As filed with the Securities and Exchange Commission on June 27, 1996
Registration No. ______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
HFS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 22-3059335
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
339 Jefferson Road
Parsippany, New Jersey 07054
(Address of principal executive office) (Zip Code)
HFS Incorporated
Employee Savings Plan
(Full title of the plan)
James E. Buckman, Esq.
339 Jefferson Road, Parsippany, New Jersey 07054
(201) 428-9700
(Name, address and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Max-
Title of imum Offering Proposed Maximum Amount of
Securities to Amount to be Price Per Aggregate Offering Registration
be Registered Registered(1) Share (2)(3) Price(2)(3) Fee(2)
- --------------------------------------------------------------------------------
Common Stock,
par value $.01
per share 200,000 $63.375 $12,675,000 $4,371
================================================================================
(1) An additional 60,000 shares (after adjustment for a two-for-one stock
split effected as of February 14, 1996) of the Registrant's Common
Stock, par value $.01 per share, issuable pursuant to the Registrant's
Employee Savings Plan, were previously registered under the Securities
Act of 1933, as amended (the "Securities Act"), pursuant to the
Registrant's Registration Statement on Form S-8, file number 33- 72752.
(2) Pursuant to paragraphs (c) and (h) of Rule 457 under the Securities Act,
the proposed maximum offering price and the registration fee are based
upon the average of the high and low prices per share of the
Registrant's Common Stock reported on the New York Stock Exchange
Composite Transaction Tape on June 21, 1996, within five business days
prior to the date of filing of this Registration Statement.
(3) Estimated solely for the purpose of calculating the registration fee.
In addition, pursuant to Rule 416(c) under the Securities Act, this Registration
Statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents which have been heretofore filed with the
Securities and Exchange Commission (the "Commission") by the registrant, HFS
Incorporated, a Delaware corporation (the "Registrant"), are incorporated by
reference in this Registration Statement:
(a) The Registrant's annual report on Form 10-K for the fiscal year
ending December 31, 1995 (File Number 1-11402) filed with the Commission on
March 29, 1996 and the Registrant's quarterly report on Form 10-Q for the
quarterly period ending March 31, 1996, filed with the Commission on May 15,
1996;
(b) All reports filed by the Registrant with the Commission pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to December 31, 1995.
(c) The description of the Registrant's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
September 28, 1994 (File Number 1-11402) pursuant to Section 12(b) of the
Exchange Act and any amendment or report filed with the Commission for purposes
of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all such securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Registrant is a Delaware corporation. Reference is made to
Section 145 of the Delaware General Corporation Law, as amended ("GCL"), which
provides that a corporation may indemnify any person who was or
<PAGE>
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at its request in such capacity
of another corporation or business organization, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that such person's conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of a corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action, suit or proceeding referred to
above, the corporation must indemnify against the expenses (including attorneys'
fees) that such officer or director actually and reasonably incurred in
connection therewith.
Reference is also made to Section 102(b)(7) of the GCL, which
permits a corporation to provide in its certificate of incorporation that a
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the GCL or (iv) for any transaction from which
the director derived an improper personal benefit.
Articles Ninth and Tenth of the Registrant's Restated Certificate
of Incorporation provide for (i) the elimination of personal liability of a
director for breach of fiduciary duty as permitted by Section 102(b)(7) of the
GCL, and (ii) the Registrant to indemnify its directors and officers to the full
extent permitted by Section 145 of the GCL.
The Registrant maintains, at its expense, a policy of insurance
which insures its directors and officers, subject to certain exclusions and
deductions as are customary in such insurance policies, against certain
liabilities which may be incurred in those capacities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 HFS Incorporated Amended and Restated Employee Savings Plan
4.2 Registrant's Restated Certificate of Incorporation filed with the Secretary
of State of the State of Delaware on January 22, 1996 (Incorporated by
reference to Exhibit 4 to the Registrant's Registration Statement on Form
8-A filed on February 21, 1996)
4.3 Registrant's By-Laws (Incorporated by reference to the Registrant's
Registration Statement on Form S-8, file number 33-83956, Exhibit 4.3)
5.1 Opinion of Carpenter, Bennett & Morrissey
23.1 Consent of Deloitte & Touche LLP relating to the financial statements of
HFS Incorporated
23.2 Consent of Deloitte & Touche LLP relating to the financial statements of
Century 21 Real Estate of Mid-Atlantic States, Inc.
23.3 Consent of Toback CPAs, P.C. relating to the financial statements of
Century 21 of the Southwest, Inc.
23.4 Consent of Woolard, Krajnik & Company relating to the financial statements
of Century 21 of Eastern Pennsylvania, Inc.
23.5 Consent of Beers & Cutler relating to the financial statements of Century
21 Real Estate of the Mid-Atlantic States, Inc.
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<PAGE>
23.6 Consent of White, Nelson & Co. LLP relating to the financial statements of
Century 21 Region V, Inc.
23.7 Consent of Ernst & Young LLP relating to the financial statements of
Electronic Realty Associates, Inc. and Electronic Realty Associates, L.P.
23.8 Consent of Coopers & Lybrand L.L.P. relating to the financial statements of
Coldwell Banker Corporation.
23.9 Consent of Deloitte & Touche LLP relating to the financial statements of
Coldwell Banker Corporation.
23.10 Consent of Carpenter, Bennett & Morrissey (contained in Exhibit 5.1)
24.1 Power of Attorney (contained in the signature page hereof)
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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 this Registration Statement:
iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
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<PAGE>
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of 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.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Parsippany, State of New Jersey, on this 27th day of
June 1996.
HFS INCORPORATED
By: /s/ Henry R. Silverman
Henry R. Silverman
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Henry R. Silverman, Stephen P. Holmes and James E.
Buckman his true and lawful attorney-in-fact and agents, each acting alone, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any or all amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, and hereby ratifies and confirms
all his said attorneys-in-fact and agents, each acting alone, or his substitute
or substitutes may lawfully do or cause to be done by virtue thereof.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title Date
/s/ Henry R. Silverman Chairman of the Board, June 27, 1996
Henry R. Silverman Chief Executive Officer
and Director
(Principal Executive Officer)
/s/John D. Snodgrass President, Chief Operating June 27, 1996
John D. Snodgrass Officer and Director
Executive Vice President, June 27, 1996
/s/ Stephen P. Holmes Chief Financial Officer,
Stephen P. Holmes Treasurer and Director
(Principal Financial Officer
and Principal Accounting Officer)
/s/ James E. Buckman Executive Vice President, June 27, 1996
James E. Buckman General Counsel and Director
_____________________ Director
Martin L. Edelman
_____________________ Director
Robert E. Nederlander
_____________________ Director
Robert W. Pittman
/s/ Leonard Schutzman Director June 27, 1996
Leonard Schutzman
/s/ Robert F. Smith Director June 27, 1996
Robert F. Smith
/s/ Roger J. Stone, Jr. Director June 27, 1996
Roger J. Stone, Jr.
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<PAGE>
EXHIBIT INDEX
4.1 HFS Incorporated Amended and Restated Employee Savings Plan
4.2 Registrant's Restated Certificate of Incorporation filed with the Secretary
of State of the State of Delaware on January 22, 1996 (Incorporated by
reference to Exhibit 4 to the Registrant's Registration Statement on Form
8-A filed on February 21, 1996)
4.3 Registrant's By-Laws (Incorporated by reference to the Registrant's
Registration Statement on Form S-8, file number 33-83956, Exhibit 4.3)
5.1 Opinion of Carpenter, Bennett & Morrissey
23.1 Consent of Deloitte & Touche LLP relating to the financial statements of
HFS Incorporated
23.2 Consent of Deloitte & Touche LLP relating to the financial statements of
Century 21 Real Estate of Mid-Atlantic States, Inc.
23.3 Consent of Toback CPAs, P.C. relating to the financial statements of
Century 21 of the Southwest, Inc.
23.4 Consent of Woolard, Krajnik & Company relating to the financial
statements of Century 21 of Eastern Pennsylvania, Inc.
23.5 Consent of Beers & Cutler relating to the financial statements of
Century 21 Real Estate of the Mid-Atlantic States, Inc.
23.6 Consent of White, Nelson & Co. LLP relating to the financial statements of
Century 21 Region V, Inc.
23.7 Consent of Ernst & Young LLP relating to the financial statements of
Electronic Realty Associates, Inc. and Electronic Realty Associates, L.P.
23.8 Consent of Coopers & Lybrand L.L.P. relating to the financial statements of
Coldwell Banker Corporation.
23.9 Consent of Deloitte & Touche LLP relating to the financial statements of
Coldwell Banker Corporation.
23.10 Consent of Carpenter, Bennett & Morrissey (contained in Exhibit 5.1)
24.1 Power of Attorney (contained in the signature page hereof)
EXHIBIT 4.1
HFS INCORPORATED
EMPLOYEE SAVINGS PLAN
Amended and Restated as of January 1, 1996
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS..........................................................-1-
(a) "Account" ..................................................-1-
(b) "Administrative Committee" or "Committee" ..................-2-
(c) "Administrator" or "Plan Administrator" ....................-2-
(d) "Annual Additions" .........................................-2-
(e) "Board of Directors" .......................................-2-
(f) "Break in Service" .........................................-2-
(g) "Code" .....................................................-2-
(h) "Company" ..................................................-2-
(i) "Compensation" .............................................-3-
(j) "Disability" ...............................................-5-
(k) "Effective Date" and "Original Effective Date"..............-5-
(l) "Employee" .................................................-5-
(m) "Entry Date" ...............................................-6-
(n) "ERISA" ....................................................-6-
(o) "Family Member" ............................................-7-
(p) "Fiduciary" ................................................-7-
(q) "Fund" .....................................................-7-
(r) "Highly Compensated Employee" ..............................-7-
(s) "Hour of Service" ..........................................-9-
(t) "Investment Category" ......................................-9-
(u) "Investment Manager" ......................................-10-
(v) "Limitation Year" .........................................-10-
(w) "Member" ..................................................-10-
(x) "Normal Retirement Date" ..................................-10-
(y) "Participating Company" ...................................-10-
(z) "Period of Service" .......................................-10-
(aa) "Period of Severance" .....................................-12-
(bb) "Plan" ....................................................-12-
(cc) "Plan Year" ...............................................-12-
(dd) "Related Entity" ..........................................-12-
(ee) "Service" ...............................................-13-
(ff) "Severance Date" ..........................................-13-
(gg) "Trust Agreement" .........................................-14-
(hh) "Trustee" .................................................-14-
(ii) "Valuation Date" ..........................................-14-
(jj) "Voluntary Contribution" ..................................-14-
2. ADMINISTRATION OF THE PLAN..........................................-15-
(a) ERISA Reporting and Disclosure by Administrator. .........-15-
(b) Committee. ..............................................-15-
(c) Multiple Capacities. .....................................-15-
-i-
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(d) Committee Powers. .......................................-15-
(e) Allocation of Fiduciary Responsibility. ..................-16-
(f) Claims. ..................................................-17-
(g) Fiduciary Compensation. ..................................-18-
(h) Plan Expenses. ...........................................-19-
(i) Fiduciary Insurance. .....................................-19-
(j) Indemnification. .........................................-19-
3. PARTICIPATION IN THE PLAN...........................................-19-
(a) Initial Eligibility. .....................................-19-
(b) Ineligible Employees.......................................-21-
(c) Commencement of Participation. ...........................-22-
(d) Termination and Requalification. .........................-22-
(e) Termination of Membership. ...............................-23-
(f) Transfers. ...............................................-23-
4. CONTRIBUTIONS.......................................................-23-
(a) Salary Deferral Contributions. ...........................-23-
(b) Salary Deferral Contribution Limitations. ................-25-
(c) Salary Deferral Account. .................................-26-
(d) Compliance with Salary Deferral Discrimination Tests.......-26-
(e) Participating Company Contributions. .....................-31-
(f) Employer Contribution Account. ...........................-32-
(g) Compliance with Participating Company Matching Contribution
Discrimination Tests......................................-32-
(h) Rollovers. ...............................................-38-
(i) Rollover Account. ........................................-38-
(j) "Failsafe" Contributions. ................................-38-
(k) Payroll Taxes. ...........................................-39-
5. MAXIMUM CONTRIBUTIONS AND BENEFITS..................................-39-
(a) Defined Contribution Limitation. .........................-39-
(b) Combined Limitation. .....................................-40-
(c) Combined Limitation Computation. .........................-40-
(d) Definition of "Compensation" for Code Limitations..........-43-
6. ADMINISTRATION OF FUNDS.............................................-44-
(a) Investment Control. ......................................-44-
(b) Member Elections. ........................................-45-
(c) Life Insurance Investment Category. ......................-46-
(d) No Member Election. ......................................-48-
(e) Facilitation. ............................................-48-
(f) Valuations. ..............................................-48-
(g) Allocation of Gain or Loss. ..............................-48-
(h) Provisions Optional. .....................................-49-
(i) Bookkeeping. .............................................-49-
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<PAGE>
7. BENEFICIARIES AND DEATH BENEFITS....................................-49-
(a) Designation of Beneficiary. ..............................-49-
(b) Beneficiary Priority List. ...............................-50-
8. BENEFITS FOR MEMBERS................................................-50-
(a) Retirement Benefit.........................................-50-
(b) Death Benefit..............................................-51-
(c) Disability Benefit. ......................................-52-
(d) Termination of Employment Benefit..........................-52-
(e) Recognition of Forfeitures. ..............................-55-
9. DISTRIBUTION OF BENEFITS............................................-55-
(a) Commencement. ............................................-55-
(b) Benefit Form...............................................-56-
(c) Account Balances Less Than $3,500. .......................-57-
(d) Definitions. .............................................-57-
(e) Withholding. .............................................-57-
(f) Rollover Election. .......................................-57-
(g) Super 8 Employees' Option. ...............................-58-
10. IN-SERVICE DISTRIBUTIONS............................................-60-
(a) Age 59-1/2. ..............................................-60-
(b) Hardship. ................................................-61-
(c) Need.......................................................-61-
(d) Satisfaction of Need. ....................................-61-
(e) Limitation. ..............................................-62-
(f) Withdrawal of Voluntary Contributions......................-62-
11. LOANS...............................................................-63-
(a) Committee Discretion. ....................................-63-
(b) Minimum Requirements. ....................................-63-
(c) Accounting. ..............................................-65-
12. TITLE TO ASSETS.....................................................-65-
13. AMENDMENT AND TERMINATION...........................................-65-
(a) Amendment. ...............................................-65-
(b) Termination. .............................................-66-
(c) Conduct on Termination. ..................................-66-
(d) Procedure for Plan Amendment. .............................-67-
14. LIMITATION OF RIGHTS................................................-67-
(a) Alienation. ..............................................-67-
(b) Qualified Domestic Relations Order Exception. ............-67-
(c) Employment. ..............................................-68-
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15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS.................-68-
16. PARTICIPATION BY RELATED ENTITIES...................................-68-
(a) Commencement. ............................................-68-
(b) Termination. .............................................-69-
(c) Single Plan. .............................................-69-
(d) Delegation of Authority. .................................-69-
17. TOP-HEAVY REQUIREMENTS..............................................-69-
(a) General Rule. ............................................-69-
(b) Definitions. .............................................-69-
(c) Combined Benefit Limitation. .............................-73-
(d) Vesting. .................................................-73-
(e) Minimum Contribution. ....................................-74-
18. MISCELLANEOUS.......................................................-75-
(a) Incapacity. ..............................................-75-
(b) Reversions. ..............................................-75-
(c) Employee Data. ...........................................-76-
(d) Law Governing. ...........................................-76-
(e) Pronouns. ................................................-76-
(f) Interpretation. ..........................................-77-
19. COMPANY STOCK.......................................................-77-
(a) Voting of Company Stock. ..................................-77-
(b) Securities Laws. .........................................-77-
(c) Tender Offers. ...........................................-78-
(d) Confidentiality Procedures. ..............................-79-
(e) Employer Securities. .....................................-79-
(f) Company Stock. ...........................................-80-
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<PAGE>
HFS INCORPORATED
EMPLOYEE SAVINGS PLAN
HFS Incorporated (formerly known as Hospitality Franchise Systems, Inc.), a
Delaware corporation (the "Company"), heretofore effective July 2, 1990, adopted
a Section 401(k) profit sharing plan, the HFS Incorporated Employee Savings
Plan, to provide individuals who shall qualify as Members hereunder with an
additional source of retirement income for themselves or survivor benefits for
their beneficiaries by affording them an opportunity to increase their savings
on a tax-favored basis. On July 16, 1991, the Company adopted a First Amendment
to the Plan, on May 4, 1992, the Company adopted a Second Amendment to the Plan,
on December 8, 1993, the Company adopted a Third Amendment to the Plan, on March
28, 1994 the Company adopted a Fourth Amendment to the Plan, on August 31, 1994
the Company adopted a Fifth Amendment to the Plan, and on September 29, 1995 the
Company adopted a Sixth Amendment to the Plan. Effective January 1, 1996, the
Company has decided to further amend the Plan by restating it in its entirety,
as permitted in accordance with Section 13(a) of the Plan.
