<PAGE> 1
As filed with the Securities and Exchange Commission on March 30, 1998.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
USA NETWORKS, INC. (formerly HSN, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 59-2712887
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
152 West 57th Street, New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
HSN, INC. RETIREMENT SAVINGS PLAN
(Full title of the plan)
THOMAS KUHN, ESQ.
USA NETWORKS, INC.
152 WEST 57TH STREET, 38TH FLOOR
NEW YORK, NEW YORK 10019
(Name and address of agent for service)
(212) 247-5810
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE PRICE FEE
<S> <C> <C> <C> <C>
Common Stock, 1,500,000 $27.375(2) $41,062,500(2) $12,113.44(2)
par value shares
$.01 per share
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) The average of the high and low reported prices of the Registrant's
Common Stock on March 27, 1998 has been used for the purpose of
calculating the registration fee pursuant to Rule 457(c).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INTRODUCTORY STATEMENT
This Registration Statement on Form S-8 (the "Registration Statement")
of USA Networks, Inc., a Delaware corporation formerly known as HSN, Inc. (the
"Company" or the "Registrant"), relates to up to 1,500,000 shares of the
Registrant's common stock, par value $.01 per share (the "Common Stock"),
issuable in connection with the HSN, Inc. Retirement Savings Plan (Amended and
restated effective as of January 1, 1998) (the "Plan").
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in this
Registration Statement. All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), subsequent to the date of the filing of this Registration
Statement and prior to the filing of a post-effective amendment that indicates
that all securities registered hereunder have been sold, or that deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of the filing of such documents.
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997; and
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<PAGE> 3
(b) The description of the Common Stock contained in the
Company's Registration Statement on Form S-4 dated November 20, 1996, (No.
333-16437).
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Restated Certificate of Incorporation limits, to the
maximum extent permitted by Delaware law, the personal liability of directors
for monetary damages for breach of their fiduciary duties as directors. The
Registrant's Bylaws provide that the directors, officers and certain other
persons will be indemnified to the fullest extent permitted by Delaware law
with respect to third-party actions or suits, provided such person has met the
applicable standard of conduct which permits indemnification under Delaware
law. The Registrant's Bylaws further provide that directors, officers and
certain other persons will be indemnified with respect to actions or suits
initiated by such person, provided that such proceeding was authorized by the
Board of Directors. The Registrant's Bylaws allow the Registrant to pay all
expenses incurred by a director, officer, employee or agent in defending any
proceeding within the scope of the indemnification provisions as such expenses
are incurred in advance of its final disposition, subject to repayment if it is
ultimately determined that such party was not entitled to indemnity by the
Registrant. From time to time, officers and directors may be provided with
indemnification agreements that are consistent with the foregoing provisions.
The Registrant believes that these agreements are necessary to attract and
retain qualified persons as directors and officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party to
an action by reason of the fact that he was a director, officer or agent of the
corporation or was serving at the request of the corporation against expenses
actually and reasonably incurred by him in connection with such action if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action, had no reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the Registrant pursuant to the foregoing
provisions, the Registrant has been advised that in the opinion of the
Securities and Exchange
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<PAGE> 4
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
ITEM 8. EXHIBITS.
The exhibits incorporated by reference or filed as part of this
Registration Statement are listed in the Index of Exhibits that begins on page
10. Registrant hereby undertakes to submit the Plan and any amendments thereto
to the Internal Revenue Service ("IRS") in a timely manner and will make all
changes required by the IRS in order to qualify the Plan under Sections 401(a)
and 401(k) of the Internal Revenue Code of 1986, as amended.
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the "Securities Act"); (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
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.
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<PAGE> 5
B. The undersigned 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 that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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 provisions described under Item 6 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 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 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.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this Registration Statement 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 Los Angeles, State of
California, on the 20th day of February, 1998.
USA NETWORKS, INC.
By: /s/ Barry Diller
-----------------------------
Name: Barry Diller
Title: Chairman of the
Board and Chief
Executive Officer
6
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James G. Gallagher and Thomas Kuhn,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/Barry Diller Chairman of the February 20, 1998
- ------------------------------- Board and Chief
Barry Diller Executive Officer
/s/Paul G. Allen Director February 20, 1998
- -------------------------------
Paul G. Allen
/s/Frank J. Biondi, Jr. Director February 20, 1998
- -------------------------------
Frank J. Biondi, Jr.
/s/Edgar Bronfman, Jr. Director February 20, 1998
- -------------------------------
Edgar Bronfman, Jr.
/s/James G. Held Director, Vice February 20, 1998
- ------------------------------- Chairman
James G. Held
/s/Victor A. Kaufman Director, Office February 20, 1998
- ------------------------------- of the Chairman,
Victor A. Kaufman and Chief Financial
Officer (Principal
financial officer)
/s/Robert W. Matschullat Director February 20, 1998
- --------------------------------
Robert W. Matschullat
/s/Samuel Minzberg Director February 20, 1998
- --------------------------------
Samuel Minzberg
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C>
/s/Bruce M. Ramer Director February 20, 1998
- --------------------------------
Bruce M. Ramer
/s/William D. Savoy Director February 20, 1998
- --------------------------------
William D. Savoy
/s/H. Norman Schwarzkopf Director February 20, 1998
- --------------------------------
H. Norman Schwarzkopf
/s/Richard E. Snyder
- -------------------------------- Director February 20, 1998
Richard E. Snyder
/s/Brian Feldman Controller (Chief February 24, 1998
- -------------------------------- accounting officer)
Brian Feldman
</TABLE>
8
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the plan
administrator has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of
St. Petersburg, state of Florida on February 24, 1998.
USA NETWORKS, INC.,
as Plan Administrator for HSN, Inc.
Retirement Savings Plan (Amended
and Restated Effective as of January
1, 1998)
By: /s/ Brian J. Feldman
------------------------------------------
Name: Brian J. Feldman
Title: Controller (Chief accounting officer)
9
<PAGE> 10
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
23.01 Consent of Deloitte & Touche LLP (filed as Exhibit 23.2 to
FORM 10-K dated March 30, 1998 as incorporated herein by
reference)
23.02 Consent of Ernst & Young LLP (filed as Exhibit 23.1 to
FORM 10-K dated March 30, 1998 as incorporated herein
by reference)
24.01 Power of Attorney (included on Page 7 of this Registration
Statement)
99.01 HSN, Inc. Retirement Savings Plan (Amended and restated
effective as of January 1, 1998)
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<PAGE> 1
EXHIBIT 99.01
HSN, INC. RETIREMENT SAVINGS PLAN
(Amended and restated effective as of January 1, 1998)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I DEFINITIONS..................................................1
ARTICLE II SERVICE.....................................................16
ARTICLE III ELIGIBILITY.................................................23
ARTICLE IV CONTRIBUTIONS...............................................25
ARTICLE V VESTING AND FORFEITURES.....................................40
ARTICLE VI ALLOCATION..................................................43
ARTICLE VII DISTRIBUTIONS...............................................46
ARTICLE VIII VOTING AND OTHER RIGHTS.....................................64
ARTICLE IX PAYMENT OF BENEFITS.........................................68
ARTICLE X ADMINISTRATION OF THE PLAN..................................69
ARTICLE XI FUNDING OF PLAN.............................................76
ARTICLE XII AMENDMENT OF THE PLAN.......................................78
ARTICLE XIII TERMINATION OF THE PLAN.....................................80
ARTICLE XIV PROVISIONS RELATING TO TOP-HEAVY PLAN.......................81
ARTICLE XV MISCELLANEOUS...............................................89
ARTICLE XVI ADOPTION OF PLAN BY AFFILIATE...............................91
EXHIBIT A SPECIAL RULES REGARDING SILVER KING ACCOUNTS...............A-1
EXHIBIT B SPECIAL RULES REGARDING COMPANY STOCK......................B-1
EXHIBIT C PROCEDURES REGARDING QUALIFIED DOMESTIC
RELATIONS ORDERS...........................................C-1
EXHIBIT D HSN, INC. RETIREMENT SAVINGS PLAN
ADOPTION AGREEMENT.........................................D-1
</TABLE>
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PREFACE
It is the purpose of this Plan to provide a means of providing
retirement and other benefits to employees of HSN, inc. and certain related
companies and to permit employees a means to save for their retirement.
The Plan was originally established as the Home Shopping Network, Inc.
Retirement Savings and Employee Stock Ownership Plan, effective February 1, 1990
and was subsequently amended and restated effective as of January 1, 1994 and
renamed the Home Shopping Network, Inc. Retirement Savings Plan. The Plan is now
amended and restated in the form set forth herein effective January 1, 1998 and
renamed the HSN, inc. Retirement Savings Plan. The benefits of Members who do
not perform an Hour of Eligibility Service on or after January 1, 1998 shall be
governed by the provisions of the Plan in effect as of the day such Members
incurred a Termination of Employment.
The accounts of participants in the Silver King Communications, Inc.
401(k) Retirement Savings Plan shall be transferred to the Plan effective
January 1, 1998, and the benefits of such participants who do not perform an
Hour of Eligibility Service on or after January 1, 1998 shall be governed by the
provisions of Silver King Communications, Inc. 401(k) Retirement Savings Plan in
effect as of the day such participants incurred a Termination of Employment.
The Plan herein set forth and its related Trust are hereby designated
as constituting parts of a plan and trust intended to qualify under Section
401(a) of the Internal
ii
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Revenue Code of 1986, as amended, and to be exempt from federal income taxation
under Section 501(a) of the Internal Revenue Code of 1986, as amended.
This Plan, which is a profit-sharing plan, provides for an Internal
Revenue Code Section 401(k) feature.
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<PAGE> 5
ARTICLE I
DEFINITIONS
The following words and terms as used in this Plan shall have the
meanings set forth below, unless a different meaning is clearly required by the
context:
1.1 Account. The total of subaccounts maintained by the Trustee to
record the interest of a Member in the Plan, including the Salary Reduction
Contribution Account, the Matching Contribution Account, the Profit Sharing
Account, the QNEC Account, the Employee Rollover Account and if applicable, the
Silver King Employer Contribution Account, the Silver King Employee Contribution
Account and the Silver King Rollover Account.
1.2 Accrued Benefit. The net value of all assets, earned or accrued,
allocated to a Member's Account.
1.3 Affiliate. The Company and any other entity affiliated with the
Company within the meaning of Section 414(b) of the Code with respect to members
of the controlled group of corporations, Section 414(c) of the Code with respect
to trades or businesses under common control with the Company, Section 414(m) of
the Code with respect to affiliated service groups and any other entity required
to be aggregated with the Company under Section 414(o) of the Code, except for
the purposes of applying the provisions hereof with respect to the limitations
on benefits, Section 415(h) of the Code shall apply. No entity shall be treated
as an Affiliate for any period during which it is not part of the controlled
group, under common control or otherwise required to be aggregated under Section
414 of the Code, except as may otherwise be determined by the Board and set
forth in resolutions of the Board.
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<PAGE> 6
1.4 Beneficiary. (a) If the Member is married at the time of his or her
death, the Member's Spouse, unless such Spouse does not survive the Member or a
different bene ficiary is designated by the Participant or former Participant
and consented to by the Spouse in accordance with the provisions of Section 7.7
hereof and Exhibit A.
(b) If the Member is not married at the time of his or her death,
such person(s) as he or she shall designate in accordance with the provisions of
Article VII hereof, or, if the Member shall die without leaving a designated
beneficiary, his or her estate.
1.5 Benefit Starting Date. The first day for which an amount is payable
(i.e., the date on which all events have occurred which entitle the Participant
to such benefits) without regard to administrative delay and not the actual
payment date.
1.6 Board. The Board of Directors of the Company or a duly authorized
committee thereof.
1.7 Childrearing Absence. Any period of absence of an Eligible Employee
(i) by reason of the pregnancy of such Employee, (ii) by reason of the birth of
a child of such Employee, (iii) by reason of the placement of a child with such
Employee in connection with the adoption of such child by such Employee, or (iv)
for purposes of caring for such child for a period beginning immediately
following such birth or placement. Childrearing Absences shall be granted in
accordance with such policies as may, from time to time, be adopted by the
Employer, and none of the provisions of this Plan shall be construed to afford
any Employee any rights other than in accordance with such policies.
1.8 Code. The Internal Revenue Code of 1986, as amended.
2
<PAGE> 7
1.9 Committee. The committee appointed by the Company for the purpose
of administering the Plan on its behalf as set forth in Article X.
1.10 Company. HSN, inc. and any successor by merger, consolidation,
purchase or otherwise.
1.11 Company Stock. Common stock of HSN, inc., $.01 par value.
1.12 Company Stock Fund. An investment vehicle under the Plan which is
intended to invest primarily in Company Stock.
1.13 Compensation. For any Plan Year, all cash compensation for
services paid by an Employer to an Employee while a Participant during the Plan
Year and except as specifically set forth below, reflected on his or her W-2 for
such year including salary, bonuses commissions, and overtime pay, as well as
contributions by an Employer on behalf of a Participant pursuant to a salary
reduction agreement between an Employer and a Participant under Code Section
401(k) or 125, if any. Compensation for any Plan Year shall exclude: (1) all
noncash compensation and any contributions by the Employer to, or benefits paid
under, this Plan or any other pension, profit-sharing, fringe benefit, group
insurance (including, without limitation, life insurance or health insurance) or
other employee welfare plan (including, without limitation, severance or
disability) or any deferred compensation arrangement (other than any salary
reductions under Code Sections 401(k) and 125); (2) amounts paid under any
relocation plan of the Employer; (3) income on the exercise of a nonstatutory
stock option or any other type of stock award; (4) income on the disqualifying
disposition of shares acquired under any stock option plan or stock purchase
plan of the Employer or any other type of stock award; (5) all items
3
<PAGE> 8
of imputed income; (6) amounts paid pursuant to any long term compensation plan
maintained by the Employer; (7) cash prizes and awards; (8) automobile
allowances; (9) meal allowances and (10) travel expenses and allowances.
Compensation for any Plan Year shall not exceed one hundred sixty thousand
dollars ($160,000), as adjusted for cost-of-living increases, in accordance with
Section 401(a)(17) of the Code. With respect to any short Plan Year,
Compensation shall not exceed the foregoing limit multiplied by a fraction, the
numerator of which is the number of months in the short Plan Year and the
denominator of which is twelve (12).
1.14 Disability. A Participant will be deemed to have a Disability for
purposes of the Plan if he or she is incapable of engaging in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12) months.
The performance and degree of such impairment shall be supported by medical
evidence, including, if the Committee decides in its sole discretion, a medical
examination of the Participant by a physician selected by the Committee.
1.15 Effective Date. February 1, 1990.
1.16 Elective Deferrals. The sum of:
(a) Any salary reduction contribution under a qualified cash or
deferred arrangement (as defined in Code Section 401(k)) to the extent not
includable in gross income for the taxable year under Code Section 402(e)(3)
(determined without regard to the limitation set forth in Code Section 402(g));
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<PAGE> 9
(b) Any salary reduction contribution to the extent not includable
in gross income for the taxable year under Code Section 402(h)(1)(B) (determined
without regard to the limitation set forth in Code Section 402(g)); and
(c) Any salary reduction contribution to purchase an annuity
contract under Code Section 403(b) under a salary reduction agreement (within
the meaning of Code Section 3121(a)(5)(D)), provided that the limitation set
forth in Section 4.1(f) hereof shall be adjusted for any such contribution to
the extent set forth in Code Sections 402(g)(4) and (8).
1.17 Eligible Employee. Any Employee of the Employer other than (a) an
Employee whose employment is governed by the terms of a collective bargaining
agreement between Employee representatives (within the meaning of Code Section
7701(a)(46)) and the Employer (except to the extent that the collective
bargaining agreement expressly provides for the inclusion of such Employees),
(b) a "leased employee," as such term is defined under Code Section 414(n), or
(c) a nonresident alien who receives no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer which constitutes income from sources
within the United States (within the meaning of Code Section 861(a)(3)). An
individual classified by the Employer at the time services are provided as
either an independent contractor or an individual who is not classified by the
Employer as an Employee but who provides services to the Employer through
another entity shall not be eligible to participate in this Plan during the
period that the individual is so initially classified, even if such individual
is later retroactively reclassified as an employee during all or any part of
such period pursuant to applicable law or otherwise.
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<PAGE> 10
1.18 Employee. Any individual employed by an Employer, as used herein,
including any "leased employee," as such term is defined under Code Section
414(n). The term "Employee," as used herein, shall exclude any other agent or
independent contractor.
1.19 Employee Rollover Account. The Participant's subaccount with
respect to rollovers to this Plan pursuant to Section 4.7 and earnings and
losses thereon.
1.20 Employer. The Company and any entity that is or hereafter becomes
a Member Company.
1.21 Employment Commencement Date. The first day on which an Employee
is credited by an Employer with an Hour of Eligibility Service or Hour of
Vesting Service, as applicable.
1.22 ERISA. Employee Retirement Income Security Act of 1974, as
amended.
1.23 Fair Market Value. With respect to a specified date, the closing
price of a share of Company Stock as reported for the preceding trading day on
the principal national securities exchange in the United States on which it is
then traded, or, if Company Stock is not traded on the any national securities
exchange, as quoted on an automated quotation system sponsored by the National
Association of Securities Dealers, or if the sales of the Company Stock shall
not have been reported on such date, on the first day prior thereto on which the
Company Stock was reported or quoted. With respect to investments other than
investments in Company Stock, Fair Market Value shall be determined by the
entity maintaining the applicable Investment Fund, in accordance with generally
accepted valuation methods and practices.
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<PAGE> 11
1.24 Highly Compensated Employee. (a) Any Employee who, during the Plan
Year or the preceding Plan Year:
(i) if the Employer is a corporation, owned (or is considered
as owning within the meaning of Section 318 of the Code) at any time during
the current or preceding Plan Year 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 "5
Percent Owner") or if the Employer is not a corporation, owned at any time
during the current or preceding Plan Year more than five percent (5%) of the
capital or profit interest in the Employer; or
(ii) received Section 414 Compensation from the Employer and
Affiliates in excess of eighty thousand dollars ($80,000), as adjusted by
the Secretary of the Treasury, in the preceding Plan Year.
1.25 Highly Compensated Group. (a) With respect to an Employer for any
Plan Year, the group of all Highly Compensated Employees.
(b) Prior to determining the Highly Compensated Group, Code
Sections 414(b), (c), (m) and (o) shall be applied.
(c) Persons who are nonresident aliens and who receive no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer or
Affiliates which constitutes income from sources within the United States
(within the meaning of Code Section 861(a)(3)) shall not be treated as Employees
for purposes of determining the Highly Compensated Group.
1.26 Investment Fund. One of the funds designated by the Committee for
investment of contributions made to the Plan.
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<PAGE> 12
1.27 Leave of Absence. Any absence approved by the Employer, other than
absence which qualifies as a Childrearing Absence or a Military Leave of
Absence, including, but not limited to, sick or disability leave.
1.28 Limitation Year. The Plan Year.
1.29 Matching Contribution. A contribution made pursuant to Section 4.2
hereof as a result of a Salary Reduction Contribution made pursuant to Section
4.1 hereof.
1.30 Matching Contribution Account. The Member's subaccount with
respect to contributions made by the Employer pursuant to Section 4.2 hereof and
the earnings and losses thereon.
