<PAGE> 1
As filed with the Securities and Exchange Commission on June 13, 1996.
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
____________________________________
HEARTLAND WIRELESS COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1435149
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
903 N. BOWSER
SUITE 140
RICHARDSON, TEXAS 75081
(Address of Principal Executive Offices) (Zip Code)
__________________
HEARTLAND WIRELESS COMMUNICATIONS, INC.
401(K) PLAN
(Full title of the plan)
J. CURTIS HENDERSON, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
HEARTLAND WIRELESS COMMUNICATIONS, INC.
903 N. BOWSER
SUITE 140
RICHARDSON, TEXAS 75081
(214) 479-9244
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
___________________________________________________
Copy to:
KENT JAMISON
LOCKE PURNELL RAIN HARRELL
(A PROFESSIONAL CORPORATION)
2200 ROSS AVENUE
SUITE 2200
DALLAS, TEXAS 75201
(214) 740-8000
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
====================================================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price per Aggregate Offering Registration Fee *
Share * Price*
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 500,000 shares $25.3125 $12,656,250.00 $4,364.23
par value
====================================================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee. This
fee was calculated pursuant to Rule 457(c) and (h) under the Securities Act of
1933, as amended, on the basis of the average of the high and low prices for
the Common Stock of the Company on the Nasdaq Stock Market National Market on
June 11, 1996.
In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended, this Registration Statement also covers (i) shares of Common Stock of
the Company issuable to prevent dilution resulting from stock splits, stock
dividends or similar transactions and (ii) an indeterminate amount of interests
in the employee benefit plan described herein to be offered or sold pursuant to
the plan described herein.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The information specified by Item 1 of Part I of Form S-8 is omitted from
this filing in accordance with the provisions of Rule 428 under the Securities
Act of 1933, as amended, and the introductory note to Part I of Form S-8. The
document(s) containing the information specified in Part I will be sent or
given to employees as specified by Rule 428(b)(1).
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The information specified by Item 2 of Part I of Form S-8 is omitted from
this filing in accordance with the provisions of Rule 428 under the Securities
Act of 1933, as amended, and the introductory note to Part I of Form S-8. The
document(s) containing the information specified in Part I will be sent or
given to employees as specified by Rule 428(b)(1).
I-1
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents set forth below are hereby incorporated by reference in this
Registration Statement. All documents subsequently filed by Heartland Wireless
Communications, Inc., a Delaware corporation (the "Company"), and the Heartland
Wireless Communications, Inc. 401(k) Plan (the "Plan") pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment that
indicates that the securities offered hereby have been sold or which
deregisters the securities offered hereby then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof commencing on the respective dates on which such documents are
filed.
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report
referred to in (1) above.
(3) The description of the Company's Common Stock contained in the
Company's Form 8-A Registration Statement filed with the Commission pursuant
to the Exchange Act, including any amendments or reports filed for the
purposes of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Section 102(b)(7) of the Delaware General Corporation Law (the
"DGCL"), Article VI of the Company's Restated Certificate of Incorporation
eliminates the liability of the Company's directors to the Company or its
stockholders, except for liabilities related to breach of duty of loyalty,
actions not in good faith and certain other liabilities.
Section 145 of the DGCL provides for indemnification by the Company of its
directors and officers. In addition, Article IX, Section 1 of the Company's
Restated By-Laws requires the Company to indemnify any current or former
director or officer to the fullest extent permitted by the DGCL. In
addition, the Company has entered into indemnity agreement with its
directors, which obligate the Company to indemnify such directors to the
fullest extent permitted by the DGCL. In addition, the Company maintains
officers' and directors' liability insurance that insures against liabilities
that officers and directors of the Company may incur in such capacities.
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1
to the Company's Registration Statement on Form S-1 (File No. 33-74244) which
provides for indemnification of the directors and officers of the Company
signing such registration statement and
II-1
<PAGE> 4
certain controlling persons of the Company against certain liabilities,
including those arising under the Securities Act in certain instances by the
underwriters.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (File Number 33-74244) (the "Form S-1")).
4.2 Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Form S-1.)
4.3 Heartland Wireless Communications, Inc. 401(k) Plan.
5.1 Opinion of Locke Purnell Rain Harrell (A Professional Corporation).
23.1 Consent of KPMG Peat Marwick LLP (Heartland Wireless Communications, Inc.).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Coopers & Lybrand L.L.P.
23.4 Consent of KPMG Peat Marwick LLP (Cross Country Division).
23.5 Consent of KPMG Peat Marwick LLP (TechniVision, Inc.).
23.6 Consent of Locke Purnell Rain Harrell (A Professional Corporation) (included in its opinion filed as Exhibit
5.1).
24 Power of Attorney (included on the signature page of this Registration Statement).
</TABLE>
The Company hereby undertakes that it will submit or has submitted the Plan
and any amendments thereto to the Internal Revenue Service (the "IRS") in a
timely manner and has made or will make all changes required by the IRS in
order to qualify the Plan under Section 401 of the Internal Revenue Code.