1. DEFINITIONS
(a) "Account" shall mean on any date of determination the value of a
Member's share of the Fund.
(i) "Salary Deferral Account" shall mean the portion of the
Member's Account derived from Participating Company contributions under
subsection 4(a).
(ii) "Rollover Account" shall mean the portion of the Member's
Account derived from amounts transferred to the Fund under subsection 4(h).
(iii) "Employer Contributions Account" shall mean the portion
of the Member's Account derived from Participating Company contributions under
subsection 4(e).
<PAGE>
(iv) "Voluntary Contribution Account" shall mean the portion of
the Member's Account derived from Voluntary Contributions made to the Century 21
Real Estate Corporation Savings and Investment Plan.
(b) "Administrative Committee" or "Committee" shall mean the individual
or group of individuals designated pursuant to subsection 2(b) to control and
manage the operation and administration of the Plan to the extent set forth
herein.
(c) "Administrator" or "Plan Administrator" shall mean the Company.
(d) "Annual Additions" shall mean the sum for any Limitation Year of (i)
employer contributions, (ii) employee contributions, (iii) forfeitures and (iv)
amounts described in Sections 415(l)(1) and 419A(d)(2) of the Code, which are
allocated to the account of a Member under the terms of a plan subject to
Section 415 of the Code. "Annual Additions" shall include excess contributions
as defined in Section 401(k)(8)(B) of the Code, excess aggregate contributions
as defined in Section 401(m)(6)(B) of the Code and excess deferrals as described
in Section 402(g) of the Code, regardless of whether such amounts are
distributed or forfeited. "Annual Additions" shall not include contributions
made under subsection 4(h).
(e) "Board of Directors" shall mean the Board of Directors of the
Company.
(f) "Break in Service" shall mean a Period of Severance.
(g) "Code" shall mean the Internal Revenue Code of 1986, and the same
as may be amended from time to time.
(h) "Company" shall mean HFS Incorporated (formerly known as Hospitality
Franchise Systems, Inc.) a Delaware corporation.
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<PAGE>
(i) "Compensation" means all of each Member's regular or base salary or
wages (including overtime). On or prior to March 31, 1996, Compensation shall
include bonuses for all Nonhighly Compensated Employees. Effective April 1,
1996, Compensation shall not include bonuses for any Employees. Compensation
shall not include stock option payments, severance pay, nor any allowances or
reimbursements such as car allowances, relocation expenses or any other forms of
compensation other than base salary or wages.
Compensation shall include only that compensation which is
actually paid to the Member during the applicable period. Except as provided
elsewhere in this Plan, the applicable period shall be the Plan Year.
Notwithstanding the above, Compensation shall include any
amount which is contributed by the Company pursuant to a salary reduction
agreement and which is not includable in the gross income of the Employee under
Code Sections 125, 402(a)(8), 402(h) or 403(b).
For Plan Years beginning (within each applicable calendar year)
after December 31, 1993, the annual Compensation of each Member taken into
account under the Plan for any year shall not exceed $150,000, as adjusted at
the same time and in the same manner as under Code Section 415(d). In
determining the Compensation of a Member for purposes of this limitation, the
rules of Code Section 414(q)(6) shall apply, except in applying such rules, the
term "family" shall include only the Spouse of the Member and any lineal
descendants of the Member who have not attained age nineteen (19) before the
close of the year. If the above-referenced limitation is exceeded due to the
family aggregation rules, the
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permissible Compensation up to the limitation shall be prorated among family
members prorata to their Compensation.
If a short Plan Year is created because of an amendment
changing the Plan Year to a different twelve (12) consecutive month period,
Compensation shall be pro-rated based on the following formula:
Number of Months in the short Plan Year
---------------------------------------
12
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding
twelve (12) months, over which compensation is determined (determination
period), beginning in such calendar year. If a determination period consists of
fewer than twelve (12) months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is twelve (12).
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
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If Compensation for any prior determination period is taken into account
in determining an employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
(j) "Disability" shall mean a medically determinable physical or mental
impairment of a permanent nature which prevents a Member from performing his
customary employment duties without endangering his health.
(k) "Effective Date" and "Original Effective Date" The "Effective Date"
of this Plan shall mean January 1, 1996. The "Original Effective Date" of this
Plan shall mean July 2, 1990.
(l) "Employee" shall mean each and every person employed by a
Participating Company or a Related Entity. The term "Employee" shall also
include a person who is a "leased employee" with respect to the Company or
Related Entity. No person who is a "leased employee" shall be eligible to
participate in this Plan. "Leased employee" shall mean any person who is not an
Employee but who provides services to the Company or Related Entity if:
(a) such services are provided pursuant to an agreement between
the Company or Related Entity and any leasing organization;
(b) such person has performed services for the Company or
Related Entity (or for the Company or Related Entity and any related
person within the
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meaning of Section 414(n)(6) of the Code) on a substantially full-time
basis for a period of at least one (1) year; and
(c) the services are of a type historically performed by
employees in the business field of the Company or Related Entity.
A "leased employee" shall be treated as an Employee of the
Company or Related Entity; however, contributions or benefits provided by the
leasing organization which are attributable to services performed for the
Company or Related Entity shall be treated as provided by the Company or Related
Entity. A "leased employee" shall not be treated as an Employee if such "leased
employee" is covered by a money purchase pension plan of the leasing
organization, and the number of leased employees does not constitute more than
twenty percent (20%) of the Company or Related Entity's Non-Highly Compensated
work force as defined by Section 414(n)(5)(C) of the Code. The money purchase
pension plan of the leasing organization must provide benefits equal to or
greater than: (1) a non-integrated employer contribution rate of at least ten
percent (10%) of compensation, (2) immediate participation, and (3) full and
immediate vesting.
(m) "Entry Date" Effective January 1, 1992 and thereafter, "Entry Date"
shall mean the first day of each Plan Year and the first day of the fourth,
seventh and tenth months of the Plan Year. For the Plan's first Plan Year, the
Entry Dates shall be July 2, 1990 and September 1, 1990. For the Plan's 1991
Plan Year, the Entry Dates shall fall on the first day of the fourth, seventh
and tenth months.
(n) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the same as may be amended from time to time.
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<PAGE>
(o) "Family Member" as defined in Code Section 414(q)(6)(B) shall mean
the spouse, lineal ascendants and descendants and the spouses of such lineal
ascendants or descendants, of either a 5% owner of the Employer as defined in
Section 416(i) of the Code, or one of the top ten paid Employees of the
Employer.
(p) "Fiduciary" shall mean a person who, with respect to the Plan, (i)
exercises any discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control with respect to
management or disposition of the Plan's assets, (ii) renders investment advice
for a fee or other compensation, direct or indirect, with respect to any monies
or other property of the Plan, or has any authority or responsibility to do so,
or (iii) has any discretionary authority or discretionary responsibility in the
administration of the Plan.
(q) "Fund" shall mean the assets of the Plan. All Investment Categories
shall be part of the Fund.
(r) "Highly Compensated Employee" includes Highly Compensated active
Employees and Highly Compensated former Employees.
A Highly Compensated active Employee includes any Employee who
performs service for the Employer during the determination year and who, during
the look-back year:
(i)received Compensation from the Employer in excess of $85,485
(as adjusted pursuant to Section 415(d) of the Code);
(ii) received Compensation from the Employer in excess of
$56,990 (as adjusted pursuant to Section 415(d) of the Code) and was a member of
the top-paid group for such year; or
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(iii) was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code.
The term Highly Compensated Employee also includes:
(i) Employees who are both described in the preceding sentence
if the term "determination year" is substituted for the term "look-back year"
and the Employee is one of the 100 Employees who received the most Compensation
from the Employer during the determination year; and
(ii) Employees who are 5 percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A Highly Compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
Highly Compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or lookback year, a
Family Member of either a 5 percent owner who is an active or former Employee or
a Highly Compensated
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Employee who is one of the 10 most Highly Compensated Employees ranked on the
basis of Compensation paid by the Employer during such year, then the Family
Member and the 5 percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the Family Member and 5 percent owner or top-ten
Highly Compensated Employee shall be treated as a single Employee receiving
Compensation and plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the Family Member and 5 percent
owner or top-ten Highly Compensated Employee.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
Compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
(s) "Hour of Service" shall mean each hour (i) for which an Employee is
directly or indirectly paid, or entitled to payment, by a Participating Company
or a Related Entity for the performance of duties or (ii) for which back pay,
irrespective of mitigation of damages, has been either awarded or agreed to by a
Participating Company or a Related Entity. These hours shall be credited to the
Employee for the period or periods in which the duties were performed or to
which the award or agreement pertains irrespective of when payment is made. For
purposes of this subsection, the regulations issued by the Secretary of Labor at
29 CFR 2530.200b-2(b) and (c) are incorporated by reference. Nothing herein
shall be construed as denying an Employee credit for an "Hour of Service" if
credit is required by separate federal law.
(t) "Investment Category" shall mean any separate investment fund which
is made available under the terms of the Plan.
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<PAGE>
(u) "Investment Manager" shall mean any Fiduciary who:
(i) has the power to manage, acquire, or dispose of any asset
of the Plan;
(ii) is:
(A) registered as an investment adviser under the
Investment Advisers Act of 1940;
(B) a bank, as defined in that Act; or
(C) an insurance company qualified to perform
services described in subsection 1(u)(i) above under the
laws of more than one state; and
(iii) has acknowledged in writing that he is a Fiduciary
with respect to the Plan.
(v) "Limitation Year" shall mean the consecutive twelve-month period
commencing on January 1 and ending on December 31.
(w) "Member" shall mean each and every Employee of a Participating
Company who satisfies the requirements for participation under Section 3 hereof
or who has an Account held under the Plan.
(x) "Normal Retirement Date" shall mean the date on which a Member
attains age 65.
(y) "Participating Company" shall mean any Related Entity with respect
to the Company which adopts this Plan pursuant to Section 16. The term shall
also include the Company, unless the context otherwise requires.
(z) "Period of Service" shall mean the period of time commencing on the
date on which an Employee first is credited with an Hour of Service or, if
applicable, the first date
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following a Period of Severance on which an Employee is credited with an Hour of
Service, and ending on the next following Severance Date. Notwithstanding the
foregoing, for purposes of eligibility to participate under Section 3, a Period
of Severance of less than one year shall be included in a Period of Service.
Furthermore, "Period of Service" shall include the period of time during which
the Employee is absent from work, up to the first anniversary of the date on
which such absence began, (i) by reason of the Employee's pregnancy, (ii) by
reason of the birth of the Employee's child, (iii) by reason of the placement of
a child with such Employee in connection with an adoption of such child by the
Employee or (iv) for purposes of caring for a child for a period beginning
immediately following birth or placement. Unless expressly provided otherwise
herein, for purposes of any computation of Years of Service or Breaks in
Service, the computation period for determining a Year of Service or a Break in
Service shall commence on the date an Employee first performs an Hour of Service
and each annual anniversary thereof. Unless otherwise provided herein, the
computation period applicable to a former employee of a company, the stock or
assets of which are acquired by a Participating Company, and who became an
Employee of the Company as of the date of consummation of such acquisition,
shall commence as of the date of consummation of such acquisition. Service shall
include an Employee's Period of Service with Prime Motor Inns, Inc. and its
affiliates prior to July 2, 1990 if such Employee was employed by a
Participating Company on such date. The computation period applicable to a
former Employee of Century 21 Real Estate Corporation who became an Employee of
the Company on August 1, 1995 shall commence as of the date such Employee first
performed an Hour of Service for Century 21 Real Estate Corporation. The
computation period applicable to a former Employee of a Related Entity that is
not a
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Participating Company who transfers to the employ of the Company pursuant to
subsection 3(f) such that participation in the Plan is available to him shall
commence as of the date he first performed an Hour of Service for the Related
Entity. Notwithstanding the foregoing, for purposes of subsection 4(e), if an
Employee has previously had any Breaks in Service, Service shall include only
that Period of Service commencing subsequent to such Breaks in Service.
(aa) "Period of Severance" shall mean the period of time commencing on
an Employee's Severance Date and ending on the date on which the Employee first
again is credited with an Hour of Service.
(bb) "Plan" shall mean HFS Incorporated Employee Savings Plan as set
forth herein as of the Effective Date and the same as may be amended from time
to time.
(cc) "Plan Year" shall mean the consecutive twelve-month period
commencing on January 1 and ending on December 31. The first "Plan Year" shall
begin July 2, 1990 and end December 31, 1990.
(dd) "Related Entity" shall mean (i) all corporations which are members
with a Participating Company in a controlled group of corporations within the
meaning of Section 1563(a) of the Code, determined without regard to Sections
1563(a)(4) and (e)(3)(c) of the Code, (ii) all trades or businesses (whether or
not incorporated) which are under common control with a Participating Company as
determined by regulations promulgated under Section 414(c) of the Code, (iii)
all trades or businesses which are members of an affiliated service group with a
Participating Company within the meaning of Section 414(m) of the Code and (iv)
any other entity required to be aggregated with a Participating Company in
accordance with regulations under Section 414(o) of the Code; provided, however,
for purposes of Section 5, the definition
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shall be modified to substitute the phrase "more than 50%" for the phrase "at
least 80%" each place it appears in Section 1563(a)(1) of the Code. Furthermore,
for purposes of crediting Hours of Service for eligibility to participate and
vesting, Service performed as a leased employee, within the meaning of Section
414(n) of the Code, of a Participating Company or a Related Entity shall be
treated as Service performed for a Participating Company or a Related Entity. An
entity is a Related Entity only during those periods in which it is included in
a category described in this subsection.
(ee) "Service" shall mean the sum of an Employee's Periods of Service.
Service is measured in completed years, months and days, where 365 days (366
days in a leap year) of Service equal one Year of Service and a Month of Service
shall be the period commencing on any day in a month and ending on the day
preceding the day in the next calendar month with the same numerical value as
the commencement date; for example, one Month of Service commencing on September
15 would end on October 14.
