this multiple use limit, the Actual Matching Percentage and the Actual
Deferral Percentage shall be determined after any required distributions of
Excess Contributions under Subsections 4.8(c) and 5.2(c) and Excess Deferrals
under Section 5.3.
(c) Adjustments for Excess Contributions.
(i) Prospective Reduction of Salary Reduction
Contributions. If at any time during the Plan Year the Actual Deferral
Percentage for the Highly Compensated Employees is reasonably expected
by the Committee to exceed the amounts allowed under Subsection 5.2(a),
as limited by Subsection 5.2(b), then the Committee, in its sole and
absolute discretion, may reduce the amount of Compensation to be
deferred pursuant to Section 5.1 by Highly Compensated Employees on
such basis as the Committee in its sole discretion deems equitable and
likely to result in an Actual Deferral Percentage for the Plan Year
within the limitations of this Section 5.2.
(ii) (A) Refund of Excess Salary Reduction
Contributions. If as of the end of any Plan Year, the Actual Deferral
Percentage for the Highly Compensated Employees exceeds the amount
allowed under Subsection 5.2(a), as limited by Subsection 5.2(b), then
the Committee shall cause there to be refunded the portion of each
Highly Compensated Employee's Employer Salary Reduction Contribution
that constitutes a portion of the Excess Contribution (hereinafter
defined) for the Plan Year, plus earnings (or less losses) thereon for
the Plan Year, until the Actual Deferral Percentage for the Highly
Compensated Employees equals (by rounding up) the greater of (i) or
(ii) of Subsection 5.2(a), as limited by Subsection 5.2(b), with all
refunds from a Participant's Employer Salary Reduction Contribution
Account to be charged against Employer Salary Reduction Contributions
for the calendar year that includes the first day of the Plan Year. All
refunds of such Excess Contributions shall be distributed by the
Trustee to the Highly Compensated Employees during the following Plan
Year.
For purposes of this Subsection 5.2(c)(ii), "Excess
Contribution" shall mean, with respect to any Plan Year, the excess of:
(i) The aggregate amount of Employer Salary Reduction
Contributions actually paid over to the Trust on behalf of Highly
Compensated Employees for such Plan Year; over
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(ii) The maximum amount of such Employer Salary
Reduction Contributions permitted under the limitations of Subsection
5.2(a), as limited by Subsection 5.2(b).
The Excess Contributions shall be determined by reducing the
Employer Salary Reduction Contributions made on behalf of Highly
Compensated Employees in order of the Actual Deferral Percentages
beginning with the Highly Compensated Employees with the highest Actual
Deferral Percentage at the time, and proportionately reducing their
Actual Deferral Percentages until such percentages equal the next
highest group, and, if necessary, then reducing the Actual Deferral
Percentages of the next highest group (including those Highly
Compensated Employees whose percentages were just reduced) and so
forth, until the limitations of Subsection 5.2(a), as limited by
Subsection 5.2(b), are satisfied. A total equal to the aggregate amount
of Excess Contributions identified by application of the preceding
sentence shall be distributed to the Highly Compensated Employees in
proportion to their respective amounts of Employer Salary Reduction
Contributions for the Plan Year. The provisions of this Subsection
5.2(c)(ii) shall be applied after the provisions of Section 5.3 and any
distributions of Excess Deferrals thereunder. Any distribution of
Excess Contributions made pursuant to this Subsection 5.2(c)(ii) may be
made notwithstanding any other provision of this Plan.
(B) Determination of Earning and Losses for Plan
Year. The earnings or losses allocable to Excess Contributions for the
applicable Plan Year shall be determined by multiplying the total
income (or loss) allocable to the Participant's Employer Salary
Reduction Contribution Account for the applicable Plan Year by a
fraction, the numerator of which is the Excess Contribution on behalf
of the Participant for the applicable Plan Year and the denominator of
which is the balance of the Participant's Employer Salary Reduction
Contribution Account on the last day of the applicable Plan Year (prior
to any refund of Excess Contributions) inclusive of the income for such
Plan Year.
(C) Income Allocable to Excess Contributions. The
income allocable to Excess Contributions for purposes of Subsection
5.2(c)(ii)(B) 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.
(D) Treatment of Any Match On Excess Contributions.
If Excess Contributions are distributed to a Participant from the Plan
pursuant to this Subsection 5.2(c)(ii), the Employer Matching
Contribution to which such Excess Contributions relate, if any, plus
any income and minus any loss attributable thereto shall be forfeited
at the time the Excess Contributions are distributed. Such amount shall
become a Forfeiture and used in accordance with Section 4.2 to reduce
Employer Matching Contributions under Section 4.7 for the Plan Year in
which the Forfeiture occurs.
5.3 Distribution of Excess Deferrals. If a Participant is required
to include in his or her gross income for a calendar year elective deferrals (as
defined in Code section 402(g)(3)) which
27
<PAGE>
exceed Nine Thousand Five Hundred Dollars ($9,500) (or such greater amount as
prescribed by regulations or rulings issued by the Secretary of the Treasury),
such amounts shall be treated as "Excess Deferrals" and shall be distributed to
the Participant. If the Participant makes Excess Deferrals to one or more plans
with respect to a calendar year, the Participant may allocate the Excess
Deferrals among the plans to which such Excess Deferrals were made. Not later
than the first March 1 following the close of the calendar year in which the
Excess Deferrals were made, the Participant shall notify the Committee of
whether and to what extent the Participant has allocated any of the
Participant's Excess Deferrals to this Plan. If such allocation is made, the
Committee shall distribute such Excess Deferrals allocated to this Plan,
adjusted for any income or losses allocable to such amount, for the Plan Year in
question not later than the first April 15 following the calendar year in which
the Excess Deferrals were made. The amount of Excess Deferrals to be distributed
shall be reduced by any Excess Contributions previously distributed with respect
to the Plan Year beginning with the calendar year. Any distribution of Excess
Deferrals made pursuant to this Section 5.3 may be made notwithstanding any
other provision of this Plan.
If Excess Deferrals are distributed to a Participant from the Plan pursuant to
this Section 5.3, the Employer Matching Contribution to which such Excess
Deferrals relate, if any, (plus any income and minus any loss attributable
thereto) shall be forfeited and applied in the same manner as Employer Matching
Contributions on Excess Contributions (Subsection 5.2(c)(ii)(D). Similarly, the
provisions of Subsection 5.2(c)(ii)(B)-(C) shall also apply in a like manner for
purposes of determining the earnings and losses, and income allocable, to any
Excess Deferrals.
- ---------------------------
End of Article V
28
<PAGE>
ARTICLE VI
ACCOUNTS AND ALLOCATIONS
------------------------
6.1 Participant's Accounts. The Committee shall establish for each
Participant one or more of the Accounts described in Subsection 2.1(a) which
will reflect the Participant's share of Employer Salary Reduction Contributions,
Employer Matching Contributions, and, if applicable, Rollover Contributions,
together with the income, expense, gain, and loss attributable to such
contributions and amounts. The establishment of separate Accounts shall not
require a separation of the Trust assets.
6.2 Segregated Accounts During Repayment of Distribution. If a
Participant, having incurred a Forfeiture pursuant to Subsection 7.6(b),
subsequently reenters the Plan, the Committee shall maintain, or cause to be
maintained, a segregated account for amounts repaid by the Participant in
accordance with Section 7.7, together with the income, expense, gain, and loss
attributable to such amounts. Such Account shall remain segregated until the
balances of the Participant's Employer Matching Contribution Account are
restored pursuant to Section 7.7, at which time the balance of such Account
shall be used to restore the balances of the Participant's Employer Matching
Contribution Account.
6.3 Charging of Payments, Distributions and Specific Items. As of each
Valuation Date, all payments and distributions made under the Plan since the
immediately preceding Valuation Date to or for the benefit of a Participant or
his or her Beneficiary, and all income, expense, gain or loss specifically
creditable to or chargeable against a specific Participant Account pursuant to
the terms of the Plan (such as interest income on loans to a Participant and
loan fees) will be charged to the proper Account of such Participant.
6.4 Allocation of Trust Fund Income, Expenses, Gains and Losses. Within
a reasonable time after each Valuation Date and prior to the allocation of
Employer Contributions pursuant to Section 6.5, the Committee shall apportion
changes in the net fair market value of the Trust Fund for the period ending on
the most recent Valuation Date (other than changes attributable to all income,
expense, gain or loss specifically creditable to or chargeable against a
specific Participant Account) among the Accounts of Participants in the ratio
that the balance credited to each of the Accounts of each Participant on the
preceding Valuation Date bears to the balances credited to all Accounts of all
Participants on such Valuation Date, after deducting withdrawals, distributions,
and any other amounts chargeable to the Accounts pursuant to any other
provisions of this Plan since such Valuation Date. The Suspense Account, if any,
shall not be adjusted to reflect any Trust income and expenses, gains and
losses.
6.5 Allocation of Employer Contributions. Subject to the limitations of
Section 6.11, as of each Valuation Date specified below in this Section 6.5, the
Committee shall:
(a) First, allocate to the Employer Matching Contribution
Accounts of Participants whose non-vested Matching Contribution Accounts were
forfeited in prior Plan Years but who are entitled to have the balances of such
Accounts restored in accordance with Section 7.7, such portion of the
Forfeitures for the Plan Year that have arisen under Section 7.6, and such
portion of the
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Employer Matching Contribution received by the Trust Fund since the preceding
Valuation Date, as is necessary to restore such balances. No allocation of the
Employer Matching Contribution shall be made pursuant to the immediately
preceding sentence unless the Forfeitures are insufficient to restore the
balances of the appropriate Accounts.
(b) Second, if Forfeitures for a Plan Year that have arisen
under Section 7.6, minus such portion of such Forfeitures, if any, that have
been allocated pursuant to Subsection 6.5(b), exceed the aggregate limitation
prescribed by Section 6.11 for all Participants entitled to share in the
allocation of Employer Contributions for the Limitation Year ending within the
Plan Year plus any amounts described in Subsection 4.2(b), the amount by which
such Forfeitures exceed the aggregate limitation and the amount described in
Subsection 4.2(b) shall be credited and held unallocated in the Suspense Account
until the next Valuation Date that coincides with the end of a Plan Year when
such Forfeitures shall be deemed to be Forfeitures arising under Section 7.6.
(c) Next, allocate to each Participant's Employer Salary
Reduction Contribution Account that portion of the total Employer Salary
Reduction Contributions equal to the amount by which the Participant has
elected, in accordance, with Section 5.1, to defer a portion of his Compensation
for the payroll period or periods for which such payments of Contributions were
paid.
(d) Next, allocate any Employer Matching Contributions
received by the Trust Fund since the preceding Valuation Date (and not
previously allocated under Subsection 6.5(a) above) among the Employer Matching
Contribution Accounts of Participants eligible to share in the allocation of
such amounts as determined under Section 4.7, such allocation to be based on a
ratio of the amount of Compensation deferred by such Participant for the month
or months for which such Contributions were made to the total amount of
Compensation deferred by all Participants for such month or months. For this
purpose, deferrals in excess of six percent (6%) of Compensation for the month
or months for which such Employer Matching Contributions were made shall not be
taken into account.
(e) Notwithstanding the foregoing provisions of this Section
6.5, the allocations for any Participant for any Limitation Year shall not
exceed the amount determined pursuant to Section 6.11. If after the allocations
provided for above in this Section 6.5, any Employer Contributions remain
unallocated, such remainder shall be held in the Suspense Account and used to
reduce Employer Matching Contributions in the following Plan Year(s).
6.6 Forfeitures. Forfeitures of Employer Matching Contributions that
have arisen under Section 7.6 shall be used to reduce Employer Matching
Contributions to the Plan. To the extent possible, Forfeitures will be used to
reduce the Employer Matching Contribution for the Plan Year in which such
Forfeitures occur. However, if Forfeitures arising during a particular Plan Year
exceed the required Employer Matching Contribution for that year, the amount of
excess Forfeitures will be credited to and held unallocated in the Suspense
Account until the next succeeding Plan Year when such Forfeitures shall be
deemed to be Forfeitures arising under Section 7.6.
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<PAGE>
6.7 Dates Contributions Considered Made. Except as provided in Section
4.4 and Section 6.4, Employer Salary Reduction Contributions, Employer Matching
Contributions, and any Rollover Contributions shall be deemed made on the day on
which it is deposited into the Trust Fund.
6.8 Accrual of Benefits. The Committee shall determine a Participant's
Accrued Benefit on the basis of the Limitation Year.
6.9 Valuation. Within a reasonable time after the last Valuation Date
of each Plan Year, the Trustee shall prepare or cause to be prepared a statement
of the condition of the Trust Fund, setting forth an investments, receipts, and
disbursements, and other transactions affected by it during the Plan Year then
ended, and showing all the assets of the Trust Fund and the cost and fair market
value thereof. Such statements shall be delivered to the Committee. The
Trustee's determination of the fair market value of the assets of the Trust Fund
and the Committee's charges or credits to Accounts shall be final and conclusive
on all persons ever interested hereunder, subject to the claims review
procedures of Subsections 12.9 and 12.10.
6.10 Equitable Allocations. If the Committee determines in making any
valuation, allocation, or adding interest to any Account under the provisions of
the Plan that the strict application of the provisions of the Plan will not
produce an equitable and nondiscriminatory allocation among the Accounts of the
Participants, it may modify any procedure specified in the Plan for the purpose
of achieving an equitable and nondiscriminatory allocation in accordance with
the general concepts of the Plan; provided, however, that any such modification
shall not reduce the Participant's Vested Accrued Benefit and shall be
consistent with the provisions of Code sections 401(a)(4) and 411(d)(6).
6.11 Limitation on Annual Additions.
(a) General. Notwithstanding any other provision of the Plan,
the Annual Addition to a Participant's Accounts for any Limitation Year may not
exceed an amount equal to the lesser of:
(i) Thirty Thousand Dollars ($30,000), adjusted for
the Limitation Year (if and to the extent that such adjustment may be
allowed by regulations prescribed by the Secretary of the Treasury), to
take into account any cost-of-living increase adjustment provided for
that year under Code section 415(d); or
(ii) Twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year.
If a Participant's Annual Additions would exceed the above
limitation that such Annual Additions will be reduced as follows:
(i) The amount of Employer Salary Reduction
Contributions allocated to the Participant for the Plan Year will be
reduced as necessary and paid to the Participant as soon as
administratively feasible;
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(ii) To the extent that the reductions in item (i)
are not sufficient, the amount of the Forfeitures allocated to the
Participant shall be reduced as necessary and allocated to other
Participant Accounts in accordance with the Plan formula for allocating
Forfeitures to the extent that such allocations do not cause the
additions to any other Participant's Accounts to exceed the lesser of
the limit set forth above or any other limitation provided in the Plan;
(iii) To the extent that the amount of the reductions
in item (i) and (ii) are not sufficient, Employer Matching
Contributions allocated to the Participant will be reduced as necessary
and allocated to other Participant Accounts in accordance with the
formula for Employer Matching Contributions to the extent that such
allocations do not cause the additions to any other Participant's
Accounts to exceed the lesser of the limitations set forth above or any
other limitation provided above; or
(iv) To the extent that the allocations in item (iii)
cannot be allocated to other Participant's Accounts, the reductions
will be allocated to the Suspense Account as Forfeitures until the next
succeeding Valuation Date on which Forfeitures could be applied to
reduce Employer Matching Contributions under the provisions of the
Plan. All amounts held in the Suspense Account must be applied as
Forfeitures before any additional Employer Contributions may be made to
the Plan. If the Plan terminates, the Suspense Account will revert to
the Employer to the extent it may not be allocated to any Participant's
Accounts.
(b) Additional Limitation -- Related Plan. If a Participant
also participates in a Related Plan, the limitation specified in Subsection
6.11(a), shall be reduced by the Annual Addition made under any Related Plan on
behalf of the Participant for the Limitation Year.