1.31 Member. A Participant, a Terminated Participant or a Retired
Participant who has an Accrued Benefit under the Plan or an individual who (i)
was a participant in a plan which was merged into the Plan and (ii) has an
Account balance under the Plan.
1.32 Member Company. The Company and any entity that is or hereafter
becomes an Affiliate and assumes the obligations of the Plan and Trust by vote
of its board of directors (or of its equivalent body) and with the consent of
the Board. If the Plan is only adopted by a Member Company with regard to
certain divisions, only those divisions shall be deemed the Member Company and
the other divisions of such Member Company shall not be deemed to be Member
Companies hereunder.
1.33 Military Leave of Absence. Absence of an Employee in military
service for the United States of America, provided that the Employee returns to
the employ of the
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<PAGE> 13
Employer prior to the end of any period prescribed by the laws of the United
States during which he or she has reemployment rights with the Employer; and
provided further that such military service and the Employee's subsequent return
to employment with the Employer satisfy the requirements for guaranteed
reemployment under the Selective Services Act, the Uniform Services Employment
and Reemployment Act or any similar law then existing. 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 Section 414(u) of the Code.
1.34 Named Fiduciary. The Committee except where the Member (or
Beneficiary thereof) or the Trustee shall be a "named fiduciary" with respect to
the vote or tender of Company Stock as set forth in Section 8.4.
1.35 Non Highly Compensated Group. That group of Participants who are
not included in the Highly Compensated Group.
1.36 Normal Retirement Age. The Member's attainment of age sixty-five
(65).
1.37 Normal Retirement Date. The first day of the month coinciding with
or immediately following the Member's attainment of Normal Retirement Age.
1.38 Participant. Any Employee who shall have become a Participant in
the Plan in accordance with the provisions of Article III hereof, and whose
participation shall not have ceased. A Participant's participation shall cease
upon his or her ceasing to be an Eligible Employee. The term Participant shall
not include Retired Participants and Terminated Participants.
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<PAGE> 14
1.39 Plan. The HSN, inc. Retirement Savings Plan, as herein set forth
and as hereafter amended.
1.40 Plan Administrator. The Company.
1.41 Plan Year. A period of twelve (12) months beginning on January 1st
and ending on the following December 31st.
1.42 Profit Sharing Account. The Participant's subaccount with respect
to Profit Sharing Contributions by the Employer pursuant to Section 4.5 hereof
and earnings and losses thereon.
1.43 Profit Sharing Contributions. A contribution made pursuant to
Section 4.5 hereof.
1.44 QNEC Account. The Participant's subaccount with respect to QNECs
by the Employer pursuant to Section 4.4 hereof and earnings and losses thereon.
1.45 QNECs. Qualified non-elective contributions made pursuant to
Section 4.4 used to satisfy the Actual Deferral Percentage Test described in
Section 4.1(b) or the Actual Contribution Percentage Test described in Section
4.3.
1.46 Reemployment Commencement Date. The first day on which an Employee
is credited with an Hour of Eligibility Service after a Break in Service or an
Hour of Vesting Service after a Period of Severance, as applicable.
1.47 Restatement Date. January 1, 1998.
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1.48 Retired Participant. A former Participant who has retired on or
after Normal Retirement Age and is eligible to receive benefits under the Plan.
1.49 Salary Reduction Contribution. A contribution made pursuant to
Section 4.1 hereof.
1.50 Salary Reduction Contribution Account. The Participant's
subaccount with respect to contributions by the Employer pursuant to Section 4.1
hereof and the earnings thereon.
1.51 Section 414 Compensation. In the case of employees other than
employees within the meaning of Section 401(c)(1) of the Code,"wages" as defined
in Section 3401(a) of the Code for purposes of income tax withholding at the
source but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Section
3401(a)(2) of the Code). Section 414 Compensation shall be determined without
regard to the exclusions in Code Sections 125, 402(e)(3) and 402(h)(1)(B) and
shall be measured based on compensation actually paid or made available to a
Participant during the measuring period and not on an accrued basis. For
purposes of Section 4.1(c) and Section 4.3(c), Section 414 Compensation for any
Plan Year shall not exceed one hundred sixty thousand dollars ($160,000), as
adjusted for cost-of-living increases, in accordance with Section 401(a)(17) of
the Code, and with respect to any short Plan Year, Section 414 Compensation
shall not exceed the foregoing limit multiplied by a fraction, the numerator of
which is the number of months in the short Plan Year and the denominator of
which is twelve (12).
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1.52 Silver King Account. The total of the following subaccounts
maintained by the Trustee to record the interest of a Member with respect to
amounts transferred from the Silver King Plan to the Plan:
(a) Silver King Employee Contribution Account. The subaccount with
respect to elective deferrals and qualified non-elective contributions and
earnings and losses thereon, made on behalf of a Silver King Participant to the
Silver King Plan prior to January 1, 1998 and transferred to this Plan, and
earnings and losses thereon.
(b) Silver King Employer Contribution Account. The subaccount with
respect to matching contributions and earnings and losses thereon, made on
behalf of a Silver King Participant to the Silver King Plan prior to January 1,
1998, and transferred to this Plan, and earnings and losses thereon.
(c) Silver King Rollover Account. The subaccount with respect to
rollover contributions, and earnings and losses thereon, made on behalf of a
Silver King Participant to the Silver King Plan prior to January 1, 1998, and
transferred to this Plan, and earnings and losses thereon.
1.53 Silver King Participant. Any person who was a participant in the
Silver King Plan and whose account thereunder was transferred to the Plan
pursuant to the merger of the Silver King Plan into the Plan.
1.54 Silver King Plan. The Silver King Communications, Inc. 401(k)
Retirement Savings Plan, originally effective January 1, 1993.
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1.55 Spouse. A Participant's legal spouse.
1.56 Terminated Participant. A Participant who has ceased to be an
Employee prior to his or her Normal Retirement Age for any reason other than
death and who is eligible to receive benefits under the Plan
1.57 Termination. An amendment to the Plan expressly terminating the
Plan.
1.58 Termination of Employment. Separation from the employment of all
Employers and Affiliates for any reason, including, but not limited to,
retirement, death, dis ability, resignation or dismissal with or without cause.
Where an Employee enters upon an authorized Leave of Absence or layoff,
Termination of Employment shall not be deemed to occur until his or her Leave of
Absence expires without immediate reemployment, or in the case of layoff, he or
she is not rehired within the time established by the Committee in accordance
with the general policy of the Employer. Where an Employee is on a Military
Leave of Absence, Termination of Employment shall not be deemed to occur unless
and until the Employee fails to return to employment prior to the end of the
period during which is right to reemployment is protected by the Selective
Service Act, or Uniform Services Employment and Reemployment Act or any similar
law then existing. In the event that an Employee is transferred from one
Employer or Affiliate to another Employer or Affiliate, the Employee will not be
deemed to have incurred a Termination of Employment until he or she is no longer
employed by any Employer or Affiliate. In the event the Employer or an Affiliate
sells some or all of its assets, any Employee who in connection with, or as a
result of, such sale becomes employed by the acquirer of such assets shall not,
for purposes of Article VII hereof and only for such purposes, be deemed to have
incurred a Termination of Employment unless and until the Employee is no longer
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employed by such acquirer or any entity thereafter acquiring the aforesaid
assets, provided that the foregoing shall not apply to the extent that the
disposition is covered by subsection (iii) or subsection (iv) of Section 7.10(a)
hereof or at any time at or after the disposition at which the Participant has
attained age fifty-nine and one-half (59-1/2). For purposes of the foregoing
sentence, and only for such purposes, a sale of stock of an Employer or
Affiliate shall be within the meaning of the term "assets."
1.59 Trust. The Trust adopted by the Company under the trust agreement
with the Trustee, which is established to hold and invest contributions made
under the Plan, as amended from time to time.
1.60 Trustee. Such person or persons or corporation appointed and
acting as Trustee or successor Trustee of the Trust under the trust agreement.
1.61 Trust Fund. All assets of whatsoever kind or nature, including all
property and income, held from time to time by the Trustee under the Trust.
1.62 Valuation Date. Each business day or such other dates as the
Committee may determine in accordance with its rules and procedures.
1.63 Value. The Member's Accrued Benefit with regard to his or her
Account.
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Construction
The masculine gender where appearing in this Plan shall be deemed to
include the feminine gender, unless the context clearly indicates to the
contrary. Where appropriate, words used in the singular include the plural and
the plural includes the singular. The words "hereof," "herein," "hereunder" and
other similar compounds of the word "here" shall mean and refer to this entire
Plan, not to any particular provision or section.
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<PAGE> 20
ARTICLE II
SERVICE
2.1 Hours of Eligibility Service. "Hours of Eligibility Service" means
hours for which an Employee is or will be directly or indirectly compensated by
the Employer or any Affiliate for the performance of duties, including overtime
(but only actual hours worked irrespective of premium pay) and hours for which a
back pay award is made (without offset for mitigation of damages). It shall also
include hours for which the Employee is or will be directly or indirectly
compensated by the Employer or any Affiliate for reasons other than for the
performance of duties, including, but not limited to, sick days, disability,
vacation, holidays, jury duty, layoff, military duty or Leave of Absence, but
not in excess of five hundred and one (501) hours for any continuous period of
nonworking time for which the Employee is compensated. In addition, the Employee
shall be credited for Hours of Eligibility Service during a Military Leave of
Absence to the extent required by law. Hours of Eligibility Service shall not be
credited for any hours for which an Employee is directly or indirectly paid
under a plan maintained solely for the purpose of complying with applicable
worker's compensation, unemployment compensation or disability laws. No Hour of
Eligibility Service shall be credited with regard to any Employee for any period
prior to the date the entity by which he or she is employed became or becomes an
Employer except as specifically provided in the adoption agreement of the entity
and then only as so specifically provided. Notwithstanding the foregoing, Hours
of Eligibility Service shall be credited with regard to an Employee's prior
hours of service with Silver King Communications, Inc. to the extent such hours
of service were credited under the Silver King Plan.
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2.2 Guidelines. For purposes of determining Hours of Eligibility
Service ("Hours"), the following guidelines shall be applied:
(a) Hours of Eligibility Service credited as a result of an award,
agreement or payment for back pay shall be credited to the Employee for the
computation period or periods to which the award, agreement or payment pertains
rather than the computation period in which the award, agreement or payment is
made. If an Employee has previously been credited with an Hour of Eligibility
Service for any hour of work, he or she shall not be entitled to be credited for
a second hour under any back pay award or agreement.
(b) For purposes of crediting Hours of Eligibility Service during
which an Employee did not perform duties for the Employer or an Affiliate,
subject to the limitations of Section 2.1, Hours of Eligibility Service shall be
determined as follows:
(i) if payments are calculated on the basis of units of time,
the Hours of Eligibility Service credited shall be equal to the number of
Employee's regularly scheduled working hours in such unit of time;
(ii) if payments are not calculated on the basis of units of
time, the number of Hours of Eligibility Service to be credited shall be
equal to the amount of the payment divided by the Employee's most recent
hourly rate of compensation for the performance of duties; and
(iii) if no payments were made, the Hours of Eligibility
Service credited, if any, shall be at the time rate of eight (8) Hours of
Eligibility Service per workday.
(c) Notwithstanding anything in this Plan, an Employee shall be
credited with Hours of Eligibility Service if required by any federal law,
including, without limitation, the Family and Medical Leave Act; the nature and
extent of such credit shall be determined under such law.
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<PAGE> 22
(d) Employees compensated on other than an hourly basis and for
whom hours are not required to be counted and recorded by any other federal law,
such as the Fair Labor Standards Act, shall be credited with ten (10) Hours of
Eligibility Service for any day during which the Employee is credited with one
(1) Hour of Eligibility Service.
(e) Hours of Eligibility Service shall not be credited for payments
which were made solely to reimburse an Employee for medical or medically related
expenses incurred by the Employee, nor for extra pay for any period for which
Hours of Eligibility Service have previously been credited, such as extra pay in
lieu of vacation.
(f) When necessary, Hours of Eligibility Service completed prior to
the Effective Date shall be determined from such records as the Employer has
maintained in the past, making reasonable approximations where necessary. If
these records are insufficient to make an approximation, a reasonable estimate
of Hours of Eligibility Service to be credited will be made.
(g) Hours of Eligibility Service will be credited in accordance
with the requirements of Section 2530.200b-2 of the Department of Labor
Regulations, as hereafter amended or superseded.
2.3 Continuous Service. "Continuous Service" means a Participant's most
recent period of uninterrupted service with the Employer or any Affiliate prior
to his or her retirement or Termination of Employment, if earlier. Continuous
Service shall not be broken in any Plan Year in which an Employee completes more
than five hundred (500) Hours of Eligibility Service. Continuous Service will be
considered broken in any Plan Year in which an
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<PAGE> 23
Employee completes five hundred (500) or less Hours of Eligibility Service. For
purposes of determining Continuous Service, and only for such purpose, Hours of
Eligibility Service shall also include hours during which the Employee is on a
Leave of Absence and, subject to Section 2.4 hereof, hours during which the
Employee is on a Childrearing Absence.
2.4 Childrearing Absence. For the purpose of determining whether an
Employee's Continuous Service is broken under Section 2.3, and only for such
purpose, an Employee who incurs a Childrearing Absence shall be credited with
Hours of Eligibility Service for the period of such absence equal to either (i)
the Hours of Eligibility Service that would have been credited to such Employee
but for such Childrearing Absence, or (ii) if the Hours of Eligibility Service
to be credited to such Employee pursuant to the preceding clause (i) cannot be
determined, eight (8) Hours of Eligibility Service for each normal workday of
absence; provided, however, that in no event shall any Employee be credited with
more than five hundred and one (501) Hours of Eligibility Service under this
Section 2.4. Hours of Eligibility Service credited under this Section 2.4 shall
be credited only to the Plan Year in which an Employee's Childrearing Absence
begins, if, and to the extent, such Employee would be prevented from incurring a
one-year Break in Service in such Plan Year solely as a result of the treatment
of such Childrearing Absence as Hours of Eligibility Service, and in all other
cases, to the Plan Year immediately following the Plan Year in which such
Childrearing Absence begins.
2.5 Break in Service. A Break in Service will occur in any Plan Year in
which an Employee's Continuous Service is broken. If any Employee whose
Continuous Service is broken is subsequently reemployed, his or her prior Years
of Service shall be reinstated if and only if:
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<PAGE> 24
(i) the Employee had met the requirements for a vested benefit
under the Plan at the time of his or her Break in Service; or
(ii) the number of his or her consecutive one-year Breaks in
Service from the time his or her prior Continuous Service is deemed broken
to the date of his or her reemployment does not exceed the greater of (A)
five (5) or (B) the aggregate number of Years of Service credited to such
Employee for the period prior to the time his or her Continuous Service was
broken.
2.6 Year of Service. A Year of Service shall mean a twelve (12)
consecutive month period commencing on an Employee's Employment Commencement
Date or Reemployment Commencement Date or any anniversary thereof, during which
the Employee is credited with at least one thousand (1,000) Hours of Eligibility
Service.
2.7 Hours of Vesting Service. "Hours of Vesting Service" means each
hour for which an Employee is or will be directly or indirectly compensated by
an Employer or an Affiliate for the performance of duties, including overtime
(but only actual hours worked irrespective of premium pay. Notwithstanding the
foregoing, Hours of Vesting Service shall be credited with regard to an
Employee's prior hours of service with Silver King Communications, Inc. to the
extent such hours of service were credited under the Silver King Plan.
2.8 Period of Service. A period commencing on the Employee's (i)
Employment Commencement Date or (ii) Reemployment Commencement Date, whichever
is applicable, and ending on the Severance from Service Date, as defined below.
A Period of Service includes a Period of Severance, as defined below, of less
than twelve (12) consecutive months; provided, however, that if an Employee is
absent from service on the date immediately preceding his or her Severance from
Service Date, as defined below, his or her Period of Severance shall be included
in his or her Period of Service only if he or she again performs an
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<PAGE> 25
Hour of Vesting Service within twelve (12) months after the commencement of such
absence. An Employee's Period of Service shall include the period of such
Employee's Military Leave of Absence. If an Employee is reemployed by the
Employer after a One Year Period of Severance, as defined below, his or her
prior Period of Service shall be reinstated if:
(a) the Employee had met the requirements for a vested benefit
under the Plan at the time of the Employee's Severance from Service Date, and
(b) the number of the Employee's consecutive One Year Periods of
Severance immediately prior to the Employee's Reemployment Commencement Date
does not exceed the greater of (i) five (5) or (ii) the aggregate number of
years of the Employee's Period of Service prior to his or her Period of
Severance.
2.9 Severance. (a) Period of Severance. A period of time commencing on
the Severance from Service Date and ending on the date the Employee again
performs an Hour of Vesting Service. An Employee shall not suffer a Period of
Severance due to a Military Leave of Absence to the extent required by law.
(b) One Year Period of Severance. A Period of Severance of at least
twelve (12) consecutive months.
(c) Severance from Service Date. The earlier of (i) the date an
Employee quits, retires, is discharged or dies, or (ii) the first anniversary of
the first date of a period in which an Employee is continuously absent from
service (with or without pay) with the Employer for any reason other than
quitting, retirement, discharge or death.
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(d) Childrearing Absence. For purposes of Section 2.9, the
Severance from Service Date of an Employee who incurs a Childrearing Absence
that extends beyond the first anniversary of the first date of such Childrearing
Absence is the second anniversary of the first date of absence and the period
between the first and second anniversary will be treated as neither a Period of
Severance nor a Period of Service.
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ARTICLE III
ELIGIBILITY
3.1 Present Employees. Each present Participant shall continue to be a
Participant in the Plan. Each present Silver King Participant who was an active
participant in the Silver King Plan and employed by Silver King Communications,
Inc. or an Affiliate thereof on the date immediately prior to the Restatement
Date and who becomes an Eligible Employee on the Restatement Date shall become a
Participant in the Plan on the Restatement Date. Any other Eligible Employee
shall be eligible to become a Participant in the Plan on the Restatement Date,
provided he or she has (a) completed the earlier of (i) at least one thousand
(1,000) Hours of Eligibility Service in a period not exceeding the twelve (12)
consecutive month period commencing on an Employee's Employment Commencement
Date or Reemployment Commencement Date or any anniversary thereof or (ii)
completed a Year of Service, and (b) attained age twenty-one (21).
3.2 Future Employees. Each future Employee and each current Employee
who is not eligible to become a Participant in accordance with Section 3.1
hereof shall become a Participant in the Plan on the first day of the calendar
quarter coinciding with or next following the date on which he or she (a)
completes the earlier of (i) at least one thousand (1,000) Hours of Eligibility
Service in a period not exceeding the twelve (12) consecutive month period
commencing on an Employee's Employment Commencement Date or Reemployment
Commencement Date or any anniversary thereof or (ii) a Year of Service, and (b)
attains age twenty-one (21).
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3.3 Reemployment. Any Member or Silver King Participant who is
reemployed and who satisfies the requirements of Section 2.5 shall become a
Participant in the Plan as of the date of his or her Reemployment Commencement
Date. An Employee who is reemployed but who is not eligible to become a
Participant in accordance with Section 3.2 shall not be eligible to become a
Participant until he or she satisfies the requirements of Section 3.2 based on
his or her Reemployment Commencement Date.