(ff) "Severance Date" shall mean the earlier of (i) the date an Employee
quits, is discharged, retires or dies or (ii) the first anniversary of the date
an Employee is absent from the employ of the Company and all Related Entities
for any reason other than an approved leave of absence granted in writing by the
Company according to a uniform rule applied without discrimination provided the
Employee returns to the employ of the Company or a Related Entity upon
completion of the leave. Notwithstanding the foregoing, an Employee who
terminates Service to enter the military service of the United States shall not
suffer a Severance Date as of such date provided (i) such Employee's rights are
protected by federal law and (ii) such Employee returns to employment with the
Company or a Related Entity within the period
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required by law for preservation of his rights. Under such circumstances, an
Employee shall receive credit for Service for his entire period of absence. If
the Employee does not return to Service within the time prescribed by law, then
the date he terminated employment shall be his Severance Date. In addition, for
purposes of subsection l(f), an Employee shall not suffer a Severance Date until
the second anniversary of the date on which such Employee is absent from work
(i) by reason of the Employee's pregnancy, (ii) by reason of the birth of the
Employee's child, (iii) by reason of the placement of a child with such Employee
in connection with an adoption of such child by the Employee or (iv) for
purposes of caring for a child for a period beginning immediately following
birth or placement.
(gg) "Trust Agreement" shall mean the agreement between the Company and
the Trustee under which the Fund is held.
(hh) "Trustee" shall mean such person, persons or corporate fiduciary
designated pursuant to subsection 6(a) to manage and control the Fund pursuant
to the terms of the Plan and the Trust Agreement.
(ii) "Valuation Date" shall mean the last business day of each month in
the Plan Year. If the Fund or any Investment Category is invested in a manner
which permits daily valuation of the portion of a Member's Account held therein
without incremental cost or the Committee otherwise directs, then the date of
liquidation of a Member's investment therein for distribution or reinvestment
shall also be a "Valuation Date".
(jj) "Voluntary Contribution" shall mean any contribution made to the
Century 21 Real Estate Corporation Savings and Investment Plan by a Member that
was included in the
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Member's gross income in the year in which it was made and that is maintained
under a separate account to which earnings and losses are allocated.
2. ADMINISTRATION OF THE PLAN
(a) ERISA Reporting and Disclosure by Administrator. The Administrator
shall file all reports and distribute to Members and beneficiaries reports and
other information required under ERISA and the Code.
(b) Committee. The Company, through its Board of Directors, shall
designate an Administrative Committee which shall have the authority to control
and manage the operation and administration of the Plan. If the Committee
consists of more than two members, it shall act by majority vote. The Committee
may (i) delegate all or a portion of the responsibilities of controlling and
managing the operation and administration of the Plan to one or more persons and
(ii) appoint agents, investment advisers, counsel, or other representatives to
render advice with regard to any of its responsibilities under the Plan. The
Board of Directors may remove, with or without cause, the Committee or any
Committee member. The Committee may remove, with or without cause, any delegate
or adviser designated by it.
(c) Multiple Capacities. Any person may serve in more than one fiduciary
capacity (including service both as Trustee and Committee member).
(d) Committee Powers. The responsibility to control and manage the
operation and administration of the Plan shall include, but shall not be limited
to, the performance of the following acts:
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(i) the filing of all reports required of the Plan, other than
those which are the responsibility of the Administrator;
(ii) the distribution to Members and beneficiaries of all
reports and other information required of the Plan, other than reports and
information required to be distributed by the Administrator;
(iii) the keeping of complete records of the administration
of the Plan;
(iv) the promulgation of rules and regulations for the adminis-
tration of the Plan consistent with the terms and provisions of the Plan; and
(v) the exclusive discretionary authority and power to
determine eligibility for benefits and to construe the terms and provisions of
the Plan, determine questions of fact and law arising under the Plan, direct
disbursements pursuant to the Plan, and exercise all other powers specified
herein or which may be implied from the provisions hereof. The Committee may
adopt such rules for the conduct of the administration of the Plan as it may
deem appropriate.
(e) Allocation of Fiduciary Responsibility. The Board of Directors, the
Administrator, the Committee, the Trustee and the Investment Manager (if any)
possess certain specified powers, duties, responsibilities and obligations under
the Plan and the Trust Agreement. It is intended under this Plan and the Trust
Agreement that each be responsible solely for the proper exercise of its own
functions and that each not be responsible for any act or failure to act of
another, unless otherwise responsible as a breach of its fiduciary duty or for
breach of duty by another Fiduciary under ERISA's rules of co-fiduciary
responsibility. In general:
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(i) the Board of Directors is responsible for appointing and
removing the Committee and the Trustee and for amending or terminating the Plan
and the Trust Agreement;
(ii) the Committee is responsible for administering the Plan,
for adopting such rules and regulations as in the opinion of the Committee are
necessary or advisable to implement and administer the Plan and to transact its
business, and for providing a procedure for carrying out a funding policy and
method consistent with the objectives of the Plan and the requirements of Title
I of ERISA and the Code;
(iii) the Administrator is responsible for discharging the
statutory duties of a plan administrator under ERISA and the Code;
(iv) the Trustee and the Investment Manager are responsible for
the management and control of the respective portions of the Fund over which
they have control to the extent provided in the Trust Agreement; and
(v) the Fiduciary appointing an Investment Manager is
responsible for the appointment and retention of the Investment Manager.
(f) Claims. If, pursuant to the rules, regulations or other
interpretations of the Plan, the Committee denies the claim of a Member or
beneficiary for benefits under the Plan, the Committee shall provide written
notice, within 90 days after receipt of the claim, setting forth in a manner
calculated to be understood by the claimant:
(i) the specific reasons for such denial;
(ii) the specific reference to the Plan provisions on which
the denial is based;
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(iii) a description of any additional material or information
necessary to perfect the claim and an explanation of why such material or infor-
mation is needed; and
(iv) an explanation of the Plan's claim review procedure and
the time limitations of this subsection applicable thereto.
A Member or beneficiary whose claim for benefits has been denied may
request review by the Committee of the denied claim by notifying the Committee
in writing within 60 days after receipt of the notification of claim denial. As
part of said review procedure, the claimant or his authorized representative may
review pertinent documents and submit issues and comments to the Committee in
writing. The Committee shall render its decision to the claimant in writing in a
manner calculated to be understood by the claimant not later than 60 days after
receipt of the request for review, unless special circumstances require an
extension of time, in which case decision shall be rendered as soon after the
sixty-day period as possible, but not later than 120 days after receipt of the
request for review. The decision on review shall state the specific reasons
therefore and the specific Plan references on which it is based.
(g) Fiduciary Compensation. A Committee member, delegate, or adviser who
already receives full-time pay from the Company or a Related Entity shall serve
without compensation for his services as such, but he shall be reimbursed
pursuant to subsection 2(h) for any reasonable expenses incurred by him in the
administration of the Plan. A Committee member, delegate, or adviser who is not
already receiving full-time pay from the Company may be paid such reasonable
compensation as shall be agreed upon.
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(h) Plan Expenses. All expenses of administration of the Plan may be
paid by the Company. If the Company does not pay such expenses, then they shall
be paid out of the Fund.
(i) Fiduciary Insurance. If the Committee so directs, the Plan shall
purchase insurance to cover the Plan from liability or loss occurring by reason
of the act or omission of a Fiduciary provided such insurance permits recourse
by the insurer against the Fiduciary in the case of a breach of duty by such
Fiduciary.
(j) Indemnification. The Company shall indemnify and hold harmless to
the maximum extent permitted by its by-laws each Fiduciary who is an Employee or
who is an officer or director of any Participating Company or any Related Entity
from any claim, damage, loss or expense, including litigation expenses and
attorneys' fees, resulting from such person's service as a Fiduciary of the Plan
provided the claim, damage, loss or expense does not result from the Fiduciary's
gross negligence or intentional misconduct.
3. PARTICIPATION IN THE PLAN
(a) Initial Eligibility. (i) Each and every Employee of a
Participating Company who has attained age twenty-one (21), was employed on or
before September 1, 1990, and was not excluded under subsection 3 (b) shall be
eligible and shall qualify to participate in the Plan on either the Original
Effective Date or September 1, 1990. Each and every other Employee hired after
September 1, 1990, and not excluded under subsection 3(b) shall be eligible and
shall qualify to participate in the Plan on the Entry Date next following
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both attainment by such Employee of age twenty-one (21) and completion by such
Employee of six (6) months of Service, provided he is then employed by a
Participating Company.
(ii) Effective as of the date any such acquisition
is consummated (the "Acquisition Date"), and except as provided below, former
"regular" Employees of a company (the "Acquired Company"), the stock or assets
of which are acquired by a Participating Company, who become Employees of the
Company as of the Acquisition Date shall be eligible and shall qualify to
participate in the Plan on (A) the Acquisition Date, provided each such Employee
completed six (6) months of Service with the Acquired Company on or prior to the
Acquisition Date, or (B) the Entry Date next following completion by each such
Employee of six (6) months of Service as a "regular" Employee, subject to the
provisions below.
(iii) Notwithstanding the foregoing, if the Acquired
Company continues to maintain a plan qualified under Section 401(a) of the
Code after the Acquisition Date, former employees of the Acquired Company
shall not be eligible to participate in the Plan until such other qualified plan
is no longer maintained.
(iv) INTENTIONALLY OMITTED.
(v) INTENTIONALLY OMITTED.
(vi) For purposes of this Section 3, a "regular"
Employee is an Employee whose terms and conditions of employment dictate that
he complete (or completed, as the case may be) at least twenty (20) Hours
of Service per calendar week. Furthermore, for purposes of satisfying
the eligibility requirements stated in subsection 3(a)(ii)(B) of said Section,
Service performed prior to February 1, 1992 for Days Inns of America, Inc. and
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Service performed prior to May 1, 1993 for Super 8 Motels, Inc. shall count
toward the completion of the Plan's initial eligibility period.
(vii) The age requirement for eligibility to partic-
ipate in the Plan stated in subsection 3 (a) (i) hereinabove is waived for
those Employees who were regular Employees of Days Inns of America, Inc. on
January 31, 1992 and then became regular Employees of the Company on February
1, 1992, for those Employees who were regular Employees of Super 8 Motels, Inc.
on April 30, 1993 and then became regular Employees of the Company on May 1,
1993 and for those Employees who were regular employees of Casino & Credit Ser-
vices, Inc. on May 10, 1995 and then became regular Employees of the Company
on May 11, 1995. Each and every other Employee remains subject to the
eligibility requirements as stated in subsection 3(a)(i).
(b) Ineligible Employees
(i) Collective Bargaining Agreement. No Employee whose
terms and conditions of employment are determined by a collective bargaining
agreement between employee representatives and a Participating Company shall be
eligible or qualify for participation unless such collective bargaining
agreement provides to the contrary, in which case such Employee shall be
eligible or shall qualify for participation upon compliance with such provisions
for eligibility or participation as such agreement shall provide; except that no
Employee who has selected, or in the future selects, a union shall become
ineligible during the period between his selection of the union and the
execution of the first collective bargaining agreement which covers him.
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(ii) Certain Related Entities. No Employee of a Related Entity which is not
a Participating Company shall be eligible or qualify for participation. This
category includes any former clerical employee of the Atlanta branch of Days Inn
of America, Inc. who did not become an Employee of the Company pursuant to the
asset purchase on February 1, 1992.
(iii) Part-time Employees. No Employee whose terms and conditions of
employment are such that he is scheduled to completed less than 20 Hours of
Service per week shall be eligible nor qualify for participation.
(iv) Temporary/Seasonal Employees. No Employee hired on a temporary or
seasonal basis shall be eligible nor qualify for participation.
(v) Cooperative Students. No Employee who is participating in a cooperative
student program with a Participating Company shall be eligible or qualify for
participation.
(c) Commencement of Participation. An Employee who satisfies
all the requirements for eligibility under subsection 3(a) and who is not
excluded under subsection 3(b) shall become a Member on the Entry Date following
his timely election authorizing amounts be withheld from his Compensation and be
credited to his Salary Deferral Account.
(d) Termination and Requalification. An Employee who has
satisfied the service requirement of subsection 3(a) applicable to him and who
subsequently becomes ineligible for any reason shall requalify for participation
on the date on which he is next credited with an Hour of Service in an eligible
job classification or, if applicable, on the Entry Date after which he satisfies
the age requirement.
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(e) Termination of Membership. An Employee who becomes a
Member shall remain a Member as long as he has an Account held under the Plan.
(f) Transfers. An Employee excluded from participation pursuant
to subparagraphs 3(b)(iii), (iv) or (v) shall be eligible to qualify for
participation on the Entry Date next following completion of the requirements of
subparagraph 3(a)(i) hereof upon his transfer to an eligible classification of
Employee. Service performed while a member of an ineligible classification shall
count towards the satisfaction of said requirements. Furthermore, an Employee of
a Related Entity excluded from participation pursuant to subparagraph 3(b)(ii)
who is transferred to the employ of a Participating Company shall be eligible to
participate in the Plan in accordance with the terms of subparagraph 3(a)(i);
for purposes of crediting eligibility Service for such an Employee, all Service
performed for the Related Entity shall be counted as Service for a Participating
Company.
4. CONTRIBUTIONS
(a) Salary Deferral Contributions. Each Employee who becomes eligible to
participate may elect that his Participating Company contribute on his behalf
any whole percentage of his Compensation, as he shall elect, subject to the
following rules:
(i) Amount. Effective January 1, 1994, the amount of
contribution which may be specified shall be determined by the Committee and may
be changed from time to time, but for the first Plan Year and for each
subsequent Plan Year prior to the beginning of which the Committee does not
announce a different maximum or minimum, a Member
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may specify any amount equal to any whole percentage of his Compensation, not to
exceed 15% thereof and not less than 1% thereof.
(ii) Change. A Member may change the specified percentage from
time to time by making a revised election; the frequency with which such changes
are allowed shall be specified in rules established by the Committee, which
rules shall permit a change no less often than annually.
(iii) Suspension. A Member may suspend his election at any time
with sufficient notice given to the Committee, as specified in rules established
by the Committee. A Member who suspends his election may not again have the
Participating Company contribute a percentage of his compensation until the next
applicable change date pursuant to subsection 4(a)(ii).
(iv) Salary Reduction. A Member's pay for a Plan Year shall
be reduced by the amount of the contribution that he elects for such Plan Year.
(v) Election. All elections shall be made at the time, in the
manner, and subject to the conditions specified by the Committee, which shall
prescribe uniform and nondiscriminatory rules for such elections. The
Participating Companies shall pay over to the Fund all contributions made under
this subsection with respect to a Plan Year no later than the earlier of 90 days
after the date such contributions are deferred or 30 days after the last day of
such Plan Year. Contributions made by Participating Companies under this
subsection shall be allocated to the Salary Deferral Accounts of the Members
from whose Compensation the contributions were withheld in an amount equal to
the amount withheld. Such contribu-
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tions shall be deemed to be employer contributions made on behalf of Members to
a qualified cash or deferred arrangement (within the meaning of Section
401(k)(2) of the Code).
(b) Salary Deferral Contribution Limitations. Contributions under
subsection 4(a) shall be limited as provided below.
(i) Exclusion Limit. No Member shall be permitted to have
Salary Deferral Contributions made under this Plan, or any other qualified plan
maintained by the Company, during any taxable year, in excess of the dollar
limitation contained in Code Section 402(g) in effect at the beginning of such
taxable year. If the contribution under subsection 4(a) for a Member for any
taxable year exceeds the limit set forth in Code Section 402(g), the Committee
shall direct the Trustee to distribute the excess amount (plus any income and
minus any loss allocable thereto, as calculated in accordance with subsection
4(d)(iv)) to the Member not later than April 15th following the close of such
calendar year. If (A) a Member participates in another plan which includes a
qualified cash or deferred arrangement, (B) such Member contributes in the
aggregate more than the exclusion limit under subsection 4(a) of this Plan and
the corresponding provisions of the other plan and (C) the Member notifies the
Committee not later than March 1st following the close of such calendar year of
the portion of the excess the Member has allocated to this Plan, then the
Committee shall direct the Trustee to distribute to the Member not later than
April 15th following the close of such calendar year the excess amount (plus any
income and minus any loss allocable to such amount) which the Member allocated
to this Plan.