(c) Additional Limitation - Defined Benefit Plan. If a
Participant also participates in one or more qualified defined benefit plans (as
described in Code section 414(i)) maintained by a Related Employer, the maximum
amount otherwise allocable to his or her Accounts under Subsections 6.11(a) and
(b) shall be reduced to the extent necessary to ensure that the sum of the
Defined Benefit Fraction for the Limitation Year plus the Defined Contribution
Fraction for the Limitation Year does not exceed one (1.0).
The "Defined Benefit Fraction" for a Limitation Year shall be
a fraction the numerator of which shall be the projected annual benefit
of the Participant under such defined benefit plan or plans (determined
as of the close of the year) and the denominator of which shall be an
amount equal to the lesser of:
(i) The product of one and one-fourth (1.25)
multiplied by the dollar limitation in effect for such year under Code
section 415(b)(1)(A); or
(ii) The product of one and four-tenths (1.4)
multiplied by the amount which may be taken into account for such year
under Code section 415(b)(1)(B) with respect to such Participant.
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<PAGE>
The "Defined Contribution Fraction" for a Limitation Year
shall be a fraction (a) the numerator of which shall be the sum of the
Annual Additions to the Participant's accounts under all defined
contribution plans maintained by the Employer or Related Employer as of
the close of the Limitation Year, and (b) the denominator of which
shall be the sum of the lesser of the following amounts determined for
each such plan for the Limitation Year and for each prior year of
service with the Employer:
(i) The product of one and one-fourth (1.25)
multiplied by the dollar limitation in effect for such year under Code
section 415(c)(1)(A) (determined without regard to Code section
415(c)(6)) or
(ii) The product of one and four-tenths (1.4)
multiplied by the amount that may be taken into account under Code
section 415(c)(1)(B) with respect to such individual under the defined
contributions plans for the Limitation Year.
Notwithstanding the foregoing, the provisions of this Section
6.11 shall only apply if such defined benefit plan or plans do not
provide for a reduction of benefits to ensure that the sum of the
Defined Benefit Fraction for such Limitation Year and the Defined
Contribution Fraction for such Limitation Year does not exceed one
(1.0).
6.12 Allocation Does Not Create Rights. No Participant shall acquire
any right to or interest in any specific asset of the Trust as a result of the
allocations provided for in the Plan.
- ---------------------------
End of Article VI
33
<PAGE>
ARTICLE VII
TERMINATION OF SERVICE - PARTICIPANT VESTING
--------------------------------------------
7.1 Normal Retirement. When a Participant attains or has exceeded his
Normal Retirement Age while an Employee, his Accrued Benefit shall, to the
extent it has not previously become fully vested, become fully vested. A
Participant who remains in the employ of the Employer after attaining Normal
Retirement Age may elect to continue to participate in the Plan and delay the
distribution of his or her Accrued Benefit until the earlier of the date of his
or her actual retirement or his or her Required Commencement Date. The Committee
shall direct the Trustee to make payment of the full value of the Participant's
Accrued Benefit at the time so elected and in the manner provided in Article
VIII. The value of the Participant's Accrued Benefit shall be determined
pursuant to Article VIII.
7.2 Disability. A Participant who becomes Disabled while an Employee
shall become fully vested in his Accrued Benefit and shall have the full value
of such Accrued Benefit paid to him at such times and in such manner as provided
in Article VIII. The value of the Participant's Accrued Benefit shall be
determined pursuant to Article VIII.
7.3 Death. Upon the death of a Participant while an Employee, his
Accrued Benefit shall become fully vested and his Beneficiary shall be entitled
to receive the full value of such deceased Participant's Accrued Benefit. The
value of the Participant's Accrued Benefit shall be determined pursuant to
Article VIII.
7.4 Termination of Service Prior to Normal Retirement Age. If a
Participant's Service terminates prior to Normal Retirement Age for any reason
other than death or Disability, then such Participant's Employer Matching
Contribution Account shall vest according to the following schedule:
Years of Service Percent
Subsequent to 1/1/1992 Vested
---------------------- -------
Less than 2 years 0%
2 years but less than 3 years 33%
3 years but less than 4 years 50%
4 years or more 100%
A Participant shall be one hundred percent (100%) vested at all times
in that portion of his Accrued Benefit attributable to his or her Employer
Salary Reduction Contribution Account, and Rollover Contribution Account.
The value of a Participant's Vested Accrued Benefit shall be determined
pursuant to Article VIII.
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<PAGE>
7.5 Vesting - Termination of Service and Re-employment. If an Employee
separates from Service and resumes employment with the Employer, such Employee
shall be credited with all Years of Service earned prior to his or her
separation from Service for purposes of the Plan.
7.6 Occurrence of Forfeitures. A Participant who separates from Service
shall forfeit the non-vested portion of the Participant's Employer Matching
Contribution Account upon the earliest of:
(a) The completion of five (5) consecutive Breaks in Service;
(b) The day on which the Participant receives a distribution
of his or her entire Vested Accrued Benefit from such Accounts; provided that
such distribution is made not later than the close of the second Plan Year
following the Participant's separation from Service; and
(c) The day the Participant dies.
A Participant who separates from Service without any vested interest in his
Employer Matching Contribution Account shall be deemed to have received a
distribution of his vested interest in such Accounts equal to Zero Dollars ($0)
as of his separation from Service.
7.7 Restoration of Forfeitures. If a Participant who incurs a
forfeiture pursuant to Subsection 7.6(b) resumes Service with the Employer prior
to incurring five (5) consecutive one (1) year Breaks in Service, such forfeited
amounts shall be restored to the Participant's Employer Matching Contribution
Account, if the Participant repays to the Plan the full amount of the
distribution from such Account within five (5) years following the date of the
Participant's re-employment with the Employer. A Participant who received a
deemed distribution of his or her vested interest in his or her Employer
Matching Contribution Account equal to Zero Dollars ($0) shall be deemed to have
repaid such distribution upon the date of re-employment. Upon such repayment,
the balance of the Participant's Employer Matching Contribution Account shall be
restored in accordance with Subsection 6.5(b) to the balance of such Account as
it existed immediately prior to the distribution therefrom.
7.8 Termination, Partial Termination, or Complete Discontinuance of
Employer Contributions. Notwithstanding any other provision in this Plan, in the
event of a termination or partial termination of the Plan, or a complete
discontinuance of Employer contributions under the Plan, all affected
Participants shall have a fully vested interest in their Accrued Benefit
determined as of the date of such event. The value of the Accrued Benefit shall
be determined on the date the Accrued Benefit becomes fully vested, as if such
date was the Valuation Date for the Limitation Year in which the termination,
partial termination, or complete discontinuance of Employer Contributions
occurs.
7.9 Certain Additional Vesting. Notwithstanding any other provision of
the Plan to the contrary, the Accounts of the following Participants shall be
fully vested and nonforfeitable at all times beginning on the applicable date or
dates specified below:
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(a) All Participants who (i) ceased to be employed by the
Company in connection with the transfer of certain functions to Software
Architects, Inc. in May of 1998 and (ii) were immediately thereafter employed by
Software Architects, Inc.
(b) [Reserved].
- ------------------------------
End of Article VII
36
<PAGE>
ARTICLE VIII
TIME AND METHOD OF PAYMENT OF BENEFITS
--------------------------------------
8.1 Time of Payment.
(a) Normal Retirement. In the event of normal retirement,
within the meaning of Section 7.1, payment of the Participant's Vested Accrued
Benefit shall commence not later than ninety (90) days after the date elected by
the Participant that coincides with or immediately follows the date of the
Participant's termination of Service after attainment of Normal Retirement Age,
provided that the Participant has filed a claim for such benefit pursuant to
Section 12.9. A Participant who continues in the employ of the Employer after
his or her Normal Retirement Age may elect to defer the payment of his or her
Accrued Benefit until the earlier of his or her termination of Service with the
Employer or his or her Required Commencement Date. A Participant who is entitled
to a distribution pursuant to this Subsection 8.1(a) shall have the value of his
Accounts determined as of the Valuation Date which is on, or if not on, which
immediately precedes the date on which the Participant's Accrued Benefit is to
be distributed.
(b) Disability. In the event of Disability, payment of the
Participant's Vested Accrued Benefit shall be made no later than ninety (90)
days after the date the Participant elects to receive such distribution;
provided that the Committee has then determined that Disability exists. A
Participant who is entitled to a distribution pursuant to this Subsection 8.1(b)
shall have the value of his Accounts determined as of the Valuation Date which
is on, or if not on, which immediately precedes the date on which the
Participant's Accrued Benefit is to be distributed.
(c) Death. In the event of death, payment of the Participant's
Vested Accrued Benefit shall be made to the Participant's Beneficiary no later
than one hundred twenty (120) days after the Participant's death. The value of
the deceased Participant's Accounts shall be determined as of the Valuation Date
which is on, or if not on, which immediately precedes the date on which the
Participant's Accrued Benefit is to be distributed.
(d) Other Termination of Service. Upon a Participant's
termination of employment for any reason other than retirement, Disability or
death, payment of the Participant's Vested Accrued Benefit shall be made as soon
as practicable after he files a claim for such benefit pursuant to Section 12.9.
A Participant who is entitled to a distribution pursuant to this Subsection
8.1(d) must file a claim for such benefit pursuant to Section 12.9. The value of
the Participant's Accounts shall be determined as of the Valuation Date which is
on, or if not on, which immediately precedes the date on which the Participant's
Vested Accrued Benefit is to be distributed.
(e) Attainment of Age 59 1/2. A Participant may request an
in-service withdrawal of his Vested Accrued Benefit upon the attainment of age
fifty-nine and one-half (59 1/2). Payment of the Participant's Vested Accrued
Benefit shall be made as soon as practicable after the Committee receives such
withdrawal request. The value of the Participant's Accounts shall be determined
as of the Valuation Date which is on, or if not on, immediately precedes, the
date on which the withdrawal is paid.
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<PAGE>
(f) Limitation on Time of Payment. Notwithstanding any
provision contained herein to the contrary, in the case of a Participant who has
filed a claim for benefits in accordance with Section 12.9 hereof, unless the
Participant otherwise directs, the Trustee shall make payment of the
Participant's Vested Accrued Benefit not later than the earlier of:
(i) Sixty (60) days after the close of the Plan Year
in which the latest of the following events occurs:
(A) The date the Participant attains Normal
Retirement Age;
(B) The date on which the Participant
completes his or her tenth (10th) year of participation in the
Plan; or
(C) The date the Participant terminates
Service.
(ii) The Participant's Required Commencement Date.
Notwithstanding any other provision herein to the contrary, all
distributions made under the Plan will comply with regulations issued by the
Secretary of the Treasury under Code section 401(a)(9) and such regulations
shall override and supersede any conflicting provisions of the Plan.
8.2 Method of Payment. A Participant or his Beneficiary may elect to
have his or her Vested Accrued Benefit paid in the following forms of payment.
(a) Lump Sum Payment. By a lump sum payment, which may be in
cash or in the form of the securities in which the Participant's Account is
invested (to the extent so invested), as elected by the Participant or
Beneficiary.
(b) Direct Rollover. By direct rollover to an Eligible
Retirement Plan, provided that such payment qualifies for a direct rollover
pursuant to Code section 401(a)(31). This form shall not be available to any
Beneficiary other than a Beneficiary who is the Participant's surviving spouse.
In implementing a Participant's or Beneficiary's election with respect to this
Subsection 8.2(b), the Employer, the Committee and the Trustee shall not be
responsible for ascertaining whether a transferee plan, trust, or individual
retirement account or annuity satisfies the applicable provisions of the Code,
and the written request of the Participant or Beneficiary shall constitute a
certification that the plan, trust, or individual retirement account or annuity
satisfies such requirements and accepts such rollover.
(c) Combination. By a combination of a lump sum cash payment
or direct rollover to an Eligible Retirement Plan.
8.3 Lump Sum Cashout and Special Limitation on Involuntary Payment of
Benefits. Notwithstanding the foregoing provisions of this Article VIII, if upon
termination of a Participant's Service the value of the Participant's Vested
Accrued Benefit, determined as of the Valuation Date immediately preceding the
Participant's termination of Service, does not exceed Three Thousand Five
38
<PAGE>
Hundred Dollars ($3,500) (Five Thousand Dollars ($5,000), effective August [5],
1997), the Committee shall direct the Trustee to distribute the value of the
Participant's Vested Accrued Benefit to the Participant or the Participant's
Beneficiary promptly thereafter in such form as the Participant or Beneficiary
elect pursuant to Section 8.2 or otherwise by a lump sum cash payment. If upon
termination of a Participant's Service for any reason other than retirement or
death the then value of the Participant's Accrued Benefit exceeds Three Thousand
Five Hundred Dollars ($3,500) (Five Thousand Dollars ($5,000), effective August
[5], 1997), no distribution of the Participant's Accrued Benefit to the
Participant may occur prior to the Participant's attainment of Normal Retirement
Age unless the Participant files with the Committee a written request for the
payment of the entire amount of his Vested Accrued Benefit in a form set forth
in Section 8.2, such request expressly to consent to the form of distribution.
If the Participant files such a request the Committee may direct the Trustee to
pay such amount to the Participant in the form so elected.
8.4 Deferral of Payments. Subject to Section 8.3, a Participant who is
otherwise entitled to a distribution of his Vested Accrued Benefit pursuant to
Section 8.1 may elect to defer such distribution until his Required Commencement
Date. A Participant who elects to defer the distribution of his Vested Accrued
Benefit pursuant to this Section 8.4 may elect to receive an earlier
distribution of such benefit by filing an election with the Committee in which
case such benefit shall be distributed as soon as administratively possible, but
in any event no later than ninety (90) days after the date the Participant files
such request. If a Participant elects to defer the distribution of his Vested
Accrued Benefit pursuant to this Section 8.4, such Vested Accrued Benefit will
continue to be treated as a part of the Trust Fund and will be credited (or
debited) with its share of the net income (or loss) attributable to the
investments of such Vested Accrued Benefit but shall not be credited with any
further Employer Contributions. The value of the Participant's Vested Accrued
Benefit for purposes of this Section 8.4 shall be determined as of the Valuation
Date which is on, or if not on, which immediately precedes, the date payment of
the Participant's Vested Accrued Benefit commences and shall be made in such
manner as provided in this Article VIII.
8.5 Hardship Withdrawal for Employer Salary Reduction Contributions. A
Participant who incurs an Immediate and Heavy Financial Need may make a
withdrawal from his Employer Salary Reduction Contribution Account as specified
in this Section 8.5.
(a) Limits on Withdrawals. A Participant's withdrawals from
his Employer Salary Contribution Account may not exceed the amount of Employer
Salary Contributions credited to such Account, reduced by any prior withdrawals
of such Contributions. A Participant may not withdraw earnings credited to his
Salary Reduction Contribution Account.
(b) Immediate and Heavy Financial Need. A withdrawal will be
deemed to be made due to an Immediate and Heavy Financial Need if it is made:
(i) To prevent the eviction of the Participant from
his primary residence or foreclosure on the mortgage of the Partici-
pant's primary residence;
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(ii) To pay for medical care described in Code
section 213(d) previously incurred by the Participant, his spouse or
any of his dependents (as defined in Code section 152) or necessary for
these persons to obtain medical care described in Code section 213(d);
(iii) To pay costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the
Participant; or
(iv) To pay for tuition or educational fees for the
next twelve (12) months of post-secondary education for the
Participant, his spouse, children or dependents.