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ARTICLE IV
CONTRIBUTIONS
4.1 Salary Reduction Contribution. Subject to (f) below and the other
provisions of this Article IV, a Participant may enter into an agreement with
his or her Employer to have the Employer make contributions to the Participant's
Salary Reduction Contribution Account on behalf of the Participant for such Plan
Year, in accordance with Code Section 401(k), of one percent (1%) to sixteen
percent (16%) of his or her Compensation, in whole percentages, earned during
such Plan Year while a Participant. Such contributions shall reduce the amount
of Compensation otherwise payable to the Participant thereafter. With regard to
such contributions the following rules shall apply:
(a) Any agreement by a Participant shall be on a form acceptable to
the Committee in accordance with its rules and regulations, including the
following:
(i) A Participant may elect to make or change his or her
contribution rate with regard to future Compensation as of the first day of
the calendar quarter (or such other times as the Committee shall prescribe)
following such election, by giving sufficient prior written notice to the
Plan Administrator on a form provided by the Committee for such purpose. The
Committee may establish or change, in accordance with its rules and
regulations and in a consistent manner, the foregoing period of prior
written notice.
(ii) A Participant may elect to terminate his or her salary
reduction agreement with regard to future Compensation effective as of the
first day of the following payroll period (or such other times as the
Committee shall prescribe), by giving sufficient prior written notice to the
Plan Administrator on a form provided by the Committee for such purpose. The
Committee may establish or change, in accordance with its rules and
regulations and in a consistent manner, the foregoing period of prior
written notice.
(iii) For purposes of this Section 4.1(a), an election may, to
the extent permitted by the Committee and by applicable law, be made by
paper, telephonic or electronic means.
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(b) The contributions under this Section 4.1 on behalf of the
Highly Compensated Group in any Plan Year shall not exceed the maximum amount so
that the "Actual Deferral Percentage," as determined pursuant to (c) below, for
the Highly Compensated Group for the current Plan Year does not exceed the
Actual Deferral Percentage for the Non Highly Compensated Group for the current
Plan Year by the greater of:
(i) one hundred and twenty-five percent (125%); or
(ii) the lesser of two (2) percentage points or two hundred
percent (200%).
Notwithstanding the foregoing, to the extent the Company so elects
under Section 401(k)(3)(A) of the Code, this Section 4.1(b) may be applied using
the Actual Deferral Percentage for the Non Highly Compensated Group for the
preceding Plan Year rather than the current Plan Year; provided that if such an
election is made, it may be changed only to the extent permitted under Code
Section 401(k)(3)(A) and any regulations or other published guidance thereunder.
(c) The Actual Deferral Percentage with regard to each of the
Highly Compensated Group and the Non Highly Compensated Group shall be the
average of the percentages (calculated separately for each Participant in each
such group) of (i) divided by (ii), subject to (iii), where (i), (ii) and (iii)
are as follows:
(i) for the applicable Plan Year, the sum of (a) the Employer's
contributions for each Participant to each Participant's Salary Reduction
Contribution Account, (b) subject to paragraph (h) below, the Matching
Contributions for each Participant to each Participant's Matching
Contribution Account, and (c) the QNECs, if any, for each Participant to
each Participant's QNEC Account;
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<PAGE> 31
(ii) the Participant's Section 414 Compensation for the
applicable Plan Year; and
(iii) the Actual Deferral Percentage of a member of the Highly
Compensated Group shall be determined by treating all cash or deferred
arrangements under which the member of the Highly Compensated Group is
eligible (other than those that may not be permissively aggregated) as a
single arrangement.
(d) (i) Excess Contributions shall mean with respect to any Plan
Year, the excess of (1) the aggregate amount of the Employer's contributions
made pursuant to this Section 4.1 actually paid over to the Trust Fund on
behalf to the Highly Compensated Group for such Plan Year, over (2) the
maximum amount of such contributions permitted under (b) above. Reductions
shall be determined by reducing contributions made pursuant to this Section
4.1 hereof, on behalf of members of the Highly Compensated Group in order of
the dollar amounts of Salary Reduction Contributions beginning with the
largest of such dollar amounts of Salary Reduction Contributions, as
adjusted as reduction takes place.
(ii) The Excess Contribution for any Plan Year (and any income
allocable to such Excess Contributions) shall be distributed before the last
day of the next Plan Year to the members of the Highly Compensated Group on
the basis of the respective portions of the Excess Contributions
attributable to each such member, provided that any such amounts not
distributed before March 15 of the next Plan Year will be subject to an
excise tax on the Employer under Code Section 4979. The amount of Excess
Contributions that may be distributed under this paragraph shall be reduced
by any Excess Deferrals (as defined in Section 4.1(g)) previously
distributed with respect to such Participant for the Plan Year.
(iii) The method used for computing income or loss allocable to
Excess Contributions shall be the method set forth in Section 6.9 hereof.
Notwithstanding the foregoing, there shall be no income allocable to Excess
Contributions during the period between the end of the Plan Year and the
date of distribution of the Excess Contributions.
(e) All determinations and procedures with regard to the matters
covered by paragraphs (b), (c) and (d) of this Section 4.1 shall be made in
accordance with Code Section 401(k)(3) and Treasury Regulation Section
1.401(k)-1(b).
(f) Notwithstanding anything else herein, the amount to be
contributed for any calendar year on behalf of any Participant pursuant to an
agreement under (a) above shall
27
<PAGE> 32
not exceed ten thousand dollars ($10,000), as adjusted for calendar years after
1998 by the Secretary of Treasury in accordance with Code Section 402(g)(5) (the
"Elective Limitation").
(g) If contributions of Elective Deferrals on behalf of a
Participant for any calendar year are in excess of the Elective Limitation for
such calendar year, the excess amount ("Excess Deferrals") shall be treated as
follows:
(i) not later than March 1st of the next calendar year, the
Participant may allocate the amount of such Excess Deferrals among the plans
under which the deferrals were made and may notify each such plan the
portion allocated to it;
(ii) not later than April 15th of the next calendar year, the
Employer may distribute to the Participant the amount of Excess Deferrals
allocated to it under (i) above, and any income or loss allocable to such
amount, which shall be computed based on the method set forth in Section 6.9
hereof.
In the event Excess Deferrals were made to the Plan without
consideration of contributions to any other plans, such amounts shall be
distributed pursuant to subparagraph (ii) without regard to whether any election
under subparagraph (i) is made.
(h) In satisfying the Actual Deferral Percentage Test set forth
above, Matching Contributions may be treated as if they were contributions to
the Participant's Salary Reduction Account pursuant to Section 4.1 hereof,
provided that the requirements of Code Regulation Section 1.401(k)-1(b)(5) are
satisfied. If used to satisfy the Actual Deferral Percentage Test, such Matching
Contributions shall not be used to help other Matching Contributions satisfy the
Actual Contribution Percentage Test (as described in Section 401(m)(2) of the
Code), set forth in Section 4.3 hereof except as otherwise permitted by
applicable law.
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(i) For purposes of satisfying the Actual Deferral Percentage Test
of paragraph (c), all elective contributions that are made under two or more
plans that are aggregated for purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii)) shall be treated as made under a
single plan and if two or more plans are permissively aggregated for purposes of
Code Section 401(k), the aggregated plans must also satisfy Code Sections
401(a)(4) and 410(b) as though they were a single plan.
4.2 Matching Contributions. (a) For each Plan Year, with respect to
each Participant who is entitled to make and who makes Salary Reduction
Contributions pursuant to Section 4.1 hereof, the Employer shall contribute to
the Plan with respect to each payroll period an amount equal to fifty percent
(50%) of such Participant's Salary Reduction Contributions during such payroll
period contributed by the Participant with respect to the first six percent (6%)
of such Participant's Compensation earned while a Participant during the Plan
Year.
(b) In addition to the Matching Contributions made pursuant to Section
4.2(a), for each Plan Year, with respect to each Participant who is entitled to
make and who makes Salary Reduction Contributions pursuant to Section 4.1
hereof, additional Matching Contributions may be made by the Employer as
follows:
(i) With respect to each Participant that has made Salary
Reduction Contributions for such Plan Year equal to at least three percent
(3%) of his or her Compensation earned while a Participant during the Plan
Year, the Employer shall contribute additional Matching Contributions to the
Plan on behalf of such Participant equal to (A) one hundred percent (100%)
of such Participant's Salary Reduction Contributions during the Plan Year,
up to the lesser of (x) five hundred and twenty dollars ($520) and (y) six
percent (6%) of the Participant's Compensation earned while a Participant
during the Plan Year, minus (B) the amount of any Matching Contributions
made to the Plan on behalf of such Participant pursuant to Section 4.2(a);
and
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(ii) the Employer, in its sole and absolute discretion, may
contribute additional Matching Contributions to the Plan in an amount equal
to a designated percentage of such Participant's Salary Reduction
Contribution, as designated by the Employer for the applicable Plan Year. In
connection with the designation of any percentage for the purpose of making
additional Matching Contributions pursuant to this paragraph (ii), the
Employer in its sole and absolute discretion, may limit the Matching
Contribution by placing a total dollar or percentage limit on the Matching
Contribution.
Notwithstanding the foregoing, no Matching Contribution will be
made for any Participant pursuant to this Section 4.2(b) for any Plan Year
unless he or she is employed by the Employer on the last day of the Plan Year.
(c) In the event of the return of any Excess Contribution or Excess
Deferral to a Participant, no Matching Contribution pursuant to (a) and (b)
above shall be made and, if made prior to a determination of Excess Contribution
or Excess Deferral, shall be forfeited.
4.3 Actual Contribution Percentage. (a) The Matching Contributions on
behalf of the Highly Compensated Group in any Plan Year shall not exceed the
maximum amount so that the "Actual Contribution Percentage," as determined
pursuant to (c) below, for the Highly Compensated Group for the current Plan
Year does not exceed the Actual Contribution Percentage for the Non Highly
Compensated Group for the current Plan Year, by the greater of:
(i) one hundred and twenty-five percent (125%); or
(ii) subject to (b) below, the lesser of two (2) percentage
points or two hundred percent (200%).
Notwithstanding the foregoing, to the extent the Company so elects
under Section 401(m)(2)(A) of the Code, this Section 4.3(a) may be applied using
the Actual Contribution Percentage for the Non Highly Compensated Group for the
preceding Plan Year
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<PAGE> 35
rather than the current Plan Year; provided that if such an election is made, it
may be changed only to the extent permitted under Code Section 401(m)(2)(A) and
any regulations or other published guidance thereunder.
(b) If the Actual Deferral Percentage test set forth in Section
4.1(b) hereof is satisfied pursuant to Section 4.1(b)(ii) and not satisfied
pursuant to Section 4.1(b)(i), then Section 4.3(a)(ii) may be used to satisfy
the Actual Contribution Percentage test only to the extent that either the
"aggregate limit" is not violated or such use is otherwise permitted by
applicable law. The aggregate limit is the greater of:
(i) The sum of:
(A) one hundred and twenty-five percent (125%) of the
greater of (x) the Actual Deferral Percentage of the Non Highly
Compensated Group or (y) the Actual Contribution Percentage of the
Non Highly Compensated Group; and
(B) two (2) percentage points plus the lesser of (x) or
(y) above, but in no event greater than two hundred percent (200%)
of the lesser of (x) or (y) above; or
(ii) The sum of:
(A) one hundred and twenty-five percent (125%) of the
lesser of (x) the Actual Deferral Percentage of the Non Highly
Compensated Group or (y) the Actual Contribution Percentage of the
Non Highly Compensated Group; and
(B) two (2) percentage points plus the greater of (x) or
(y) above, but in no event greater than two hundred percent (200%)
of the greater of (x) or (y) above.
In the event that the conditions of (i) above for consideration of the
aggregate limit are satisfied and the aggregate limit is exceeded, the Actual
Deferral Percentage and the
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<PAGE> 36
Actual Contribution Percentage of Participants who are Highly Compensated
Employees shall be reduced in the following order until the aggregate limit is
reached:
(A) Unmatched Salary Reduction Contributions (and any
income allocable to such contributions); and
(B) Matched Salary Reduction Contributions and the
related Matching Contributions proportionately (and any income
allocable to such contributions).
The contributions and income shall be distributed within the respective
time periods for distribution of Excess Contributions and Excess Aggregate
Contributions. Income shall be calculated as requested for each and the order of
distribution among the Participants who are Highly Compensated Employees shall
be as specified for each.
(c) The Actual Contribution Percentage for a specified group of
Participants for a Plan Year shall be the average of the Contribution Percentage
of each Participant in such group, where such Contribution Percentage shall be
equal to the ratio of:
(i) the Matching Contributions to the Plan Year on behalf of
each Participant for the applicable Plan Year (other than those that cannot
be considered as a result of Section 4.1(h) above), plus to the extent
permitted under Code Regulation Section 1.401(m)-1(b)(5), some or all of the
contributions under Section 4.1; and
(ii) the Participant's Section 414 Compensation for the
applicable Plan Year.
(d) (i) Excess Aggregate Contributions shall mean with respect to
any Plan Year, the excess of (1) the aggregate amount of contributions made
pursuant to Section 4.2 or 4.3 actually paid over to the Trust on behalf of
the Highly Compensated Group for such Plan Year, over (2) the maximum amount
of such contributions permitted under the preceding paragraph (b).
Reductions shall be determined by reducing contributions made on behalf of
members of the Highly Compensated Group in order of the dollar amounts of
Matching Contributions beginning with the largest of such dollar amounts of
Matching Contributions, as adjusted as reduction takes place.
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<PAGE> 37
(ii) The Excess Aggregate Contributions for any Plan Year (and
any income allocable to such contributions) shall be distributed before the
last day of the next Plan Year to the members of the Highly Compensated
Group on the respective portions of the Excess Aggregate Contributions
attributable to each such member, provided that any such amounts not
distributed before March 15 of the next Plan Year will be subject to an
excise tax on the Employer under Code Section 4979. The amount of Excess
Aggregate Contributions to be distributed to an Employee for a Plan Year
shall be reduced by Excess Aggregate Contributions previously distributed to
the Employee for the taxable year ending within the Plan Year and Excess
Aggregate Contributions to be distributed to an Employee for a taxable year
shall be reduced by the Excess Aggregate Contributions previously
distributed for the Plan Year beginning in such taxable year. As an
alternative to the distribution of Excess Aggregate Contributions described
above, the Employer may, in its sole discretion, elect to forfeit Matching
Contributions (and any income allocable to such Matching Contributions) that
are not vested (determined without regard to any increase in vesting that
may occur after the date of the forfeiture) in order to correct Excess
Aggregate Contributions.
(iii) The method used for computing income or loss allocable to
Excess Aggregate Contributions shall be the method set forth in Section 6.9
hereof. There shall be no income allocable to Excess Aggregate Contributions
during the period between the end of the Plan Year and the date of
distribution of the Excess Aggregate Contributions.
(e) All determinations and procedures with regard to the matters
covered by paragraphs (a), (b), (c) and (d) of this Section 4.3 shall be made in
accordance with Code Section 401(m) and Treasury Regulation Section 1.401(m)-1.
4.4 Qualified Non-Elective Contributions. Within twelve (12) months
after the close of the Plan Year (or within such greater time if permitted by
the Internal Revenue Service), the Employer, in its sole discretion, may make
QNECs on behalf of members of the Non Highly Compensated Group to the QNEC
Account in an amount sufficient to satisfy one of the tests set forth in Section
4.1(b) or Section 4.3(b). QNECs shall be allocated to the Non Highly Compensated
Group starting with the Participant with the lowest Compensation for the testing
period until such Participant has reached the limitation under Section 4.8
hereof and
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<PAGE> 38
progressing thereafter in similar manner in reverse order of Compensation until
such QNECs are fully utilized.
4.5 Profit Sharing Contributions. (a) If the Employer elects, in its
sole and absolute discretion, to make contributions to the Plan for the Plan
Year other than that pursuant to Section 4.2, the Employer shall contribute to
the Profit Sharing Account of each Participant employed by the Employer, an
amount equal to such percentage of Compensation as may be determined by the
Employer in its sole and absolute discretion; provided that no contribution
shall be made to such Account for any Participant for such Plan Year unless he
or she is employed by the Employer on the last day of the Plan Year. Such
contributions shall be allocated to each Participant based on the proportion of
the Participant's Compensation for the Plan Year to the Compensation for all
Participants employed by the Employer for the Plan Year who are eligible to have
an allocation made to their Profit Sharing Account pursuant to this Section 4.5.
(b) Notwithstanding the provisions of paragraph (a) above, in the
event the limitations set forth herein cause the Plan to fail to satisfy for any
Plan Year the requirements of Code Section 410(b) and the regulations thereunder
because of the exclusion of certain Participants as being deemed to be
benefitting under the Plan, based on the allocation in paragraph (a) then the
Employer contributions under paragraph (a) shall be allocated for such Plan Year
as of the last day of the Plan Year among all Participants who were employed on
the last day of the Plan Year.
4.6 Time of Contributions. Contributions shall be made for each Plan
Year within the time permitted by law.
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<PAGE> 39
4.7 Rollovers. With respect to any Eligible Employee, rollovers to this
Plan from another plan qualified under Section 401(a) of the Code, whether
directly or through an individual retirement account, are permitted, provided
(i) that they are permitted under the Code, (ii) that they are made on a timely
basis as required by the Code, and (iii) that evidence satisfactory to the
Committee as to the foregoing is furnished to the Committee. Any amount rolled
over to the Plan shall be fully vested and nonforfeitable and shall be credited
to a separate Employee Rollover Account for the Employee which account shall
share in the allocation of the net annual income of the Fund.
4.8 Limitations on Contributions. (a) Section 415 of the Code is
incorporated by reference into the Plan, and notwithstanding anything herein
shall override any Plan provision to the contrary. Contributions and other
annual additions under the Plan are subject to the limitations of Section 415 of
the Code. Section 414 Compensation, as defined in Section 1.51 shall be used for
purposes of the limitations imposed by Code Section 415.
(b) If as a result of reasonable error in estimating a
Participant's Section 414 Compensation, or as a result of such other
circumstances as may be permitted under applicable Treasury Regulations, the
annual additions, as defined in Code Section 415(c)(2), to a Participant's
Account shall in any Plan Year exceed the maximum permitted under Code Section
415, the Committee shall, pursuant to the provisions of Section 1.415-6(b)(6) of
the Treasury Regulations (or any successor provision thereto), treat the excess
amounts as follows:
(i) Pursuant to the provisions of Section 1.415-6(b)(6)(ii)
of the Treasury Regulations, the excess amounts attributable to Profit
Sharing Contributions, Matching Contributions and QNECs shall be used to
reduce Profit Sharing Contributions, Matching Contributions and QNECs for
the next Limitation Year (and succeeding
35
<PAGE> 40
Limitation Years, as necessary) for that Participant if that Participant is
covered by the Plan as of the end of the Limitation Year.
(ii) If the Participant is not covered by the Plan as of the
end of the Limitation Year, then the excess amounts attributable to Profit
Sharing Contributions, Matching Contributions and QNECs shall be held
unallocated in a suspense account for the Limitation Year and allocated and
reallocated in the next Limitation Year (and succeeding Limitation Years, as
necessary) to all of the remaining Participants in the Plan before any
Profit Sharing Contributions, Matching Contributions and QNECs which would
constitute annual additions are made to the Plan for such Limitation Year.