(ii) Discrimination Test Limits. The Committee may limit the
maximum amount of contribution for Members who are Highly Compensated Employees
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<PAGE>
(within the meaning of Section 414(q) of the Code) to the extent it determines
that such limitation is necessary to keep the Plan in compliance with Section
401(a)(4) or Section 401(k)(3) of the Code. Any limitation shall be effective
for all payroll periods following the announcement of the limitation. These
limitations are also applicable for the first enrollment period from July 2,
1990 to September 1, 1990.
(c) Salary Deferral Account. The salary deferral contributions allocated
to a Member, as adjusted for investment gain or loss and income or expense,
constitute such Member's Salary Deferral Account. A Member shall at all times
have a nonforfeitable interest in the Salary Deferral Account portion of his
Account.
(d) Compliance with Salary Deferral Discrimination Tests.
(i) Rule. In no event shall the "average actual deferral
percentage" (as defined below) for Members who are Highly Compensated Employees
(as defined in Section 414(q) of the Code) for any Plan Year bear a relationship
to the "average actual deferral percentage" for Members who are not Highly
Compensated Employees which does not satisfy either subsection 4(d)(i)(A) or (B)
below.
(A) The requirement shall be satisfied for a Plan
Year if the "average actual deferral percentage" for the group of Members who
are Highly Compensated Employees that are eligible to make contributions under
subsection 4(a)for any portion of the Plan Year is not more than the average
actual deferral percentage" of all others who are eligible to make contributions
under subsection 4(a) for any portion of the Plan Year multiplied by 1.25.
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<PAGE>
(B) The requirement shall be satisfied for a Plan Year if (1) the excess of
the "average actual deferral percentage" for the Members who are Highly
Compensated Employees for the Plan Year that are eligible to make contributions
under subsection 4(a) for any portion of the Plan Year over the "average actual
deferral percentage" of all others who are eligible to make contributions for
any portion of the Plan Year is not more than two percentage points and (2) the
"average actual deferral percentage" for Members who are Highly Compensated
Employees is not more than the "average actual deferral percentage" of all
others eligible to make contributions under subsection 4(a) for any portion of
the Plan Year multiplied by two.
(ii) Special Definition of Member. For purposes of this
subsection 4(d), the term "Member" shall mean each Employee eligible to make
contributions under subsection 4(a) at any time during a Plan Year.
(iii) Refund. If the relationship of the "actual deferral
percentage" does not satisfy subsection 4(d)(i) for any Plan Year, then the
Committee shall direct the Trustee to distribute the "excess contribution" (as
defined below) for such Plan Year (plus any income and minus any loss allocable
thereto as calculated in accordance with subsection 4(d)(iv)) by the last day of
the following Plan Year to the Highly Compensated Employees on the basis of the
respective portions of the "excess contribution" attributable to each, as
determined under this subsection. If such excess amounts are distributed more
than 2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on the Company or
Related Entity maintaining the Plan with respect to such amounts. The "excess
contribution" for any Plan Year is the excess of the aggregate amount
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<PAGE>
of Participating Company contributions paid over to the Fund pursuant to
subsection 4(a) on behalf of Highly Compensated Employees for such Plan Year
over the maximum amount of such contributions permitted for Highly Compensated
Employees under subsection 4(d)(i). The portion of the "excess contribution"
attributable to a Highly Compensated Employee is determined by reducing
contributions made on behalf of Highly Compensated Employees in order of "actual
deferral percentages" for each such employee, beginning with the highest of such
percentages, until the "excess contribution" is eliminated. "Excess
contributions" shall be allocated to members who are subject to the family
aggregation rules of Section 414(q)(6) of the Code in a manner prescribed by the
regulations. Any refund made in accordance with this subsection to a Member
shall be drawn from his Salary Deferral Account.
The amount of "excess contributions" to be distributed shall be
reduced by excess deferrals previously distributed pursuant to subsection
4(b)(i) for the taxable year ending in the same Plan Year. Furthermore, excess
deferrals to be distributed for a taxable year pursuant to subsection 4(b)(i)
will be reduced by "excess contributions" previously distributed pursuant to
this subsection 4(d)(iii) hereof for the Plan Year beginning in such taxable
year.
(iv) Allocation of Income. Excess deferrals and "excess
contributions" shall be adjusted for any income or loss up to the date of
distribution. The income or loss is the sum of: (1) income or loss allocable to
the Member's Salary Deferral Account for the taxable year multiplied by a
fraction, the numerator of which is such Member's excess deferrals and "excess
contributions" for the year and the denominator of which is the Member's Salary
Deferral Account balance; and (2) ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the
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Member's taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
(v) Additional Definitions. The "average actual deferral
percentage" for a specific group of Members for a Plan Year shall be the average
of the "actual deferral percentage" for each Member in the group for such Plan
Year. The "actual deferral percentage" for a particular Member for a Plan Year
shall be the ratio of the amount of Participating Company contributions paid
over to the Fund pursuant to subsection 4(a) for such Member to the Member's
compensation for such Plan Year including, for Plan Years beginning after
December 31, 1991, the Member's compensation prior to satisfying the eligibility
requirements of Section 3. For this purpose, "compensation" means compensation
for service performed for a Participating Company which is currently includable
in gross income or which is excludable from gross income pursuant to an election
under a qualified cash or deferred arrangement under Section 401(k) of the Code
or a cafeteria plan under Section 125 of the Code.
(vi) Contributions Considered. A Member's salary deferral
contributions will be taken into account under the actual deferral percentage
test of this subsection 4(d) pursuant to Section 401(k)(3)(A) of the Code for a
Plan Year only if it satisfies subsections 4(d)(vi)(A) and (B) below:
(A) The salary deferral contributions relate to compensation that either
would have been received by the Employee in the Plan Year (but for the deferral
election) or are attributable to services performed by the Employee in the Plan
Year and
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<PAGE>
would have been received by the Employee within 2 1/2 months after the close of
the Plan Year (but for the deferral election);
(B) The salary deferral contributions are allocated to the Employee as of a
date within the Plan Year for which subsection 4(d)(i) applies. For this
purpose, salary deferral contributions are considered allocated as of a date
within a Plan Year if the allocation is not contingent on participation or
performance of services after such date and the salary deferral contribution is
actually paid to the trust no later than 12 months after the Plan Year to which
the contribution relates.
(vii) Aggregation of Plans. In the event that this Plan
satisfies the requirements of Section 410(b) of the Code only if aggregated with
one or more other plans, or if one or more other plans satisfy the requirements
of Section 401(k), 401(a)(4) or 410(b) of the Code only if aggregated with this
Plan, then subsection 4(d)(i) shall be applied by determining the "contribution
percentages" of Members as if all such plans were a single plan. Plans
permissively aggregated pursuant to this subsection must have the same Plan
Year.
(viii) Aggregation of Contributions. The "contribution
percentage" for any member who is a Highly Compensated Employee for the Plan
Year and who is eligible to have salary deferral contributions allocated to his
account under two or more plans described in Section 401(a) of the Code that are
maintained by a Participating Company or Related Entity shall be determined as
if the total of such Member contributions were made under this Plan and each
other plan. For purposes of this subsection, the contributions considered are
those taken into account for each plan with a Plan Year ending with or within
the same calendar year.
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<PAGE>
(ix) Special Rule. For purposes of determining the "actual
deferral percentage" of a Member who is a Highly Compensated Employee, the
contributions allocable to such member and "compensation" of such Member shall
include the contributions allocable to Family Members and "compensation" of
Family Members. Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate employees in determining the "average actual
deferral percentage" both for Members who are not Highly Compensated Employees
and for Members who are Highly Compensated Employees. For the purpose of this
subsection, a Family Member shall mean an individual described in Section
414(q)(6)(B) of the Code.
(e) Participating Company Contributions. The Participating Companies
shall contribute to the Fund in respect of each Member an Employer Contribution
in accordance with the following schedule based upon the number of Months or
Years of Service of the Member on the last day of the Plan Year:
THE MATCHING
IF MONTHS OR YEARS OF PERCENTAGE OF MEMBER
SERVICE AS OF THE LAST SALARY DEFERRAL
DAY OF THE PLAN YEAR: CONTRIBUTION IS:
Equal at least six
(6) Months of Service
but less than six (6)
Years of Service 25
Equal at least six
(6) Years of Service
but less than eleven
(11) Years of Service 35
Equal at least eleven
(11) or more Years of
Service 50
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<PAGE>
The matching percentage shall be limited to a Member's Salary Deferral
Contributions up to six percent (6%) of the Member's Compensation. The matching
percentage of Member Salary Deferral Contributions shall be effective for Member
Salary Deferral Contributions made on or after July 1, 1994. Participating
Companies shall pay over to the Trustee all contributions under this subsection
no later than the due date, including extensions, for filing the Participating
Companies' federal income tax returns for the taxable year coincident with or
within which the Plan Year with respect to which such contributions are to be
made ended. Such contributions shall be allocated to the Employer Contribution
Accounts of the Members with respect to whom they are made.
(f) Employer Contribution Account. The allocations made to a Member
under subsection 4(e) as adjusted for investment gain or loss and income or
expense, constitute the Member's Employer Contribution Account. A Member shall
have a nonforfeitable interest in the Employer Contribution Account portion of
his Account to the extent provided under Section 8.
(g) Compliance with Participating Company Matching Contributions
Discrimination Tests.
(i) Rule. In no event shall the "average contribution
percentage" (as defined below) for Members who are Highly Compensated Employees
(as defined in Section 414(q) of the Code) for any Plan Year bear a relationship
to the "average contribution percentage" for Members who are not Highly
Compensated Employees which does not satisfy either subsection 4(g)(i)(A) or (B)
below.
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<PAGE>
(A) The requirement shall be satisfied for a Plan Year if the "average
contribution percentage" for the group of Members who are Highly Compensated
Employees that are eligible to make contributions under subsection 4(a) for any
portion of the Plan Year is not more than the "average contribution percentage"
of all others who are eligible to make contributions under subsection 4(a) for
any portion of the Plan Year multiplied by 1.25.
(B) The requirement shall be satisfied for a Plan Year if (1) the excess of
the "average contribution percentage,, for the Members who are Highly
Compensated Employees for the Plan Year that are eligible to make contributions
under subsection 4(a) for any portion of the Plan Year over the "average
contribution percentage" of all others who are eligible to make contributions
for any portion of the Plan Year is not more than two percentage points and (2)
the "average contribution percentage" for Members who are Highly Compensated
Employees is not more than the "average contribution percentage" of all others
eligible to make contributions under subsection 4(a) for any portion of the Plan
Year multiplied by two.
(ii) Refund. If the relationship of the "average contribution
percentages" does not satisfy subsection 4(g)(i) for any Plan Year, then the
Committee shall direct the Trustee to distribute the "excess aggregate
contribution" (as defined below) for such Plan Year (plus any income and minus
any loss allocable thereto including the period between the end of the Plan Year
and the date of distribution or forfeiture) by the last day of the following
Plan Year to the Highly Compensated Employees on the basis of the respective
portions of the "excess aggregate contribution" attributable to each, as
determined under this subsec-
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<PAGE>
tion. If such "excess aggregate contributions" are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the employer maintaining the Plan
with respect to those amounts. The "excess aggregate contribution" for any Plan
Year is the excess of the aggregate amount of Participating Company
contributions allocated on a matching basis pursuant to subsection 4(e)(i) on
behalf of Highly Compensated Employees for such Plan Year over the maximum
amount of such contributions which could be allocated to Highly Compensated
Employees under subsection 4(g)(i). The portion of the "excess aggregate
contribution" attributable to a Highly Compensated Employee is determined by
reducing Participating Company contributions allocated to Highly Compensated
Employees in order of "contribution percentages" for each such employee,
beginning with the highest of such percentages, until the "excess aggregate
contribution" is eliminated. "Excess aggregate contributions" shall be allocated
to Members who are subject to the family aggregation rules of Section 414(q)(6)
of the Code in a manner prescribed by the regulations. Any refund made to a
Member in accordance with this subsection shall be drawn from his Employer
Contribution Account. Notwithstanding the foregoing, if a Member does not have a
100% nonforfeitable right to his Employer Contribution Account under subsection
8(d)(ii), the forfeitable portion of any amount withdrawn from his Employer
Contribution Account shall be forfeited and the vested portion shall be
distributed to the Member.
"Excess aggregate contributions" shall be adjusted for any income or loss
up to the date of distribution. The income or loss allocable to "excess
aggregate contributions" is the sum of: (1) income or loss allocable to the
Member's account balance attributable to
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<PAGE>
employer contributions pursuant to subsection 4(e)(i) for the Plan Year
multiplied by a fraction, the numerator of which is such Member's "excess
aggregate contributions" for the year and the denominator of which is the
Member's account balance attributable to employer contributions pursuant to
subsection 4(e)(i); and (2) ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the Plan
Year and the date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
(iii) Allocation of Forfeitures. Any amounts forfeited by
highly compensated employees under this subsection shall be applied to first
decrease Participating Company contributions to be made pursuant to subsection
4(e), and then to increase discretionary Participating Company contributions.
Notwithstanding the foregoing, no forfeiture arising under this subsection shall
be allocated to the Account of any Highly Compensated Employee.
(iv) Additional Definitions. For purposes of this subsection
4(g), the term "Member" shall mean each Employee eligible to make contributions
under subsection 4(a) at any time during a Plan Year. The "average contribution
percentage" for a specific group of Members for a Plan Year shall be the average
of the "contribution percentage" for each Member in the group for such Plan
Year. The "contribution percentage" for a particular Member shall be the ratio
of the amount of Participating Company contributions allocated to a Member
pursuant to subsection 4(e)(i) for a Plan Year and paid over to the Fund no
later than the end of the 12-month period beginning on the day after the close
of the Plan Year to the Member's "compensation" for such Plan Year. For this
purpose, "compensation" means
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<PAGE>
compensation for service performed for a Participating Company which is
currently includable in gross income or which is excludable from gross income
pursuant to an election under a qualified cash or deferred arrangement under
Section 401(k) of the Code or a cafeteria plan under Section 125 of the Code.
(v) Aggregation of Contributions. The "contribution percentage"
for any Member who is a Highly Compensated Employee for the Plan Year and who is
eligible to make after tax contributions to any plan subject to Section 415 of
the Code maintained by a Participating Company or a Related Entity or to have
Participating Company matching contributions within the meaning of Section
401(m)(4)(A) of the Code allocated to his account under two or more plans
described in Section 401(a) of the Code that are maintained by a Participating
Company or a Related Entity shall be determined as if the total of such Member
contributions and Participating Company contributions was made under this Plan
and each other plan.
(vi) Aggregation of Plans. In the event that this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of Section 410(b) of the Code only if aggregated with this
Plan, then subsection 4(g)(i) shall be applied by determining the "contribution
percentages" of Members as if all such plans were a single plan.
(vii) Special Rule. For purposes of determining the
"contribution percentage" of a Member who is a Highly Compensated Employee, the
contribution allocable to such Member pursuant to subsection 4(e)(i) and
"compensation" of such Member shall include the contributions allocable to
Family Members pursuant to subsection 4(e)(i) and
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<PAGE>
"compensation" of Family Members. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate employees in determining
the "contribution percentage" both for Members who are not Highly Compensated
Employees and for Members who are Highly Compensated Employees.