(c) Necessary to Satisfy an Immediate and Heavy Financial
Need. An amount will be considered necessary to satisfy the Participant's
Immediate and Heavy Financial Need only if the Committee determines, after a
full review of the Participant's written request and related documentation of
Immediate and Heavy Financial Need, that the need cannot be relieved by any of
the following:
(i) Reimbursement or compensation by insurance or
otherwise;
(ii) Reasonable liquidation of the Participant's
assets, including assets of the Participant's spouse and minor children
that are reasonably available to the Participant, to the extent such
liquidation would not itself cause an Immediate and Heavy Financial
need;
(iii) Cessation of Salary Reduction Contributions to
this Plan or any other plan maintained by the Employer; or
(iv) A loan from this Plan or from a commercial
source on reasonable commercial terms.
Unless the Committee has evidence to the contrary, it may rely upon the
Participant's affidavit or certificate under penalty of perjury that the need
cannot be relieved by any of the foregoing.
No hardship withdrawal may exceed the amount necessary to satisfy the
Participant's Heavy and Immediate Financial Need. However, the amount of the
Participant's hardship withdrawal may include the amount of any federal, state
or local taxes or any penalties reasonably anticipated to result from the
withdrawal. If the Participant elects, amounts necessary to satisfy such taxes
and penalties shall be withheld at the time the hardship withdrawal is
distributed to the Participant.
(d) Payment of Withdrawals. A Participant may request a
withdrawal by filing the prescribed form with the Committee. A withdrawal will
be paid to the Participant in cash as soon as reasonably practicable after the
Committee receives the prescribed form and determines that the withdrawal
request meets the requirements of this Section 8.5.
(e) Valuation Date. The value of a Participant's Salary
Reduction Contribution Account shall be determined as of the Valuation Date
immediately preceding the date the withdrawal is processed.
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(f) Spousal Consent. No withdrawal may be made pursuant to
this Section 8.5 by a Participant unless the Participant's spouse, as of the
date the Participant applies for such a withdrawal, has consented thereto.
(g) Withdrawals by Alternate Payees. An Alternate Payee who is
entitled to a portion of a Participant's Salary Reduction Contribution Account
under the terms of a Qualified Domestic Relations Order may withdraw amounts
from his Salary Reduction Contribution Account under this Section 8.4 in the
same manner, at the same times and subject to the same conditions (except that
no spousal consent shall be required) as Participants in the Plan.
8.6 Loans. A Participant may borrow an amount from the Plan as
provided in this Section 8.6.
(a) Amount of Loans. No loan will be granted to a Participant
to the extent it would cause the aggregate balance of all loans a Participant
has outstanding under the Plan (or under any other plan maintained by the
Employer or a Related Employer) to exceed the lesser of:
(i) Fifty Thousand Dollars ($50,000), reduced by the
excess of (A) the highest outstanding balance of loans from the Plan
during the one (1) year period ending on the day before the date on
which such loan was made, over (B) the outstanding balance of loans
from the Plan on the date on which such loan was made; or
(ii) Fifty percent (50%) of the Participant's Vested
Accrued Benefit.
The minimum amount of any loan is Five Hundred Dollars ($500). Only two (2)
loans to a Participant may be outstanding at any time.
(b) Vested Accrued Benefit. The Participant's Vested Accrued
Benefit shall be determined as of the latest Valuation Date preceding the date
the loan application is submitted for which information is then available. Any
amount required to fund a loan shall be drawn from the Investment Funds in which
the Participant's Account is invested, in proportion to the amounts of the
Participant's Account invested therein.
(c) Terms of Loans. All loans will be on such terms and
conditions as the Committee may determine, and must satisfy the following
requirements:
(i) Adequate Security. All loans will be made under a
promissory note secured by fifty percent (50%) of the Participant's
Vested Accrued Benefit at the time such loan was made and such other
security deemed necessary by the Committee to adequately secure the
loan.
(ii) Substantially Level Payment. All loans will be
subject to a substantially level payment schedule, as determined by the
Committee, with payments to be made at least quarterly and whenever
possible to be made through semi-monthly payroll deductions. If a
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Participant is granted an approved unpaid Leave of Absence, his loan
payments may be suspended during the period of such Leave of Absence;
provided, however, that such loan payments must recommence by the end
of the one (1) year period following the date the Participant's Leave
of Absence began.
(iii) Reasonable Rate of Interest. All loans will
bear interest at a fixed rate equal to the prime interest rate as
published in the Wall Street Journal as being representative of the
base rate on corporate loans at large United States money center
commercial banks on the first day of the month immediately preceding
the date on which the loan is approved plus one percent (1%), unless
such rate would not be "reasonable" as defined by Act section
408(b)(3), in which case a "reasonable" rate of interest will be used.
(iv) Repayment in Full. All loans will provide for
repayment in full within a reasonable period of time and may be repaid,
but only in full, at any time. Such period of time shall not exceed
five (5) years after the date the loan is made, unless the loan is used
to acquire, construct or substantially rehabilitate any dwelling unit
which, within a reasonable period of time is to be used as a principal
residence of the Participant in which case such period of time shall
not exceed fifteen (15) years after the date the loan is made.
(d) Default. If the Participant fails to make a required
payment on a loan for ninety (90) days, such loan will be in default. Upon such
default, the Committee shall take such actions as it deems necessary or
appropriate to cause the Plan to realize on its security for the loan. Those
actions may include, without limitation, a demand for payment in full, and
foreclosure against a Participant's Vested Accrued Benefit. There will be no
foreclosure against a Participant's Vested Accrued Benefit prior to the date the
Participant becomes entitled to a distribution his or her Vested Accrued Benefit
under the Plan. All loans will become due and payable upon the termination of a
Participant's Service. If a Participant with an outstanding loan terminates
Service and becomes entitled to a distribution of his Vested Accrued from the
Plan, then the outstanding balance of the unpaid loan plus any accrued interest
thereon will be deducted from the amount of otherwise distributable benefits and
the Participant's promissory note shall be distributed to the Participant. Any
income or loss attributable to a loan will be for the Account of the Participant
alone.
(e) Fees. The Committee may establish and charge the Accounts
of Participants borrowing from the Plan loan setup and annual maintenance fees,
not to exceed One Hundred Dollars ($100) per annum.
8.7 Payment in the Event of Legal Disability. Payments to any
Participant or Beneficiary shall be made to the recipient entitled thereto in
person or upon his or her personal receipt, in form satisfactory to the
Committee, except when the recipient entitled thereto shall be under a legal
disability, or, in the sole judgment of the Committee, shall otherwise be unable
to apply such payment in furtherance of his or her own interest and advantage.
The Committee may, in such event, in its sole discretion, direct all or any
portion of such payments to be made in any one or more of the following ways:
(a) To such person directly;
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(b) To the court appointed guardian of his person or his
estate; or
(c) To a custodian appointed for such person under any
applicable Uniform Gifts to Minors Act.
The decision of the Committee, in each case, will be final, binding,
and conclusive upon all persons ever interested hereunder. The Committee shall
not be obliged to see to the proper application or expenditure of any payment so
made. Any payment made pursuant to the power herein conferred upon the Committee
shall operate as a complete discharge of all obligations of the Trustee and the
Committee, to the extent of the distributions so made.
8.8 Accounts Charged. The Committee shall charge all distributions made
to a Participant or to his Beneficiary from his Accounts against the Accounts of
the Participant when made.
8.9 Payments Only from Trust Fund. All benefits of the Plan shall be
payable solely from the Trust Fund and neither the Employer, Committee, nor
Trustee shall have any liability or responsibility therefor except as expressly
provided herein.
8.10 Unclaimed Account Procedure. Neither the Trustee nor the Committee
shall be obligated to search for, or ascertain the whereabouts of, any
Participant or Beneficiary. The Committee, by certified or registered mail
addressed to his last known address of record with the Committee or the
Employer, shall notify any Participant or Beneficiary that he is entitled to a
distribution under this Plan, and the notice shall quote the provisions of this
Section 8.10. If the Participant fails to claim his benefits or make his
whereabouts known in writing to the Committee within a reasonable period of time
and the Committee does not know the whereabouts of the Participant or his
beneficiary, the Committee shall then notify the Social Security Administration
of the Participant's (or Beneficiary's) failure to claim the distribution to
which he is entitled. The Committee shall request the Social Security
Administration to notify the Participant (or Beneficiary) pursuant to the
procedures it has established for this purpose. If the Participant or
Beneficiary fails to claim his benefits or make his whereabouts known in writing
to the Committee within seven (7) calendar years after the date of notification
the benefits under the Plan of the Participant or Beneficiary will be disposed
of as follows:
(a) If the whereabouts of the Participant are unknown but the
whereabouts of the Participant's Beneficiary are then known to the Committee,
distribution will be made to the Beneficiary.
(b) If the whereabouts of the Participant and his Beneficiary
are then unknown to the Committee, but the whereabouts of one or more relatives
by adoption, blood, or marriage of the Participant are known to the Committee,
the Committee shall direct the Trustee to distribute the Participant's benefits
to any one or more of such relatives and in such proportions as the Committee
determines.
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While payment is pending the Committee may direct the Trustee to hold
the Participant's benefits in a segregated account 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 Committee shall operate as a complete discharge
of all obligations of the Trustee and the Committee, to the extent of the
distributions so made.
8.11 Qualified Domestic Relations Orders. During any period in which
the issue of whether a Domestic Relations Order is a Qualified Domestic
Relations Order is being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), the Committee shall direct the Trustee to segregate
in a separate account or in an escrow account the amount that would have been
payable to the Alternate Payee during such period if the Domestic Relations
Order is determined to be a Qualified Domestic Relations Order. If within
eighteen (18) months the Domestic Relations Order (or modification thereof) is
determined to be a Qualified Domestic Relations Order, the Committee shall
direct the Trustee to pay the segregated account (and any earnings or interest
thereon) or the balance held in the escrow account, as applicable to the person
or persons entitled thereto. If within eighteen (18) months it is determined
that the order is not a Qualified Domestic Relations Order or the issue as to
whether such Domestic Relations Order is not resolved, the Committee shall
direct the Trustee to pay the segregated account (and any earnings or interest
thereon) or the balance of the escrow account, as applicable, to the person or
persons who would have been entitled to such amounts if there had been no
Domestic Relations Order. Any determination that a Domestic Relations Order is a
Qualified Domestic Relations Order which is made after the close of the eighteen
(18) month period shall be applied prospectively only. The Committee shall
establish reasonable procedures for determining whether a Domestic Relations
Order is a Qualified Domestic Relations Order and to administer distributions
under Qualified Domestic Relations Orders. When the Plan receives a Domestic
Relations Order the Committee shall promptly notify the appropriate Participant
and any other Alternate Payee of the receipt of such order and the Committee's
procedures for determining whether such order is a Qualified Domestic Relations
Order within a reasonable period after receipt of such order, and shall within a
reasonable time after such determination notify the Participant and each
Alternate Payee of such determination.
- -----------------------------
End of Article VIII
44
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ARTICLE IX
TOP HEAVY PLAN PROVISIONS
-------------------------
9.1 Top Heavy Rules Applied. If during any Plan Year the Plan is a Top
Heavy Plan, the provisions of this Article IX shall apply.
9.2 Additional Definitions. For purposes of this Article IX, the
following definitions shall apply unless the context requires otherwise:
(a) "Determination Date" shall mean, with respect to any Plan
Year, the last day of the preceding Plan Year, or in the case of the first Plan
Year, the last day of the first Plan Year.
(b) "Key Employee" shall mean any Employee or former Employee
who at any time during the current Plan Year or any of the four (4) preceding
Plan Years, is or was:
(i) An officer of the Company or a Related Employer
whose to "annual compensation" from the Company or a Related Employer
exceeds fifty percent (50%) of the amount in effect under Code section
415(b)(1)(A) (as adjusted pursuant to regulations or rulings issued by
the Secretary of the Treasury) for the Plan Year;
(ii) One of the ten (10) Employees of the Company or
a Related Employer having "annual compensation" of more than the
limitation in effect under Code section 415(c)(1)(A) (as adjusted
pursuant to regulations or rulings issued by the Secretary of the
Treasury) for the Plan Year and owning (or considered as owning within
the meaning of Code section 318) the largest interests in the Company
or a Related Employer;
(iii) A five percent (5%) owner of the Company or a
Related Employer; or
(iv) A one percent (1%) owner of the Company or a
Related Employer having "annual compensation" from the Company or a
Related Employer of more than One Hundred Fifty Thousand Dollars
($150,000).
In addition, the term "Key Employee" shall include the Beneficiary of
any Employee or Former Employee defined in this Subsection 9.2(b) as being a Key
Employee. For purposes of this Subsection 9.2(b), the term "annual compensation"
shall have the meaning given such term under Code section 414(q)(7).
For the purposes of determining which Employees or former Employees, if
any, are or were officers of the Employer, no more than fifty (50) Employees,
or, if lesser, the greater of three (3) Employees or ten percent (10%) of the
Employees of the Employer, shall be treated as officers. A "five percent (5%)
owner" shall mean any person who owns (or is considered as owning within the
meaning of Code section 318) more than five percent (5%) of the outstanding
stock of the Employer or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer. A "one percent (1%)
owner" shall mean any person who owns (or is considered as
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owning within the meaning of Code section 318) more than one percent (1%) of the
total combined voting power of all stock of the corporation. For purposes of
applying the attribution rules of Code section 318, Code section 318(a)(2) shall
be applied by substituting "five percent (5%)" for "fifty percent (50%)" each
time that term appears in said section.
(c) "Permissive Aggregation Group" shall mean a plan or a
group of plans required to be aggregated in the Required Aggregation Group and
any other plan or plans of the Employer if the group would continue to meet the
requirements of Code sections 401(a)(4) and 410 with such additional plan being
taken into account.
(d) "Plan." The term "plan" as used in this Section 9.2 shall
mean a plan that satisfies the requirements of Code section 401(a).
(e) "Required Aggregation Group" shall mean a group of plans
consisting of each plan of the Employer in which a Key Employee is a participant
and any other plan of the Employer that enables any of such plans to meet the
requirements of Code section 401(a)(4) or 410.
(f) "Top Heavy Plan" shall mean, with respect to any Plan
Year, any plan in a Required Aggregation Group and/or a Permissive Aggregation
Group, if applicable, if, as of the Determination Date, both the Required
Aggregation Group and the Permissive Aggregation Group are a "Top Heavy Group."
A "Top Heavy Group" is any aggregation group if the sum (as of the
Determination Date) of:
(i) The present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans (within the
meaning of Code section 414(j)) included in such group; and
(ii) The aggregate of the accounts of Key Employees
under all defined contribution plans (within the meaning of Code
section 414(i)) included in such group exceeds sixty percent (60%) of a
similar sum determined for all Employees.
For the purpose of determining the present value of the cumulative
accrued benefit of any Employee or the amount of the account of any Employee,
the present value or amount shall be increased by the aggregate distributions
made with respect to such Employee under the plan during the five (5) year
period ending on the Determination Date. The cumulative accrued benefit of any
Employee or the balance of the accounts of any Employee who has not performed
any services for the Employer in the five (5) year period ending on the
Determination Date shall not be taken into account for purposes of determining
the top heavy status of the Plan.
Except to the extent provided in regulations of the Secretary of the
Treasury, any Rollover Contribution to a plan shall not be taken into account
with respect to the transferee plan for purposes of determining whether such
plan is a Top Heavy Plan (or whether any aggregation group which includes such
plan is a Top Heavy Group). If any individual is not a Key Employee with respect
to
46
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a plan in the aggregation group for any Plan Year, but such individual was a Key
Employee with respect to a plan in the aggregation group for any prior Plan
Year, any accrued benefit for such Employee and the account of such Employee
shall not be taken into consideration in making a determination of the top heavy
status of the Plan. Each plan in a Top Heavy Group shall be deemed a Top Heavy
Plan.
(g) "Super Top Heavy Plan" shall mean a Top Heavy Plan if the
plan would be a Top Heavy Plan if "ninety percent (90%)" were substituted for
"sixty percent (60%)" each place it appears in Subsection 9.2(f) above.