(iii) Excess amounts attributable to Profit Sharing
Contributions, Matching Contributions and QNECs may not be distributed to
Participants or former Participants.
(iv) Excess amounts attributable to Salary Reduction
Contributions and any earnings thereon shall be distributed to the
Participant pursuant to the provisions of Section 1.415-6(b)(6)(iv) of the
Treasury Regulations.
(c) Notwithstanding anything herein to the contrary, in the event
the annual additions on behalf of a Participant in any Limitation Year exceeds
the limitation of Code Section 415, such annual additions shall be reduced by
reducing contributions to this Plan, and if any excess then still exists, by
limiting or reducing contributions to another plan of the Employer, or any other
entity aggregated under Section 415(h) of the Code, qualified under Section
401(a) of the Code. In the event that contributions to this Plan are reduced
pursuant to the preceding sentence, Matching Contributions shall be reduced
first to eliminate the excess, then Profit Sharing Contributions, then QNECS,
and if any excess then still exists, Salary Reduction Contributions pursuant to
Section 4.1 hereof shall then be reduced to eliminate the excess.
(d) In no event shall the contributions by the Employer under this
Article IV, when combined with amounts contributed pursuant to Section 4.1
hereof and any other plan of the Employer qualified under Section 401(a) of the
Code be in excess of the
36
<PAGE> 41
amounts deductible pursuant to Section 404(a)(3) of the Code, or the Section of
any future Code provision limiting deductions to profit-sharing plans.
4.9 Investment of Contributions. (a) Subject to the rules of the
Committee, a Member (or, in the event of the Member's death, the Member's
Beneficiary) may elect to have his or her Account and future contributions made
on his or her behalf to such Account, invested in such percentages as permitted
by the Committee in one or more of the Investment Funds, which shall be funds
maintained or established by a bank, trust company, insurance company, mutual
fund or investment company, designated by the Committee as Investment Funds
under this Section 4.9. Of the designated Investment Funds, there shall be at
least three (3) Investment Funds (each of which provides a broad range of
investment alternatives as contemplated under Section 404(c) of ERISA and the
regulations thereunder) and the Company Stock Fund. From time to time the
Committee may designate additional Investment Funds, withdraw the designation of
Investment Funds or change designated Investment Funds.
(b) Upon enrollment or upon request of the Committee, each Member
shall elect in writing filed with the Committee the manner in which his or her
Account and future contributions made on his or her behalf to such Account, are
to be invested (unless specifically permitted by the Committee, an investment
election shall apply consistently to each subaccount and future contributions to
such Account shall be invested in the same manner and proportion).
Notwithstanding the foregoing, if a mutual fund or separate account is
designated by the Committee as a vehicle for investing contributions and the
mutual fund company or insurance company maintaining the mutual fund or separate
account or a third party administrator permits telephonic elections of the
manner in which a Member's Account and future contributions made
37
<PAGE> 42
on behalf of him or her are invested, the Committee may provide for such
telephonic elections. If no election is made (whether in writing or by
telephonic or electronic transmission), the Member's Account and future
contributions shall be invested in a guaranteed interest fund or money market
fund, or if there is more than one such fund or no such fund which has been so,
the Fund designated by the Committee for such investments. If the Member (or, in
the event of the Member's death, the Member's Beneficiary) fails to change his
or her election, the previous investment election shall remain effective until
the Member (or Beneficiary) affirmatively changes his or her investment
election. Subject to the provisions of the governing documents of the Investment
Funds involved, if there is a change in designated Investment Funds and a Member
(or in the event of the Member's death, the Member's Beneficiary) does not make
a new election, he or she will be deemed to have designated investment in the
designated Investment Funds most similar to those previously elected and in the
same proportion as previously elected. Subject to any limitations imposed by the
Investment Funds, a Member (or in the event of the Member's death, the Member's
Beneficiary) may change his or her election of designated Investment Funds with
regard to future contributions and current Account Values as of the first day of
any calendar quarter (or at such additional times as may be permitted by the
Committee) by filing a new written election with the Committee at such times as
may be prescribed by the Committee and with such prior notice as specified by
the Committee in advance of the date the change is to become effective or, if
telephonic elections with a mutual fund or separate account permitted, with such
notice as required by the mutual fund company or insurance company. Subject to
the rules of the Investment Funds and the Committee, including, without
limitation, rules restricting the availability of transfers and setting minimum
or maximum amounts that may be transferred and when transfers are permitted, a
Member (or in the event of the Member's
38
<PAGE> 43
death, the Member's Beneficiary) may transfer all or a part of his or her
Account from one Investment Fund to another Investment Fund in such percentages
as permitted by the Committee. All elections and transfers shall be subject to
rules established by the Committee and by the bank, trust company, mutual fund
or investment company maintaining the fund.
(c) With respect to a Member's Account, each Member (or, in the
event of the Member's death, the Member's Beneficiary) shall be solely
responsible for his or her investments under the Plan. The fact that an
Investment Fund is available under the Plan shall not be considered an
investment recommendation. The Employer intends that this Plan conform to
Section 404(c) of ERISA and Department of Labor Regulation Section 2550.404c-1
and that the Plan and Trust are operated and administered in accordance with
such provisions. With respect to any investment election or other direction by a
Member (or, in the event of the Member's death, the Member's Beneficiary), none
of the Trustee, the Plan Administrator, the Committee or the Employer shall be
under any duty to question any such direction of a Member (or, in the event of
the Member's death, the Member's Beneficiary). The Trustee shall comply as
promptly as is practicable with the directions given by a Member or by a
Beneficiary in accordance with the terms of the Plan. None of the Trustee, the
Plan Administrator, the Committee or the Employer shall be responsible or liable
for any loss or expense which may arise from or result from compliance with any
directions from the Member (or, in the event of the Member's death, the Member's
Beneficiary).
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<PAGE> 44
ARTICLE V
VESTING AND FORFEITURES
5.1 Vesting of Interest of Participant in Trust Fund. (a) A Member
shall be fully vested in his or her Salary Reduction Contribution Account, QNEC
Account, Employee Rollover Account, Silver King Employee Contribution Account
and Silver King Rollover Account at all times and such Account balances shall at
all times be nonforfeitable.
(b) The portion of a Member's Accrued Benefit in his or her
Matching Contribution Account, Profit Sharing Account and Silver King Employer
Contribution Account which shall become vested and nonforfeitable shall be based
on his or her number of years of his or her Period of Service according to the
following schedule:
<TABLE>
<CAPTION>
Number of Years Nonforfeitable
in Period of Service Percentage
-------------------- --------------
<S> <C>
Less than 1................................... 0%
1 but less than 2............................. 20%
2 but less than 3............................. 40%
3 but less than 4............................. 60%
4 but less than 5............................. 80%
5 or more..................................... 100%
</TABLE>
Notwithstanding the foregoing provisions, if any Member shall, while an
Employee, attain his or her Normal Retirement Age or shall die or incur (and
satisfy all of the requirements for) a Disability while he or she is an
Employee, the Member's entire interest in his or her Account shall become
nonforfeitable.
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<PAGE> 45
(c) Notwithstanding the foregoing, all participants in the Silver
King Plan who were actively employed by Silver King Communications, Inc. on
December 1, 1995 shall be fully vested in his or her Account.
5.2 Forfeitures. In the event a Member incurs a Termination of
Employment, any portion of the Member's Matching Contribution Account, Profit
Sharing Account and Silver King Employer Contribution Account to which he or she
is not then entitled pursuant to Section 5.1(b) hereof shall be forfeited (a
"Forfeiture"). A Forfeiture shall be deemed to take place at the following time:
(a) If the Member has no vested interest in any of his or her
Accounts, the Forfeiture shall take place in the Plan Year in which his or her
Termination of Employment occurs. In such case, the Member shall be deemed to
have a distribution of his or her zero Account Value at the time of his or her
Termination of Employment.
(b) If the Member has any vested interest in any of his or her
Accounts, the Forfeiture shall take place in the Plan Year in which occurs the
earlier of (i) completion of the distribution of the Member's benefits or (ii)
incurrence by the Member of his or her fifth (5th) consecutive one-year Period
of Severance.
5.3 Restoration of Forfeitures. (a) If an Employee whose Matching
Contribution Account, Profit Sharing Account and Silver King Employer
Contribution Account was forfeited in its entirety pursuant to Section 5.2 above
again becomes employed by an Employer or an Affiliate before he or she incurs
his or her fifth (5th) consecutive One Year
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<PAGE> 46
Period of Severance, the amount of his or her Forfeiture shall be restored to
his or her Matching Contribution Account, Profit Sharing Account and Silver King
Employer Contribution Account.
(b) If an Employee who received a distribution of less than all of
his or her Matching Contribution Account, Profit Sharing Account and Silver King
Employer Contribution Account is again employed by an Employer or an Affiliate
before he or she incurs his or her fifth (5th) consecutive One Year Period of
Severance and repays to the Plan, prior to the earlier of his or her incurring
his or her fifth (5th) consecutive One Year Period of Severance or five (5)
years after the first day on which he or she is reemployed by an Employer or an
Affiliate, the amount of his or her previous distribution, if any, the amount of
his or her Forfeitures shall be restored to his or her Matching Contribution
Account, Profit Sharing Account and Silver King Employer Contribution Account.
5.4 Use of Forfeitures. Forfeitures, if any, shall be first allocated
to the Accounts of Participants entitled to a restoration of their interests in
the Plan and the remainder of such Forfeitures shall be used to reduce future
contributions by the Employer.
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<PAGE> 47
ARTICLE VI
ALLOCATION
6.1 Salary Reduction Contribution Accounts. Salary Reduction
Contributions shall be allocated to the Salary Reduction Contribution Account of
each Participant who entered into a salary reduction agreement pursuant to which
such contributions were made.
6.2 Matching Contribution Accounts. Matching Contributions for any Plan
Year shall be allocated to the Matching Contribution Account of each Participant
for whom such contributions have been made pursuant to Section 4.2 hereof in the
amount of the Matching Contributions for each Participant.
6.3 QNEC Account. Contributions to the QNEC Account, if any, shall be
allocated to the Accounts of the Participants for whom QNECs have been made
pursuant to Section 4.4 hereof in the amount of the QNECs for such Participant.
6.4 Profit Sharing Accounts. Profit Sharing Contributions for any Plan
Year shall be allocated to the Profit Sharing Account of each Participant for
whom such contributions have been made pursuant to Section 4.5 hereof in the
amount of the Profit Sharing Contributions for each Participant.
6.5 Employee Rollover Account. Rollover contributions shall be
allocated to the Employee Rollover Account of the Participant who made the
rollover contribution to the Plan.
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<PAGE> 48
6.6 Silver King Employee Contribution Account. Elective deferrals and
qualified non-elective contributions transferred to the Plan pursuant to the
merger of the Silver King Plan into the Plan shall be allocated to the Silver
King Employee Contribution Account of the Member for whom such contributions
were made to the Silver King Plan.
6.7 Silver King Employer Contribution Account. Employer contributions
transferred to the Plan pursuant to the merger of the Silver King Plan into the
Plan shall be allocated to the Silver King Employer Contribution Account of the
Member for whom such contributions were made to the Silver King Plan.
6.8 Silver King Rollover Account. Rollover contributions transferred to
the Plan pursuant to the merger of the Silver King Plan into the Plan shall be
allocated to the Silver King Rollover Account of the Member for whom such
contributions were made to the Silver King Plan.
6.9 Valuation of the Trust Fund. The Trust Fund shall be valued at Fair
Market Value by the Trustee at each Valuation Date, with appropriate allocations
and adjustments for any items of income, expenses, gains and losses, and all
other transactions for the Plan Year. The net income thus arrived at, exclusive
of forfeitures (and net income thereon), shall be allocated on a basis of
Account balances and in a fair and nondiscriminatory manner which shall reflect
the interests of the Participants during such Plan Year in the Investment Funds
and in the Trust Fund. In addition, the Account of each Participant shall bear
any fees of the Trustee or Investment Fund charged with regard to maintaining
his or her or her Account that are not paid by the Employer. The interest of
each Participant in the Company Stock Fund shall be expressed as units of the
Investment Fund as of a Valuation Date and shall be determined by
44
<PAGE> 49
using unit accounting. The interest of each Participant in the Investment Funds
(other than the Company Stock Fund) shall be expressed in accordance with the
valuation methods and practices of the entity maintaining the Investment Fund.
45
<PAGE> 50
ARTICLE VII
DISTRIBUTIONS
7.1 General Rule. Except as otherwise provided in this Article or
prohibited by law, a Member's vested Account balance under the Plan shall be
available to the Member for distribution at any time after any of the following:
(a) the Member's retirement at or after his or her Normal
Retirement Age;
(b) the Member's death or Disability;
(c) the Member's Termination of Employment; or
(d) as set forth in Section 7.3 below; or
(e) solely to the extent permitted under Section 7.13 hereof, the
Member's attainment of age fifty-nine and one-half (59-1/2) regardless of
whether the Member had a Termination of Employment.
Such distribution shall be made to the Member on or as soon as
administratively feasible (and in accordance with the Plan's administrative
procedures) following the first day of the calendar month following the Benefit
Starting Date requested in writing by the Member. The Benefit Starting Date may
not be more than ninety (90) days after such request and, except as provided
below, may not be less than thirty (30) days after such request. The Member's
distribution shall be based on the Value on the last Valuation Date prior to the
date of actual distribution (and any contributions made since that Valuation
Date), provided that no distribution
46
<PAGE> 51
may be made until the Committee has provided the Participant with a notice as to
his or her rights and benefits under the Plan not more than ninety (90) days or
less than thirty (30) days prior to the Member's Benefit Starting Date.
Notwithstanding the foregoing, a Member may elect a Benefit Starting Date
earlier than thirty (30) days, but no less than seven (7) days, after receiving
such notice from the Committee, provided that:
(i) the Participant has been clearly informed that he or she
has a right to a period of at least thirty (30) days after receiving the
notice to consider the decision of whether or not to elect a distribution;
(ii) the Member, after receiving the notice, affirmatively
elects a distribution; and
(iii) in the case of a Silver King Participant who is married,
the consent of the Silver King Participant's Spouse is obtained in
accordance with Section 7.7 and Exhibit A if the form of benefit with
respect to the Silver King Participant's Silver King Account is not made in
the normal form for married Participants as provided in Exhibit A.
Until the Benefit Starting Date, the Member's Account shall be retained
in the Trust Fund and revalued pursuant to Section 6.9 hereof. Between the
Benefit Starting Date and the actual date on which distribution commences, the
Member's Account shall be revalued pursuant to Section 6.9 hereof and,
therefore, shall continue to share in gains and losses.
7.2 Form of Retirement Benefit Distributions. Subject to Exhibit A, a
Member shall have the vested portion of his or her Account balance under the
Plan distributed in a lump sum payment consisting of (i) cash equal to the Fair
Market Value of his or her interest in the Investment Funds (including, if
elected by the Member, his or her interest in the Company Stock Fund) and (ii)
if elected by the Member, Company Stock representing all or a portion of his or
her interest in the Company Stock Fund. Fractional shares of Company Stock shall
be
47
<PAGE> 52
aggregated to create whole shares of Company Stock, which shall be distributed
in the form of whole shares of Company Stock, if the Member elects to receive
all or a portion of his or her interest in the Company Stock Fund in Company
Stock. Notwithstanding the foregoing, cash shall be distributed in lieu of
excess fractional shares of Company Stock.
7.3 Required Commencement Date. (a) Notwithstanding the foregoing,
except as otherwise permitted by law, the payment of benefits to a Member shall
begin not later than the April 1st following the end of the calendar year in
which the Participant has both attained age seventy and one-half (70-1/2), and
retired from service with the Employer. Notwithstanding the foregoing, the
payment of benefits to a Participant who is a 5-percent owner, as defined in
Section 416 of the Code, and who is in the employ of the Employer shall begin
not later than the April 1st following the end of the calendar year in which the
Participant attains age seventy and one-half (70-1/2). Unless otherwise timely
elected by the Participant, the Benefit Starting Date shall be the last
Valuation Date coinciding with or immediately preceding the aforesaid April 1st.
Such last Valuation Date shall be deemed the Benefit Starting Date. For purposes
of this Section 7.3, the life expectancy of the Participant and the
Participant's designated beneficiary may be recalculated annually.
(b) Notwithstanding the foregoing, a Participant, other than a
Terminated Participant or Retired Participant, shall be entitled to commence
receiving minimum distributions under the Plan pursuant to Section 401(a)(9) of
the Plan, not later than the April 1st following the end of the calendar year in
which the Participant attains age seventy and one-half (70 1/2). Notwithstanding
any other provision to the contrary, a Terminated Participant or Retired
Participant shall be entitled to receive distributions as provided under Section
7.2 of the Plan.
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<PAGE> 53
(c) A Participant who attained age 70-1/2 before January 1, 1997
and commenced distributions pursuant to Code Section 401(a)(9) on a date on or
before January 1, 1997, but who remained employed by the Employer after such
date, may affirmatively elect, subject to the terms of any applicable qualified
domestic relations order as defined in Section 414(p) of the Code, to cease
receiving such distributions at any time prior to the earlier of the
Participant's Termination of Employment or December 31, 1999. Any election made
pursuant to this Section 7.3(c) shall be made by giving prior written notice to
the Plan Administrator on a form provided by the Committee for such a purpose.
This Section 7.3(c) is intended to comply with the requirements of Internal
Revenue Service Notice 97-75 and shall therefore be interpreted in accordance
with such Notice and any subsequent guidance or modifications issued by the
Internal Revenue Service regarding Internal Revenue Service Notice 97-75.
(d) This Section and the Plan shall be interpreted and administered
in accordance with Code Section 401(a)(9) and the regulations thereunder
(including without limitation, Proposed Treasury Regulation Section
1.401(a)(9)-2).
7.4 Death of a Participant. Subject to Exhibit A, in the event that a
Member dies prior to his or her Benefit Starting Date, the Value of such
Member's Account shall be distributed to such Member's Beneficiary in a lump sum
as soon as administratively feasible after the Valuation Date coinciding with or
next following the Member's death. Notwithstanding the foregoing, if a Member is
married on the date of his or her death and dies prior to his or her Benefit
Starting Date, the Value of such Member's Account shall be distributed to such
Member's Spouse in a lump sum as soon as administratively feasible after the
Valuation Date coinciding with or next following the Member's death, unless such
Member had, with the
49
<PAGE> 54
consent (obtained in accordance with the provisions of Section 7.7 hereof) of
his or her Spouse at the time of his or her death, designated another
Beneficiary.
7.5 Proof of Death and Right of Beneficiary. The Committee may require
and rely upon such proof of death and such evidence of the right of any
Beneficiary to receive the undistributed vested Value of the Account of a
deceased Member as the Committee may deem proper, and its determination of death
and of the right of such Beneficiary to receive payments shall be conclusive.