(viii) Multiple use. If either the "actual deferral percentage"
or "actual contribution percentage" of the Highly Compensated Employees exceeds
1.25 multiplied by the "actual deferral percentage" and "actual contribution
percentage" of the Non-highly Compensated Employees, then the Plan shall test
for multiple use. Such test shall occur when the sum of the "actual deferral
percentage" and "actual contribution percentage" pursuant to subsections 4(d)
and 4(g), respectively, of the Highly Compensated Employees exceeds the
"aggregate limit"; in such circumstances the "actual contribution percentage" of
the Highly Compensated Employees will be reduced (beginning with such Highly
Compensated Employee whose "actual contribution percentage" is the highest) so
that the "aggregate limit" is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Account is reduced shall be treated as an
"excess aggregate contribution". The "actual deferral percentage" and "actual
contribution percentage" of the Highly Compensated Employees are determined
after any corrections required to meet the "actual deferral percentage" and
"actual contribution percentage" tests.
For purposes of this subsection 4(g)(viii) "aggregate limit" shall
mean the sum of (i) 125 percent of the greater of the "actual deferral
percentage" of the Non-highly Compensated Employees for the Plan Year or the
"actual contribution percentage" of Non-highly Compensated Employees under the
plan subject to Code Section 401(m) for the Plan Year beginning
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<PAGE>
with or within the Plan Year of the cash or deferred arrangement and (ii) the
lesser of 200% or two plus the lesser of such "actual deferral percentage" or
"actual contribution percentage". "Lesser" is substituted for "greater" in
"(i)", above, and "greater" is substituted for "lesser after "two plus the" in
"(ii)" if it would result in a larger "aggregate limit".
(h) Rollovers. The Company may elect to provide all Employees, upon
commencement of employment with the option of making a rollover contribution to
the Trust Fund of all or any portion of the entire amount (including money or
any other property acceptable to the Company and Trustee) which is attributable
to distribution, satisfying either Code Sections 402(c), 403(a)(4), or
408(d)(3), provided such rollover contribution is received on or before the
sixtieth (60th) day immediately following the date the Employee received such
distribution from a qualified plan or conduit Individual Retirement Account or
Annuity. Such rollover contributions shall not be considered Annual Additions.
(i) Rollover Account. Any contribution under subsection 4(h), as
adjusted for investment gain or loss and income or expense, shall constitute the
Member's Rollover Account. A Member shall at all times have a nonforfeitable
interest in the Rollover Account portion of his Account.
(j) "Failsafe" Contributions. The Participating Companies may make a
special contribution to be allocated among all Employees who were eligible to
participate in the Plan during the Plan Year and who are not Highly Compensated
Employees within the meaning of Section 401(k)(4) of the Code in proportion to
their Compensation. The amount of the contribution shall not exceed the amount,
determined by the Committee, necessary to satisfy the discrimination standards
of Section 401(k)(3) of the Code. Any such contribution shall be
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treated as an addition to the Member's Salary Deferral Account and shall be
subject to the vesting and distribution provisions of the Plan pertaining to
elective contributions and the conditions described in Proposed Regulation
1.401(k) - l(b)(3) of the Code.
(k) Payroll Taxes. The Participating Companies shall withhold from the
Compensation of the Members and remit to the appropriate government agencies
such payroll taxes and income withholding as the Company determines is or may be
necessary under applicable statutes or ordinances and the regulations and
rulings thereunder.
5. MAXIMUM CONTRIBUTIONS AND BENEFITS
(a) Defined Contribution Limitation. In the event that the amount
allocable to a Member from contributions to the Fund in respect of any Plan Year
would cause the Annual Additions allocated to any Member under this Plan plus
the Annual Additions allocated to such Member under any other plan maintained by
a Participating Company or a Related Entity to exceed for any Limitation Year
the lesser of (i) $30,000 (or, if greater, one-fourth of the dollar limitation
in effect under subsection 415(b)(1)(A) of the Code for such Limitation Year) or
(ii) 25% of such Member's compensation (as defined in subsection 5(d)) for such
Limitation Year, then such amount allocable to such Member shall be reduced by
the amount of such excess to determine the actual amount of the contribution
allocable to such Member in respect of such Plan Year. The excess amount
allocable to a Member's Account shall be held in a suspense account and shall be
used to reduce contributions allocable to the Member for the next Limitation
Year (and succeeding Limitation Years as necessary) provided, however, that the
Member is covered by the Plan as of the end of the Limitation Year. If the
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Member is not covered by the Plan as of the end of the Limitation Year, then the
excess amount shall be held unallocated in a suspense account and shall be
allocated among all Employees eligible to make contributions under subsection
4(a) for such Limitation Year as an equal percentage of their Compensation for
such Limitation Year. No excess amount may be distributed to a Member or former
Member.
If a short limitation year is created because of an amendment changing
the Limitation Year to a different consecutive 12-month period, the defined
contribution dollar limitation will be prorated based on the number of months in
the short Limitation Year.
(b) Combined Limitation. In addition to the limitation of subsection
5(a), if a Participating Company or a Related Entity maintains or maintained a
defined benefit plan and the amount allocable to a Member with respect to any
Plan Year would cause the aggregate amount allocated to any Member under all
defined contribution plans maintained by all Participating Companies or Related
Entities to exceed the maximum allocation as determined in subsection 5(c), then
such amount allocable to such Member shall be reduced by the amount of such
excess to determine the actual amount of the contribution allocable to such
Member for such Plan Year. The excess amount with respect to any Member shall be
held in accordance with subsection 5(a). Notwithstanding the foregoing, to the
extent administratively feasible, the combined limitation shall be applied to
the Member's benefit payable from the defined benefit plan prior to reduction of
the Member's Annual Additions under this Plan.
(c) Combined Limitation Computation. (i) The maximum allocation is the
amount of Annual Additions which may be allocated to a Member's benefit without
permit- ting the sum of the defined benefit plan fraction (as hereinafter
defined) and the defined
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contribution plan fraction (as hereinafter defined) to exceed 1.0 for any
Limitation Year. The defined benefit plan fraction applicable to a Member for
any Limitation Year is a fraction, the numerator of which is the projected
annual benefit of the Member under the plan determined as of the close of the
Limitation Year and the denominator of which is the lesser of (1) the product of
1.25 multiplied by the maximum then permitted dollar amount of straight life
annuity payable under the defined benefit plan maximum benefit provisions of the
Code as a benefit commencing at the Member's social security retirement age or
(2) the product of 1.4 multiplied by the maximum permitted amount of straight
life annuity, based on the Member's compensation, payable under the defined
benefit plan maximum benefit provisions of the code as a benefit commencing at
the Member's social security retirement age. For purposes of this subsection
5(c), a Member's projected annual benefit is equal to the annual benefit,
expressed in the form of a straight life annuity, to which the Member would be
entitled under the terms of the defined benefit plan based on the assumptions
that (1) the Member will continue employment until reaching his social security
retirement age (or current age, if later) at a rate of compensation equal to
that for the Limitation Year under consideration and (2) all other relevant
factors used to determine benefits under the plan for the Limitation Year under
consideration will remain constant for future Limitation Years. The defined
contribution plan fraction applicable to a Member for any Limitation Year is a
fraction, the numerator of which is the sum of the Annual Additions for all
Limitation Years allocated to the Member as of the close of the Limitation Year
and the denominator of which is the sum of the lesser, separately determined for
each Limitation Year of the Member's employment with a Participating Company or
Related Entity, of (1) the product of 1.25 multiplied by the maximum dollar
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amount of Annual Additions which could have been allocated to the Member under
the Code for such Limitation Year or (2) the product of 1.4 multiplied by the
maximum amount, based on the Member's compensation, of Annual Additions which
could have been allocated to the Member for such Limitation Year.
(ii) Transitional Rule. Notwithstanding the above, if the
Employee was a Member as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans maintained by the
Participating Companies which were in existence on May 6, 1986, the denominator
of the defined benefit fraction used in computing the combined limitation
pursuant to 5(c)(i) hereof will not be less than 125 percent of the sum of the
annual benefits under such plans which the Member had accrued as of the close of
the last Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415 for all Limitation Years
beginning before January 1, 1987.
Furthermore, in computing the defined contribution plan fraction
pursuant to 5(c)(i) hereof, if the Employee was a Member as of the end of the
first day of the first Limitation Year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the Participating Companies
which were in existence on May 6, 1986, the numera- tor of the defined
contribution fraction will be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (1) the excess of
the sum of the fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the
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numerator of this fraction. The adjustment is calculated using the fractions as
they would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and conditions
of the plan made after May 5, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January 1, 1987.
(d) Definition of "Compensation" for Code Limitations.
For purposes of the limitations on the allocation of Annual Additions to
a Member and maximum benefits under a defined benefit plan as provided for in
this Section 5, "compensation" for a Limitation Year shall mean the sum of (i)
amounts paid by a Participating Company or a Related Entity to the Member with
respect to personal services rendered by the Member, (ii) earned income of a
self-employed person with respect to a Participating Company or a Related
Entity, (iii) amounts received by the Member (A) through accident or health
insurance or under an accident or health plan maintained or contributed to by a
Participating Company or a Related Entity and which are includable in the gross
income of the Member, (B) through a plan contributed to by a Participating
Company or a Related Entity providing payments in lieu of wages on account of a
Member's permanent and total disability, or (C) as a moving expense allowance
paid by a Participating Company or a Related Entity and which are not deductible
by the Member for federal income tax purposes; (iv) the value of a non-statutory
stock option granted by a Participating Company or a Related Entity to the
Member to the extent included in the Member's gross income for the taxable year
in which it was granted; and (v) the value of property transferred by a
Participating Company or a Related Entity to the Member which is includable in
the Member's gross
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income due to an election by the Member under Section 83(b) of the Code.
Compensation shall not include (i) contributions made by a Participating Company
or Related Entity to a deferred compensation plan which, without regard to
Section 415 of the Code, are not includable in the Member's gross income for the
taxable year in which contributed; (ii) Participating Company or Related Entity
contributions made on behalf of Member to a simplified employee pension plan to
the extent they are deductible by the Member under Section 219(b)(7) of the
Code; (iii) distributions from a deferred compensation plan (except from an
unfunded non-qualified plan when includable in gross income); (iv) amounts
realized from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by a Member either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture; (v) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified or
incentive stock option; and (vi) other amounts which receive special tax
benefits, such as premiums for group term life insurance (to the extent
excludable from gross income) or Participating Company or Related Entity
contributions towards the purchase of an annuity contract described in Section
403(b) of the Code.
6. ADMINISTRATION OF FUNDS
(a) Investment Control. The management and control of the assets of the
Plan shall be vested in the Trustee designated from time to time by the Company
through its Board of Directors; provided, however, the Company, through its
Board of Directors, or the Trustee, may appoint one or more Investment Managers
to manage, acquire or dispose of any assets of the Plan and the Committee may
instruct the Trustee to establish Investment Categories for
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selection by the Members in accordance with the Plan, in which case the
Committee may at any time add to or delete from the Investment Categories.
(b) Member Elections. If Investment Categories are established, then in
accordance with uniform rules of general application established by the
Committee, each Member shall have the right to designate the Investment Category
or Categories in which the Trustee is to invest the subaccounts which constitute
such Member's Account. Such rules may permit each Member to specify separate
investment for any or all of his subaccounts or require that all of a Member's
subaccounts be invested in a uniform manner. With respect to new contributions,
a Member may elect to have flat dollar amounts invested under subsection 6(c)
and the remainder allocated among the Investment Categories in multiples of 25%
of the amount of such remainder. A Member may elect to transfer amounts between
any of the Investment Categories. Such elections shall be made at such time, in
such manner, and in such form as the Committee may prescribe through uniform and
nondiscriminatory rules. The minimum amount transferable out of any one
Investment Category shall be 25% of the value of the Member's Account, or, if
less, the entire amount invested under such option. Any designation or change in
designation of Investment Category shall be made in writing on forms provided by
and submitted to the Committee. Unless the Committee provides otherwise, such
change in designation shall be effective as soon after the Valuation Date after
which it is received by the Committee as is administratively feasible. Any
election of Investment Category by any Member shall, on its effective date,
cancel any prior election. The Committee may limit the right of a Member (i) to
increase or decrease his contributions to a particular Investment Category, (ii)
to transfer amounts to or from a particular Investment
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Category or (iii) to transfer amounts between particular Investment Categories,
if it determines that any such limitation is necessary or desirable to establish
or maintain an Investment Category. In accordance with subsection 2(d), the
Committee may promulgate separate accounting and administrative rules to
facilitate the establishment or maintenance of an Investment Category.
(c) Life Insurance Investment Category. If the Committee authorizes an
Investment Category limited to life insurance, it may permit a Member to direct
that a portion of amounts allocable to his Salary Deferral Account be invested
in life insurance in accordance with the following rules:
(i) Policies. A Member may elect to invest his Salary Deferral
Account in individual or group insurance policies covering the Member, his
spouse, or his children and in individual or group annuity contracts issued by
one or more insurance companies. If individual policies are purchased for a
Member's Salary Deferral Account, such purchases may only be made with the
Member's consent. Individual policies shall be considered a separate Investment
Category of the Member's Salary Deferral Account and premiums on such policies
shall be charged to such Salary Deferral Account. A Member may not borrow
amounts from insurers issuing such policies or use such policies as security for
a loan; however, the Trustee, with the consent of the Committee, may borrow
against the policies to fund loans under Section 11 hereof.
(ii) Distribution. When a Member's Salary Deferral Account is
distributed, the Committee may direct the Trustee to convert into cash the
entire value of any individual policies or contracts purchased for a Member's
Salary Deferral Account and to
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credit such amount to the Member's Salary Deferral Account. If not so directed
by the Committee, the Trustee shall distribute any or all of such policies or
contracts intact to the Member.
(iii) Beneficiary of Policy on Member. The Trustee shall be the
owner and beneficiary of any insurance policy on the Member's life. The proceeds
shall be distributed to the beneficiary determined under Section 7 hereof. A
Member's spouse will be the designated beneficiary of the proceeds in all
circumstances unless a qualified election has been made in accordance with
Sections 7 and 9. Under no circumstances shall the Trust retain any part of the
proceeds. In the event of any conflict between the terms of this Plan and the
terms of any insurance policy purchased hereunder, the Plan provisions shall
control.
(iv) Beneficiary of Policy on Spouse or Child. To the extent
that a Member's Salary Deferral Account is invested in a life insurance policy
on the life of the Member's spouse or children, the beneficiary under such a
policy shall be the Member, to the extent of the excess of the proceeds over the
cash value, if any, at the time of the death of the insured, and the beneficiary
of the balance of the proceeds shall be the Member's Salary Deferral Account.
(v) Limitation. Not more than 49.99% of the aggregate amount of
Participating Company contributions made on behalf of any Member may be invested
in ordinary life insurance contracts on the life of such Member or his spouse or
children. Not more than 24.99% of the aggregate amount of Participating Company
contributions on behalf of any Member may be invested in term life or universal
life insurance contracts on the life of such Member or his spouse or children.
If both ordinary and term life insurance contracts
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are purchased on the life of a Member or his spouse or children, the sum of the
annual term life insurance premium plus one-half of the ordinary life insurance
premium may not exceed 24.99% of the Participating Company contribution made on
behalf of such Member for the Plan Year in question.
(vi) Policy Dividends. Any dividends that become payable on any contracts
shall be used to provide additional benefits for the Member or shall be credited
to the Member's Salary Deferral Account.
(d) No Member Election. If Investment Categories are made available and
a Member does not make a written election of Investment Category, then the
Committee shall direct the Trustee to invest the Account of such Member in the
Investment Category which, in the opinion of the Committee, best protects
principal.