9.3 Additional Limitation - Defined Benefit Plan. If during a Plan Year
this Plan is a Top Heavy Plan and a Participant also participates in one or more
defined benefit plans (within the meaning of Code section 414(j)) maintained by
the Employer or a Related Employer, the maximum amount otherwise allocable to
his or her Accounts under Section 6.11 shall be reduced to the extent necessary
to ensure that the sum of the Defined Benefit Fraction (within the meaning of
Subsection 6.11(c)) for the Limitation Year plus the Defined Contribution
Fraction (within the meaning of 6.1l(c)) for the Limitation Year does not exceed
one (1.0). For this purpose the Defined Benefit Fraction shall have a
denominator that shall be an amount equal to the lesser of:
(i) The product of one (1.0) multiplied by the dollar
limitation in effect for such year under Code section 415(b)(1)(A); or
(ii) The product of one and four-tenths (1.4)
multiplied by the amount that may be taken into account for such year
under Code section 415(b)(1)(B) with respect to such Participant.
The Defined Contribution Fraction shall have a denominator that shall be the sum
of the lesser of the following amounts determined for each defined contribution
plan maintained by the Employer or a Related Employer as of the close of the
Limitation Year and in which the Participant has an account for the Limitation
Year and for each prior Year of Service with the Employer:
(i) The product of one (1.0) multiplied by the dollar
limitation in effect for such year under Code section 415(c)(1)(A)
(determined without regard to Code section 415(c)(6)); or
(ii) The product of one and four-tenths (1.4)
multiplied by the amount that may be taken into account under Code
section 415(c)(1)(B) with respect to such individual under such defined
contribution plans for the Limitation Year.
9.4 Minimum Benefit. During any Plan Year in which this Plan is a Top
Heavy Plan, notwithstanding the provisions of Section 6.5, the Employer shall
make an aggregate contribution to this Plan and any Related Plan for the benefit
of each Participant who is an Employee and is not a Key Employee and who was in
the Service of the Employer on the last day of the Plan Year in an amount which
when allocated to the Employer Matching Contribution Account of each Participant
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who is not a Key Employee and expressed as a percentage of each such
Participant's Compensation, is equal to or exceeds the lesser of:
(a) Three percent (3%) of such non-Key Employee Participant's
Compensation; or
(b) A percentage of such non-Key Employee Participant's
Compensation equal to the percentage at which contributions (including Employer
Salary Reduction and Matching Contributions are made under the Plan for such
year for the Key Employee for whom such percentage is the highest.
The amount to be allocated to non-Key Employee Participants pursuant to
this Section 9.4 shall be in addition to any Employer Salary Reduction or
Matching Contributions allocated such Participants.
- --------------------------
End of Article IX
48
<PAGE>
ARTICLE X
EMPLOYER ADMINISTRATIVE PROVISIONS
----------------------------------
10.1 Information. The Employer shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished, all of the
information or documentation which is necessary or required by the Committee and
Trustee to perform their respective duties and functions under the Plan. The
Employer's records as to the current information the Employer furnishes to the
Committee and Trustee shall be conclusive as to all persons.
10.2 No Liability. Subject to Article XIII hereof, the Employer assumes
no obligation or responsibility to any of the Employees, Participants, or
Beneficiaries for any act of, or failure to act, on the part of the Committee or
the Trustee.
10.3 Indemnity. The Employer indemnifies and saves harmless the Board
of Directors, individual Trustee(s), and the members of the Committee, aud each
of them, from and against any and all loss resulting from liability to which the
Board of Directors, individual Trustee(s), and the Committee, or the members of
the Board of Directors and Committee, may be subjected by reason of any act or
conduct (except willful or reckless misconduct) in their official capacities in
the administration of this Plan, the Trust or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide such
defense. The indemnification provisions of this Section 10.5 shall not relieve
the Board of Directors, individual Trustee(s), or any members of the Committee
from any liability they may have under the Act for breach of a fiduciary duty.
- -------------------------
End of Article X
49
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ARTICLE XI
COMMITTEE PROVISIONS
--------------------
11.1 Appointment of Committee. The Company shall appoint a committee to
administer the Plan and otherwise carrying the duties assigned the Committee
under the Plan and the Trust Agreement, the members of which may or may not be
Participants in the Plan. The Committee shall consist of no less than three (3)
members.
11.2 Term. Each member of the Committee shall serve until his or her
successor is appointed. Any member of the Committee may be removed by the Board
of Directors, with or without cause, which shall have the power to fill any
vacancy which may occur. An Committee member may resign upon written notice to
the Company.
11.3 Compensation. The members of the Committee shall serve without
compensation for services as such, but each shall be entitled reimbursement for
any reasonable expenses incurred in carrying out his responsibilities as a
member of the Committee, including the expenses for any bond required under Act
section 412. Such reimbursements shall be paid by the Trustee from the Trust
Fund, unless the Company elects that the Employers paid the same.
11.4 Powers of Committee. Subject to Article XIII hereof, the Committee
shall have the following powers and duties:
(a) To direct the administration of the Plan in accordance
with the provisions herein set forth;
(b) To adopt rules of procedure and regulations necessary for
the administration of the Plan provided the rules are not inconsistent with the
terms of the Plan;
(c) To determine, in its sole and absolute discretion, all
questions with regard to rights of Employees, Participants, and Beneficiaries
under the Plan, including but not limited to rights of eligibility of an
Employee to participate in the Plan, the value of a Participant's Accrued
Benefit, and the Vested Accrued Benefit of each Participant;
(d) To enforce the terms of the Plan and the rules and regu-
lations it adopts;
(e) To direct the Trustee as to the investment of
Participant's Accounts; provided, however, that to the extent such investments
are directed by the Participant, this authority will be limited to transmitting
Participant investment directions to the Trustee;
(f) To direct the Trustee regarding the crediting and
distribution of the Trust Fund and all other matters within its discretion as
provided in the Trust Agreement;
(g) To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
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(h) To furnish the Employer with information which the
Employer may require for tax or other purposes;
(i) To engage the service of counsel (who may, if appropriate,
be counsel for the Employer) and agents whom it may deem advisable to assist it
with the performance of its duties;
(j) To prescribe procedures to be followed by distributees in
obtaining benefits;
(k) To receive from the Employer and from Employees such
information as shall be necessary for the proper administration of the Plan;
(l) To receive and review reports of the financial condition
and of the receipts and disbursements of the Trust Fund from the Trustee;
(m) To maintain, or cause to be maintained, separate Accounts
in the name of each Participant to reflect the Participant's Accrued Benefit
under the Plan;
(n) To select a secretary, who need not be a member of the
Committee;
(o) To designate the Investment Funds under the Plan, except
the PageNet Stock Fund;
(p) To appoint an Investment Manager as provided in Subsection
13.3(c);
(q) To remove the Trustee and to appoint any additional or
successor Trustee, and to establish and communicate to the Trustee a funding
policy for the Plan; and
(r) To interpret and construe the Plan, supply any omissions
in the Plan, reconcile and correct any errors or inconsistencies in the Plan,
and make any equitable adjustments for any mistakes or errors made in the
administration of the Plan.
11.5 Manner of Action. The decision of a majority of the members of the
Committee appointed and qualified shall control. In case of a vacancy in the
membership of the Committee, the remaining members of the Committee may exercise
any and all of the powers, authorities, duties, and discretions conferred upon
the Committee pending the filling of the vacancy. The Committee may, but need
not, call or hold formal meetings. Any decisions made or action taken pursuant
to written approval of a majority of the then members shall be sufficient. The
Committee shall maintain adequate records of its decisions.
11.6 Authorized Representative. The Committee may authorize any one of
its members, or its secretaries, to sign on its behalf any notices, directions,
applications, certificates, consents, approvals, waivers, letters, or other
documents. The Committee must evidence this authority by an instrument signed by
all its respective members and filed with the Trustee.
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11.7 Nondiscrimination. The Committee shall administer the Plan in a
uniform, nondiscriminatory manner for the exclusive benefit of the Participants
and their Beneficiaries.
11.8 Interested Member. No member of the Committee may decide or
determine any matter concerning the distribution, nature, or method of
settlement of his own benefits under the Plan unless there is only one person
acting alone in such capacity.
11.9 Individual Statement. As soon as practicable after the last
Valuation Date of each Plan Year but within the time prescribed by the Act and
the regulations under the Act, the Committee will deliver to each Participant
(and to each Beneficiary) a statement reflecting the condition of his Accrued
Benefit in the Trust as of that date and such other information that the Act
requires to be furnished to the Participant or Beneficiary. No Participant
except a member of the Committee, shall have the right to inspect the records
reflecting the Account of any other Participant.
11.10 Books and Records. The Committee shall maintain, or cause to be
maintained, records which will adequately disclose at all times the state of the
Trust Fund and of each separate interest therein. The books, forms, and methods
of accounting shall be the responsibility of the Committee.
- -------------------------
End of Article XI
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ARTICLE XII
PARTICIPANT ADMINISTRATIVE PROVISIONS
-------------------------------------
12.1 Beneficiary Designation. Each Participant may from time to time
designate, in writing, a Beneficiary to whom the Trustee shall pay his Vested
Accrued Benefit in the Trust Fund in the event of his death. The Committee shall
prescribe the form for the written designation of Beneficiary and, upon the
Participant's filing the form with the Committee, it effectively shall revoke
all designations filed prior to that date by the same Participant. As a
condition to any married Participant designating a Beneficiary other than his
spouse, the Committee shall require the spouse's consent as provided in
Subsection 2.(j).
12.2 No Beneficiary Designation. If a Participant fails to name a
Beneficiary in accordance with Section 12.1, or if the Beneficiary named by a
Participant predeceases him or dies before complete distribution of the
Participant's interest in the Trust Fund, then the Trustee shall pay the
Participant's Vested Accrued Benefit in the following manner to the first of the
following (who are listed in order of priority) who survive the Participant by
at least thirty (30) days:
(a) In a lump sum to the Participating surviving spouse;
(b) Equally among the then living children of the Parti-
cipant by birth or adoption;
(c) Among the Participant's then living lineal descend-
ants, by right of representation; or
(d) In a lump sum to the Participant's estate.
The Committee, in its sole discretion, shall direct the Trustee as to whom the
Trustee shall make payment under this Section 12.2.
12.3 Personal Data to Committee. Each Participant and Beneficiary must
furnish to the Committee evidence, data, or information as the Committee
considers necessary or desirable for the purpose of administering the Plan. The
provisions of this Plan are effective for the benefit of each Participant upon
the condition precedent that each Participant will furnish promptly full, true,
and complete evidence, data, and information when requested by the Committee;
provided the Committee shall advise each Participant of the effect of his
failure to comply with its request.
12.4 Address for Notification. Each Participant and each Beneficiary of
a deceased Participant shall file with the Committee, in writing, his post
office address, and each subsequent change of such post office address. Any
payment or distribution hereunder, and any communication addressed to a
Participant or Beneficiary, at the last address filed with the Committee, or if
no such address has been filed, then the last address indicated on the records
of the Employer shall be deemed to have been delivered to the Participant or
Beneficiary on the date that such distribution or communication is deposited in
the United States mail, postage prepaid.
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12.5 Assignment or Alienation.
(a) In General. No Participant or Beneficiary, and no creditor
of a Participant or Beneficiary, shall have any right to assign, pledge,
hypothecate, anticipate or in any way create a lien upon the Trust Fund or upon
his interest therein, except as provided in Section 8.6 (regarding loans to
Participants) or this Section 12.5. Except as provided in Section 8.7 regarding
payments in the event of a legal disability, all payments to be made to
Participants or Beneficiaries shall be made only upon their personal receipt or
endorsement, and no interest in the Trust Fund shall be subject to assignment or
transfer or otherwise be alienable, either by voluntary or involuntary act or by
operation of law, or subject to attachment, execution, garnishment,
sequestration or other seizure under any legal, equitable or other process, or
be liable in any way for the debts or defaults of Participants and
Beneficiaries, except as provided in this Section 12.5.
(b) Permissible Arrangements. Notwithstanding the foregoing, a
Participant or Beneficiary may assign to the Employer payments of benefits under
this Plan for the purpose of payment of debts owed the Employer, provided that
any such assignment shall be voluntary and revocable, shall not exceed ten
percent (10%) of any benefit payment, and shall be solely for the purpose of
paying debts of the Participant to the Employer. In addition, this Section 12.5
shall not preclude the following types of arrangements:
(i) Arrangements for the withholding of taxes from
benefit payments;
(ii) Arrangements for the recovery of benefit over-
payments;
(iii) Arrangements for the transfer of benefit rights
to another plan;
(iv) Arrangements for direct deposit of benefit
payments to an account in a bank, savings and loan association or
credit union (provided that such arrangement is not part of an
arrangement constituting an assignment or alienation); or
(v) Arrangements directing payment of all or any part
of each benefit payment to a third party (including the Employer)
provided that the arrangement may be revoked at any time by the
Participant or Beneficiary, and the third party acknowledges in writing
to the Committee within ninety (90) days of the date the arrangement is
entered into that it does not have an enforceable right to all or any
part of any benefit payment (other than to amounts already received
pursuant to the arrangement).
Lastly, the creation, assignment or recognition of a right to all or a portion
of a Participant's benefits under the Plan pursuant to a Qualified Domestic
Relations Order pursuant to Section 8.11 shall not constitute a violation of
this Section 12.5.
12.6 Litigation Against the Trust. If any legal action filed against
the Trustee, Board of Directors, or the Committee, or against any member or
members of the Committee or Board of Directors, by or on behalf of any
Participant or Beneficiary, results adversely to the Participant or to the
Beneficiary, the Trustee shall reimburse itself, the Board of Directors,
Committee, and any
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member or members of the Committee or Board of Directors, all costs and fees
expended by it or them by surcharging all costs and fees against the sums
payable under the Plan to the Participant or to the Beneficiary, but only to the
extent a court of competent jurisdiction specifically authorizes and directs any
such surcharges.
12.7 Information Available. Any Participant in the Plan or any
Beneficiary may examine copies of the summary plan description, latest annual
report, any bargaining agreement, this Plan document, the Trust Agreement,
contract, or any other instrument under which the Plan was established or is
operated. The Committee will maintain all of the items listed in this Section
12.7 in its office, or in such other place or places as it may designate from
time to time in order to comply with the regulations issued under the Act, for
examination during reasonable business hours. Upon the written request of a
Participant or Beneficiary, the Committee shall furnish him with a copy of any
item listed in this Section 12.7. The Committee may make a reasonable charge to
the requesting person for the copy so furnished.
12.8 Beneficiary's Right to Information. A Beneficiary's right to (and
the Committee's or the Trustee's duty to provide to the Beneficiary) information
or data concerning the Plan shall not arise until he first becomes entitled to
receive a benefit under the Plan.
12.9 Claims Procedure. Prior to or upon becoming entitled to receive a
benefit hereunder, a Participant or Beneficiary shall file a claim for such
benefit with the Committee at the time and in the manner prescribed thereby.
Notwithstanding the immediately preceding sentence, the Committee may direct the
Trustee to commence payment of a Participant's or Beneficiary's benefits
hereunder without requiring the filing of a claim therefor if the Committee has
knowledge of such Participant's or Beneficiary's whereabouts and the
Participant's or Beneficiary's consent to distribution is not otherwise required
by the Plan.