ITEM 9. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the
"Act");
II-2
<PAGE> 5
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)
(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to
the Securities and Exchange Commission by the Company
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the 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 which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Act, each filing of the Company's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that
is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under
the Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of
expenses incurred or paid by a director, officer or
controlling person of the Company 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 Company will, unless
in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints J.R. Holland, Jr., John R. Bailey and J. Curtis
Henderson, each of them or any one of them, as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, to execute in the name and on behalf of such person, in any and
all capacities, any or all amendments (including post-effective amendments) to
this Registration Statement now or hereafter filed by or on behalf of Heartland
Wireless Communications, Inc. (the "Company") covering securities issued or
issuable under or in connection with the Company's 401(k) Plan (as now or
hereafter amended) and to file the same, with all exhibits thereto, and other
documents required in connection therewith, with the Securities and Exchange
Commission and any state or other securities authority, granting unto said
attorneys-in-fact and agents, and each of them or any of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them or any
one of them, or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Form S-8
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on the 13th day of
June, 1996.
HEARTLAND WIRELESS COMMUNICATIONS, INC.
By: /s/ J. Curtis Henderson
-----------------------------------
J. Curtis Henderson
Vice President and General Counsel
II-4
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, this Form S-8
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ J.R. Holland, Jr. Chairman of the Board and Director June 13, 1996
- ----------------------------
J. R. Holland, Jr.
/s/ David E. Webb President, Chief Executive Officer and June 13, 1996
- ---------------------------- Director (Principal Executive Officer)
David E. Webb
/s/ John R. Bailey Senior Vice President - Finance, Chief June 13, 1996
- ---------------------------- Financial Officer, Treasurer and Secretary
John R. Bailey (Principal Financial Officer)
/s/ David D. Hagey Vice President and Controller June 13, 1996
- ---------------------------- (Principal Accounting Officer)
David D. Hagey
/s/ Alvin H. Lane, Jr. Director June 13, 1996
- ----------------------------
Alvin H. Lane, Jr.
/s/ Dennis M. O'Rourke Director June 13, 1996
- ----------------------------
Dennis M. O'Rourke
/s/ John A. Sprague Director June 13, 1996
- ----------------------------
John A. Sprague
/s/ Wes W. Watkins Director June 13, 1996
- ----------------------------
Wes W. Watkins
/s/ L. Allen Wheeler Director June 13, 1996
- ----------------------------
L. Allen Wheeler
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the trustee
(or other persons who administer the Plan) has duly caused this Form S-8
Registration Statement to be signed on behalf of the Plan by the undersigned,
thereunto duly authorized, in the City of St. Louis, State of Missouri, on the
13th day of June, 1996.
HEARTLAND WIRELESS COMMUNICATIONS,
INC. 401(K) PLAN
By: A.G. Edwards Trust Company, Trustee
of the Heartland Wireless Communications,
Inc. 401(k) Plan
By: /s/ PETER J. OSTER
------------------------------------
Printed Name: Peter J. Oster
--------------------------
Title: Associate Vice President
---------------------------------
II-5
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Number Description Page
-------------- ----------- --------------
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Company (incorporated by reference to N/A
Exhibit 3.1 to the Company's Registration Statement on Form S-1 (File Number 33-
74244) (the "Form S-1"))
4.2 Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the N/A
Form S-1)
4.3 Heartland Wireless Communications, Inc. 401(k) Plan 9
5.1 Opinion of Locke Purnell Rain Harrell (A Professional Corporation) 94
23.1 Consent of KPMG Peat Marwick LLP (Heartland Wireless Communications, Inc.) 96
23.2 Consent of Arthur Andersen LLP 97
23.3 Consent of Coopers & Lybrand L.L.P. 98
23.4 Consent of KPMG Peat Marwick LLP (Cross Country Division) 99
23.5 Consent of KPMG Peat Marwick LLP (TechniVision, Inc.) 100
23.6 Consent of Locke Purnell Rain Harrell (A Professional Corporation) (included in N/A
its opinion filed as Exhibit 5.1)
24 Power of Attorney (included on the signature page of this Registration Statement)
</TABLE>
<PAGE> 1
EXHIBIT 4.3
HEARTLAND WIRELESS COMMUNICATIONS, INC. 401(k) PLAN
<PAGE> 2
HEARTLAND WIRELESS COMMUNICATIONS, INC. 401(K) PLAN
<PAGE> 3
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . .16
2.2 DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . . . . . . .16
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER . . . . . . . . . . . .19
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY . . . . . . . . . . . . . .20
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES . . . . . . . . . . .20
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . . . . . . . . .20
2.7 RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . .21
2.8 APPOINTMENT OF ADVISERS . . . . . . . . . . . . . . . . . . . . . .22
2.9 INFORMATION FROM EMPLOYER . . . . . . . . . . . . . . . . . . . . .22
2.10 PAYMENT OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . .22
2.11 MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . .22
2.12 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . .22
2.13 CLAIMS REVIEW PROCEDURE . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . .23
3.2 APPLICATION FOR PARTICIPATION . . . . . . . . . . . . . . . . . . .24
<PAGE> 4
3.3 EFFECTIVE DATE OF PARTICIPATION . . . . . . . . . . . . . . . . . .24
3.4 DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . .24
3.5 TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . .24
3.6 OMISSION OF ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . .25
3.7 INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . .25
3.8 ELECTION NOT TO PARTICIPATE . . . . . . . . . . . . . . . . . . . .25
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . . . . . . . .25