7.6 Limitation on Payments. Notwithstanding anything else in this Plan
to the contrary, the payment of benefits with respect to a deceased Member shall
be made in accordance with Code Section 401(a)(9) and the regulations
thereunder. All benefits payable under the Plan shall be subject to the
following limitations and rules which shall in no event expand the requirements
and limitations on benefit payments set forth elsewhere herein:
(a) In no event shall the payment of benefits under any form of
benefit elected by a Member extend over a period which exceeds the longest of:
(i) the life of the Member;
(ii) the lives of the Member and his or her Beneficiary, if
any;
(iii) the life expectancy of the Member; or
(iv) the joint life expectancies of the Member and his or her
Beneficiary, if any.
(b) Notwithstanding anything else in this Plan to the contrary, the
payment of any death benefit payable to any Beneficiary of a Member shall be
subject to the
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rules and restrictions of Code Section 401(a)(9) and the regulations thereunder
(including, without limitation, Proposed Treasury Regulation Section
1.401(a)(9)-2) which restrictions shall not expand the requirements of Section
7.2 and Section 7.4 hereof with regard to a payment upon death:
(i) If the Member dies after his or her required beginning
date under Code Section 401(a)(9) and the regulations thereunder or after
his or her benefits have irrevocably commenced (the "Commencement Date"),
such death benefit must be distributed to the Beneficiary under a method
that is at least as rapid as the method under which distributions were being
made to the Member as of the date of the Member's death;
(ii) If the Member dies before his or her Commencement Date
and the Beneficiary is not a designated Beneficiary within the meaning of
Code Section 401(a)(9), the entire interest of the Member must be
distributed over a period which does not exceed five (5) years from the
December 31st of the calendar year in which such Member's death occurred;
(iii) Except as provided in (iv) below, if a Member's interest
is payable to, or for the benefit of, a designated Beneficiary (other than
such Member's Spouse), such portion may be distributed over a period which
does not exceed the life, or life expectancy, of such designated
Beneficiary, provided that distribution of such portion must commence not
later than December 31st of the calendar year immediately following the
calendar year in which the Member's death occurred or such later date as may
be permitted under applicable Treasury regulations;
(iv) If the Member dies before his or her Commencement Date
and any portion of such Member's interest is payable to, or for the benefit
of, such Member's Spouse as designated Beneficiary, distribution of such
portion must commence no later than the later of the period specified in
(iii) above or the December 31st of the calendar year in which the Member
would have attained age seventy and one-half (70-1/2);
(v) In the event that a Member shall have designated his or
her Spouse as designated Beneficiary and such Spouse shall die after the
death of the Member and before the commencement of distributions to such
Spouse, the Member's Spouse shall be substituted for the Member in applying
the provisions of this subsection (v), but only for the purpose of
determining the period over which payment of benefits may be made;
(vi) For purposes of this Section 7.6 the life expectancy of a
Member and his or her Spouse may be recalculated no more frequently than
annually; and
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(vii) For purposes of this Section 7.6, and in accordance with
applicable Treasury regulations, any death benefit to a Member's child shall
be treated as if it had been paid to such Member's surviving Spouse if such
amount will become payable to such surviving Spouse upon such child's
reaching the age of majority (or upon the occurrence of such other event as
may be designated by applicable Treasury regulations).
7.7 Consent of Spouse. Whenever the terms of this Plan require that the
consent of a Member's Spouse be obtained, such consent shall be valid only if it
is in writing, contains an acknowledgment by such Spouse of the effect of such
consent, designates a Beneficiary which may not be changed without the consent
of the Spouse (unless such consent specifically permits designation by the
Member without any requirement of further consent of the Spouse) and is
witnessed either by a representative of the Plan or by a notary public;
provided, however, that the consent of a Member's Spouse shall not be required
in the event that the Member establishes to the satisfaction of the Plan
representative that he or she has no Spouse, that such Spouse cannot be located,
or under such other circumstances as may be permitted under applicable Treasury
regulations. Any consent of a Member's Spouse obtained in accordance with the
provision of this Section 7.7 shall be revocable by the Member during his or her
lifetime without the consent of the Member's Spouse. Unless a Qualified Domestic
Relations Order, as defined in Section 414(p) of the Code, requires otherwise, a
Spouse's consent shall not be required (and, hence, shall for purposes of this
Plan be deemed given) if the Participant is legally separated or the Participant
has been abandoned (within the meaning of local law) and the Participant has a
court order to such effect.
7.8 Cash-Outs. Notwithstanding any other provision of this Plan, if a
Member's vested Account Value is equal to or less than three thousand five
hundred dollars ($3,500) at the time of his or her Termination of Employment and
at all times thereafter prior to
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distribution, such vested Account Value shall be distributed in the form of a
lump sum distribution without the consent of the Participant as soon as
administratively feasible. Notwithstanding the foregoing, with regard to any
Member who incurs a Termination of Employment on or after January 1, 1998 (and
to the extent permitted by applicable guidance from the Secretary of Treasury,
Members who incurred a Termination of Employment prior thereto), if the Member's
vested Account balance is equal to or less than five thousand dollars ($5,000)
at the time of his or her Termination of Employment and at all times thereafter
prior to distribution, such vested Account balance shall be distributed in the
form of a lump sum distribution (in the form set forth in Section 7.2 hereof)
without the consent of the Member as soon as administratively feasible.
7.9 Required Distributions. Notwithstanding anything else herein, a
Member shall be eligible to receive payment, or to commence payment, under the
Plan of his or her benefits no later than sixty (60) days after the end of the
Plan Year in which the latest of the following occurs:
(i) the Member's attainment of age sixty-five (65);
(ii) the tenth (10th) anniversary of the year in which the
Member began participation in the Plan; or
(iii) the Member's Termination of Employment.
7.10 Limit on Distribution from Salary Reduction Contribution Accounts
QNEC Accounts and Silver King Employee Contribution Accounts.
(a) Notwithstanding anything else herein and without expanding the
rights with regard to distributions otherwise set forth herein, no distribution
shall be made from a
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Participant's Salary Reduction Contribution Account, QNEC Account or Silver King
Employee Contribution Account prior to:
(i) Separation from service, death or Disability of the
Member;
(ii) Termination of the Plan without establishment or
maintenance of another defined contribution plan (other than an employer
stock ownership plan as defined in Code Section 4975(e)(7));
(iii) The disposition by the Employer of substantially all of
the assets (within the meaning of Code Section 409(d)(2)) used by the
Employer in a trade or business of the Employer, but only with respect to an
Employee who continues employment with the corporation acquiring the assets;
(iv) The disposition by an Employer of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)), but only with
respect to an Employee who continues employment with such subsidiary;
(v) The attainment of age fifty-nine and one-half (59-1/2) by
the Participant; or
(vi) In the case of the Salary Reduction Contribution Account
and Silver King Employee Contribution Account, a Participant experiencing a
Hardship, as defined in Section 7.11 below.
(b) With regard to subparts (ii), (iii) and (iv) of paragraph (a)
above, any distribution made by reason of one of such events must be a lump sum
distribution (as defined in Code Section 402(e)(4) without regard to clauses
(i), (ii), (iii) and (iv) of subparagraph (A), subparagraph (B) or subparagraph
(H) thereof). With regard to subparts (ii) and (iii) of paragraph (a) above,
such event shall be deemed covered by such subpart only if the Employer
continues to maintain the Plan after the disposition. The foregoing limitations
on distributions are intended to comply with the requirements of Code Section
401(k)(2)(B) and shall therefore be interpreted in accordance with such Code
Section and the regulations thereunder.
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7.11 In-Service Distributions for Hardship. (a) In the event of
Hardship (as hereinafter defined), a Participant shall have the right to
withdraw, up to the amount of the Hardship, all or a part of his or her Salary
Reduction Contribution Account and Silver King Employee Contribution Account
(but not in excess of the actual contributions on his or her behalf to such
Accounts), upon such prior written notice to the Committee as the Committee may
require in accordance with its rules and regulations.
(b) For the purposes of this Section 7.11, a Participant shall
experience a "Hardship" if, and only if, such Participant experiences an
immediate and heavy financial need (as defined in (c) below) and the withdrawal
is necessary to satisfy the financial need of the Participant (as defined in (d)
below).
(c) A Participant will be deemed to experience an immediate and
heavy financial need if, and only if, he or she needs the withdrawal for one of
the following reasons:
(i) to pay for expenses for medical care described in Code
Section 213(d) previously incurred by the Participant, the Participant's
Spouse, or any dependents of the Participant, or necessary for these persons
to obtain medical care described in Code Section 213(d);
(ii) to pay costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments);
(iii) to pay tuition and related educational fees, including
room and board expenses, for the next twelve (12) months of post-secondary
education for the Participant, or the Participant's Spouse, children or
dependents;
(iv) to pay amounts necessary to prevent the eviction of the
Participant from the Participant's principal residence or foreclosure on the
mortgage of that residence; or
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(v) such other financial needs as may be specifically
promulgated by the Internal Revenue Service.
(d) A withdrawal will be deemed necessary to satisfy the financial
need of a Participant if, and only if:
(i) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the Participant. The amount of an
immediate and heavy financial need may include any amounts necessary to pay
any federal, state or local income taxes or penalties reasonably anticipated
to result from the distribution.
(ii) The Participant has obtained all distributions, other
than Hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Employer.
(e) In the event the Participant makes a withdrawal pursuant to
this Section 7.11, then:
(i) The Participant shall be suspended from making Salary
Reduction Contributions pursuant to Section 4.1 hereof pre-tax elective or
after-tax voluntary contributions to any other qualified or nonqualified
plan maintained by the Employer (which shall be deemed to include all
qualified and nonqualified plans of deferred compensation, other than the
mandatory employee contribution portion of a defined benefit plan, stock
option, stock purchase or similar plan, but shall not include health or
welfare benefit plans) for twelve (12) months following the withdrawal; and
(ii) In the taxable year following the withdrawal, the
Participant's Salary Reduction Contributions under this Plan and any other
permitted pre-tax elective contribution to any other plan maintained by the
Employer may not be greater than the excess of the applicable limit under
Code Section 402(g) for such next taxable year less the amount of such
Participant's Salary Reduction Contributions hereunder and any other
permitted pre-tax elective contributions to any other plan maintained by
the Employer for the taxable year of the Hardship distribution.
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(f) No withdrawal shall be for less than two hundred dollars
($200). Only one withdrawal may be made in any twelve (12) consecutive month
period. All withdrawals shall be on the basis of the Value of the Participant's
Salary Reduction Contribution Account and Silver King Employee Contribution
Account on the Valuation Date that is at least thirty (30) days after the
request for withdrawal is made. The Committee may establish rules and
regulations, which do not discriminate in favor of officers, stockholders and
Highly Compensated Employees, as to procedures, forms and required notice
periods for withdrawal requests.
7.12 Distribution of Rollover Contributions. A Participant shall, at
any time, have the right to withdraw any or all amounts in his or her Employee
Rollover Account and Silver King Rollover Account, upon such prior written
notice, as prescribed by the Committee, to the Committee.
7.13 In-Service Distributions On or After Age 59-1/2. (a) A Participant
shall have the right to receive in-service distributions from the vested portion
of his or her Account on or after his or her attainment of age fifty-nine and
one-half (59-1/2), upon such prior written notice, as prescribed by the
Committee, to the Committee.
(b) Any in-service distribution by a Silver King Participant from
any portion of his or her Silver King Account shall require the consent
(obtained in accordance with the provisions of Section 7.7 hereof and Exhibit A)
of the Silver King Participant's Spouse.
7.14 Loans to Participants. (a) Upon application of any Participant
employed by the Employer or any person covered by paragraph (e) below (a
"Borrower") to the Committee,
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the Committee shall direct the Trustee to make a loan or loans to such Borrower
from the Loan Available Account (as defined in paragraph (f) below) of the
Borrower. The minimum amount of any loan shall be five hundred dollars ($500).
All such loans shall (i) be adequately secured, (ii) bear interest at the
prevailing commercial rate determined by the Committee based on a review of
prevailing commercial rates in the Employer's geographical region, (iii) be
subject to such charges as imposed by the Committee in accordance with a uniform
nondiscriminatory policy and (iv) be repaid within a specified period not longer
than five (5) years in substantially level amortized payments by means of
payroll deduction (not less frequently than quarterly), provided that such
period may exceed five (5) years (but may not exceed fifteen (15) years, if the
loan is used to acquire any dwelling unit which within a reasonable time is to
be used (determined at the time the loan is made) as the principal residence of
the Participant; and further provided that all loans made to Participants while
actively employed by the Employer shall become immediately due and payable
within ninety (90) days following Termination of Employment unless paragraph (e)
of this Section 7.14 is applicable. Loan repayments will be suspended under this
Plan as permitted under Section 414(u)(4) of the Code. Any loan shall be subject
to such additional acceleration provisions as shall be determined by the
Committee to be commercially reasonable. In no event shall the total of any such
loan or loans to any Borrower from the Plan and any Section 401(a) Plan required
to be aggregated with this Plan pursuant to Code Section 72(p) exceed the least
of (i) $50,000, less the excess (if any) of (A) the highest amount of loans
outstanding within the twelve (12) month period ending on the day prior to the
date the loan is made over (B) the outstanding balance of loans outstanding on
the date the loan is made, or (ii) fifty percent (50%) of the vested Account of
the Borrower under the Plan. Only two (2) loans (including any loan outstanding
pursuant to paragraph (j) hereof) to a Participant
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may be outstanding simultaneously; provided, however, that one (1) of the two
(2) loans must be used to acquire any dwelling unit which within a reasonable
time is to be used (determined at the time the loan is made) as the principal
residence of the Participant and that one (1) of the two (2) loans must be used
as a general purpose loan. Notwithstanding the foregoing, a loan shall not be
deemed outstanding if all or a portion of it is to be used (determined at the
time the loan is made) to repay an existing loan under the Plan to such same
Participant.
(b) As security for such loan or loans, the Borrower shall pledge
the portion of his or her Loan Available Account represented by the loan and
earnings thereon. Loans to Participants shall be repaid through salary
deductions made on a level basis during each applicable pay period. In the event
that the Borrower does not repay any loan or the interest thereon within the
time and upon the schedules set forth in the promissory note representing the
loan, the Committee shall deduct the total amount of the loan outstanding, and
any interest and other charges then due and owing, from any payment or
distribution from the Borrower's Loan Available Account securing the loan to
which such Borrower may be entitled under the terms of the Plan. If under the
terms of the Plan, payment or distribution is not then permitted, the Borrower
will have a deemed distribution for tax purposes, but the loan will remain
outstanding and the Committee shall deduct the total amount of the loan
outstanding, and any interest and other charges then due and owing, from the
portion of the Borrower's Loan Available Account securing the loan as soon as a
distribution or withdrawal is then permitted at law from such portion of the
Loan Available Account (without regard to limitations in the Plan that are
narrower than required by the Code) Any loan hereunder shall be considered an
investment of the Participant's Loan Available Account and Participants may
elect the Investment Fund or Investment Funds from which such loan shall be
made. In the event no such election is made,
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any such loan shall reduce the investment of the Participant in each respective
Investment Fund, on a proportionate basis. When a loan is repaid, the repayment
shall be invested in the manner and same proportion that the Participant had
previously elected for his Account and which is currently in effect pursuant to
Article 4.
(c) In the event any loan remains outstanding at the time a
distribution (other than an additional loan) is otherwise scheduled to occur and
such distribution would reduce the prescribed security for, or otherwise violate
limitations with regard to the loan, then the amount of the distribution will be
reduced by all or a portion of the outstanding loans to prevent such reduction.
(d) A loan may be prepaid in full or part at any time, but any
prepayment shall be applied to the last payments due on the loan.
(e) Any "party in interest" as defined in ERISA Section 3(14) who
is a Terminated Participant or Retired Participant with an Account balance under
the Plan shall have the right to receive a loan from the Plan.
(f) Loan Available Account is defined for purposes of this Section
7.14 as the Participant's Silver King Employee Contribution Account, if any, and
then the Salary Reduction Contribution Account.
(g) No loan shall be made in the event that the interest rate
required to be charged pursuant to (a)(ii) of this Section 7.14 would violate
any applicable usury law.
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(h) The Committee shall administer this Section 7.14 pursuant to
the foregoing and such additional rules and regulations as it shall promulgate
in accordance with Code Section 72(p) and Department of Labor Regulation Section
2550.408b-1.
(i) Any loan to a Silver King Participant who is married as of the
date of the loan and all or part of whose Silver King Account will be held as
security for a loan hereunder shall require the consent (obtained in accordance
with the provisions of Section 7.7 and Exhibit A hereof within ninety (90) days
prior to the date of the loan) of the Member's Spouse to (i) the making of such
loan and (ii) any potential reduction of the benefits payable to or with respect
to such Member in the event of nonpayment of such loan. Such consent of a
Member's Spouse shall be required in the event of any renegotiation, extension,
renewal or other revisions of a loan to a Member.
(j) Notwithstanding the foregoing, a Silver King Participant who
immediately prior to becoming a Member had a loan (or loans) outstanding under
the Silver King Plan shall be entitled to keep such loan (or loans) outstanding
under the Plan until the loan (or loans) is repaid pursuant to the terms of the
Silver King Plan as in effect on January 1, 1998, to the extent such terms are
applicable. Notwithstanding the foregoing, repayment of principal and interest
on a loan made under the terms of the Silver King Plan shall be credited to the
applicable Silver King Account established for such Silver King Participant.
7.15 Unclaimed Payments. In the event that all, or any portion, of the
distribution payable to a Member or his or her Beneficiary hereunder shall, at
the expiration of five (5) years after it shall become payable, remain unpaid
solely by reason of the inability of the Plan Administrator, after sending a
registered letter, return receipt requested, to the last known
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address, and after requesting the cooperation of the Social Security
Administration to ascertain the whereabouts of such Member or his or her
Beneficiary, the amount so distributable shall be deposited into a suspense
account.
In the event a Member or Beneficiary is located subsequent to his or
her benefit being forfeited, such benefit shall be restored by the Employer.
7.16 Rollover Provisions. (a) Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover. The Committee shall have the authority to set minimums and
maximums with respect to Eligible Rollover Distributions and adopt other
guidelines and administrative procedures that are necessary or desirable to
administer the direct rollover rules under this Section.
(b) An "Eligible Rollover Distribution" is any distribution of all
or any portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee or the Distributee's
designated Beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section 401(a)(9)
of the Code; and the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to Company Stock).
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(c) An "Eligible Retirement Plan" is an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover Dis tribution.
However, in the case of an Eligible Rollover Distribution to the surviving
Spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(d) A "Distributee" includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving Spouse and the
Employee's or former Employee's Spouse or former Spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the Spouse or
former Spouse.
(e) A "Direct Rollover" is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
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ARTICLE VIII
VOTING AND OTHER RIGHTS
8.1 Voting of Company Stock. Each Member (or, in the event of the
Member's death, the Member's Beneficiary) shall be entitled to instruct the
Trustee as to the manner in which the Company Stock held in the Company Stock
Fund attributable to the Member's Account shall be voted on each matter brought
before an annual or special stockholders' meeting of the Company. Before each
such meeting of stockholders, the Company shall cause to be furnished to each
Member (or, in the event of the Member's death, the Member's Beneficiary) a copy
of all proxy solicitation material, together with a form requesting confidential
instructions to be given to the Trustee on how the Company Stock attributable to
the Member's Account shall be voted on each such matter. Upon timely receipt of
such instructions, the Trustee shall on each such matter vote such Company Stock
as instructed. The instructions received by the Trustee from Members (or
Beneficiaries, as the case may be) shall be held by the Trustee in confidence
and shall not be divulged or released to any person, including officers or
employees of the Company or any Affiliate. Where no such voting instructions
have been received by the Trustee, the Trustee shall vote such Company Stock as
to which timely instructions were not received by the Trustee in the same
proportion as it votes shares of Company Stock as to which timely instructions
were received by the Trustee in accordance with ERISA.