12.10 Appeal Procedure for Denial of Benefits. The Committee shall
provide adequate notice in writing to any Claimant whose claim for benefits
under the Plan the Committee has denied. Such notice must be sent within ninety
(90) days of the date the claim is received by the Committee unless special
circumstances require an extension of time for processing the claim. Such
extension shall not exceed ninety (90) days and no extension shall be allowed
unless, within the initial ninety (90) day period, the Claimant is sent an
extension notice indicating the special circumstances requiring the extension
and specifying a date by which the Committee expects to render its final
decision. The Committee's notice of denial to the Claimant shall set forth:
(a) The specific reason or reasons for the denial;
(b) Specific references to pertinent Plan provisions on which
the Committee based its denial;
(c) A description of any additional material and information
needed for the Claimant to perfect his or her claim and an explanation of why
the material or information is needed;
(d) A statement that the Claimant may:
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(i) Request a review upon written application to
the Committee;
(ii) Review pertinent Plan documents; and
(iii) Submit issues and comments in writing; and
(e) A statement that any appeal the Claimant wishes to make of
the adverse determination must be in writing to the Committee within sixty (60)
days after receipt of the Committee's notice of denial of benefits.
The Committee's notice must further advise the Claimant that his or her
failure to appeal the action to the Committee in writing within the sixty (60)
day period will render the Committee's determination final, binding, and
conclusive. The Committee's notice of denial of benefits shall identify the name
of each member of the Committee and the name and address of the Committee member
to whom the Claimant may forward his or her appeal.
If the Claimant should appeal to the Committee, he or his or her duly
authorized representative, may submit, in writing, whatever issues and comments
he or his duly authorized representative, feels are pertinent. The Committee
shall reexamine all facts related to the appeal and make a final determination
as to whether the denial of benefits is justified under the circumstances. The
Committee shall advise the Claimant in writing of its decision on his appeal,
the specific reasons for the decision, and the specific Plan provisions on which
the decision is based. The notice of the decision shall be given within sixty
(60) days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision within
the sixty (60) day period infeasible, but in no event shall the Committee render
a decision regarding the denial of a claim for benefits later than one hundred
twenty (120) days after its receipt of a request for review. If an extension of
time for review is required because of special circumstances, written notice of
the extension shall be furnished to the Claimant prior to the date the extension
period commences.
12.11 Place of Payment and Proof of Continued Eligibility. As required
by Section 12.4, each Participant and Beneficiary of a deceased Participant
shall file with the Committee from time to time in writing his post office
address and each change of post office address. Any check representing payment
hereunder and any communication addressed to a Participant or Beneficiary at his
last address filed with the Committee, or if no such address has been filed,
then at his last address as indicated on the records of the Employer, shall be
deemed to have been delivered to such person on the date on which such check or
communication is deposited in the United States mail, postage prepaid. If the
Committee, for any reason, is in doubt as to whether payments under the Plan are
being received by the person entitled thereto, it shall, by certified or
registered mail addressed to the person concerned, at his address last known to
the Committee, notify such person that all unmailed and future Plan benefit
payments shall be withheld until he provides the Committee with evidence of his
entitlement to such benefit and his proper mailing address.
12.12 No Rights Implied. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation
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of any Account, or the payment of any benefit, shall give any Employee,
Participant, or any Beneficiary any right to continue employment, any legal or
equitable right against the Employer or any officer, director, or Employee of
the Employer, or against the Trustee, or its agents or employees, except as
expressly provided by the Plan, the Trust Agreement or the Act.
12.13 Participant Direction of Investment. Each Participant shall
direct the Committee to invest the amounts allocated to his Accounts entirely in
any one of the Investment Funds, or in any combination Of Investment Funds. Once
amounts have been invested in a given Investment Fund, the amounts so invested
shall remain invested in such Investment Fund until the Participant gives
subsequent directions to invest all or a portion of the Participant's Account's
attributable to investment in such Investment Fund in another Investment Fund,
in which event the Participant may elect to withdraw, partially or wholly, from
one Investment Fund and reinvest in another Investment Fund in any increments
whatsoever. The Participant may also give separate directions regarding the
allocation between Investment Funds of contributions that will be allocated to
his Accounts subsequent to the effective date of given investment directions;
provided that such contributions must be allocated to the Investment Funds in
increments of one percent (1%), but the directions regarding investment of
increments of such contributions need not be identical to those regarding the
investment of amounts to the credit of the Participant as of the effective date
of the investment directions.
The Committee shall apply the Participant's investment directions
uniformly, or as uniformly as is administratively feasible to all the
Participant's Accounts, and a Participant shall not be entitled to give separate
investment directions with regard to any one of his Accounts (unless at the time
the directions become effective the Participant has only one Account under the
Plan). If a Participant fails to give the Committee investment directions
regarding the investment of his Accounts in the Investment Funds, the Committee
shall invest the Participant's Accounts until such time as the Participant
supplies investment directions and such directions become effective as provided
in this Section 12.13. A Participant's directions to the Committee regarding the
investment of his Accounts among the Investment Funds shall be made in the form
specified by the Committee, and shall be subject to such limitations, including
minimum notice periods, as the Committee in its sole discretion deems to be
administratively necessary or advisable. The Committee may also adopt uniform
rules for complying with investment directions that would result in the
allocation of fractional cents between a Participant's Accounts or between the
parts of a Participant's Accounts invested in the Investment Funds so as to
eliminate such fractional cents.
Notwithstanding the foregoing provisions, the Committee shall not be
required to transfer amounts between Investment Funds if to do so it would be
necessary to liquidate existing Trust investments and if the Committee, in its
sole and absolute discretion, determines that the liquidation of Trust
investments would not be in the best interest of all Plan Participants. Further,
the Committee may decline to implement any investment directions, or changes in
investment directions, to the extent such directions, if implemented:
(a) Would not be in accordance with the terms of the Plan to
the extent such terms are consistent with the provisions of Title I of the Act;
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(b) Would cause the Committee to maintain the indicia of
ownership of any Plan assets outside the jurisdiction of the district courts of
the United States, other than as permitted by Act section 404(b) and section
2550.404(b)-l of the Department of Labor Regulations;
(c) Would jeopardize the Plan's tax qualified status under the
Code;
(d) Could result in a loss in excess of the balance of the
Participant's Accounts; or
(e) Would result in a prohibited transaction under Act Section
406 or Code section 4975.
12.14 Exercise of Voting Rights. Effective January 1, 1994, each
Participant shall be entitled to direct the voting of all whole and fractional
shares of Company stock allocated to his Accounts (or represented by units
allocated to such Accounts) as of the last Valuation Date coinciding with or
preceding the applicable record date. The Committee shall conclusively determine
the number of the shares of Company stock that are subject to each Participant's
voting instructions and shall advise the Trustee accordingly.
Before any annual or special meeting of the shareholders of the Company
at which matters are to be voted on by shareholders, with respect to shares of
Company stock credited to a Participant's Accounts, the Committee shall cause to
be delivered to each Participant the proxy statement and any related materials
prepared for holders of Company stock, a request for written voting
instructions, and the voting instructions for-in prescribed by the Board of
Directors for this purpose. Voting of such shares shall be made by Participant
direction to the Trustee, in which event the Trustee shall vote such shares in
accordance with the Participant directions if such directions are "proper" as
that term is used in Act section 403(a)(1) and are not contrary to the
provisions of the Act. Each Participant who wishes to exercise his voting right
must complete and return such form to the Trustee before the date prescribed by
the Board of Directors. Once received by the Trustee, a Participant's voting
instructions may be revoked, subject to such conditions as the Trustee may
impose.
The Trustee also shall determine the ratio of affirmative votes,
negative votes and abstentions with respect to each matter for which it has
received timely voting instructions from Participants. The Trustee shall then
vote on such matters all shares of Company stock allocated to Participants'
Accounts with respect to which it has not received timely voting instructions in
accordance with the ratios so determined. If the Trustee determines that voting
such shares in accordance with such ratios would violate its fiduciary
responsibilities under the Act, it shall vote such shares of Company stock in
accordance with such fiduciary requirements. The Trustee shall aggregate any
fractional shares and, after rounding down to the next lower integer if the
total is not a whole number, shall vote an equivalent number of whole shares of
Company stock.
For purposes of this Section 12.14, each Participant shall be a "Named
Fiduciary" as defined under Act section 402(a) with respect to the shares of
Company stock allocated to his Accounts.
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ARTICLE XIII
FIDUCIARIES DUTIES
------------------
13.1 Fiduciaries. The "Fiduciaries" of the Plan shall be the following:
(a) The Company;
(b) The Committee;
(c) The Trustee; and
(d) Such other person or persons that are designated to carry
out fiduciary responsibilities under the Plan in accordance with Section 13.3
hereof.
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan, and in capacities other than as a fiduciary.
A Fiduciary may employ one or more persons to render advice with regard to any
responsibility such Fiduciary has under the Plan.
13.2 Allocation of Responsibilities. The powers and responsibilities of
the Fiduciaries, as Fiduciaries, are hereby allocated as indicated below:
(a) Company. The Company shall have the authority to appoint
and remove the members of the Committee, and such other fiduciary
responsibilities and authorities as may be assigned it under the Trust
Agreement. Any such authority shall be exercised by resolution of the Employer's
Board of Directors or other governing body.
(b) Committee. The Committee shall have the responsibility and
authority to control the operation and administration of the Plan in accordance
with the terms of the Plan and the Trust Agreement, except with respect to
duties and responsibilities specifically allocated to other Fiduciaries. The
Committee shall have the authority to issue written directions to the Trustee to
the extent provided in this Plan document and the Trust Agreement. The Trustee
shall follow the Committee's directions unless it is clear that the actions to
be taken under those directions would be violations of applicable fiduciary
standards or would be contrary to the terms of the Plan or Trust Agreement.
(c) Trustee. The Trustee shall have the responsibility and
authority to control the investment of the Trust Fund in accordance with the
terms of the Plan and Trust Agreement, except with respect to duties and
responsibilities specifically allocated to other Fiduciaries.
(d) Allocations. Powers and responsibilities may be allocated
to other Fiduciaries in accordance with Section 13.3 hereof, or as otherwise
provided herein or in the Trust Agreement.
This Article XIII is intended to allocate to each Fiduciary the
individual responsibility for the prudent execution of the fiduciary functions
assigned to it, and none of such responsibilities or any
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other responsibility shall be shared by two or more of such Fiduciaries unless
such sharing shall be provided by a specified provision of the Plan or the Trust
Agreement.
13.3 Procedures for Delegation and Allocation of Responsibilities.
Fiduciary responsibilities may be allocated as follows:
(a) The Committee may specifically allocate responsibilities
to a specified member or members of the committee.
(b) The Committee may designate a person or persons other than
a Fiduciary to carry out fiduciary responsibilities under the Plan; however,
this authority shall not cause any person or persons employed to perform
ministerial acts and services for the Plan to be deemed Fiduciaries of the Plan.
(c) The Committee may appoint an Investment Manager or
managers to manage (including the power to acquire and dispose of) the assets of
the Plan (or any portion thereof).
(d) If at any time there is more than one person serving as
Trustee under the Trust Agreement, the Committee may allocate specific
responsibilities, obligations, or duties among them in such manner as it shall
deem appropriate.
Any allocation of responsibilities pursuant to this Section 13.3 shall
be made in writing specifically designating the person or persons to whom such
responsibilities or duties are allocated and specifically setting out the
particular duties and responsibilities with respect to which the allocation or
designation is made.
13.4 General Fiduciary Standards. Subject to Section 13.5 hereof, to
the extent the same consistent fiduciaries responsibilities under the Act, a
Fiduciary shall discharge his duties with respect to the Plan solely in the
interest of the Participants and their Beneficiaries and
(a) For the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying reasonable expenses of
administering the Plan;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims;
(c) By diversifying the investments of the Plan so as to
minimize the risk of large losses, unless under the circumstances it is clearly
prudent not to do so; and
(d) In accordance with the documents and instruments governing
the Plan, insofar as such documents and instruments are consistent with the
provisions of Title I of the Act.
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13.5 Liability Among Co-Fiduciaries.
(a) General. Except for any liability which he may have under
the Act, a Fiduciary shall not be liable for the breach of a fiduciary duty or
responsibility by another Fiduciary of the Plan except in the following
circumstances:
(i) He participates knowingly in, or knowingly
undertakes to conceal, an act or omission, or such other Fiduciary,
knowing such act or omission is a breach;
(ii) By his failure to comply with the general
fiduciary standards set out in Section 13.4 in the administration of
his specific responsibilities which give rise to his status as a
Fiduciary, he has enabled such other Fiduciary to commit a breach; or
(iii) He has knowledge of a breach by such other
Fiduciary and he does not undertake reasonable efforts under the
circumstances to remedy the breach.
(b) Co-Trustees. In the event that there is more than one
person serving as Trustee under the Trust Agreement, each should use reasonable
care to prevent a co-Trustee from committing a breach of fiduciary duty and they
shall jointly manage and control assets of the Plan, except that in the event of
an allocation of responsibilities, obligations, or duties, a Trustee to whom
such responsibilities, obligations, or duties have not been allocated shall not
be liable to any person by reason of this Section 13.5, either individually or
as a Trustee, for any loss resulting to the Plan arising from the acts or
omissions on the part of the Trustee to whom such responsibilities, obligations,
or duties have been allocated.
(c) Liability Where Allocation is in Effect. To the extent
that the fiduciary responsibilities are specifically allocated by a Fiduciary,
or pursuant to the express terms hereof, to any person or persons, then such
Fiduciary shall not be liable for any act or omission of such person in carrying
out such responsibility except to the extent that (i) the Fiduciary violated
Section 13.4 hereof (A) with respect to such allocation or designation, (B) with
respect to the establishment or implementation of the procedure for making such
an allocation or designation, or (C) in continuing the allocation or
designation; or (ii) the Fiduciary would otherwise be liable in accordance with
this Section 13.5.
(d) Liability of Trustee Following Committee Directions. No
Trustee shall be liable for following instructions of the Committee given
pursuant to Subsection 13.2(b) hereof.
(e) No Responsibility for Employer, Participant or Eligible
Action. Neither the Trustee nor the Committee shall have any obligation or
responsibility with respect to (i) any action required by the Plan to be taken
by the Employer, any Participant or any Eligible Employee; or (ii) the failure
of any of the above persons to act or make any payment or contribution, or to
otherwise provide any benefit contemplated under this Plan. Further, neither the
Trustee nor the Committee shall be required to collect any contribution required
under the Plan or determine the correctness of the amount of any contribution.
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(f) No Duty to Inquire. Neither the Trustee nor the Committee
shall have any obligation to inquire into or be responsible for any action or
failure to act on the part of the others.
(g) Liability of Trustee and Committee Where Investment
Manager Appointed. If an Investment Manager has been appointed pursuant to
Subsection 13.3(c), the Trustee and the Committee shall not be liable for the
acts or omissions of such Investment Manager or be under any obligation to
invest or otherwise manage any assets of the Plan which are subject to the
management of such Investment Manager.
(h) Successor Fiduciary. No Fiduciary shall be liable with
respect to any breach of fiduciary duty if such breach was committed before he
became a Fiduciary or after he ceased to be a Fiduciary.
- ----------------------------
End of Article XIII
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ARTICLE XIV
DISCONTINUANCE, AMENDMENT, AND TERMINATION
------------------------------------------
14.1 Discontinuance. The Employer shall have the right, at any time, to
suspend or discontinue its contributions under the Plan.
14.2 Amendment. The Plan Administrator shall have the right at any time
to amend the Plan in any manner it deems necessary or advisable in order to
qualify (or maintain qualification of) the Plan and the Trust under the
provisions of Code section 401(a) and to amend the Plan in any other manner,
subject to the following limitations:
(a) No amendment shall authorize or permit any portion of the
Trust Fund (other than the part which is required to pay taxes and
administration expenses) to be used for or diverted to purposes other than for
the exclusive benefit of the Participants or their Beneficiaries.
(b) No amendment shall cause or permit any portion of the
Trust Fund to revert to or become the property of the Employer.
(c) No amendment shall increase the duties or responsibilities
of the Trustee without the written consent of the affected Trustee, or alter the
authority of the Company without the consent of the Board of Directors.