(e) Facilitation. Notwithstanding any instruction from any Member for
investment of funds in an Investment Category as provided for herein, the
Trustee shall have the right to hold uninvested or invested in a short term
investment fund any amounts intended for investment or reinvestment until such
time as investment may be made in accordance with the Plan and the Trust
Agreement.
(f) Valuations. The Fund and each Investment Category shall be valued by
the Trustee at fair market value as of each Valuation Date.
(g) Allocation of Gain or Loss. Any increase or decrease in the market
value of each Investment Category of the Fund since the preceding Valuation Date
and all income earned, expenses incurred and realized profits and losses, shall
be determined in accordance with accounting methods uniformly and consistently
applied and shall be added to or
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deducted from the Account of each Member based on the amount of a Member's
Account in such Investment Category at the prior Valuation Date in accordance
with non-discriminatory procedures and rules adopted by the Committee. Before
reallocation, the Accounts of the Members shall be reduced by any payments made
therefrom in the period. At the Commit- tee's discretion uniformly applied,
administrative expenses directly connected or associated with a particular
Member's Account may be charged to the Account. Notwithstanding the foregoing,
allocation shall not be required to the extent the Fund, or any Investment
Category thereof, is administered in a manner which permits separate valuation
of each Member's interest therein without separate incremental cost to the Plan
or the Committee otherwise provides for separate valuation.
(h) Provisions Optional. Nothing herein shall require the Committee to
establish Investment Categories. If no Investment Categories are established,
the Fund shall be administered as a unit.
(i) Bookkeeping. The Committee shall direct that separate bookkeeping
accounts be maintained to reflect each Member's Salary Deferral Account,
Rollover Account, Voluntary Contribution Account and Employer Contribution
Account.
7. BENEFICIARIES AND DEATH BENEFITS
(a) Designation of Beneficiary. Each Member shall have the right to
designate one or more beneficiaries and contingent beneficiaries to receive any
benefit to which such Member may be entitled hereunder in the event of the death
of the Member prior to the distribution of such benefit by filing a written
designation with the Committee on the form
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prescribed by the Committee. Such Member may thereafter designate a different
beneficiary at any time by filing a new written designation with the Committee.
Notwithstanding the foregoing, if a married Member designates a beneficiary
other than his spouse, such designation or subsequent changes shall not be valid
unless the spouse consented in writing witnessed by a notary public or a member
of the Committee in a manner prescribed by the Committee. A spouse's consent
given in accordance with the Committee's rules shall be irrevocable by the
spouse with respect to the beneficiary then designated by the Member unless the
Member makes a new beneficiary designation. Any written designation shall become
effective only upon its receipt by the Committee. If the beneficiary designated
pursuant to this subsection should die on or before the commencement of
distribution of benefits and the Member fails to make a new designation, then
his beneficiary shall be determined pursuant to subsection 7(b).
(b) Beneficiary Priority List. If (i) a Member omits or fails to designate
a beneficiary, (ii) no designated beneficiary survives the Member or (iii) the
Committee determines that the Member's beneficiary designation is invalid for
any reason, then the death benefits shall be paid to the Member's surviving
spouse, or if the Member is not survived by his spouse, then to the Member's
estate.
8. BENEFITS FOR MEMBERS
The following are the only post employment benefits provided by the
Plan:
(a) Retirement Benefit
(i) Valuation. Each Member shall be entitled to a retirement
benefit equal to 100% of the Member's Account as of the Valuation Date
coincident with or next following his retirement on or after his Early
Retirement or Normal Retirement Date.
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(ii) Early Retirement shall mean the first day of the month
coinciding with or following the date on which a Member or former Member attains
age 55; provided that, for employees becoming eligible to participate in the
Plan on or after September 1, 1994, "Early Retirement" shall mean the first day
of the month coinciding with or following the later of the date on which a
Member or former Member (A) attains age 55 or (B) completes three Years of
Service.
(iii) Late Retirement. A Member who continues employment beyond
his Normal Retirement Date shall continue to participate in the Plan. His
Account shall become nonforfeitable upon his attaining his Normal Retirement
Date.
(b) Death Benefit
(i) Valuation. In the event of the death of a Member before
actual retirement, 100% of the Member's Account on the Valuation Date coincident
with or next following his death shall constitute his death benefit and shall be
distributed pursuant to Sections 7 and 9 (A) to his designated beneficiary or
(B) if no designation of beneficiary is then in effect, to the beneficiary
determined pursuant to subsection 7(b).
(ii) Survivor Benefits. In the event of the death of a retired
Member before distribution of his Account has been made to him, his Account
shall constitute a death benefit and shall be distributed (A) to his designated
beneficiary or (B) if no designation of beneficiary is then in effect, to the
beneficiary determined pursuant to subsection 7(b).
(c) Disability Benefit. In the event a Member suffers a Disability before
actual retirement, 100% of the Member's Account on the Valuation Date coincident
with or next following his Disability shall constitute his Disability benefit.
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(d) Termination of Employment Benefit
(i) Valuation. In the event a Member terminates employment with
all Participating Companies and all Related Entities other than by reason of
retirement on or after his Normal Retirement Date, Disability or death, the
Member shall be entitled to receive a benefit equal to 100% of his Salary
Deferral Account, Voluntary Contribution Account and Rollover Account and the
nonforfeitable portion (as determined under the vesting schedule at subsection
8(d)(ii)) of his Employer Contribution Account on the Valuation Date coincident
with or last preceding distribution.
(ii) Vesting Schedule. Each Member actively participating in
the Plan pursuant to an election to have amounts withheld from Compensation and
credited to the Salary Deferral Account, shall at all times be 100% vested in
his Salary Deferral Account, and, effective as of the Effective Date, shall at
all times be 100% vested in his Employer Contribution Account. Each Member shall
at all times be 100% vested in his Voluntary Contribution Account, if any.
(iii) Crediting Service. With respect to the vesting of Company
contributions as set forth below, this provision shall be applicable to any
Member who separated from Service with the Company on or before December 31,
1995 and who subsequent to such separation commences another Period of Service
on or prior to the date on which such Member's Break in Service shall have been
for five or more consecutive Plan Years.
If distribution was made to a Member on account of termination of
employment and prior to the date on which the resulting Break in Service would
have a duration of five or
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more consecutive Plan Years the Member returns to employment covered by the
Plan, the Member's Account shall subsequently be determined without regard to
the portion thereof derived from predistribution employment provided the Member
(i) received distribution of the entire present value of the nonforfeitable
portion of his Account at the time of distribution, (ii) the amount of the
distribution did not exceed $3,500 or the Member (with spousal consent, if
applicable) voluntarily elected to receive the distribution, and (iii) the
Member upon return to employment covered by the Plan does not repay the full
amount of the distribution before the earlier of suffering five (5) consecutive
one (1) year Breaks in Service, or at the close of the first period of five (5)
consecutive one year Breaks in Service commencing after the withdrawal.
If timely repayment is made, the Member's Account shall equal the sum of
the repayment and the forfeitable portion of the Member's Account on the date of
distribution, unadjusted by gains or losses subsequent to the distribution. Such
amount previously forfeited shall vest, as determined by the Committee, in
accordance with the following vesting schedule:
NONFORFEITABLE
YEARS OF SERVICE PERCENTAGE
Less than 1 year 0%
1 year but less than 2 years 33%
2 years but less than 3 years 66%
3 years or more 100%
Periods of Service prior to the initial termination of employment with
the Company shall be credited for purposes of the vesting schedule hereinabove.
Restoration required due
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to Fund losses shall be made, to the extent necessary, first from forfeitures in
the Plan Year of repayment and second from Participating Company contributions.
(iv) Change in Vesting Schedule. If the Plan's vesting schedule
is amended, or the Plan is amended in any way that directly or indirectly
affects the computation of the Member's nonforfeitable percentage or if the Plan
is deemed amended by an automatic change to or from a top-heavy vesting
schedule, each Member with at least 3 years of Service with the Participating
Company may elect, within a reasonable period after the adoption of the
amendment or change, to have the nonforfeitable percentage computed under the
Plan without regard to such amendment or change. For Members who do not have at
least 1 Hour of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "5 years of Service" for "3
years of Service" where such language appears.
The period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end on the
latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after amendment becomes effective; or
(3) 60 days after Member is issued written notice of
the amendment by the Participating Company.
(e) Recognition of Forfeitures. The nonvested portion of the Employer
Contribution Account of a Member (i) who separates from service with no vested
interest in his Employer Contribution Account or (ii) who receives a
distribution prior to suffering his fifth consecutive Break in Service shall be
forfeited on the date of (i) separation or (ii) distribution, as the case may
be, subject to the right to restoration. The nonvested portion of the Employer
Contribu-
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tion Account of any other Member shall be forfeited on the last day of the Plan
Year in which the member suffers his fifth consecutive Break in Service.
Forfeitures shall first decrease Participating Company contributions, if any,
and then increase discretionary Participating Company contributions.
9. DISTRIBUTION OF BENEFITS
(a) Commencement. The payment of benefits shall commence as soon after
the Valuation Date following the Member's termination of employment as is
administratively feasible, except as provided below.
(i) Termination of Employment Benefits. If the nonforfeitable
portion of the Member's Account exceeds $3,500 and is not "immediately
distributable", distributions of benefits payable under subsection 8(d) shall
not commence unless the Member consents to such distribution in writing. The
Committee shall notify the Member of his right to defer said distribution,
subject to the limitations of subsections 9(a)(ii) below.
If the Member does not consent to distribution, his Account shall be
retained in the Fund until such later date as the Member requests distribution.
If the Member does not request distribution prior to his Normal Retirement Date
or death, distribution shall commence as soon after the Valuation Date next
following the first to occur of the Member's Normal Retirement Date or death
(provided the Committee receives notice of the Member's death), as is
administratively feasible.
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(ii) Deferral Limitation. In no event other than with the written
consent of the Member shall the payment of benefits commence later than the
sixtieth day after the close of the Plan Year in which the latest of the
following occurs:
(A) the Member's Normal Retirement Date; (B) the Member's
separation from service; or (C) the tenth anniversary of
the year in which the Member commenced participation in
the Plan.
Provided, however, distribution of benefits must commence on or before
the April 1st of the calendar year following the calendar year in which the
Member attains age 70 1/2.
(iii) Death Benefit Deferral Limitation. The payment of death
benefits under the Plan shall commence as soon after the Valuation Date
following the Member's death as is administratively feasible or as the Member's
beneficiary elects, subject to the limitation of subsection 9(b)(ii).
(b) Benefit Form.
(i) All benefits shall be distributed in one lump sum, excepting
Death benefits which shall be paid in accordance with subsection 9 (b) (ii)
hereof. Any distribution made in one lump sum may include, at the election of
the individual eligible to receive such distribution, shares of Company Stock
allocable to the Member's Account. Notwithstanding the foregoing, all Members'
Accounts shall continue to be adjusted under subsection 6(g) through the
Valuation Date coincident with or last preceding distribution.
(ii) Death Benefits. Death benefits shall be distributed in one
lump sum or in installments over a period not extending beyond five years of the
Member's date of death.
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(c) Account Balances Less Than $3,500. If a terminated Member's vested
Account balance does not exceed $3,500 on the Valuation Date coincident with or
next following his termination, said Member's Account may be immediately
distributed without his consent.
(d) Definitions. The following definitions shall apply to this Section
7 and 9 hereof:
(i) "Immediately distributable benefit" shall mean the vested
Account balance which could be distributed to a Member (or surviving spouse)
before said Member attains (or would have attained if not deceased) the later
of Normal Retirement Age or age 62.
(ii) "Spouse" (surviving spouse) shall mean the spouse or
surviving spouse of the Member, provided that a former spouse will not be
treated as the spouse or surviving spouse if the Member re-marries within 1 year
of the annuity starting date, and remains married for the 1 year period ending
on the date of death.
(e) Withholding. All distributions under the plan are subject to
federal, state and local withholding as required by applicable law as in effect
from time to time.
(f) Rollover Election. This subsection (f) applies to distributions made
on or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
subsection (f) , 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 following definitions shall apply for purposes of this subsection (f):
(i) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an
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eligible rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten (10) 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 employer securities).
(ii) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(g) Super 8 Employees' Option. Notwithstanding any provision in this
Plan to the contrary, any Member (or his or her beneficiary) who had been a
participant in the Super 8 Motels, Inc. 401(k) Retirement Plan shall have the
option to receive his or her benefit under the Plan in the form of an annuity
with a ten (10) year term certain. Any such Member's benefit shall be subject to
the Qualified Joint and Survivor Annuity and Qualified Preretirement Survivor
Annuity options of the predecessor plan, including all the applicable spousal
consent and notice requirements under Code Sections 401(a)(11) and 417.
(h) Waiver of Thirty (30) Day Notice Period. The notice required by
Section
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1.411(a)-11(c) of the Income Tax Regulations must be provided to a Member no
less than thirty (30) days and no more than ninety (90) days before the Annuity
Starting Date.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than
thirty (30) days after the notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(i) the Plan Administrator clearly informs the ember that the
Member 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 (and, if applicable a particular distribution option),
and
(ii) the Member, after receiving the notice, affirmatively elects
a distribution.
(i) Distribution to Alternate Payee. The Committee shall direct the
Trustee to distribute to an Alternate Payee named under a Qualified Domestic
Relations Order, which is found to be in compliance with Sections 401(a)(13) and
414(p) of the Code, any amount to which he or she is entitled under said
Qualified Domestic Relations Order in cash and/or in kind, in a lump sum
payment. For purposes of compliance with Section 401(k)(2)(B)(i) or any success-
or thereto, said Alternate Payee shall be deemed to have separated from Ser-
vice with the Participating Company.
(j) Casino & Credit Services Employees' Option. Notwithstanding any
provision in this Plan to the contrary, any Member (or his or her beneficiary)
who had been a participant in the Casino & Credit Services Inc. 401(k)
Retirement Savings Plan (the "CACS Plan") shall have the option to receive his
or her benefit under the Plan in the form of an immediate installment as defined
under the CACS Plan. Any such Member's benefit shall be subject to
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the Qualified Joint and Survivor Annuity and Qualified Preretirement Survivor
Annuity options of the CACS Plan, including all the applicable spousal consent
and notice requirements under Code Sections 401(a)(11) and 417.
(k) Century 21 Real Estate Corporation Employee's Option.
Notwithstanding any provision in this Plan to the contrary, any Member (or his
or her beneficiary) who had been a participant in the Century 21 Real Estate
Corporation Savings and Investment Plan (the "C-21 Plan") shall have the option
to receive his or her benefit under the Plan in the form of the various
installment and annuity options allowed under the C-21 Plan. Any such Member's
benefit shall be subject to the Qualified Joint and Survivor Annuity and
Qualified Preretirement Survivor Annuity options of the C-21 Plan, including all
the applicable spousal consent and notice requirements under Code Sections
401(a)(11) and 417.
10. IN-SERVICE DISTRIBUTIONS
(a) Age 59-1/2. A Member who has attained age 59-1/2 shall have the
right to withdraw all or a portion of his Salary Deferral or Rollover Account as
of the Valuation Date next following the Member's timely delivery of request for
withdrawal to the Committee.
(b) Hardship. A Member shall have the right to request an in-service
distribution from his Salary Deferral or Rollover Account for purposes of
hardship. A distribution is on account of hardship only if the distribution both
(i) is made on account of an immediate and heavy financial need of the Member
and (ii) is necessary to satisfy such financial need.