8.2 Tender and Exchange Offers on Company Stock. (a) Each Member (or,
in the event of the Member's death, the Member's Beneficiary) shall have the
right, based upon the Company Stock held in the Company Stock Fund attributable
to the Member's Account, to direct
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the Trustee in writing as to the manner in which to respond to a tender or
exchange offer for such Company Stock and the Trustee shall tender or not tender
such Company Stock for each Member's Account based upon such instructions. The
Company shall utilize its best efforts to timely distribute or cause to be
distributed to each Member (or Beneficiary, as the case may be) such identical
written information (if any) as will be distributed to stockholders of the
Company in connection with any such tender or exchange offer and a tender or
exchange offer instruction form for return to the Trustee or its designee.
(b) The form described in (a) above shall show the number of full
shares of Company Stock attributable to the Member's Account (whether or not
vested) and shall provide a means for him or her or her to (i) instruct the
Trustee whether or not to tender such shares and (ii) specify the Investment
Fund under the Plan in which the proceeds of any sale shall be invested in the
event such shares are sold pursuant to the tender offer. Such form shall also
advise each Member with an investment in the Company Stock Fund that, in the
event the Trustee is not provided with tender or exchange instructions, the
Trustee shall not tender or exchange shares of Company Stock as to which timely
instructions were not received by the Trustee. Such form shall further advise
that, in the event a Member's Company Stock is sold and the Member has not
specified the Investment Fund in which the proceeds shall be invested, such
proceeds shall be invested in a guaranteed interest account or a money market
fund, until a further investment election is made by the Member pursuant to the
Plan. Except for the foregoing, the Company shall not provide to the Member any
information or guidance not provided to all stockholders. Upon receipt of such
instructions, the Trustee shall tender or not tender (or withdraw from tender)
or exchange such Company Stock in accordance with such instructions, and the
Trustee shall not to tender or exchange any such shares of Company Stock
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as to which timely instructions were not received by the Trustee. Except as may
be required by law, instruction forms received from the Member shall be retained
by the Trustee and shall not be provided to the Company or to any officer or
employee thereof or to any other person.
8.3 Procedures of the Company With Respect to Voting and Tender
Instructions. In implementing the foregoing procedures, the Company will act
fairly, in the best interests of each Member, and in a manner which will not
impose undue pressure on any Member as to what tender or exchange offer
instructions he or she or she should give to the Trustee. The giving of an
instruction to the Trustee to tender or exchange Company Stock shall not be
deemed to constitute withdrawal or suspension from the Plan or forfeiture of any
portion of a Member's interest in the Plan. Accounts shall be adjusted
appropriately to reflect the Trustee's execution of their instructions, or if no
instructions were received, no adjustment shall be made to the extent the
Trustee does not tender or exchange any such shares of Company Stock as to which
timely instructions were not received by the Trustee. Proceeds resulting from
the sale of any Company Stock shall be invested in the Investment Fund specified
by the Member in his or her or her instructions to the Trustee and, in the
absence of such instructions, such proceeds shall be invested in the money
market fund, until a further investment election is made by the Member pursuant
to the Plan.
8.4 Member Deemed Named Fiduciary. Notwithstanding anything in the Plan
to the contrary, each Member is, for purposes of this Section, hereby designated
a "named fiduciary", within the meaning of Section 402(a)(1) of ERISA, with
regard to his or her Account.
8.5 Confidentiality. It is intended that the Company Stock Fund is
administered and operated in accordance with Section 404(c) of ERISA and the
regulations
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thereunder. For such purposes, the Trustee shall be the identified fiduciary and
shall be responsible for, without limitation, the implementation and monitoring
of confidentiality procedures.
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ARTICLE IX
PAYMENT OF BENEFITS
9.1 Payments for Incompetent Persons. If the Committee shall find that
any person to whom a benefit is payable under the Plan is unable to care for his
or her affairs because of illness or accident, any payment due (unless a prior
claim therefor shall have been made by a duly appointed guardian, committee or
other legal representative) may be paid to the Spouse, child, grandchild,
parent, brother or sister of such person, or to any person deemed by the
Committee to have incurred expense for such person otherwise entitled to
payment. Any such payment shall be a complete discharge of any liability under
the Plan therefor.
9.2 Spendthrift. No benefit payable at any time under the Plan shall be
subject in any manner to alienation, anticipation, sale, transfer, assignment,
pledge, attachment or encumbrance of any kind. No benefit and no fund
established in connection with the Plan shall in any manner be subject to the
debts or liabilities of any person entitled to such benefit. This Section 9.2
shall also apply to the creation, assignment or recognition of a right to any
benefit payable with respect to a Member pursuant to a domestic relations order,
unless such order is determined to be a "qualified domestic relations order," as
defined in Section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985. The procedures with regard to "qualified domestic
relations orders" are annexed hereto as Exhibit C. Notwithstanding anything
herein to the contrary, the provisions of this Section 9.2 shall not apply to
any offset of a Participant's benefits provided under the Plan against an amount
that the Participant is ordered or required to pay to the Plan under any of the
circumstances set forth in Section 401(a)(13)(C) of the Code and Sections
206(d)(4) and 206(d)(5) of ERISA.
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ARTICLE X
ADMINISTRATION OF THE PLAN
10.1 Plan Administrator. The general administration of the Plan on
behalf of the Plan Administrator shall be placed in a Committee of not less than
two (2) members. The members of the Committee shall be appointed by the Board or
a duly appointed committee thereof and each such member shall serve at the
pleasure of such Board.
10.2 Appointment to and Resignation From the Committee. Any person
appointed to be a member of the Committee shall signify his or her acceptance in
writing to the Board which appointed him or her. Any member of the Committee may
resign by delivering his or her written resignation to the Board which appointed
him or her. Such resignation shall become effective upon delivery or at any
later date specified therein.
10.3 Reimbursement of Expenses of Committee. The Plan shall pay or
reimburse the members of the Committee for all reasonable expenses incurred
unless the Employer shall pay or reimburse the members of the Committee for such
expenses.
10.4 Action by Majority of the Committee. A majority of the members of
the Committee at the time in office may do any act which the Plan authorizes or
requires the Committee to do, and the action of such majority of the members
expressed from time to time by a vote at a meeting, or in writing without a
meeting, shall constitute the action of the Committee and shall have the same
effect for all purposes as if assented to by all the members.
10.5 Internal Structure of Committee. The members of the Committee
shall elect from their number a Chairman and shall appoint a Secretary, who need
not be a member of
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the Committee. The Committee may appoint such subcommittees with such powers as
it shall determine and may authorize one or more members of the Committee or any
agent to execute or deliver any instrument or make any payment in its behalf.
10.6 Powers of the Committee. Subject to the limitations of the Plan,
the Committee may make such rules and regulations as it deems necessary or
proper for the adminis tration of the Plan and the transaction of business
thereunder; may interpret the Plan; may decide on questions as to the
eligibility of any person to receive benefits and the amount of such benefits;
may authorize the payment of benefits in such manner and at such times as it may
determine; may prescribe forms or telephonic or electronic means to be used for
making various elections under the Plan, for designating beneficiaries or for
changing or revoking such designations, for applying for benefits and for any
other purposes of the Plan, which prescribed forms in all cases must be executed
and filed with the Committee (unless the Committee shall otherwise determine)
and may take such other action or make such determinations in accordance with
the Plan as it deems appropriate. To the extent that the form or method
prescribed by the Committee to be used in the operation and administration of
the Plan does not conflict with the terms and provisions of the Plan, such form
shall be evidence of (i) the Committee's interpretation, construction and
administration of this Plan and (ii) decisions or rules made by the Committee
pursuant to the authority granted to the Committee under the Plan.
10.7 Actions of the Committee to be Uniform; Regular Personnel Policies
to be Followed. Any discretionary actions to be taken under this Plan by the
Committee with respect to the classification of the Employees, contributions, or
benefits shall be uniform in their nature and applicable to all Employees
similarly situated. With respect to service with the Employer,
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leaves of absence and other similar matters, the Committee shall administer the
Plan in accordance with the Employer's regular personnel policies at the time in
effect.
10.8 Decisions of Committee are Binding. The decisions of the
Committee with respect to any matter it is empowered to act on shall be made in
the Committee's sole discretion and shall be final, conclusive and binding on
all persons, based on the Plan documents. In carrying out its functions under
the Plan, the Committee shall endeavor to act by general rules so as to
administer the Plan in a uniform and nondiscriminatory manner as to all persons
similarly situated.
10.9 Spouse's Consent. In addition to when such consent is expressly
required by the terms of this Plan, the Committee may in its sole discretion
also require the written consent of the Employee's Spouse to any other election
or revocation of election made under this Plan before such election or
revocation shall be effective.
10.10 Delegation of Authority. The Committee may delegate any and all
of its powers and responsibilities hereunder to other persons by formal
resolution filed with and accepted by the Board of Directors. Any such
delegation shall not be effective until it is accepted by the Board and the
persons designated and may be rescinded at any time by written notice from the
Committee to the person to whom the delegation is made.
10.11 Multiple Fiduciary Capacities. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
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10.12 Retention of Professional Assistance. The Committee may employ
such legal counsel, accountants, actuaries and other persons as may be required
in carrying out the provisions of the Plan.
10.13 Reliance on Various Documents. The members of the Committee and
the Employer and its officers, trustees and directors shall be entitled to rely
upon all tables, valu ations, certificates and reports furnished by the Plan
actuary, upon all certificates and reports made by any accountant selected by
the Committee, and upon all opinions given by any legal counsel selected by the
Committee. The members of the Committee and the Employer and its officers,
trustees and directors shall be fully protected in respect of any action taken
or suffered by them in good faith in reliance upon any such actuary, accountant
or counsel, and all action so taken or suffered shall be conclusive upon all
parties.
10.14 Accounts and Records. The Committee shall maintain such accounts
and records regarding the fiscal and other transactions of the Plan and such
other data as may be required to carry out its functions under the Plan and to
comply with all applicable laws. The Committee shall report annually to the
Board on the financial condition and administrative operation of the Plan for
the preceding year.
10.15 Compliance with Applicable Law. The Company shall be deemed the
Plan Administrator for the purposes of any applicable law and shall be
responsible for the preparation and filing of any required returns, reports,
statements or other filings with appropriate governmental agencies. The Company
shall also be responsible for the preparation and delivery of information to
persons entitled to such information under any applicable law.
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10.16 Liability. The functions of the Committee, the Board, and the
Employer under the Plan are fiduciary in nature and each shall be carried out
solely in the interest of the Participants and other persons entitled to
benefits under the Plan for the exclusive purpose of providing the benefits
under the Plan (and for the defraying of reasonable expenses of administering
the Plan). The Committee, the Board, and the Employer shall carry out their
respective functions in accordance with the terms of the Plan 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. No
member of the Committee and no officer, director, to employee of the Employer
shall be liable for any action or inaction with respect to his or her functions
under the Plan unless such action or inaction is adjudicated to be a breach of
the fiduciary standard of conduct set forth above. Further, no member of the
Committee shall be personally liable merely by virtue of any instrument executed
by him or her or on his or her behalf as a member of the Committee.
10.17 Indemnification. The Company shall indemnify to the full extent
permitted by law and the Company's Certificate of Incorporation and by-laws, and
to the extent not covered by insurance, its officers and directors (and any
employee involved in carrying out the functions of the Company under the Plan)
and each member of the Committee against any expenses, including amounts paid in
settlement of a liability, which are reasonably incurred in connection with any
legal action to which such person is a party by reason of his or her duties or
responsibilities with respect to the Plan except with regard to any matters as
to which he or she shall be adjudged in such action to be liable for gross
negligence or willful misconduct in the performance of his or her duty as a
fiduciary. Any indemnification by the Employer shall be at the Employer's
expense and shall not be deemed an expense of the Plan.
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10.18 Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Solely to the extent required under Section 16(b) of the
Exchange Act, all elections and transactions under the Plan by persons subject
to Section 16 of the Exchange Act involving shares of Company Stock are intended
to comply with all exemptive conditions under Rule 16b-3 promulgated under the
Exchange Act. The Committee may establish and adopt written administrative
guidelines designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
the Plan.
10.19 Claims Procedure. If an Employee, Member or Beneficiary
("Claimant") is denied benefits under the Plan, the Committee shall notify the
Claimant in writing of the denial of the claim within ninety (90) days after the
claim has been made provided that in the event of special circumstances such
period may be extended to one hundred eighty (180) days. In such event the
Claimant shall be notified in writing of such extension. Such notice shall set
forth:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent plan provisions on which the
denial is based;
(c) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation of why such
material or information is necessary; and
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(d) appropriate information as to the steps to be taken if the
Claimant wishes to submit his or her claim for review.
Any request for review of a claim must be made in writing to the
Committee within sixty (60) days after receipt of the Committee's notice. The
claim will then be reviewed by the full Committee. A Claimant or his or her duly
authorized representative may:
(a) review pertinent documents; and
(b) submit issues and comments in writing.
If the Committee deems it appropriate, it may hold a hearing as to a
claim. If a hearing is held, the Claimant shall be entitled to be represented by
counsel. The decision of the Committee shall be made within sixty (60) days
after receipt of the request unless special circumstances (such as the need to
hold a hearing) require an extension of time; in any event such decision shall
be rendered not later than one hundred twenty (120) days after receipt of the
request for review. Written notice of any special circumstance requiring an
extension shall be sent to the Claimant. If the decision on review is not sent
to the Claimant within the appropriate time, it shall be deemed denied on
review. All interpretations, determinations and decisions of the Committee with
respect to any claim shall be made by the Committee in its sole discretion based
on the Plan and documents presented to it and shall be final, conclusive and
binding.
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ARTICLE XI
FUNDING OF PLAN
11.1 Media of Funding. A Trustee has been appointed to hold the assets
of the Trust Fund. The Plan shall be funded through one or more funds and
invested in stocks, securities, bonds, mortgages, insurance or annuity
contracts, real estate or any other legal investment; provided that all such
investments shall be the property of the Trustee.
11.2 Trust Fund to be for the Exclusive Benefit of Members. The
contributions of the Employer to the Trust Fund shall be for the exclusive
benefit of Members, and no part of the assets of such Trust Fund shall revert to
the Employer.
11.3 Interests of Members in Trust Fund. No Member shall have any
right, title, or interest in any part of the assets of any Trust Fund except as
and to the extent expressly provided in the Plan.
11.4 Payment Instructions from Committee. The Trustee shall make
payments from the Trust Fund upon the receipt of written instructions from the
Committee to the person or persons designated by the Committee as entitled under
the terms of the Plan to such payment. Any payment instructions from the
Committee to the Trustee shall warrant that such payment is being made either to
a person entitled to benefits or payments under the Plan or to pay the expenses
of the Plan.
11.5 Investment and Control of Trust Fund. The investment of the assets
comprising the Trust Fund shall be the responsibility of the Trustee, subject
to, and except as otherwise provided by the terms and provisions of Section 4.10
hereof and of the Trust
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Agreement (including any provision for appointment of an investment manager, as
defined in Section 3(38) of ERISA, for all or any portion of the Trust Fund).
The Company shall have no responsibility with respect to control and management
of the Trust Fund except to the extent expressly provided in the Trust
Agreement.
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ARTICLE XII
AMENDMENT OF THE PLAN
12.1 Company May Amend Plan. Subject to the provisions of this Article
XII, the Company by action of the Board (or a duly authorized committee
thereof), in accordance with the by-laws of the Company, reserves the right at
any time, and from time to time, to modify and amend any or all of the
provisions of the Plan.
12.2 Retroactive Amendments. Except as otherwise provided herein, no
modification or amendment may be made which shall have any retroactive effect so
as to deprive any Member or other person of any vested benefits under the Plan.
A modification or amendment may retroactively reduce benefits if expressly
permitted by any applicable law or if such modification or amendment is
necessary to bring the Plan into conformity with the requirements of Section
401(a) of the Code or other applicable provisions of the Code.
12.3 Amendment Affecting Vesting Provisions. No amendment shall reduce
the extent to which a Participant would be vested in his or her retirement
income if the Participant's employment were to terminate as of the date of the
amendment and no amendment which modifies the method or criteria used to
determine to what extent a Participant would be vested in his or her retirement
income if his or her employment were to terminate and no amendment which
modifies the method or criteria used to determine to what extent a Participant
would be vested shall become effective with respect to a Participant with at
least three (3) years in a Period of Service for vesting purposes unless the
Participant is permitted to elect to have the extent of his or her vesting
determined without regard to such amendment. The Committee shall offer the
election referred to in the preceding sentence no later than sixty (60) days
after the latest
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of the adoption of the amendment, the amendment's effective date, or the date
the Participant is notified of the amendment.
12.4 No Diversion of Fund. No modification or amendment of the Plan
shall cause or permit any part of the assets comprising the Fund to be diverted
to purposes other than for the exclusive benefit of Members and others entitled
to benefits under the Plan or for the payment of expenses of the Plan.
12.5 Reversion to Employer. No modification or amendment shall cause or
permit any part of the assets comprising the Fund to revert to or become the
property of the Employer prior to the satisfaction of all liabilities under the
Plan to Members and others entitled to benefits hereunder. Following the
satisfaction of all liabilities under the Plan to Participants and others
entitled to benefits hereunder and payment of Plan expenses, any remaining
assets shall be distributed to the Employer to the extent, and only to the
extent, permitted under the Code.
12.6 Mergers, Consolidations and Transfers. The Plan shall not be
merged or consolidated, in whole or in part, with any other plan, nor shall any
assets or liabilities of the Plan be transferred to any other plan unless the
benefit that would be payable to any affected Member under such plan if it
terminated immediately after the merger, consolidation or transfer, is equal to
or greater than the benefit that would be payable to the affected Member under
this Plan if it had terminated immediately before the merger, consolidation or
transfer.
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ARTICLE XIII
TERMINATION OF THE PLAN
13.1 Right to Terminate. The Company (on behalf of itself and Member
Companies) by action of its Board (or a duly authorized committee thereof), on
behalf of the Company and the Employer, shall have the right in accordance with
the by-laws of the Company, anything herein to the contrary notwithstanding, to
terminate, or completely discontinue contributions under, the Plan at any time.
13.2 Termination of Plan. In the event that the Plan is terminated for
any reason, or contributions are completely discontinued, the rights of all
Members to benefits accrued under the Plan as of the date of such termination,
to the extent then funded, shall be nonforfeitable; and the assets of the Plan
shall be allocated by the Committee. After providing for the expenses of the
Plan, the assets remaining in the Trust shall in the discretion of the Committee
be either continued in the Trust until paid out in accordance with the
provisions of the Plan or distributed to the Members and Beneficiaries (unless
the Plan is continued by a successor to the Employer), with any remaining assets
to be distributed to the Employer.
13.3 Partial Termination. The Plan may be partially terminated by the
Employer, or by operation of law, with respect to a group of Members without
causing the termination of the Plan as a whole. In the event of such a partial
termination, the Accounts of the Members involved in the partial termination
shall, to the extent then funded, be fully vested and nonforfeitable.