(d) No amendment shall amend the vesting schedule if as a
result the vested percentage of any Participant's Accrued Benefit derived from
Employer Contributions (determined as of the later of the date the Committee
adopts the amendment, or the date the amendment becomes effective) would be
reduced to a percentage less than the vested percentage computed under the Plan
without regard to the amendment. In addition, in the event the vesting schedule
of this Plan is amended consistent with the preceding, any Participant who has
completed at least three (3) Years of Service may elect to have his Vested
Accrued Benefit computed under the Plan without regard to such amendment by
notifying the 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 sixty (60) days after the latest of:
(i) The day such amendment is adopted;
(ii) The day such amendment becomes effective; or
(iii) The day the Participant is given written notice
of such amendment by the Committee.
Any election made pursuant to this Section 14.2 shall be irrevocable. The
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
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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.
(e) No amendment shall eliminate or reduce an early retirement
benefit or a retirement-type subsidy or eliminate an optional form of benefit
with respect to benefits attributable to Service before the amendment, and
neither any current provision of the Plan nor any amendment to the Plan shall
restrict the availability of an alternative form of benefit to a certain select
group or classification of Participants or Beneficiaries which favor Highly
Compensated Employees, or restrict or deny a Participant through the withholding
of consent or the exercise of discretion by some person or persons other than
the Participant (and, where relevant, his or her spouse) of an alternative form
of benefit. For purposes of this Section 14.9, Plan provisions will be
considered to favor Highly Compensated Employees if the group of Employees to
whom the benefit is available does not satisfy the requirements of Code section
401(a)(4) and Code section 410(b). For purposes of this Subsection 14.2(e), an
alternative form of benefit encompasses the different forms of benefit payment
available under the Plan which provide that (a) a Participant's benefits under
the Plan may be paid in more than one form, or (b) payment of a particular form
of benefit may commence at some time earlier or later than the normal date for
the commencement of such benefit.
The Committee shall make all amendments in writing. Each amendment shall state
the date on which it is either retroactively or prospectively effective.
14.3 Termination. The Company shall have the right to terminate the
Plan in its entirety at any time. The Plan shall terminate in its entirety upon
the first to occur of the following:
(a) The date on which the Plan is terminated by action of
the Board of Directors;
(b) The date on which the Company is judicially declared
bankrupt or insolvent; or
(c) The date of the dissolution, merger, consolidation, or
reorganization of the Company or the sale by the Company of all or substantially
all of its assets, unless the successor or purchaser makes provision to continue
the Plan, in which event the successor or purchaser shall be substituted as the
Company under this Plan.
14.4 Procedure on Termination. In the event of termination of the Plan
or permanent discontinuance of Employer Contributions, the Company shall, in its
sole discretion, authorize any one of the following procedures:
(a) Continue Plan. To continue the Plan in operation in all
respects until the Trustee has distributed all benefits under the Plan, except
that no further persons shall become Participants, no further Employer
Contributions shall be made, all Accounts shall be fully vested, and no further
payments shall be made except in distribution of the Trust Fund and payment of
administration expenses; or
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(b) Liquidate Plan. Subject to Section 8.3 (unless neither the
Company nor any Related Employer maintains another defined contribution plan
intended to qualify under Code section 401(a), other than an employee stock
ownership plan) and Section 14.8, wind up and liquidate the Plan and the Trust
and distribute the assets thereof after deduction of all expenses to the
Participants and Beneficiaries in accordance with their respective Accounts as
then constituted. If the Company makes no election before termination, then this
subsection (b) will govern distribution of the Trust Fund.
14.5 Merger. Without the consent of any other person, the Company may
cause the Plan to merge or consolidate with, or transfer assets or liabilities
to, another plan intended to qualify under Code section 401(a), but the Plan
shall not be a party to any such merger, consolidation or transfer unless
immediately after the merger, consolidation, or transfer the surviving plan
provides each Participant a benefit equal to or greater than the benefit each
Participant would have received had the Plan terminated immediately before the
merger, consolidation, or transfer.
14.6 Notice of Change in Terms. The Committee, within the time
prescribed by the Act and applicable regulations, shall furnish all Participants
and Beneficiaries a summary description of any material amendment to the Plan or
notice of discontinuance of the Plan and an other information required by the
Act to be furnished without charge.
14.7 Reversion of Suspense Account. Notwithstanding any provision
contained herein to the contrary, the Employer reserves the right to recover
upon the termination of the Plan and Trust Fund any amounts held in a Suspense
Account that cannot be allocated to the Accounts of Participants and their
Beneficiaries in the year of termination because of the limitations contained in
Section 6.11 of the Plan and Code section 415.
14.8 Restrictions on Distribution of Employer Salary Reduction
Contribution Accounts. Notwithstanding anything to the contrary in Section 14.5,
a Participant's Employer Salary Reduction Contribution Account shall not be
distributed before the first to occur of the following events:
(a) The Participant's retirement;
(b) The Participant's death;
(c) The Participant's Disability;
(d) The Participant's termination of employment;
(e) The Participant's hardship;
(f) The Participant's attainment of age fifty-nine and
one-half (59 1/2);
(g) The termination of the Plan, provided that neither the
Company nor a Related Employer maintains a successor plan;
65
<PAGE>
(h) The date of the sale to a corporation that is not a
Related Employer of substantially all of the assets (within the meaning of Code
section 409(d)(2)) used by the Employer in the trade or business in which the
Participant is employed, provided that the Participant continues employment with
the transferee corporation and the Employer continues to maintain the Plan; or
(i) The date of the sale to a corporation that is not a
Related Employer of the Employer's interest in a subsidiary in which the
Participant is employed, provided that the Participant continues employment with
the subsidiary and the Employer continues to maintain the Plan.
A distribution may be made under paragraphs (g), (h), or (i) above only
if it constitutes a total distribution of the Participant's entire balance in
all Accounts.
- ---------------------------
End of Article XIV
66
<PAGE>
ARTICLE XV
EMPLOYER PARTICIPATION
----------------------
15.1 Adoption by Employers. Subject to the further provisions of this
Article XV, any Related Employer with employees, now in existence or hereafter
formed or acquired, may, with the consent and approval of the Committee, by
formal resolution or decision of its own board of directors, adopt the Plan and
the Trust Agreement, for all or any classification of its employees and thereby,
from and after the specified effective date of the adoption, become an Employer
under this Plan. Such adoption shall be effectuated by and evidenced by a formal
resolution of the Committee consenting to and containing or incorporating by
reference such formal resolution or decision of the adopting corporation. The
adoption resolution or decision shall become, as to such adopting corporation
and its employees, a part of the Plan as then or subsequently amended. It shall
not be necessary for the adopting corporation to sign or execute the Plan
document. The effective date of the Plan for any such adopting corporation shall
be that stated in the resolution or decision of adoption of the adopting
corporation, and from and after such effective date the adopting corporation
shall assume all the rights, obligations and liabilities of the Employer
hereunder as to its employees. The administrative powers and control granted to
the Company and the Committee under the Plan, as now or hereafter provided,
including the sole right of amendment of the Plan and Trust and of appointment
and removal of the Committee and its successors, shall not be diminished by
reason of the participation of any such adopting corporation in the Plan and
Trust.
15.2 Withdrawal by Employer. Any Employer, by an action of its board of
directors directing a discontinuance of its contributions hereunder and upon
notice to the Committee and the Trustee, may withdraw from the Plan and Trust at
any time without affecting other Employers not withdrawing. In addition, with
the agreement of the Committee, a withdrawing Employer may arrange for the
continuation of this Plan and Trust by itself or its successor in separate form
for its own Employees, with such amendments, if any, as it may deem proper, or
may arrange for continuation of the Plan and the Trust by merger with an
existing plan and trust qualified under Code sections 401(a) and 501(a) and
transfer of such portion of the Trust Fund as the Committee determines are
allocable to the Employer and its Employee Participants. The Committee may, in
its absolute discretion, terminate an Employer's participation at any time when
the Employer is no longer a Related Employer or when in its judgment such
Employer fails or refuses to discharge its obligations under the Plan following
such prior notice and opportunity to cure as the Committee may deem to be
appropriate under the circumstances.
15.3 Adoption Contingent Upon Initial and Continued Qualification. The
adoption of the Plan and Trust by a Related Employer as provided in Section 15.1
is made contingent and subject to the condition precedent that the adopting
Employer meets all the statutory requirements for qualified plans under the Code
for its employees. The adopting Employer may, or at the request of the Committee
shall, request an initial letter of determination from the appropriate District
Director of the Internal Revenue Service to the effect that the Plan and the
Trust, as set forth herein and in the Trust Agreement or as amended with respect
to the adopting Employer, meet the requirements of the applicable federal
statutes for tax qualification purposes for such adopting Employer and its
employees. In the event the Plan or the Trust in their operation, become
disqualified for any reason
67
<PAGE>
as to such adopting Employer and its Employees, the portion of the Trust Fund
allocable to them shall be segregated as soon as is administratively feasible,
pending either:
(a) The prompt requalification of the Plan and the Trust as to
such Employer and its Employees to the satisfaction of the Internal Revenue
Service, so as not to affect the continued qualified status of the Plan and
Trust to all other Employers; or
(b) As provided in Section 15.2 above, the prompt withdrawal
of such Related Employer from this Plan and Trust and a continuation by itself
or its successor of its plan and trust separate and apart from this Plan and
Trust, or by merger with another existing qualified plan and trust accompanied
by a transfer of its segregated portion of the Trust Fund; or
(c) The prompt termination of the Plan and Trust as to itself
and its Employees.
15.4 No Joint Venture Implied. The adoption of the Plan by any Employer
shall not create a joint venture or partnership between it and any other
Employer. Any rights, duties, liabilities and obligations assumed or incurred
hereunder by any Employer, or imposed upon any Employer by the provisions of the
Plan, shall relate to and affect such Employer alone.
15.5 Continuation by Employer's Successor. With the agreement of the
Committee, any corporation succeeding to the interest of an Employer by sale,
transfer, consolidation, merger, or bankruptcy may elect to continue its
participation in the Plan and the Trust Fund by adopting the Plan and this Trust
Agreement and assuming the duties and responsibilities of the Plan and Trust
Agreement. Alternatively, but only with the agreement of the Committee, such
Employer may establish a separate plan and trust for the continuation of
benefits for its employees in which event the Trust Fund, held on behalf of the
Employees of the prior Employer, shall, subject to the provisions of this Plan
and the Trust Agreement, be transferred to the trustee of the new trust.
- ------------------------
End of Article XV
68
<PAGE>
ARTICLE XVI
THE TRUST
-----------
16.1 Purpose of the Trust Fund. A Trust Fund has been created and will
be maintained for the purposes of the Plan, and the assets thereof shall be
invested in accordance with the terms of the Trust Agreement. All contributions
will be paid into the Trust Fund, and all benefits under the Plan will be paid
from the Trust Fund. In addition, all expenses determined by the Committee to be
both reasonably necessary or desirable for the maintenance and operation of the
Plan and the Trust and lawfully payable from the Trust Fund will be paid from
the Trust Fund, except to the extent the Committee may from time to time in its
discretion elect that the Employers pay any such expenses.
16.2 Appointment of Trustee. One or more individuals, an entity, or
combination thereof, shall be appointed by the Committee as Trustee to
administer the Trust Fund. The Trustee's obligations, duties, and
responsibilities shall he governed solely by the terms of the Trust Agreement,
except as expressly provided herein or in the Trust Agreement.
16.3 Exclusive Benefit of Participants. Subject to Sections 4.5 and
14.7 hereof, the Trust Fund will be used and applied only in accordance with the
provisions of the Plan to provide the benefits thereof, and no part of the
corpus or income of the Trust Fund shall be used for or diverted to purposes
other than for the exclusive benefit of the Participants and their Beneficiaries
and with respect to expenses of administration.
16.4 Benefits Supported Only By the Trust Fund. Any person having any
claim under the Plan will took solely to the assets of the Trust Fund for
satisfaction.
- ---------------------------
End of Article XVI
69
<PAGE>
ARTICLE XVII
MISCELLANEOUS
-------------
17.1 Execution of Receipts and Releases. Any payment to any
Participant, or to his or her legal representative or Beneficiary, in accordance
with the provisions of the Plan, shall to the extent thereof be in full
satisfaction of all claims hereunder against the Plan and Trust. The Committee
may require such Participant, legal representative, or Beneficiary, as a
condition precedent to such payment, to execute a receipt and release therefor
in such form as it shall determine.
17.2 No Guarantee of Interests. Neither the Trustee, the Committee, nor
the Employer guarantee the Trust Fund from loss or depreciation. The Employer
does not guarantee the payment of any money which may be or may become due to
any person from the Trust Fund. The liability of the Committee and the Trustee
to make any payment from the Trust Fund is limited to the then available assets
of the Trust Fund.
17.3 Payment of Expenses. All expenses incident to the administration,
termination, protection of the Plan and the Trust, including but not limited to
legal accounting, and Trustee fees, shall be paid by the Employer, except that
in case of failure of the Employer to pay the expenses, they will be paid from
the Trust Fund, and until paid, shall constitute a first and prior claim and
lien against the Trust Fund.
17.4 Employer Records. Records of the Employer as to an Employee's or
Participant's period of employment, termination of employment and the reason
therefor, leaves of absence, reemployment, and Compensation will be conclusive
on all persons, unless determined to be incorrect.
17.5 Interpretations and Adjustments. To the extent permitted by law,
an interpretation of the Plan and a decision on any matter within the named
Fiduciary's discretion made in good faith is binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes known
and the person responsible shall make such adjustment on account thereof as he
or she considers equitable and practicable.
17.6 Uniform Rules. In the administration of the Plan, uniform
rules will be applied to all Participants and Employees similarly situated.
17.7 Evidence. Evidence required of anyone under the Plan may be
certificate, affidavit, document, or other information which the person acting
on it considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
17.8 Severability. In the event any provision of the Plan shall be held
to be illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the Plan, but shall be fully severable and
the Plan shall be construed and enforced as if the illegal or invalid provision
had never been included herein.
17.9 Notice. Any notice required to be given herein by the Trustee, the
Employer, or the Committee, shall be deemed delivered, when (a) personally
delivered, or (b) placed in the United
70
<PAGE>
States mail, in an envelope addressed to the last known address of the person to
whom the notice is given.
17.10 Waiver of Notice. Any person entitled to notice under the Plan
may waive the giving of such notice.
17.11 Application to Multiple Employers. Except as provided in Section
6.11 and this Section, all employees of Related Employers shall be treated as
employed by a single employer. In the case of an entity (an "Unaffiliated
Related Employer") which is not an affiliate for tax-qualified plan purposes as
determined under Code section 414 (that is, clauses (i)-(iv) of the definition
of Related Employer, Subsection 2.1(pp)) but which is a Related Employer solely
because of Subsection 2.1(pp)(v), for purposes of the following the portion of
the Plan relating to such Unaffiliated Related Employer (and any of its
affiliates for tax-qualified plan purposes) shall be treated as though a
separate plan from the portion of the Plan relating to the Company and such of
the Related Employers as are affiliates of the Company for tax-qualified plan
purposes.
(a) Whether the Plan is a Top Heavy Plan (and all subsidiary
determinations, e.g., the scope of the Permissive and Required Aggregation
Groups), and all consequences following from such a determination.
(b) Application of the limitations on Employer Salary
Reduction Contributions and Employer Matching Contribution contained in Sections
4.8 and 5.2.
(c) The determination of which individuals are Highly
Compensated Employees.
17.12 Successors. The Plan shall be binding upon all persons entitled
to benefit under the Plan, their respective heirs and legal representatives,
upon the Employer, its successors and assigns and upon the Trustees, the
Committee and their successors.