(c) Need. A distribution shall be deemed to be made on account of an
immediate and heavy financial need of the Member if the distribution is on
account of (i) medical
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expenses described in Section 213 (d) of the Code incurred by the Member, the
Member's spouse or any dependent of the Member (as defined in Section 152 of the
Code); (ii) purchase (excluding mortgage payments) of a principal residence for
the Member; (iii) payment of tuition for the next twelve (12) months of
post-secondary education for the Member, the Member's spouse, child or any
dependent of the Member (as defined in Section 152 of the Code); or (iv) the
need to prevent the eviction of the Member from his principal residence or
foreclosure on the mortgage of the Member's principal residence. Further, the
Committee, according to uniform rules, may find that an immediate and heavy
financial need exists in other circumstances where it concludes that the
elimination of the need is necessary to preserve the health or well-being of the
Member, his spouse or a dependent of the Member as defined in Section 152 of the
Code.
(d) Satisfaction of Need. A distribution will be deemed to be necessary
to satisfy an immediate and heavy financial need of a Member only if all of the
requirements or conditions set forth below are satisfied or agreed to by the
Member, as appropriate.
(i) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Member.
(ii) The Member has obtained all distributions, other than
hardship distributions, and all non-taxable loans currently available under all
plans subject to Section 415 of the Code maintained by the Company and any
Related Entity.
(iii) The Member's elective contributions under this Plan and
each other plan subject to Section 415 of the Code maintained by the Company or
a Related Entity in which the Member participates are suspended for a period of
at least twelve full calendar months after
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receipt of the distribution. After such 12-month period has elapsed, the
Member's elective contributions shall continue to be suspended until the next
Entry Date, at which time the member may again elect that the Participating
Company make contributions on his behalf from his current compensation.
(iv) The Member does not make elective contributions under this
Plan or any other plan maintained by the Company or a Related Entity for the
year immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Section 402(g) of the Code for such next
taxable year reduced by the amount of the Member's elective contributions for
the taxable year of the hardship distribution.
(e) Limitation. Distributions from a Member's Salary Deferral Account
made on account of hardship shall be limited to the Member's elective
contributions under the Plan. No more than one distribution may be made to any
Member under this Section in any Plan Year. Distributions shall be subject to
the withholding requirements of subsection 9(e).
(f) Withdrawal of Voluntary Contributions. Notwithstanding any provision in
this Plan to the contrary, a member who previously made Voluntary Contributions
to the C-21 Plan may withdraw all or any portion of the lesser of:
(i) the total amount of actual Voluntary Contributions made less
amounts previously withdrawn, if any; or
(ii) the balance of his Voluntary Contribution Account.
The time, amount and manner of withdrawal shall be determined by the
Administrative Committee under uniform rules of general application.
Members may not elect to make Voluntary Contributions to this Plan.
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11. LOANS
(a) Committee Discretion. The Committee, in its discretion, shall have
the right to direct that a bona fide loan be made from a Member's Salary
Deferral or Rollover Account to any Member who requests the same. For purposes
of this Section 11, the term "Member" shall also include beneficiaries and
terminated employees with deferred vested account balances who are "parties in
interest" as defined in Section 3 of ERISA. All such loans shall be subject to
the requirements of this Section and such other rules which the Committee shall
from time to time prescribe. Eligibility for and the rules with respect to loans
shall be uniformly applied to all Members. Nothing in this Section shall require
the Committee to make loans available to Members.
(b) Minimum Requirements. To the extent the Committee
authorizes loans to Members, such loans shall be subject to the following rules:
(i) Principal Amount. The principal amount of the loan to a
Member may not exceed, when added to the outstanding balance of all other loans
to the Member from the Plan, the lesser of (A) $50,000, reduced by the excess of
the highest outstanding balance of loans to the Member from the Plan during the
one-year period ending on the day before the date on which such loan was made
over the outstanding balance of loans to the Member from the Plan on the date on
which such loan is so made or (B) 50% of the Member's nonforfeitable Account on
the Valuation Date last preceding the date on which the loan is made.
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(ii) Maximum Term. Generally, the term of the loan may not exceed
five years. However, if the Member demonstrates that the purpose of a loan is to
acquire a principal residence for the Member, then the maximum term shall be
fifteen years.
(iii) Interest Rate. The interest rate shall be determined by the
Committee from time to time at a rate equivalent to that charged by major
financial institutions for comparable loans at the time the loan is made.
(iv) Repayment. The loan shall be repaid over its term in level
installment payments made at least quarterly. If the Member is an active
employee, the payments shall correspond to the Member's payroll period. As a
condition precedent to approval of the loan, the Member shall be required to
authorize payroll withholding in the amount of each installment. Members may
prepay the entire outstanding balance of their loan at any time.
(v) Collateral. The loan shall be secured by the Member's Account
to the extent of the principal amount of the loan plus accrued interest. No more
than 50% of the Member's vested Account balance may be used to secure a loan.
The Committee, according to a uniform rule, may require a Member to post
additional collateral to secure a loan.
(vi) Distribution of Account. If the nonforfeitable portion of a
Member's Account is to be distributed prior to the Member's payment of all
principal and accrued interest due on any loan to such Member, the distribution
shall include as an offset the amount of unpaid principal and interest due on
the loan.
(vii) Notes. All loans shall be evidenced by a note containing
such terms and conditions as the Committee shall require.
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(viii) Multiple Loans. A Member shall be permitted only one
outstanding loan at any time.
(c) Accounting. The principal amount of any loan shall be treated as a
separate earmarked investment of the borrowing Member. All payments of principal
and interest with respect to such loan shall be credited to a separate account
for the borrowing Member until redeposited into the Fund in accordance with the
Member's election.
12. TITLE TO ASSETS.
No person or entity shall have any legal or equitable right or interest
in the contributions made by any Participating Company, or otherwise received
into the Fund, or in any assets of the Fund, except as expressly provided in the
Plan.
13. AMENDMENT AND TERMINATION
(a) Amendment. The provisions of this Plan may be amended by the Company
from time to time and at any time in whole or in part, provided that no
amendment shall be effective unless the Plan as so amended shall be for the
exclusive benefit of the Members and their beneficiaries. No amendment to the
Plan shall be effective to the extent that it has the effect of decreasing a
Member's Account balance or eliminating an optional form of benefit, with
respect to benefits attributable to service before the amendment. Furthermore,
if the vesting schedule of the Plan is amended, in the case of an Employee who
is a Member as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeit-able percentage (determined as of such date)
of such Employee's right to his Account balance
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will not be less than his percentage computed under the plan without regard to
such amendment.
(b) Termination. While it is the Company's intention to continue the
Plan in operation indefinitely, the right is, nevertheless, expressly reserved
to terminate the Plan in whole or in part or discontinue contributions in the
event of unforeseen conditions. Any such termination, partial termination or
discontinuance of contributions shall be effected only upon condition that such
action is taken as shall render it impossible for any part of the corpus of the
Fund or the income therefrom to be used for, or diverted to, purposes other than
the exclusive benefit of the Members and their beneficiaries.
(c) Conduct on Termination. If the Plan is to be terminated at any time
without establishment of a successor plan, the Company shall give written notice
to the Trustee which shall thereupon revalue the assets of the Fund and the
accounts of the Members as of the date of termination, partial termination or
discontinuance of contributions and, after discharging and satisfying any
obligations of the Plan, shall allocate all unallocated assets to the Accounts
of the Members at the date of termination, partial termination or discontinuance
of contributions as provided for in Section 6. Upon termination, partial
termination or discontinuance of contributions the Accounts of Members affected
thereby shall be nonforfeitable. The Committee, in its sole discretion, shall
instruct the Trustee either (i) to pay over to each affected Member his Account
or (ii) to continue to control and manage the Fund for the benefit of the
Members to whom distributions will be made in later periods at the time provided
in Section 8 and in the manner provided in Section 9.
(d) Procedure for Plan Amendment. The termination, modification, or other
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amendment of the Plan shall be effected by a resolution adopted by the Board
of Directors of the Company.
14. LIMITATION OF RIGHTS
(a) Alienation. None of the payments, benefits or rights of any Member
shall be subject to any claim of any creditor of such Member and, in particular,
to the fullest extent permitted by law, shall be free from attachment,
garnishment, trustee's process, or any other legal or equitable process
available to any creditor of such Member. No Member shall have the right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits or
payments which he may expect to receive, contingently or otherwise, under this
Plan, except the right to designate a beneficiary or beneficiaries as
hereinabove provided. For purposes of this subsection, neither a loan made to a
Member nor the pledging of the Member's Account as security therefor, both
pursuant to Section 11, shall be treated as an assignment or alienation unless
such loan is subject to the tax imposed by Section 4975 of the Code.
(b) Qualified Domestic Relations Order Exception. Subsection 14(a) shall
not apply to the creation, assignment or recognition of a right to any benefit
payable with respect to a Member under a qualified domestic relations order
within the meaning of Section 414(p) of the Code.
(c) Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the
payment of any benefit shall be construed as giving any Member or Employee, or
any person whomsoever, any legal or equitable right against any Participating
Company, the Trustee or the Committee, unless such
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right shall be specifically provided for in the Trust Agreement or the Plan or
conferred by affirmative action of the Committee or the Company in accordance
with the terms and provisions of the Plan or as giving any Member or Employee
the right to be retained in the employ of any Participating Company. All Members
and other Employees shall remain subject to discharge to the same extent as if
the Plan had never been adopted.
15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
In the case of any Plan merger or Plan consolidation with, or transfer
of assets or liabilities of the Plan to, any other plan, each Member in the Plan
must be entitled to receive a benefit immediately after the merger,
consolidation, or transfer (if the Plan were then to terminate) which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had been
terminated).
16. PARTICIPATION BY RELATED ENTITIES
(a) Commencement. Any entity which is a Related Entity with respect to
the Company may, with the permission of the Board of Directors, elect to adopt
this Plan and the accompanying Trust Agreement.
(b) Termination. The Company may, by action of the Board of Directors,
determine at any time that any such Participating Company shall withdraw and
establish a separate plan and fund. The withdrawal shall be effected by a duly
executed instrument delivered to the Trustee instructing it to segregate the
assets of the Fund allocable to the Employees of such Participating Company and
pay them over to the separate fund.
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(c) Single Plan. The Plan shall at all times be administered and
interpreted as a single plan for the benefit of the Employees of all
Participating Companies.
(d) Delegation of Authority. Each Participating Company, by adopting the
Plan, acknowledges that the Company has all the rights and duties thereof under
the Plan and the Trust Agreement, including the right to amend the same.
17. TOP-HEAVY REQUIREMENTS
(a) General Rule. For any Plan Year in which the Plan is a top-heavy
plan or included in a top-heavy group as determined under this Section, the
special requirements of this Section shall apply. The Plan shall be a top-heavy
plan (if it is not included in an "aggregation group") or a plan included in a
top-heavy group (if it is included in an "aggregation group") with respect to
any Plan Year if the sum as of the "determination date" of the "cumulative
accounts" of "key employees" for the Plan Year exceeds 60% of a similar sum
determined for all "employees", excluding "employees" who were "key employees"
in prior Plan Years only.
(b) Definitions. For purposes of this Section, the following definitions
shall apply to be interpreted in accordance with the provisions of Section 416
of the Code and the regulations thereunder.
(i) "Aggregation Group" shall mean the plans of each
Participating Company or a Related Entity included below:
(A) each such plan in which a "key employee" is a
participant; (B) each other such plan which enables any
plan in subsection (A)
above to meet the requirements of Section 401(a)(4) or 410 of the Code;
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(C) each other plan not required to be included in the
"aggregation group" which the Company elects to include in the "aggregation
group" in accordance with the "permissive aggregation group" rules of the Code
if such group would continue to meet the requirements of Sections 401(a)(4) and
410 of the Code with such plan being taken into account; and
(D) each terminated plan of the Company that was
maintained within the last five (5) years ending on the "determination date".
(ii) "Cumulative Account" for any "employee" shall mean the sum
of the amount of his accounts under this Plan plus all defined contribution
plans included in the "aggregation group" (if any) as of the most recent
valuation date for each such plan within a twelve-month period ending on the
"determination date", increased by any contributions due after such valuation
date and before the "determination date" plus the present value of his accrued
benefit under all defined benefit pension plans included in the "aggregation
group" (if any) as of the "determination date". For a defined benefit plan, the
present value of the accrued benefit as of any particular determination date
shall be the amount determined under (A) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the Participating
Companies and all Related Entities, or (B) if there is no such method, as if
such benefit accrued not more rapidly than under the slowest accrual rate
permitted under the fractional accrual rule of Section 411(b)(1)(C) of the Code,
as of the most recent valuation date for the defined benefit plan, under
actuarial equivalent factors specified therein, which is within a twelve-month
period ending on the determination date. For this purpose, the valuation date
shall be the date for computing plan costs for purposes of determining the
minimum funding
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requirement under Section 412 of the Code. "Cumulative accounts" of "employees"
who have not performed an Hour of Service for any Participating Company or
Related Entity for the five-year period ending on the "determination date" shall
be disregarded. An "employees" "cumulative account" shall be increased by the
aggregate distributions during the five-year period ending on the "determination
date" made with respect to him under any plan in the "aggregation group".
Rollovers and direct plan-to-plan transfers to this Plan or to a plan in the
"aggregation group" shall be included in the "employee's" "cumulative account"
unless the transfer is initiated by the "employee" and made from a plan
maintained by an employer which is not a Participating Company or Related
Entity.
(iii) "Determination Date" shall mean with respect to any Plan
Year the last day of the preceding Plan Year; however, for the first Plan Year
the term shall mean the last day of such Plan Year.
(iv) "Employee" shall mean any person (including a beneficiary
thereof) who has or had an Account held under this Plan or a plan in the
"aggregation group" including this Plan at any time during the Plan Year or any
of the four preceding Plan Years. Any "employee" other than a "key-employee"
described in subsection 17(c)(v) shall be considered a "non-key employee" for
purposes of this Section 17.
(v) "Key Employee" shall mean any "employee" or former "employee"
(including a beneficiary thereof) who is, at any time during the Plan Year, or
was, during any one of the four preceding Plan Years any one or more of the
following:
(A) an officer of a Participating Company or a Related
Entity whose annual compensation (as defined in subsection 17(b)(vi)) exceeds
50% of the dollar limitation
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in effect under Section 415(b)(1)(A) of the Code, unless 50 other such officers
(or, if lesser, a number of such officers equal to the greater of three or 10%
of the "employees") have higher annual compensation;
(B) one of the ten persons employed by a Participating
Company or Related Entity having annual compensation (as defined below) greater
than the limitation in effect under Section 415(c)(1)(A) of the Code, and
owning (or considered as owning within the meaning of Section 318 of the Code)
more than 1/2% interest as well as one of the largest interests in all Par-
ticipating Companies or Related Entities. For purposes of this subsection
(B), if two "employees" have the same interest, the one with the greater compen-
sation shall be treated as owning the larger interest;
(C) any person owning (or considered as owning within
the meaning of Section 318 of the Code) more than 5% of the outstanding
stock of a Participating Company or a Related Entity or stock possessing more
than 5% of the total combined voting power of such stock;
(D) a person who would be described in subsection (C)
above if 1% were substituted for 5% each place the same appears in subsection
(C) above, and who has annual compensation of more than $150,000. For purposes
of determining ownership under this subsection, Section 318(a)(2)(C) of the
Code shall be applied by substituting 5% for 50%.
(vi) "Compensation". For purposes of this Section 17,
"compensation" shall mean compensation as defined in Section 415(c)(3) of the
Code, but including amounts contributed by the employer pursuant to a salary
reduction agreement which are excludable
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from the Employee's gross income under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code.
(c) Combined Benefit Limitation. For purposes of the calculation of the
combined limitation of subsection 5(c), "1.0" shall be substituted for "1.25"
each place the same appears in that subsection if either (i) the "cumulative
accounts" of "key employees" exceeds 90% of the aggregate for all "employees" or
(ii) the Participating Companies' contribution allocated to Members who are not
"key employees" does not at least equal 4% of compensation (as defined in
subsection 5(d)) or the minimum defined benefit under a defined benefit plan
does not meet the requirement of Section 416(h)(2)(A)(ii) of the Code.