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ARTICLE XIV
PROVISIONS RELATING TO TOP-HEAVY PLAN
14.1 Applicability. The provisions of this Article XIV shall apply to
any Plan Year if, as of the applicable Determination Date, the Plan constitutes
a Top-Heavy Plan.
14.2 Definitions. The definitions apply to this Article XIV and unless
otherwise specifically stated in another section hereof do not apply to any
other section of this Plan.
(a) Determination Date. With respect to each Plan Year, the
Determination Date shall be the final day of the immediately preceding Plan
Year; provided, however, that with regard to the Plan's initial Plan Year the
"Determination Date" shall be the last day of the first Plan Year.
(b) Key Employee. "Key Employee" shall mean any Employee who, at
any time during the Plan Year as of which a determination is made or any of the
four (4) preceding Plan Years, is (in accordance with Code Section 416(i) and
the regulations promulgated thereunder):
(i) an officer of an Employer or any Affiliate whose annual
compensation during any such Plan Year exceeds fifty percent (50%) of the
maximum dollar limitation under Code Section 415(b)(1)(A) as in effect for
the calendar year of the Determination Date, provided that no more than
fifty (50) employees (or, if lesser, the greater of three (3) or ten (10)
percent of the employees) shall be treated as officers;
(ii) one of the ten (10) Employees of the Employer or any
Affiliate owning or considered as owning (within the meaning of Section 318
of the Code) the largest interests in the Employer or such Affiliate,
excluding, however, any Employee who earns less than the maximum dollar
limitation under Section 415(c)(1)(A)
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as in effect for the calendar year of the Determination Date, provided that
for the purposes of this paragraph (b), if two (2) Employees have the same
interest in the Employer or an Affiliate, the Employee whose annual
compensation from the Employer or such Affiliate is greater shall be treated
as having the greater interest;
(iii) an Employee who owns (or is considered as owning within
the meaning of Section 318 of the Code) 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; or
(iv) an Employee who (i) owns (or is considered as owning
within the meaning of Section 318 of the Code) more than one percent (1%) of
the outstanding stock of the Employer or more than one percent (1%) of the
total combined voting power of all stock of the Employer and (ii) who
receives annual compensation from the Employer or any Affiliate in excess of
one hundred fifty thousand dollars ($150,000).
(v) for the purpose of applying Section 318 of the Code
under paragraphs (b), (c) and (d) of this subsection (b), the phrase "50
percent" in Section 318(a)(2) of the Code shall be replaced by the phrase "5
percent."
(c) Aggregated Plans. "Aggregated Plans" shall mean all plans of
the Employer or any Affiliate (1) that are qualified under Code Section 401(a)
and (b) in which a Key Employee is a participant, and (2) all other plans of the
Employer or any Affiliate that enable any plan described in clause (1) above to
meet the requirements of Code Section 401(a)(4) or 410 (the "Required
Aggregation Group"). The Required Aggregation Group shall include each plan
which satisfies the requirements of the preceding sentence, whether or not any
such plan is terminated. In addition, the term "Aggregated Plans" shall include
any plan of the Employer or any Affiliate which is not required to be included
in the Required Aggregation Group, provided that the resulting group, taken as a
whole, continues to meet the requirements of Code Sections 401(a)(4) and 410
(the "Permissive Aggregation Group"). The Committee may elect to exclude as an
Aggregated Plan any plan in the Permissive Aggregation Group that is a
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collectively bargained plan, if the necessary information as to participants and
benefits with respect to such plan is not available.
(d) Top-Heavy Plan. The Plan shall constitute a "Top-Heavy Plan"
for any Plan Year if, as of the applicable Determination Date, the sum of (a)
the accounts of Key Employees under any Aggregate Plan that is of a defined
contribution type and (b) the present value of the cumulative accrued benefits
of Key Employees under any Aggregate Plan that is of a defined benefit type
exceeds sixty percent (60%) of the sum of (a) the accounts of all Employees
under any Aggregate Plan that is of a defined contribution type and (b) the
present value of the cumulative accrued benefits of all Employees under any
Aggregate Plan that is of a defined benefit type. The above determinations shall
be made in accordance with Code Section 416(g).
(e) Super Top-Heavy Plan. The Plan shall constitute a "Super
Top-Heavy Plan" for any Plan Year if, as of the Applicable Determination Date,
the sum of (a) the accounts of Key Employees under any Aggregate Plan that is of
a defined contribution type and (b) the present value of the cumulative accrued
benefits of Key Employees under any Aggregate Plan that is of a defined benefit
type exceeds ninety percent (90%) of the sum of (a) the accounts of all
Employees under any Aggregate Plan that is of a defined contribution type and
(b) the present value of the cumulative accrued benefits of all Employees under
any Aggregate Plan that is of a defined benefit type. The above determinations
shall be made in accordance with Code Sections 416(g) and 416(h)(2)(B).
(f) Rules for Determining Accrued Benefits and Accounts. In
determining the present value of accrued benefits for Aggregated Plans of the
defined benefit
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variety and accounts for Aggregated Plans of the defined contribution variety,
the following rules shall prevail:
(i) The accrued benefit for each current Employee shall be
computed as if the Employee voluntarily terminated service as of the
Determination Date.
(ii) The interest rate to be used shall be the interest rate
in the defined benefit plan maintained by the Company, if any, and
post-retirement mortality shall be determined based on the mortality table
used by such defined benefit plan for post-retirement mortality assumptions.
There shall be no assumption as to pre-retirement mortality or future
increases in cost of living.
(iii) If a qualified joint and survivor annuity within the
meaning of Code Section 401(a)(11) is the normal form of benefit, for
purposes of determining the present value of the accrued benefit, the Spouse
of the Member shall be assumed to be the same age as the Member.
(iv) The present value shall reflect a benefit payable
commencing at Normal Retirement Age (or attained age, if later), provided
that if the Plan provides for a nonproportional subsidy, the benefit shall
be assumed to commence at the age at which the benefit is most valuable.
(v) The Matching Contribution Account, Profit Sharing
Contribution Account, QNEC Account and Silver King Employer Contribution
Account shall be determined as of the most recent valuation occurring within
the twelve (12) month period ending on the Determination Date.
(vi) An adjustment shall be made for any contributions due
as of the Determination Date. Such adjustment shall be the amount of any
contributions actually made after the valuation date but before the
Determination Date, except that for the first Plan Year such adjustment
shall also reflect the amount of any contributions made after the
Determination Date that are allocated as of a date in the first Plan Year.
(vii) The accrued benefit or account balance with respect to
any Employee shall be increased by the aggregate distributions made to such
Employee from any Aggregated Plan during the five (5) year period ending on
the Determination Date; provided, however, that any distribution made after
a valuation date but prior to the Determination Date shall not be counted as
a distribution to the extent already included as of the valuation date.
(viii) Any Employee contributions, whether voluntary or
mandatory, shall be included. However, amounts attributable to tax
deductible qualified employee contributions shall not be considered to be a
part of the account.
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(ix) With respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made from a
plan maintained by one employer to a plan maintained by another employer),
if this Plan provides for rollovers or plan-to-plan transfers, it shall
always consider such rollovers or plan-to-plan transfers as a distribution
for the purpose of this Article XIV. If this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not consider such rollovers or
plan-to-plan transfers as part of the account.
(x) With respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a distribution for
purposes of this Article XIV. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Employee's account, irrespective of the
date on which such rollover or plan-to-plan transfer is accepted.
(xi) For purposes of determining whether the employer is the
same employer under (i) and (j) an Employer and all Affiliates shall be
treated as the same employer.
(xii) For purposes of this Article XIV, a Beneficiary of any
deceased Employee shall be considered a Participant hereunder.
(xiii) Notwithstanding anything herein to the contrary, no
individual shall be counted as an Employee or Participant for the purposes
of this Article XIV if such individual has not performed services for the
Employer or an Affiliate at any time during the five (5) year period ending
on a Determination Date.
(g) Top-Heavy Plan Year. "Top-Heavy Plan Year" shall mean a Plan
Year in which a one year Period of Service is accrued by the Top-Heavy
Participant provided that no Plan Year shall be classified as a Top-Heavy Plan
Year if in such Plan Year the Plan was not a Top-Heavy Plan.
(h) Top-Heavy Participant. "Top-Heavy Participant" shall mean each
Participant and any Employee who is excluded from being a Participant (or who
accrued no benefit) because his or her compensation was less than a stated
amount or any Employee who is
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excluded from being a Participant because of a failure to make mandatory
employee contributions.
(i) Testing Period. "Testing Period" shall mean, with respect
to a Top-Heavy Participant, the five (5) consecutive Top-Heavy Plan Years of
employment of such Top-Heavy Participant by the Employer or any Affiliate during
which the aggregate Top-Heavy Compensation paid by the Employer or any Affiliate
to such Top-Heavy Participant was the highest, or if the Plan was a Top-Heavy
Plan for less than five (5) Top-Heavy Plan Years, the number of Top-Heavy Plan
Years. Exclusion of a Plan Year as a Top-Heavy Plan Year because a one year
Period of Service was not accrued or because of subparagraph (h) above shall not
be deemed to break the consecutiveness of the surrounding Top-Heavy Plan Years.
(j) Top-Heavy Compensation. "Top-Heavy Compensation" shall mean
compensation as defined in Treasury Regulation Section 1.415-2(d).
14.3 Minimum Contribution. (a) Subject to paragraphs (c) and (d) below,
for each Plan Year during which the Plan constitutes a Top-Heavy Plan, any
Employer contributions made under the Plan shall be allocated to assure that
each Top-Heavy Participant, other than a Key Employee, who is employed on the
last day of the Plan Year (and without regard to whether such Participant was
credited with a one year Period of Service for such Plan Year) is credited with
a benefit for such Plan Year under the Plan and any other defined contribution
plan of the Employer no less than the lesser of (i) three percent (3%) of such
Top-Heavy Participant's Top-Heavy Compensation for such Plan Year, or (ii) if
the greatest percentage of Top-Heavy Compensation contributed by the Employer on
behalf of a Key Employee during such Plan Year is less than three percent (3%),
the greatest percentage of such Top-Heavy Participant's Top-
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Heavy Compensation contributed for a Key Employee. In determining the benefit
credited to any Participant during any Plan Year, all Employer contributions
made hereof shall be included.
(b) The minimum contribution referred to in (a) above (except with
regard to Key Employees) shall not include any Employee contributions, nor
amounts treated as Employer contributions pursuant to a salary reduction
arrangement permitted by Code Section 401(k), except for purposes of determining
the greatest percentage of Top-Heavy Compensation allocated on behalf of Key
Employees.
(c) If the Top-Heavy Participant (other than a Key Employee) is
also a participant in a qualified defined benefit plan or any other defined
contribution plan of the Employer, the additional contribution due under (a)
above shall be reduced by the actuarial equivalent of the benefits derived by
the Top-Heavy Participant under such defined benefit plan calculated on the
basis of the actuarial assumptions of the Plan, or by the amount of the
contributions under the defined contribution plan.
(d) If the Top-Heavy Participant (other than a Key Employee) is
also a participant in a qualified defined benefit plan or any other defined
contribution plan that constitutes a Top-Heavy Plan, no minimum contribution
under this Section 14.3 shall be required, unless otherwise required by Treasury
Regulation Section 1.416-1.
14.4 Section 415 Adjustments. In the event the Plan is a Top-Heavy Plan
for any Plan Year, each Top-Heavy Participant shall be credited for such Plan
Year with a benefit not less than the lesser of four percent (4%) or the amount
tdetermined under the Section
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14.3(a)(ii) hereof; provided, however, if the Plan is a Super Top-Heavy Plan for
such Plan Year, 1.0 shall be substituted for 1.25 in applying Code Section
415(e).
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ARTICLE XV
MISCELLANEOUS
15.1 Rights of Employees. Nothing herein contained shall be deemed to
give any Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discharge such Employee at any time,
nor shall it be deemed to give the Employer the right to require the Employee to
remain in its service, nor shall it interfere with the Employee's right to
terminate his or her service at any time.
15.2 Deductibility. All contributions under the Plan are expressly
conditioned upon the deductibility of such contributions under Section 404 of
the Code and to the extent the deduction is disallowed, shall be returned to the
Employer within one year after the disallowance of the deduction. A contribution
which is not deductible in the current taxable year of the Employer but may be
deducted in the taxable years of the Employer subsequent to the year in respect
of which it is made, shall not be considered to be disallowed.
15.3 Mistake in Fact. In the case of a contribution which is made by
the Employer under mistake of fact, such contribution may be returned to the
Employer within one year after the payment of the contribution.
15.4 Plan Qualification. Contributions to the Plan are conditioned on
the initial qualification of the Plan under Section 401(a) and 401(k) of the
Code, and if the Plan is found not to so qualify, contributions made in respect
of any period subsequent to the effective date of the disqualification shall be
returned to the contributor within one (1) year after the denial of such
qualification.
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15.5 Headings. The headings of the Plan are inserted for convenience of
reference only and shall have no effect upon the meaning of the provisions
hereof.
15.6 Use of Words. Whenever used in this instrument, a masculine
pronoun shall be deemed to include the masculine and feminine gender, and a
singular word shall be deemed to include the singular and plural, in all cases
where the context so requires.
15.7 Applicability of State Law. If any determination is to be made
with respect to the Plan under applicable state law, the laws of the State of
Florida shall apply.
15.8 Adjustments for Changes in Capital Structure. The existence of
this Plan shall not affect in any way the right or power of the Board or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger, consolidation or separation, including a
spin-off, or other distribution of stock or property of the Company or
Affiliates, any issue of bonds, debentures, preferred or prior preference stock
ahead of or affecting Company Stock, the authorization or issuance of
additional shares of Common Stock, the dissolution or liquidation of the
Company or Affiliates, any sale or transfer of all or part of its assets or
business or any other corporate act or proceeding. In the event of any change
in the capital structure or business of the Company by reason of any stock
dividend or extraordinary dividend, stock split or reverse stock split,
recapitalization, reorganization, merger, consolidation, spin-off or exchange
of shares, distribution with respect to its outstanding Company Stock or
capital stock other than Company Stock, reclassification of its capital stock,
any sale or transfer of all or part of the Company's assets or business, or any
similar change affecting the Company's capital structure or business and the
Committee determines an adjustment is appropriate under this Plan, then the
aggregate number and kind of shares which thereafter may be issued under this
Plan, the number and kind of shares or other property (including cash) held
under this Plan shall be appropriately adjusted consistent with such change in
such manner as the Committee may deem equitable to prevent substantial dilution
or enlargement of the rights granted to, or available for, Members under this
Plan or as otherwise necessary to reflect the change, and any such adjustment
determined by the Committee in good faith shall be binding and conclusive on
the Company and all Members, Beneficiaries and employees and their respective
heirs, executors, administrators, successors and assigns.
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ARTICLE XVI
ADOPTION OF PLAN BY AFFILIATE
16.1 Purpose of Article. The purpose of this Article is to describe the
terms and conditions under which an Affiliate may adopt, and become a Member
Company under, the Plan and Trust for the benefit of its eligible employees.
16.2 Execution of Adoption Agreement. Any Affiliate may, with the
written consent of the Board of Directors of the Company, become a Member
Company under the Plan and Trust by adopting the Plan as a Member Company by
resolution of its board of directors (or a duly authorized committee thereof) or
by executing an Adoption Agreement under which:
(a) The Member Company shall agree to be bound by all the
provisions of the Plan and Trust in the manner set forth herein and any
amendments thereto.
(b) The Member Company shall agree to pay its share of the
contributions to, and expenses of, the Plan and Trust as they may be determined
from time to time in the manner specified herein.
(c) The Member Company shall agree to provide the Company,
Committee and Trustee with full, complete, and timely information on all matters
necessary to them in the operation of the Plan and Trust.
16.3 Participation in the Plan. (a) In the event of the adoption of the
Plan and Trust by an Affiliate, the Affiliate shall become a Member Company and
all the terms and conditions of the Plan and Trust as set forth hereunder shall
apply to the participation under the
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Plan of such Affiliate and its employees in the manner as set forth herein for a
Member Company and its employees; notwithstanding the above, the following
rights are specifically reserved to the Company:
(i) The right to designate a Member Company as set forth
herein;
(ii) The right to appoint the members of the Committee, as
set forth herein, is specifically reserved to the Company so long as the
Company participates under the Plan; provided that a Member Company may
appoint an advisory committee of such composition and size as it may
determine to advise the Committee on any matters affecting such Member
Company or its employees who are Participants under the Plan. The Committee
shall be entitled to rely upon any information furnished it by the Member
Company or its employees who are Participants under the Plan. The Committee
shall be entitled to rely upon any information furnished it by the Member
Company appointing such advisory committee, but in no event shall the
existence of such advisory committee modify or otherwise limit any of the
powers or duties of the Committee under the Plan;
(iii) The right to direct, appoint, remove, approve the
accounts of, or otherwise deal with the Trustee, as set forth herein, is
specifically reserved to the Company so long as the Company participates
under the Plan;
(iv) The right to amend the Plan and Trust, as set forth
herein, is specifically reserved to the Company so long as the Company
participates under the Plan; and any such amendment, unless otherwise
specified herein, shall be fully binding with respect to such participation
by any Member Company; provided that this reservation shall in no event be
construed to prevent any Member Company from terminating at any time, in the
manner set forth herein, its participation as a Member Company under the
Plan.
(b) In the operation of the Plan with respect to a Member Company,
the term "Effective Date" shall mean such date specified in such Member
Company's Adoption Agreement.
(c) A Member Company may specify in such Member Company's Adoption
Agreement or resolutions the applicable provisions for recognition of Years of
Service
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or Periods of Service, as applicable, for such Member Company for eligibility,
vesting and benefit purposes.
16.4 Termination by a Member Company. Any Member Company may by action
of its board of directors (or a duly authorized committee thereof) in accordance
with the by-laws of such Member Company, at any time elect to terminate its
participation under the Plan in the manner set forth herein, or any Member
Company may elect at any time by appropriate amendment or action affecting only
its own status hereunder to disassociate itself from this Plan and Trust but to
continue the Plan and the portion of the Trust as it pertains to itself and its
employees as an entity separate and distinct from this Plan and Trust.
Termination of the participation of any Member Company, or disassociation, shall
not affect the participation in the Plan of any other Member Company nor
terminate the Plan or Trust with respect to them and their employees; provided
that, if the Company shall terminate its participation in the Plan, or
disassociate itself, then each remaining Member Company shall make such
arrangements and take such action as may be necessary to assume the duties of
the Company in providing for the operation and continued administration of the
Plan and Trust as the same pertains to the Member Company.
16.5 Member Company Plan Expenses. Each Member Company shall be liable
for and shall pay at least annually to the Company its fair share of the
expenses of operating the Plan and Trust, including its share of any Trustee's
fees. The amount of such charges to each Member Company shall be determined by
the Committee in its sole discretion; provided that, except with respect to
charges incurred solely on account of a particular Member Company, a Member
Company shall not be charged for a greater portion of any expenses of Plan
operation
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than the ratio that the number of Members who are or were its employees bears to
the total of all Members nor for a greater proportion of any Trustee's fees than
the ratio that the portion of the Trust Fund pertaining to Members who are or
were its Employees bears to the total Trust Fund.