17.13 Headings. The titles and headings of Articles and Sections are
inserted for the convenience of reference only and are not to be considered in
the interpretation or construction of the provision.
17.14 Governing Law. All questions arising with respect to the
provisions of this Plan shall be determined by application of the laws of the
State of Texas except to the extent the same is preempted by Federal statute.
17.15 USERRA Amendment. Notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code section
414(u). Loan repayments will be suspended under this Plan as permitted under
Code section 414(u)(4).
71
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed effective as of the
first day of January, 1997.
PAGING NETWORK,
By: /s/ Levy Curry
-----------------------------------
Levy Curry
Its: Vice President
72
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
PAGENET EMPLOYEES SAVINGS PLAN
LIST OF RELATED EMPLOYERS WHO HAVE ADOPTED PLAN
<S> <C>
Consolidating Entity - Paging none assigned
Paging Network, Inc. - Corporate 04-2740516
Paging Network of America, Inc. none assigned
Paging Network of Arizona, Inc. 75-1905021
Paging Network of Atlanta, Inc. 58-1978706
Paging Network of Burbank, Inc. 74-2516535
Paging Network of Cleveland, Inc. 34-1704602
Paging Network of Columbus, Inc. 31-1340506
Paging Network Services, Inc. 75-2422021
Paging Network of Dallas-Ft. Worth, Inc. 33-0434322
Paging Network of Denver, Inc. 84-1208036
Paging Network Equipment Company, Inc. 75-2434332
Paging Network of Florida, Inc. 75-2181816
Paging Network of Hartford/Springfield, Inc. 75-2371020
Paging Network of Houston, Inc. 75-1835235
Paging Network of Illinois, Inc. 75-2205752
Paging Network of Indiana, Inc. 35-1870931
Paging Network of Kansas City, Inc. 48-1122456
Paging Network of Las Vegas, Inc. 88-0283523
Paging Network of Long Beach, Inc. 33-0531350
Paging Network of Long Island, Inc. 06-1301287
Paging Network of Los Angeles, Inc. 75-2094537
Paging Network of Louisiana, Inc. not available yet
Paging Network of Maryland, Inc. 75-2215186
Paging Network of Massachusetts, Inc. 75-2203027
Paging Network of Miami, Inc. 65-0268851
Paging Network of Michigan, Inc. 75-1905024
Paging Network of Minnesota, Inc. not available yet
Paging Network of New Jersey, Inc. 75-2191900
Paging Network of New York, Inc. 04-2758381
Paging Network of North Carolina, Inc. 56-1792713
Paging Network of Pittsburgh, Inc. 25-1682770
Paging Network of Portland, Inc. 93-1097526
Paging Network of Oakland, Inc. 94-3153359
Paging Network of Ohio, Inc. 93-0900600
Paging Network of Ontario, Inc. 33-0461444
Paging Network of Orange County, Inc. 75-1963269
Paging Network of Orlando, Inc. 59-3138307
Paging Network of Philadelphia, Inc. 75-2136329
Paging Network of Sacramento, Inc. 68-0275882
Paging Network of San Antonio, Inc. 74-2644416
73
<PAGE>
Paging Network of San Diego, Inc. 75-2146810
Paging Network of San Francisco, Inc. 75-2756281
Paging Network of San Jose, Inc. 77-0302626
Paging Network of Seattle, Inc. 91-1576513
Paging Network of St. Louis, Inc. not available yet
Paging Network of Tampa, Inc. 59-3122922
Paging Network of Tennessee, Inc. not available yet
Paging Network of Virginia, Inc. 54-1636492
Paging Network of Washington, Inc. 75-2212470
Paging Network of Westchester, Inc. 75-2371021
Paging Network - Atlantic Region, Inc. 54-1649110
Paging Network - Central Region, Inc. 36-3722949
Paging Network - Southern Region, Inc. 75-2342351
Paging Network - Northeastern Region, Inc. 22-3064696
Paging Network - Southeastern Region, Inc. 58-1973355
Paging Network - Northwestern Region, Inc. 94-3151517
Paging Network - Southwestern Region, Inc. 33-0427933
</TABLE>
74
PAGENET EMPLOYEES SAVINGS PLAN
AS AMENDED AND RESTATED
EFFECTIVE OF JANUARY 1, 1997
First Amendment
PURSUANT to Section 14.2 of the PageNet Employees Savings Plan, as
amended and restated as of January 1, 1997, the PageNet Savings Plan Committee
established pursuant to said Plan hereby amends said Plan as follows, effective
as of January 1, 1998:
1. Section 2.1(t) is hereby amended to read in its entirety as
follows: "(t) "Eligible Employee" means each Employee except:
"(i) leased employees (within the meaning of section 414(n)(2) of
the Code; and
"(ii) non-resident aliens."
2. Section 3.1 is hereby amended to read in its entirety as follows:
"3.1 Eligibility. Each Eligible Employee who was a Participant
immediately prior to the Effective Date shall continue as a
Participant as of the Effective Date, subject to the remainder of this
Article III. Each other Employee shall become a Participant in the
Plan immediately upon becoming an Eligible Employee, provided he or
she is then at least twenty-one (21) years of age, and otherwise on
the date he or she attains age twenty-one (21) provided he or she is
still then an Eligible Employee."
3. Section 4.7 is hereby amended to read in its entirety as follows:
"4.7 Employer Matching Contribution. The Employer shall make an
Employer Matching Contribution to the Plan for each calendar month in
an amount equal to fifty percent (50%) of each qualified Participant's
allocated share of any Employer Salary Reduction Contributions to the
extent it does not exceed six percent (6%) of the Participant's
Compensation for such month, to the extent it does not exceed six
percent (6%) of the Participant's Compensation for such month. The
Employer Matching Contributions will be reduced by an Forfeitures
allocated as matching contributions pursuant to Section 6.6. For this
purpose, a Participant shall be qualified to receive allocations of
matching contributions only subsequent to the first of calendar
quarter following his or her completion of six (6) months of Service."
1
<PAGE>
IN WITNESS WHEREOF, the PageNet Savings Plan Committee has caused this
amendment to be executed in its name and on its behalf by the undersigned
effective as of the first day of January, 1998.
PAGENET SAVINGS
PLAN COMMITTEE
By: /s/ Colleen Davidson
---------------------------
Colleen Davidson
2
PAGENET EMPLOYEES SAVINGS PLAN
AS AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 1997
Second Amendment
PURSUANT to Section 14.2 of the PageNet Employees Savings Plan, as
amended and restated as of January 1, 1997, and as further amended by the First
amendment thereto, the PageNet Savings Plan Committee established pursuant to
said Plan hereby further amends said Plan by adding a new Section 7.9 to Article
VII, to read in its entirety as follows, effective as of May 24, 1998:
"7.9 Certain Additional Vesting. Notwithstanding any other
provision of the Plan to the contrary, the Accounts of the following
Participants shall be fully vested and nonforfeitable at all times
beginning on the applicable date or dates specified below:
"(a) All Participants who (i) ceased to be employed by the
Company in connection with the transfer of certain functions to
Software Architects, Inc. in May of 1998 and (ii) were
immediately thereafter employed by Software Architects, Inc.
"(b) [Reserved]."
IN WITNESS WHEREOF, the PageNet Savings Plan Committee has caused this
Amendment to be executed in its name and on its behalf by the undersigned this
30th day of June, 1998.
PAGENET SAVINGS PLAN COMMITTEE
By: /s/ Levy Curry
------------------------------
Levy Curry
PageNet Employees Savings Plan
as Amended and Restated
Third Amendment
WHEREAS, pursuant to Section 14.2 of the PageNet Employees Savings Plan as
amended and restated as of January 1, 1997, and as amended by the First
Amendment and Second Amendment thereto (the "Plan"), the Committee has the
authority to amend the Plan and wishes to transfer that authority to the Board
of Directors of Paging Network, Inc. ("Board of Directors") who wish to delegate
their authority to amend the Plan to certain designated officers of the Paging
Network, Inc., and
WHEREAS, effective October 16, 1998, Paging Network, Inc. wishes to become the
Plan Administrator in lieu of the Committee and assume administrative
responsibility for the Plan.
NOW THEREFORE, pursuant to Section 14.2 of the Plan,, the PageNet Savings Plan
Committee hereby amends the Plan, effective as of October 16, 1998, to change
all references to the Committee, when acting in its fiduciary capacity, to
references to the Plan Administrator, and effective December 16, 1998, to change
all references to the Committee, when acting in its corporate capacity, to
references to the Board of Directors and the following officers of the Company:
Chairman of the Board, Chief Executive Officer and President
Chief Financial Officer
Senior Vice President and General Counsel
Vice President of Human Resources
IN WITNESS WHEREOF, the PageNet Savings Plan Committee has caused this
Amendment to be executed in its name and on its behalf by the undersigned this
11th day of December, 1998.
PAGENET SAVINGS PLAN COMMITTEE
By: /s/ S. Robert Thompson
------------------------------
S. Robert Thompson
AMENDMENT NO. FOUR TO
PAGENET EMPLOYEES SAVINGS PLAN
WHEREAS, Paging Network, Inc.("PageNet") maintains the PageNet
Employees Savings Plan, as amended and restated effective as of January 1, 1997,
and as further amended by the First Amendment, effective as of January 1, 1998;
the Second Amendment, effective as of May 24, 1998; and the Third Amendment,
effective as of January 1, 1997 (as amended, the "Plan"); and
WHEREAS, pursuant to Section 14.2 of the Plan, PageNet may amend the
Plan at any time; and
WHEREAS, PageNet desires to amend the Plan to: (i) conform the payment
schedule of the loan provisions to a bi-weekly payroll, (ii) delete the
requirement that a participant must be employed on the last day of the month in
order to receive a matching contribution, (iii) clarify in-kind distribution
rights, (iv) remove the Committee as administrator of the Plan, and designate
PageNet the Plan Administrator, (v) make certain other revisions of a technical
nature, (vi) comply with new legislation under the Small Business Job Protection
Act of 1996, the Taxpayer Relief Act of 1997, and the IRS Restructuring Act of
1998, (vii) add the ability to contribute qualified nonelective contributions,
and (viii) delete the provision automatically terminating the Plan upon
bankruptcy.
NOW, THEREFORE, pursuant to its authority under Section 14.2 of the
Plan, PageNet amends the Plan generally effective January 1, 1999, except where
otherwise provided:
1. Effective January 1, 1997, the last full paragraph of existing
Section 2.1(bb) is deleted in its entirety and the following is substituted
in its place:
"The term 'compensation' for purposes of this Section 2.1(bb)
shall mean Compensation as defined in Section 2.1(p) of the
Plan."
2. Effective January 1, 1998, existing Section 2.1(nn) is deleted in
its entirety and the following is substituted in its place:
"(nn) 'Plan Entry Date' means each business day of the
Plan Year."
3. Effective January 1, 1998, a new Section 2.1(qq) is added to
Article II as follows:
"(qq) 'Qualified Nonelective Contribution' or 'QNEC'
shall mean a contribution (other than Employer Salary
Reduction Contributions and Employer Matching
Contributions), if any, (i) made by the Employer in its
1
<PAGE>
sole and absolute discretion for the benefit of Participants
who are not Highly Compensated Employees, (ii) which are
allocable to the Employer Salary Reduction Contribution
Account in accordance with Section 6.5(c), and (iii) which
shall be treated for all purposes (other than for hardship
withdrawals as provided in subsection 8.5) as Employer
Salary Reduction Contributions, as designated by the Plan
Administrator."
4. Existing Section 4.7 is amended to delete the second full paragraph
thereof in its entirety and shall read as follows:
"4.7 Employer Matching Contribution. The Employer shall make
an Employer Matching Contribution to the Plan for each
calendar month in an amount equal to fifty percent (50%) of
each Participant's allocated share of any Employer Salary
Reduction Contributions for such month, to the extent it
does not exceed six percent (6%) of the Participant's
Compensation for such month. The Employer Matching
Contribution will be reduced by any Forfeitures allocated
pursuant to Section 6.6."
5. Effective January 1, 1998, existing Section 4.8 is amended to add a
new Subsection 4.8(c)(iii) to the end thereof as follows:
"4.8(c)(iii) Qualified Nonelective Contributions. In addition
to or in lieu of the above procedures to conform Employer Matching
Contributions to the limitations of Sections 4.8(a) and 4.8(b), the
Employer may, in its sole discretion, make a Qualified Nonelective
Contributions on behalf of any Eligible Employee who is not a Highly
Compensated Employee (which shall be treated as Employer Salary
Reduction Contributions) to the extent necessary to insure that the
limitations of Sections 4.8(a) and 4.8(b) are met. Such QNECs shall be
immediately fully vested, allocated in accordance with Section 6.5(c)
hereof, and subject to the distribution restrictions of Section 14.8
hereof, applicable to Employer Salary Reduction Contributions. Such
QNECs shall be included in the calculations under Section 4.8(a) and
4.8(b) only if the requirements of Treasury Regulation Section
1.401(m)-l(b)(5) (or any successor thereto) are met. In addition, the
Plan Administrator may designate that all or part of the Employer
Salary Reduction Contributions shall be included in the calculations
under Section 4.8(a) and (b) (any such amounts shall not be included in
the calculations under Subsection 5.2(a) and (b)) provided such use
complies with the requirements of Treasury Regulation Section
1.401(m)-l(b)(2) (or any successor thereto). In the event a QNEC is to
be allocated to a Participant under either this Section 4.8(c)(iii) or
Section 5.2(c)(iii) such allocation shall equal the maximum amount
which can be allocated to that Participant without causing the total
amount allocated to the Participant under the Plan to exceed the
limitation of Section 6.11,
2
<PAGE>
provided that QNECs shall be allocated first to the accounts of
Eligible Employees who are not Highly Compensated Employees who have
the lowest Compensation for the Plan Year, then as the Actual Deferral
Percentages (or, if applicable, the Actual Contribution Percentages) of
those Participants increase, allocations shall be made to the accounts
of Eligible Employees who are not Highly Compensated Employees with the
next lowest Compensation and so on until the entire QNEC has been
allocated."
6. Effective January 1, 1998, existing Section 5.2 is amended to add a
new Subsection 5.2(c)(iii) to the end thereof as follows:
"5.2(c)(iii) Qualified Nonelective Contributions. In addition
to or in lieu of the above procedures to conform Employer Salary
Reduction Contributions to the limitations of Section 5.2(a) and (b),
the Employer may, in its sole discretion, make a Qualified Nonelective
Contribution on behalf of any Eligible Employee who is not a Highly
Compensated Employee (which shall be treated as Employer Salary
Reduction Contributions) to the extent necessary to insure that the
limitations of Section 5.2(a) and (b) are met. Such additional
contributions shall be immediately fully vested, allocated in
accordance with Section 6.5(c) hereof, and subject to the distribution
restrictions of Section 14.8 hereof, applicable to Employer Salary
Reduction Contributions. Such QNECs shall be treated as Employer Salary
Deferral Contributions only if the requirements of Treasury Regulation
Section 1.401(k)-l(b)(5) (or any successor thereto) are met."
7. Existing Section 8.2 is deleted in its entirety and the following
is substituted in its place:
"8.2 Method of Payment. A Participant or his Beneficiary may
elect to have his or her Vested Accrued Benefit paid in the following
forms of payment:
(a) Lump Sum Payment. By a lump sum payment, which
may be in cash or in Company stock in which the Participant's
Account is invested (to the extent so invested), as elected by
the Participant or Beneficiary.