(d) Vesting. The schedule set forth below shall be substituted for the
schedule contained in subsection 8(d) to the extent it provides for more rapid
vesting.
NONFORFEITABLE
YEARS OF SERVICE PERCENTAGE
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
The schedule above shall apply to all benefits accrued as of the date the
schedule becomes effective and all benefits accrued for Plan Years thereafter to
which this Section applies. If the Plan ceases to be top-heavy, no benefit which
became nonforfeitable under the schedule above shall become forfeitable. For
Members with three Years of Service or more, the schedule shall continue to
apply to future accruals to the extent it provides for more rapid vesting.
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(e) Minimum Contribution. Minimum Participating Company contributions
and forfeitures for a Member who is not a "key employee" shall be required in an
amount equal to the lesser of 3% of compensation (as defined in subsection
17(b)(vi) herein) or the highest percentage of Participating Company
contributions and forfeitures expressed as a percentage of the first $200,000
(or an increased amount permitted under a cost of living adjustment),
contributed for any "key employee" under Section 4. If the highest rate
allocated to a key employee for a year in which the plan is top heavy is less
than 3%, amounts attributable to a salary reduction shall be included in
determining contributions made on behalf of key employees. For purposes of this
subsection, employer social security contributions shall be disregarded. Each
"non-key employee" of a Participating Company who has not separated from service
at the end of the Plan Year and who has satisfied the eligibility requirements
of subsection 3(a) shall receive any minimum contribution provided under this
Section 17 without regard to (i) whether he is credited with 1,000 Hours of
Service in the Plan Year (ii) earnings level for the Plan Year or (iii) whether
he elects to make contributions under subsection 4(a). If an "employee"
participates in both a defined benefit plan and a defined contribution plan, the
minimum benefit shall be provided under the defined benefit plan. If an
"employee" participates in another defined contribution plan, the minimum
benefit shall be provided under the other defined contribution plan.
18. MISCELLANEOUS
(a) Incapacity. If the Committee determines that a person entitled to
receive any benefit payment is under a legal disability or is incapacitated in
any way so as to be unable to
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manage his financial affairs, the Committee may make payments to such person for
his benefit, or apply the payments for the benefit of such person in such manner
as the Committee considers advisable. Any payment of a benefit in accordance
with the provisions of this subsection shall be a complete discharge of any
liability to make such payment.
(b) Reversions. In no event, except as provided herein, shall the Trustee
return to a Participating Company any amount contributed by it to the Plan.
(i) Mistake of Fact. In the case of a contribution made by a
good faith mistake of fact, the Trustee shall return the erroneous portion of
the contribution, without increase for investment earnings, but with decrease
for investment losses, if any, within one year after payment of the contribution
to the Fund.
(ii) Deductibility. To the extent deduction of any contribution
determined by the Company in good faith to be deductible is disallowed, the
Trustee, at the option of the Company, shall return that portion of the
contribution, without increase for investment earnings but with decrease for
investment losses, if any, for which deduction has been disallowed within one
year after the disallowance of the deduction.
(iii) Initial Qualification. In the event there is a
determination that the Plan does not initially satisfy all applicable
requirements of Section 401 of the Code, all contributions made by a
Participating Company incident to that initial qualification shall be returned
to the Participating Company by the Trustee within one year after the date on
which the initial qualification is denied, but only if the Company submitted an
application for such initial determination by the due date of the Company's
income tax return for the taxable year in which the Plan was adopted, or such
later date as the Secretary may prescribe.
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(iv) Limitation. No return of contribution shall be made under
this subsection which adversely affects the Plan's qualified status under
regulations, rulings or other published positions of the Internal Revenue
Service or reduces a Member's Account below the amount it would have been had
such contribution not been made.
This subsection shall not preclude refunds made in accordance with
subsections 4(b)(i), 4(d)(iii), and 4(g)(ii).
(c) Employee Data. The Committee or the Trustee may require that each
Employee provide such data as it deems necessary upon his becoming a Member in
the Plan. Each Employee, upon becoming a Member, shall be deemed to have
approved of and to have acquiesced in each and every provision of the Plan for
himself, his personal representatives, distributees, legatees, assigns, and
beneficiaries.
(d) Law Governing. This Plan shall be construed, administered and applied
in a manner consistent with the laws of the State of New Jersey.
(e) Pronouns. The use of the masculine pronoun shall be extended to include
the feminine gender wherever appropriate.
(f) Interpretation. The Plan is a profit sharing plan including a
qualified, tax exempt trust under Sections 401(a) and 501(a) of the Code and a
qualified cash or deferred arrangement under Section 401(k)(2) of the Code. The
Plan shall be interpreted in a manner consistent with its satisfaction of all
requirements of the Code applicable to such a plan.
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19. COMPANY STOCK.
(a) Voting of Company Stock. Each Member shall direct the voting of
Company Stock allocated to his Account. The Trustee shall vote allocated Company
Stock for which it has not received direction from the Member or Beneficiary, as
the case may be, in the same proportion as directed Company Stock is voted. For
each corporate matter that must be decided (either by law or charter) by vote of
the outstanding common shares, each Member shall be given notice, either in
person or by mail, of the following: (i) the matter to be decided; (ii) that he
is entitled to direct the Trustee as to the manner of voting the Company Stock
allocated to his Account; and (iii) the procedure to be followed to exercise his
voting rights.
(b) Securities Laws. All provisions contained herein with respect to any
transactions involving Company Stock, including but not limited to its
distribution as a benefit, its repurchase or sale, are subject to and
conditioned upon compliance with any applicable provisions of federal and state
securities laws or regulations. Without limiting the generality of the
foregoing, and notwithstanding anything to the contrary contained in the Trust,
no certificate for shares of Company Stock or certificate of beneficial interest
shall be issued or transferred to a Member or Beneficiary unless such shares or
other securities, at the time of any such issuance or transfer (i) are exempt
securities, or are the subject matter of an exempt transaction under applicable
securities law and regulations; (ii) are covered by a registration statement
under the Securities Act of 1933 which is in effect or are exempt from
registration under said Act; (iii) comply with the rules of any stock exchange
on which the Company's shares may be listed; and (iv) have been approved by such
other regulatory bodies
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as the Administrator may deem advisable. Prior to or as soon as practicable
after the time when shares of Company Stock or certificates of beneficial
interest in such shares would otherwise be deliverable to a Member or
Beneficiary, the Administrator will register such shares or interests and take
such other steps as may be necessary to allow the issuance or transfer of
certificates as aforesaid. Any certificate issued to evidence such shares or
interests may bear such legends and statements as the Administrator may deem
advisable to assure compliance with this Plan and with federal and state laws
and regulations.
(c) Tender Offers. In the event of a tender offer, or other similar
offer to acquire any Company Stock held in the Fund for the benefit of a Member
or Beneficiary, it shall be the duty of the Administrator to furnish each Member
or Beneficiary with all information provided to shareholders of the Company with
respect to such offer and with a form to be completed and forwarded directly to
the Trustee specifying whether the Member or Beneficiary desires that such offer
be accepted or rejected with respect to any Company Stock held for the benefit
of that Member or Beneficiary. Such form shall notify the Member or Beneficiary,
as the case may be, that the Trustee will act only in accordance with
instructions received from the Member or Beneficiary and that in the absence of
any such instructions, shall not accept such offer with respect to any Company
Stock held for the benefit of that Member or Beneficiary. All such forms shall
be forwarded by the Member or Beneficiary directly to the Trustee and shall
remain confidential as between the Member or Beneficiary and Trustee. The
Trustee shall provide no information concerning such forms to the Administrator,
the Company, or any of its agents which may serve to identify the action taken
by any Member or Beneficiary with respect to that offer.
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(d) Confidentiality Procedures. Notwithstanding any other provision in
this Plan to the contrary except to the extent necessary to comply with federal
and state laws not preempted by ERISA, the Committee shall make certain that
procedures are maintained to safeguard the confidentiality of information
relating to the purchase, holding, and sale of Company Stock, and the exercise
of voting, tender and similar rights with respect to such Company Stock by
Members or Beneficiaries. The Committee shall determine whether or not an
independent fiduciary must be appointed to preserve confidentiality, where there
is a potential for undue employer influence upon Members or Beneficiaries with
regard to the direct or indirect exercise of shareholder rights. For purposes of
this subsection (d), a fiduciary is not independent if the fiduciary is
affiliated with the Company.
(e) Employer Securities. The Trustee shall be empowered to acquire and
hold "qualifying employer securities" as that term is defined under ERISA,
provided, however, that the Trustee shall not be permitted to acquire any
qualifying employer securities if, immediately after the acquisition of such
securities, the fair market value of all qualifying employer securities held by
the Trustee hereunder should amount to more than 100% of the fair market value
of all the assets in the Trust Fund.
(f) Company Stock. For purposes of this Section 19, the term "Company
Stock" shall mean the common stock of HFS Incorporated.
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IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by the
Company, it has caused the same to be signed by its officers thereunto duly
authorized, and its corporate seal to be affixed thereto, this 1st day of
January 1996.
HFS INCORPORATED
Attest:
By: s/Scott E. Forbes
Name: Scott E. Forbes
Title: Senior Vice President
- Finance
s/Jeanne M. Murphy
Secretary
[Corporate Seal]
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EXHIBIT 5.1
CARPENTER, BENNETT & MORRISSEY
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07108-4078
June 27, 1996
Board of Directors
HFS Incorporated
339 Jefferson Road
P.O. Box 278
Parsippany, NJ 07054-0278
Re: HFS Incorporated Employee Savings Plan
Dear Sirs and Mesdames:
It is our understanding that HFS Incorporated (the "Company") is filing
a Form S-8 Registration Statement (the "Statement") with the Securities and
Exchange Commission to register additional Company common stock which the HFS
Incorporated Employee Savings Plan (the "Plan") members may select as an
investment option under the terms of the Plan. As part of this filing, you have
requested us to furnish our opinion as to whether the Plan, as amended, and the
Trust Agreement described below comply with the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
We have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such documents as we have deemed
necessary or appropriate as a basis for the opinion set forth herein, including
(i) the amended and restated Plan as adopted effective January 1, 1996, and (ii)
the Trust Agreement between Merrill Lynch Trust Company and the Company
effective February 1, 1996. In our examination, we have assumed the genuineness
of all signatures, legal capacity of natural persons, the authenticity of the
all documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified, conformed or photostatic copies,
and the authenticity of the originals of such copies. As to any facts material
to the opinion expressed herein, which were not independently established or
verified, we have relied upon statements and
<PAGE>
representations of officers and other representatives of the Company and others.
In addition, we have made such other examination of law and facts as we
considered necessary in order to form a basis for the opinion hereinafter
expressed.
Based upon the foregoing, and subject to the comments and qualifications
noted below, it is our opinion that the provisions of the Plan and the Trust
Agreement are in compliance in all material respects with the applicable
requirements of ERISA.
The Company received a favorable determination letter dated May 21, 1996
from the Internal Revenue Service (the "Service") on the qualification of the
amended and restated Plan based on the information submitted to the Service at
that time. The Service stated in its determination letter that the continued
qualification of the Plan under its form as submitted to the Service will depend
on its effect in operation. Similarly, our opinion is limited to the form of the
provisions of the Plan and Trust Agreement and not to their effect in operation.
We are admitted to the Bar of the State of New Jersey, and we express no
opinion as to the laws of any other jurisdiction other than, to the extent
specifically referred to herein, the federal laws of the United States of
America.
The opinion expressed herein is based on the existing legal authority
and precedent, which are subject to change at any time. Accordingly, there can
be no assurance that there will not be any legislative, administrative or
judicial development after the date of this letter that might cause us to
reassess the opinion expressed herein.
We hereby consent to the use of this opinion as an exhibit to the
Statement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required by the Securities Act of 1933
and the rules promulgated thereunder.
Very truly yours,
CARPENTER, BENNETT & MORRISSEY
By: s/ Edward T. Day, Jr.
Edward T. Day, Jr.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
HFS Incorporated on Form S-8 of our reports dated February 22, 1996 (February
28, 1996 as to Note 2A) and March 29, 1996, appearing in and incorporated by
reference in the Annual Report on Form 10-K, for the year ended December 31,
1995.
s/DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 26, 1996
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated February 19,
1996, related to the balance sheet of Century 21 Real Estate of the Mid-Atlantic
States, Inc. as of December 31, 1995 and the related statements of income,
changes in stockholder's equity and cash flows for the year then ended included
in the Company's Current Report of Form 8-K dated April 5, 1996.
s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 26, 1996
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated May 15, 1995,
related to the financial statements of Century 21 of The Southwest, Inc. as of
and for the years ended March 31, 1995 and 1994, included in the Company's
Current Report on Form 8-K dated February 16, 1996.
s/TOBACK CPAS, P.C.
Phoenix, Arizona
June 18, 1996
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated June 22, 1995
(except for Note 13, as to which the date is October 12, 1995), related to the
financial statements of Century 21 of Eastern Pennsylvania, Inc. as of and for
the years ended April 30, 1995 and 1994, included in the Company's Current
Report on Form 8-K dated February 16, 1996.
s/WOOLARD, KRAJNIK & COMPANY, LLP
Exton, Pennsylvania
June 18, 1996
EXHIBIT 23.5
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated May 11, 1995,
related to the financial statements of Century 21 Real Estate of the
Mid-Atlantic States, Inc. as of and for the years ended December 31, 1994 and
1993, included in the Company's Current Report on Form 8-K dated February 16,
1996.
s/BEERS & CUTLER
Washington, D.C.
June 18, 1996
EXHIBIT 23.6
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated January 12,
1996, related to the consolidated financial statements of Century 21 Region V,
Inc. and Subsidiaries as of and for the year ended July 31, 1995, included in
the Company's Current Report on Form 8-K dated February 16, 1996.
s/WHITE, NELSON & CO. LLP
Anaheim, California
June 18, 1996
EXHIBIT 23.7
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of HFS Incorporated for the registration of 200,000 shares of common stock
pertaining to the HFS Incorporated Amended and Restated Employee Savings Plan of
our report dated February 27, 1995, with respect to the consolidated financial
statements of Electronic Realty Associates, Inc. for the years ended December
31, 1994 and 1993, included in the Current Report on Form 8-K of HFS
Incorporated dated February 16, 1996, filed with the Securities and Exchange
Commission, and our report dated February 21, 1996, with respect to the
consolidated financial statements of Electronic Realty Associates, L.P. for the
years ended December 31, 1995 and 1994, included in the Current Report on Form
8-K of HFS Incorporated dated April 5, 1996, filed with the Securities and
Exchange Commission.
s/ERNST & YOUNG LLP
Kansas City, Missouri
June 25, 1996
EXHIBIT 23.8
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated February 27,
1996, related to the consolidated financial statements of Coldwell Banker
Corporation and Subsidiaries as of December 31, 1995 and 1994, and for each of
the two years in the period ended December 31, 1995.
s/ COOPERS & LYBRAND L.L.P.
Newport Beach, California
June 21, 1996
EXHIBIT 23.9
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
HFS Incorporated (the "Company") on Form S-8 of our report dated March 11, 1994,
related to the consolidated statements of operations, stockholders' equity and
cash flows for the three months ended December 31, 1993 and the consolidated
statements of operations and cash flows for the nine months ended September 30,
1993 of Coldwell Banker Corporation and Subsidiaries included in the Company's
Current Report on Form 8-K dated May 8, 1996.
s/DELOITTE & TOUCHE LLP
Costa Mesa, California
June 21, 1996