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EXHIBIT A
SPECIAL RULES REGARDING SILVER KING ACCOUNTS
The following provisions apply solely to the Silver King Account and
are subject to, without limitation, Sections 7.1, 7.3, 7.5, 7.6, 7.7, 7.8, 7.9
and 7.10 of the Plan.
1.1 Forms of Distribution.
(a) Except with regard to the automatic cash-out provision under
Section 7.8 of the Plan, the normal form of benefit with respect to the Member's
Silver King Account under the Plan (A) for an unmarried Silver King Participant,
shall be a life annuity, payable for the life of the Silver King Participant,
and (B) for a Silver King Participant who is married on the Benefit Starting
Date, shall be a Joint and Survivor Annuity described in Section 1.2 below. A
Silver King Participant shall receive his or her normal form of benefit with
respect to his or her Silver King Account, unless he or she elects an optional
form of benefit described in Section 1.1(b).
(b) In lieu of receiving the normal form of benefit referred to in
Section 1.1(a) above, a Silver King Participant may elect, subject to waiver and
spousal consent requirements described herein, to receive his or her benefits
with respect to his or her Silver King Account in one of the following optional
forms:
(i) a cash lump sum; or
(ii) a Silver King Participant may direct the Trustee to
purchase, with the Silver King Participant's Silver King Account balance, an
annuity from an insurance company, of such type offered under the Silver
King Plan, providing monthly payments over the Silver King Participant's
lifetime or life expectancy, with or without a period certain and with or
without payments to the Silver King Participant's Spouse or
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Beneficiary over the Spouse's or Beneficiary's lifetime after the Silver
King Participant's death.
(c) Any election by a Silver King Participant may be revoked prior
to his or her Benefit Starting Date.
1.2 Joint and Survivor Annuity.
(a) The Joint and Survivor Annuity benefit is the actuarial
equivalent of a life annuity benefit payable to a Silver King Participant based
on the Value of the Silver King Participant's Silver King Account. Such Joint
and Survivor Annuity shall be payable to the Silver King Participant during his
or her lifetime after his or her Benefit Starting Date with fifty percent (50%)
of such reduced benefit continued to the Silver King Participant's Spouse for
the duration of the Spouse's lifetime after the death of the Silver King
Participant. No payments will be made after the death of both the Silver King
Participant and his or her Spouse.
(b) The Committee shall, no less than thirty (30) days and no more
than ninety (90) days prior to the Benefit Starting Date, provide each married
Silver King Participant a written explanation of: (i) the terms and conditions
of the Joint and Survivor Annuity; (ii) the Silver King Participant's rights to
make and the effect of an election to waive the Joint and Survivor Annuity form
of benefit; (iii) the rights of the Silver King Participant's Spouse; and (iv)
the right to revoke (and the effect of) a previous election to waive the Joint
and Survivor Annuity.
(c) The retirement benefit payable to a Silver King Participant
described in Sections 1.1(a) and 1.1(b)(ii) is the amount purchasable by the
funds in the Silver King Participant's Silver King Account as of the Valuation
Date immediately prior to the
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commencement of benefits. In determining the annuity contract to purchase, the
Committee shall have no obligation to obtain the most favorable rate available
or for the financial stability of the insurance company issuing the policy. Once
such policy is issued, the Silver King Participant shall look solely to the
insurance company issuing such annuity for payment of his or her benefits.
1.3 Whenever the terms of this Exhibit A require that the consent of a
Silver King Participant's Spouse be obtained, such consent shall be valid only
if given in accordance with Section 7.7 of the Plan.
1.4 Death of a Silver King Participant.
(a) Death Prior to Commencement of Benefits. If a Silver King
Participant shall die prior to his or her Benefit Starting Date, the Silver King
Participant's Silver King Account shall be distributed to such Silver King
Participant's Spouse (or other Beneficiary designated with the consent of his or
her Spouse (if any) in accordance with Section 7.7 of the Plan) as follows:
(i) Married Participants. If such Silver King Participant is
married at the time of his or her death, the Silver King Participant's
Silver King Account balance shall be applied to provide monthly benefits for
the life of the Silver King Participant's surviving Spouse commencing in one
hundred percent (100%) annuity form, subject to Section 7.6 of the Plan, at
any time the Spouse elects after the death of the Silver King Participant.
Notwithstanding the foregoing, each Silver King Participant's surviving
Spouse may elect to receive the Silver King Account balance that is payable
to him or her in a form permitted under Section 1.1(b) instead of a one
hundred percent (100%) annuity form.
(ii) Unmarried Participants. If such Silver King Participant
is not married at the time of his or her death, the Silver King
Participant's Silver King Account balance shall be distributed to the
Beneficiary or Beneficiaries of the Silver King Participant in a cash lump
sum in such proportion as designated by the Silver King
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Participant soon as administratively feasible after the Beneficiary's
election to receive a distribution, but no later than the last day of the
year following the year of the Silver King Participant's death. Each such
Beneficiary may elect to receive the portion of such Silver King
Participant's Silver King Account Balance that is payable to him or her in a
form permitted under Section 1.1(b) instead of a cash lump sum.
(iii) The foregoing Section 1.3(a)(i) shall not apply if the
Silver King Participant had, prior to his or her death, with the consent
(obtained in accordance with the provisions of Sections 7.7 of the Plan and
Section 1.3(e) hereof) of his or her Spouse at the time of his or her death,
designated another Beneficiary to receive that portion of his or her Account
that would otherwise be payable to his or her Spouse. In such event, the
Silver King Participant's Silver King Account balance shall be distributed
to such Beneficiary in accordance with paragraph (ii) above.
(b) Death After Commencement of Benefits. In the event that a
Silver King Participant dies on or after his or her Benefit Starting Date, his
or her surviving Spouse or other Beneficiary (designated with the consent of his
or her Spouse (if any) in accordance with Section 7.7 of the Plan) shall receive
such benefits, if any, as are provided pursuant to the form of benefit being
received by the Silver King Participant with respect to his or her Silver King
Account at the time of his or her death, provided that the portion of the
remaining payment shall be paid in a lump sum on the last day of the calendar
year following the year of the Silver King Participant's death (or at any time
earlier elected by the Beneficiary), unless the Silver King Participant has
elected to receive an annuity in which case the benefits shall be paid in
accordance with Section 1.3(a)(i) hereof.
(c) Annuity. If a Silver King Participant or Beneficiary receiving
an annuity dies, death benefits, if any, shall be paid in accordance with the
terms of the annuity.
(d) Death Before Payment. If a Spouse entitled to receive benefits
hereunder as a result of the previous death of the Silver King Participant dies
prior to commencement of such benefit or purchase of the annuity if benefits are
to be paid as such, the
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value of the Silver King Account allocable to the Spouse or other Beneficiary
shall be paid to the estate of such Spouse or other Beneficiary.
(e) Rules Relating to Designation of Beneficiaries. Notwithstanding
anything else herein, the following rules apply to a married Silver King
Participant with respect to his Silver King Account. No married Silver King
Participant may elect a nonspousal Beneficiary for his or her death benefit
payable to his or her Spouse pursuant to (a) above prior to the beginning of the
Plan Year in which the Participant attains age thirty-five (35), except that a
Participant who incurs a Termination of Employment prior to such Plan Year may
elect a Beneficiary other than his or her Spouse at any time after his or her
Termination of Employment. In the event such terminated Participant later
returns to employment and again becomes a Participant in the Plan, such election
made prior to the Plan Year in which he or she attains age thirty-five (35)
shall only apply to nonforfeitable amounts accrued at the time of the original
election (and earnings thereon). A Beneficiary other than the Spouse may not be
elected with regard to the Silver King Participant's Silver King Account until
the first day of the Plan Year in which the Participant attains age thirty-five
(35). Notwithstanding the foregoing, a Silver King Participant may elect a
Beneficiary other than his or her Spouse with respect to his Silver King Account
prior to the beginning of the Plan Year in which the Silver King Participant
attains age thirty-five (35), provided that such election shall become invalid
as of the first day of the Plan Year in which the Participant attains age
thirty-five (35). Unless any election made hereunder specifies a secondary
Beneficiary, if the designated Beneficiary predeceases the Participant, the
election shall be null and void and a new election shall be required to be made
in order to elect a Beneficiary other than a Silver King Participant's Spouse.
If a Silver King Participant's Spouse
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at the time of his or her death is not the same as the Spouse who consented to
an election of a nonspousal Beneficiary, such consent shall be null and void.
(f) An election of a nonspousal Beneficiary is revocable by the
Silver King Participant at any time before his or her death, without the consent
of his or her Spouse.
1.5 Silver King Employees Who Attained Age 70-1/2 Prior to January 1,
1997. Notwithstanding any other provision to the contrary, a Silver King
Participant who attained age 70-1/2 before January 1, 1997 and commenced
distributions pursuant to Code Section 401(a)(9) on a date on or before January
1, 1997, but who remained employed by the Employer after such date, may make an
affirmative election, pursuant to Section 7.3(c), to cease receiving
distributions, provided such election complies with either (a), (b) or (c)
below.
(a) A Silver King Participant may elect, pursuant to Section
7.3(c), to cease receiving such distributions, and no spousal consent shall be
required when distributions recommence to the Silver King Participant if:
(i) payments recommence to the Silver King Participant in the
same distribution form and with the same Beneficiary as in effect prior to
the cessation of payments to the Silver King Participant;
(ii) the individual who was the Silver King Participant's
Spouse on the Benefit Starting Date prior to the cessation of distributions
executed a general consent within the meaning of Treasury Regulation Section
1.401(a)-20, A-31; or
(iii) the individual who was the Silver King Participant's
Spouse on the Benefit Starting Date executed a specific consent to waive a
Joint and Survivor Annuity within the meaning of Treasury Regulation Section
1.401(a)-20, A-31, and the Silver King Participant is not married to that
individual when distributions recommence.
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(b) A Silver King Participant may elect, pursuant to Section
7.3(c), to cease receiving such distributions, provided that the consent of the
individual who was the Silver King Participant's Spouse on the Benefit Starting
Date is required prior to recommencement of distributions if the Silver King
Participant elects to recommence benefits either in a different form than the
form in which his or her benefits were being distributed prior to the cessation
of distributions or with a different Beneficiary and if:
(i) the original form was a Joint and Survivor Annuity, or
(ii) the individual who was the Silver King Participant's
Spouse on the Benefit Starting Date originally executed a specific consent
to waive a Joint and Survivor Annuity and the Silver King Participant is
still married to that individual when distributions recommence.
(c) A Silver King Participant may elect, pursuant to Section
7.3(c), to cease receiving distributions, and no spousal consent is required for
the Silver King Participant to make such an election unless such distributions
are being paid in the form of a Joint and Survivor Annuity. Where such
distributions are being paid in the form of a Joint and Survivor Annuity, the
individual who was the Silver King Participant's Spouse on the original Benefit
Starting Date must consent to the Silver King Participant's election to cease
receiving distributions and the Spouse's consent must acknowledge the effect of
the election. A new Benefit Starting Date shall exist for the Silver King
Participant upon his or her recommencement of distributions. If the Silver King
Participant shall die prior to his new Benefit Starting Date, his or her
benefits under the Plan shall be distributed pursuant to Section 1.4 of this
Exhibit A.
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EXHIBIT B
SPECIAL RULES REGARDING COMPANY STOCK
UNDER THE FORMER EMPLOYEE STOCK OWNERSHIP
COMPONENT OF THE PLAN
With respect to Company Stock held by the employee stock ownership
component of the Plan prior to January 1, 1998, the provisions in effect under
the Home Shopping Network, Inc. Retirement Savings and Employee Stock Ownership
Plan, adopted on October 19, 1990 and as subsequently amended, is hereby
incorporated by reference, including, without limitation, the provisions
relating to the diversification election under Code Section 401(a)(28)(B), the
right to demand Company Stock under Code Section 409(h), and, to the extent that
the Company Stock is not readily tradable on an established market, the right of
first refusal and put option requirements.
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EXHIBIT C
PROCEDURES REGARDING QUALIFIED DOMESTIC RELATIONS ORDERS
Section 1. General
The Plan shall pay benefits to the person or persons named in a
Qualified Domestic Relations Order, as defined in Section 2 below, in the amount
and to the extent provided in such order. Payment of benefits pursuant to a
Qualified Domestic Relations Order shall not be considered a violation of the
prohibition against assignment and alienation contained in Section 9.2 of the
Plan.
Section 2 Qualified Domestic Relations Orders
In order to constitute a Qualified Domestic Relations Order, the order
must meet all of the following requirements:
(a) The order must create or recognize the existence of the right
of an Alternate Payee, as defined in Section 8, to, or must
assign to an Alternate Payee the right to, receive all or a
portion of the benefits payable under the Plan with respect to
a Member.
(b) The order must constitute a judgment, decree or order
(including approval of a property settlement agreement) which
relates to the provision of child support, alimony payments or
property rights to a Spouse, former Spouse, child or other
dependent of a Member, made pursuant to a state domestic
relations law (including a community property law).
(c) The order must specify the following information:
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(1) the name and last known mailing address (if any) of
the Member and the name and mailing address of each
Alternate Payee covered by the order,
(2) the amount or percentage of the Member's benefits to
be paid by the Plan to each Alternate Payee, or the
manner in which such amount or percentage shall be
determined,
(3) the number of payments or periods to which such order
applies, and
(4) the name of each Plan to which the order applies.
(d) The order must not require the Plan to provide any type or
form of benefit, or any option, not otherwise provided under
the terms of this Plan, nor require the Plan to provide
increased benefits (determined on the basis of actuarial
value) nor require the payment of benefits to an Alternate
Payee which are required to be paid to an Alternate Payee
under a previous Qualified Domestic Relations Order.
Notwithstanding the foregoing, the order may require the
payment of benefits to an Alternate Payee while the Member is
still employed; provided, however, payments are not required
to be made before the earlier of (i) the date on which the
Member is entitled to a distribution under the Plan or (ii)
the later of age 50 or the earliest date on which the Member
would begin receiving benefits under the Plan if he or she
separated from service. Payments may be required in
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any form in which such benefits may be paid under the Plan to
the Member, except in the form of a joint and survivor annuity
with respect to the Alternate Payee and his or her or her
subsequent Spouse.
Section 3. Payments During Member's Employment
In the event the Qualified Domestic Relations Order requires payments
to be made to the Alternate Payee while the Member is employed, payments shall
be computed as if the Member had retired on the date on which payments under the
order are to begin.
Section 4. Procedures
Upon receipt of any domestic relations order by the Plan, the Committee
shall take the following steps:
(a) The Committee shall promptly notify the Member and any
Alternate Payee named in such order of the receipt of a
domestic relations order and the Plan's procedures for
determining whether such order is a Qualified Domestic
Relations Order, as defined in Section 2 above. The notice to
the Alternate Payee shall include a statement that he or she
is entitled to designate a representative for receipt of
copies of any notices that are sent to the Alternate Payee
with respect to a domestic relations order. The notice shall
be sent to the Member and Alternate Payee at the address
specified in the order, or if none is specified, at the
address of the Member or Alternate Payee last known to the
Committee.
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(b) Within a reasonable period of time after receipt of such
order, the Committee shall determine whether such order is a
Qualified Domestic Relations Order, in accordance with the
provisions of Section 2 above, and notify the Member and each
Alternate Payee of such determination. In making its
determination, the Committee may seek the advice of legal
counsel as to whether the order meets the requirements of
Section 2 hereof and may, but shall not be required to, invite
written or oral arguments by the Member and the Alternate
Payee or their representatives.
(c) Pending the Committee's determination of whether a domestic
relations order is a Qualified Domestic Relations Order, the
Committee shall instruct the Trustee to segregate in a
separate account the amounts which would be payable to the
Alternate Payee during such period if the order is a Qualified
Domestic Relations Order. If within 18 months from the date on
which the first payment would be required to be made under the
Qualified Domestic Relations Order, it is determined that the
Order is a Qualified Domestic Relations Order, the Plan shall
pay the segregated amounts, including any interest thereon, to
the person or persons entitled thereto pursuant to the terms
of the Qualified Domestic Relations Order. If it is determined
that an order is not a Qualified Domestic Relations Order or
the issue as to whether an order is a Qualified Domestic
Relations Order is not resolved within the aforesaid 18 month
period, the Plan shall pay the segregated amounts to the
person or persons entitled to such amounts in the absence of
the order. If it is subsequently determined that
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an order is a Qualified Domestic Relations Order, the Plan
shall pay benefits subsequent to the determination in
accordance with the order. If action is taken in accordance
with this subparagraph, the Plan's obligation to the Member
and each Alternate Payee shall be discharged to the extent of
any payment made pursuant to the Qualified Domestic Relations
Order.
Section 5. Relationship to Other Plan Provisions
To the extent provided in the Qualified Domestic Relations Order, the
Plan shall treat the former Spouse of a Member as the Spouse of the Member for
purposes of the Plan to the extent, and only to the extent, a Spouse has rights
pursuant to Sections 205 of ERISA and Sections 401(a)(11) and 417 of the Code
and any Spouse of the Member shall not be treated as a Spouse of the Member for
such purposes.
Section 6. Beneficiary Status
Each Alternate Payee shall be treated as a Beneficiary under the Plan,
with all the rights accorded to other Beneficiaries under the terms hereof and
as otherwise provided by law. Section 7. Definition
"Alternate Payee" means the Member's Spouse, former Spouse, child or
other dependent of the Member who is recognized as having a right to receive
all, or a portion of, the benefits payable under the Plan with respect to that
Member.
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EXHIBIT D
HSN, INC. RETIREMENT SAVINGS PLAN
ADOPTION AGREEMENT OF
WHEREAS, ____________________ (hereinafter referred to as the
"Employer") is desirous of adopting the HSN, inc. Retirement Savings Plan and
its related trust (hereinafter referred to as the "Plan" and "Trust");
WHEREAS, it is appropriate that the Employer acknowledge its adoption
of the Plan and Trust;
NOW, THEREFORE, subject to the conditions set forth below, the Employer
agrees to be bound by each and all of the provisions of the Plan and Trust.
The Employer hereby agrees that the following shall apply, but not by
way of limitation, with respect to its participation under the Plan:
A. All the terms and conditions of the Plan and Trust shall apply to
the participation under the Plan of the Employer and its employees in the manner
set forth therein.
B. The Employer shall provide the Committee and Trustees under the Plan
with full, complete, and timely information on all matters necessary to them in
the operation of the Plan and Trust.
C. The Employer may at any time elect to terminate its participation
under the Plan in the manner set forth therein, or the Employer may elect at any
time by appropriate
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amendment or action affecting only its own status thereunder to disassociate
itself from the Plan and Trust but to continue the Plan and the portion of the
Trust as it pertains to itself and its employees as an entity separate and
distinct from this Plan and Trust.
D. The Employer shall be liable for and shall pay at least annually its
fair share of the expenses of operating the Plan and Trust, including its share
of any Trustee's fees, pursuant to Article XVI of the Plan.
HSN, inc. hereby consents to the above.
IN WITNESS WHEREOF, this Adoption Agreement has been executed this day
of 199 .
(EMPLOYER)
By:
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Title:
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HSN, inc.
By:
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Title:
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D-2