(b) Direct Rollover. By direct rollover to an
Eligible Retirement Plan, provided that such payment qualifies
for a direct rollover pursuant to section 401(a)(31) of the
Code. This form shall not be available to any Beneficiary
other than a Beneficiary who is the Participant's surviving
spouse. In implementing a Participant's or Beneficiary's
election with respect to this Section 8.2(b), the Employer,
the Plan Administrator and the Trustee shall not be
responsible for ascertaining whether a transferee plan, trust,
or individual retirement account or annuity satisfies the
applicable provisions of the Code,
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and the written request of the Participant or Beneficiary
shall constitute a certification that the plan, trust, or
individual retirement account or annuity satisfies such
requirements and accepts such rollover. Notwithstanding any
provision of this Plan to the contrary, a Hardship Withdrawal
pursuant to Section 8.5 shall not be eligible for a direct
rollover.
(c) Combination. By a combination of a lump sum
cash payment or direct rollover to an eligible retirement
plan."
8. Effective February 1, 1999, existing Section 8.6(c)(ii) is deleted
in its entirety and the following is substituted in its place:
"(ii) Substantially Equal Payment. All loans will be
subject to a substantially equal payment schedule, as
determined by the Plan Administrator, with payments to be
made through regular payroll deductions. If a Participant is
granted an approved unpaid Leave of Absence, his loan
payments may be suspended during the period of such Leave of
Absence; provided, however, that such loan payments must
recommence by the end of the one (1) year period following
the date the Participant's Leave of Absence began."
9. Existing Section 10.3 is deleted in its entirety and the following
is substituted in its place:
"10.3 Indemnity. The Company shall indemnify and hold harmless
the Board of Directors, the Plan Administrator and its agents, and any
individual Trustees, and each of them, from and against any and all
loss resulting from liability to which the Company and its agents, may
be subjected by reason of any act or conduct (except willful or
reckless misconduct) in their official capacities in the administration
of this Plan or Trust or both, including all expenses reasonably
incurred in their defense, in case the Company fails to provide such
defense. The indemnification provisions of this Section 10.3 shall not
relieve any party from any liability they may have under the Act for
breach of fiduciary duty."
10. The last full sentence of existing Section 12.5 is deleted in its
entirety and the following is substituted in its place to read as follows:
"12.5 Assignment or Alienation.
(a) In General. No Participant or Beneficiary, and no
creditor of a Participant or Beneficiary, shall have any
right to assign, pledge,
4
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hypothecate, anticipate or in any way create a lien upon the
Trust Fund or upon his interest therein, except as provided
in Section 8.6 (regarding loans to Participants) or this
Section 12.5. Except as provided in Section 8.7 regarding
payments in the event of a legal disability, all payments to
be made to Participants or Beneficiaries shall be made only
upon their personal receipt or endorsement, and no interest
in the Trust Fund shall be subject to assignment or transfer
or otherwise be alienable, either by voluntary or
involuntary act or by operation of law, or subject to
attachment, execution, garnishment, sequestration or other
seizure under any legal, equitable or other process, or be
liable in any way for the debts or defaults of Participants
and Beneficiaries, except as provided in this Section 12.5.
(b) Permissible Arrangements. Notwithstanding the
foregoing, a Participant or Beneficiary may assign to the
Employer payments of benefits under this Plan for the
purpose of payment of debts owed the Employer, provided that
any such assignment shall be voluntary and revocable, shall
not exceed ten percent (10%) of any benefit payment, and
shall be solely for the purpose of paying debts of the
Participant to the Employer. In addition, this Section 12.5
shall not preclude the following types of arrangements:
(i) Arrangements for the withholding of taxes
from benefit payments;
(ii) Arrangements for the recovery of benefit
overpayments;
(iii) Arrangements for the transfer of benefit
rights to another plan;
(iv) Arrangements for direct deposit of benefit
payments to an account in a bank, savings and loan
association or credit union (provided that such
arrangement is not part of an arrangement constituting
an assignment or alienation); or
(v) Arrangements directing payment of all or any
part of each benefit payment to a third party (includ-
ing the Employer) provided that the arrangement may be
revoked at any time by the Participant or Beneficiary,
and the third party acknowledges in writing to the
Plan Administrator within ninety (90) days of the
date the arrangement is entered into that it does
not have an enforceable right to all or any part of any
benefit payment (other than to amounts already received
pursuant to the arrangement).
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Lastly, the creation, assignment or recognition of a right to
all or a portion of a Participant's benefits under the Plan pursuant to
a Qualified Domestic Relations Order pursuant to Section 8.11 or any
other assignment permitted by section 401(a)(13) of the Code shall not
constitute a violation of this Section 12.5."
11. Existing Article XII is amended to delete Section 12.7 therefrom
and all remaining sections are renumbered accordingly.
12. Existing Section 13.2 is deleted in its entirety and the following
is substituted in its place:
"13.2 Allocation of Responsibilities. The powers and
responsibilities of the Fiduciaries, as Fiduciaries, are hereby
allocated as indicated below:
(a) Plan Administrator. The administration of the
Plan shall be the responsibility of the Plan Administrator
which shall be the Company. The Company shall have such
fiduciary responsibilities and authorities as may be assigned
it under the Plan and Trust Agreement. This authority shall be
exercised by resolution of the Company's Board of Directors or
by action of members of senior management who have been
delegated such authority by the Board of Directors. The Plan
Administrator shall have the responsibility and authority to
control the operation and administration of the Plan in
accordance with the terms of the Plan and the Trust Agreement,
except with respect to duties and responsibilities
specifically allocated to other Fiduciaries. The Plan
Administrator shall have the authority to issue written
directions to the Trustee to the extent provided in this Plan
document and the Trust Agreement. The Trustee shall follow the
Plan Administrator's directions unless it is clear that the
actions to be taken under those directions would be violations
of applicable fiduciary standards or would be contrary to the
terms of the Plan or Trust Agreement. The Plan Administrator
may employ such agents and such clerical and other
administrative personnel as reasonably may be required for the
purpose of administering the Plan. Such administrative
personnel shall carry out the duties and responsibilities
assigned to them by the Plan Administrator. Expenses
necessarily incurred for such purpose shall be paid by the
Trust Fund unless paid by the Participating Companies or any
Affiliated Company, as provided in Section 17.3.
(b) Trustee. The Trustee shall have the
responsibility and authority to control the investment of the
Trust Fund in accordance with the terms of the Plan and Trust
Agreement, except with respect to duties and
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<PAGE>
responsibilities specifically allocated to other Fiduciaries.
(c) Allocations. Powers and responsibilities may be
allocated to other Fiduciaries in accordance with Section 13.3
hereof, or as otherwise provided herein or in the Trust
Agreement.
This Article XIII is intended to allocate to each Fiduciary
the individual responsibility for the prudent execution of the
fiduciary functions assigned to it, and none of such responsibilities
or any other responsibility shall be shared by two or more of such
Fiduciaries unless such sharing shall be provided by a specified
provision of the Plan or the Trust Agreement."
13. Existing Section 14.2(e) is deleted in its entirety and the
following is substituted in its place:
"(e) No amendment shall eliminate or reduce an early
retirement benefit or a retirement-type subsidy or eliminate
an optional form of benefit with respect to benefits
attributable to Service before the amendment."
14. Existing Section 14.3 is deleted in its entirety and the following
is substituted in its place:
"14.3 Termination. The Company shall have the right to
terminate the Plan in its entirety at any time. The Plan shall
terminate in its entirety upon the first to occur of the following:
(a) The date on which the Plan is terminated by
action of the Board of Directors; or
(b) The date of the dissolution, merger,
consolidation, or reorganization of the Company or the sale by
the Company of all or substantially all of its assets, unless
the successor or purchaser makes provision to continue the
Plan, in which event the successor or purchaser shall be
substituted as the Company under this Plan."
15. Existing Section 14.8(d) is deleted in its entirety and the
following is substituted in its place:
"(d) The Participant's separation from service."
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<PAGE>
16. Existing Section 17.3 is deleted in its entirety and the following
is substituted in its place:
"17.3 Payment of Fees and Expenses. The Trustees, the Plan
Administrator and their assistants and representatives shall be
entitled to payment or reimbursement for all reasonable costs, charges,
and expenses incurred in the administration of the Plan and Trust,
including, but not limited to, reasonable fees for accounting, legal,
and other services rendered, to the extent incurred by the Trustees,
the Plan Administrator, or their assistants and representatives in the
course of performance of their duties under the Plan and the Trust. All
costs, charges, and expenses incurred in the administration of the Plan
and the Trust shall be paid from the Trust Fund except to the extent
paid by the Participating Companies or any Affiliated Company.
Notwithstanding any other provision of the Plan or Trust, no person who
is a 'disqualified person,' within the meaning of Section 4975(e)(2) of
the Code and who receives full-time pay from any Participating Company
shall receive compensation from the Trust Fund, except for payment or
reimbursement of expenses properly and actually incurred. To the extent
permitted by ERISA, the Trustee may also reimburse the Employer for
reasonable and necessary direct expenses for administration of the
Plan."
IN WITNESS WHEREOF, PAGING NETWORK, INC. has caused this instrument to
be executed by its duly authorized officer on this 31st day of December, 1998.
PAGING NETWORK, INC.
By: /s/ Ruth Williams
-----------------------------------
Ruth Williams
Its: Senior Vice President and General
Counsel
8
FIFTH AMENDMENT TO
PAGENET EMPLOYEES SAVINGS PLAN
WHEREAS, Paging Network, Inc.("PageNet") maintains the PageNet
Employees Savings Plan, as amended and restated effective as of January 1, 1997;
and as further amended by the First Amendment, effective as of January 1, 1998;
the Second Amendment, effective as of May 24, 1998; the Third Amendment,
effective as of October 16, 1998; and the Fourth Amendment, generally effective
as of January 1, 1999 (as amended, the "Plan"); and
WHEREAS, pursuant to Section 14.2 of the Plan, PageNet may amend the
Plan at any time; and
WHEREAS, PageNet desires to amend the Plan to correct a scriveners
error occurring in the Fourth Amendment to properly reflect the intended
operation of the Plan and its actual operation since January 1, 1997.
NOW, THEREFORE, pursuant to its authority under Section 14.2 of the
Plan, PageNet amends the Plan by this Fifth Amendment effective January 1, 1999;
provided, however, in the unlikely event that scriveners error is not available,
the effective date of this Amendment shall be the execution date of this Fifth
Amendment:
1. Section 4.7 of the Plan as amended by the Fourth Amendment to the Plan
is deleted in its entirety and Section 4.7 as amended by the First
Amendment to the Plan is substituted in its place to read as follows:
"4.7 Employer Matching. The Employer shall make an Employer
Matching Contribution to the Plan for each calendar month in an amount
equal to fifty percent (50%) of each qualified Participant's allocated
share of any Employer Salary Reduction Contributions for such month, to
the extent it does not exceed six percent (6%) of the Participant's
Compensation for such month. The Employer Matching Contribution will be
reduced by any Forfeitures allocated as matching contributions pursuant
to Section 6.6. For this purpose, a Participant shall be qualified to
receive allocations of matching contributions only subsequent to the
first of the calendar quarter following his or her completion of six
(6) months of Service."
IN WITNESS WHEREOF, PAGING NETWORK, INC. has caused this instrument to
be executed by its duly authorized officer on this 12th day of February, 1999.
PAGING NETWORK, INC.
By: /s/ Ruth Williams
--------------------
Its: Senior Vice President
and General Counsel
1
SIXTH AMENDMENT TO
PAGENET EMPLOYEES SAVINGS PLAN
WHEREAS, Paging Network, Inc.("PageNet") maintains the PageNet
Employees Savings Plan, as amended and restated effective as of January 1, 1997;
and as further amended by the First Amendment, effective as of January 1, 1998;
the Second Amendment, effective as of May 24, 1998; the Third Amendment,
effective as of October 16, 1998; the Fourth Amendment, generally effective as
of January 1, 1999; and the Fifth Amendment effective as of its date of
execution (as amended, the "Plan"); and
WHEREAS, pursuant to Section 14.2 of the Plan, PageNet may amend the
Plan at any time; and
WHEREAS, PageNet desires to amend the Plan to clarify the timing of the
matching contributions under the Plan and to delete short term disability
payments from the definition of compensation used for calculating benefits under
the Plan.
NOW, THEREFORE, pursuant to its authority under Section 14.2 of the
Plan, PageNet amends the Plan by this Sixth Amendment generally effective
January 1, 1999, except where otherwise provided;
1. Effective June 1, 1999, section 2.1(p)(viii) of the Plan is deleted
in its entirety and the following is substituted in its place:
"(viii) Solely for purposes of determining the amount of
Salary Reduction Contributions under Subsection 5.2(a) and to the
extent not already excluded under the preceding clauses, any
prizes, awards, automobile allowances, stock options, relocation
expenses, severance pay or any payments received under the Paging
Network, Inc. Short Term Disability Plan."
2. Section 4.4 of the Plan is deleted in its entirety and the following
is substituted in its place:
"4.4 Time and Method of Payment of Employer Contributions.
The Employer shall pay Employer Salary Reduction Contributions
attributable to Compensation deferred pursuant to Section 5.1 to
the Trustee as soon as administratively possible after the end of
the payroll period to which the deferral of Compensation relates.
The Employer shall pay the Employer Matching Contribution for
each Limitation Year on or as soon as practicable after the last
day of such Limitation Year, but not later than the time
prescribed by law for filing the Employer's Federal income tax
return (including extensions thereof) for its taxable year that
ends with or within such Limitation Year. If such Employer
Matching Contribution is on account of the Employer's preceding
taxable year, the Employer Matching Contribution shall be
accompanied by the Employer's signed statement to the Trustee
that payment is on account of such taxable year. Contributions
shall be paid in cash. All
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<PAGE>
contributions for each Limitation Year, shall be deemed to be
paid as of the earlier of the actual date of payment or the last
day of such Limitation Year."
3. Section 4.7 is deleted in its entirety and the following is substi-
tuted in its place:
"4.7 Matching Contribution. The Employer shall make an
Employer Matching Contribution to the Plan for each payroll
period in an amount equal to fifty percent (50%) of each
qualified Participant's allocated share of any Employer Salary
Reduction Contributions for such payroll period, to the extent it
does not exceed six percent (6%) of the Participant's
Compensation for such payroll period. The Employer Matching
Contribution will be reduced by any Forfeitures allocated as
Employer Matching Contributions pursuant to Section 6.6. For this
purpose, a Participant shall be qualified to receive allocations
of matching contributions only subsequent to the first of
calendar quarter following his or her completion of six (6)
months of Service."
4. Section 6.5(d) is deleted in its entirety and the following is sub-
stituted in its place:
"Allocate any Employer Matching Contributions received by
the Trust Fund since the preceding Valuation Date (and not
previously allocated under Section 6.5(a) above) among the
Employer Matching Contribution Accounts of Participants eligible
to share in the allocation of such amounts as determined under
Section 4.7, such allocation to be based on a ratio of the amount
of Compensation deferred by such Participant for the payperiod or
payperiods for which such Contributions were made to the total
amount of Compensation deferred by all Participants for such
payperiod or payperiods. For this purpose, deferrals in excess of
six percent (6%) of Compensation for the payperiod or payperiods
for which such Employer Matching Contributions were made shall
not be taken into account.
IN WITNESS WHEREOF, PAGING NETWORK, INC. has caused this instrument to
be executed by its duly authorized officer on this 27 day of May, 1999.
PAGING NETWORK, INC.
By: /s/ Mary V. Haynes
--------------------
Mary V. Haynes
Its: Vice President
2
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement on Form S-8 (Registration Statement No. 33-76650) of
Paging Network, Inc. and the related Prospectus of our reports dated February
15, 1999, with respect to the consolidated financial statements and financial
statement schedule of Paging Network, Inc. included in its Annual Report on
Form 10-K for the year ended December 31, 1998, and April 22, 1999, with respect
to the financial statements of the Pagenet Employees Savings Plan included in
its Annual Report on Form 11-K, both for the year ended December 31, 1998, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Dallas, Texas
July 6, 1999