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION . . . . . . . . . . . . . .26
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . .30
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . . . . . .30
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . . . . . . . .34
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . .37
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . .38
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . .41
4.9 MAXIMUM ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . . . . . .43
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS . . . . . . . . . . . . .46
4.11 TRANSFERS FROM QUALIFIED PLANS . . . . . . . . . . . . . . . . . . .47
4.12 DIRECTED INVESTMENT ACCOUNT . . . . . . . . . . . . . . . . . . . .49
<PAGE> 5
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND . . . . . . . . . . . . . . . .. . . . 49
5.2 METHOD OF VALUATION . . . . . . . . . . . . . . . . . . . . . . . .49
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT . . . . . . . . . . . . .50
6.2 DETERMINATION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . .50
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY . . . . . . . . . .51
6.4 DETERMINATION OF BENEFITS UPON TERMINATION . . . . . . . . . . . . .51
6.5 DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . .54
6.6 DISTRIBUTION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . .57
6.7 TIME OF SEGREGATION OR DISTRIBUTION . . . . . . . . . . . . . . . .58
6.8 DISTRIBUTION FOR MINOR BENEFICIARY . . . . . . . . . . . . . . . . .59
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN . . . . . . . . . . .59
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP . . . . . . . . . . . . . . . . .59
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION . . . . . . . . . .61
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE . . . . . . . . . . . . . . .61
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE . . . . . . . . . . . .61
7.3 OTHER POWERS OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . .62
<PAGE> 6
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS . . . . . . . . . . . . . .65
7.5 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES . . . . . . . . . . .65
7.6 ANNUAL REPORT OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . .65
7.7 AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE . . . . . . . . . . .66
7.9 TRANSFER OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . .67
7.10 DIRECT ROLLOVER . . . . . . . . . . . . . . . . . . . . . . . . . .67
7.11 EMPLOYER SECURITIES AND REAL PROPERTY . . . . . . . . . . . . . . .68
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
8.2 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
8.3 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . .70
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . .70
9.2 ALIENATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
9.3 CONSTRUCTION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . .71
9.4 GENDER AND NUMBER . . . . . . . . . . . . . . . . . . . . . . . . .71
9.5 LEGAL ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS . . . . . . . . . . . . . . .71
9.7 BONDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
<PAGE> 7
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE . . . . . . . . . . . . .72
9.9 INSURER'S PROTECTIVE CLAUSE . . . . . . . . . . . . . . . . . . . .72
9.10 RECEIPT AND RELEASE FOR PAYMENTS . . . . . . . . . . . . . . . . . .72
9.11 ACTION BY THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . .73
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY . . . . . . . . .73
9.13 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
9.14 APPROVAL BY INTERNAL REVENUE SERVICE . . . . . . . . . . . . . . . .73
9.15 UNIFORMITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . .74
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS . . . . . . . . . . . . . .74
10.3 DESIGNATION OF AGENT . . . . . . . . . . . . . . . . . . . . . . . .75
10.4 EMPLOYEE TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . .76
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . . .76
10.6 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
10.7 DISCONTINUANCE OF PARTICIPATION . . . . . . . . . . . . . . . . . .76
10.8 ADMINISTRATOR'S AUTHORITY . . . . . . . . . . . . . . . . . . . . .77
<PAGE> 8
HEARTLAND WIRELESS COMMUNICATIONS, INC. 401(K) PLAN
THIS AGREEMENT, hereby made and entered into this 11th
day of June, 1996, by and between Heartland Wireless Communications, Inc.
(herein referred to as the "Employer") and A.G. Edwards Trust Company (herein
referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer desires to recognize the contribution
made to its successful operation by its employees and to reward such
contribution by means of a 401(k) Profit Sharing Plan for those employees who
shall qualify as Participants hereunder;
NOW, THEREFORE, effective January 1, 1996, (hereinafter
called the "Effective Date"), the Employer hereby establishes a 401(k) Profit
Sharing Plan and creates this trust (which plan and trust are hereinafter
called the "Plan") for the exclusive benefit of the Participants and their
Beneficiaries, and the Trustee hereby accepts the Plan on the following terms:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Affiliated Employer" means any corporation which is a member
of a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)) with the
Employer; any organization (whether or not incorporated) which is a member of
an affiliated service group (as defined in Code Section 414(m)) which includes
the Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant,
the value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions
of Section 2.2.
1.5 "Anniversary Date" means December 31.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1
<PAGE> 9
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) excluding bonuses.
(b) including amounts which are contributed by
the Employer pursuant to a salary reduction agreement and
which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B),
403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized as of such Employee's effective date of
participation pursuant to Section 3.3.
Compensation in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year and the first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year the Compensation limit
shall be an amount equal to the Compensation limit for the calendar year in
which the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12). In applying this
limitation, the family group of a Highly Compensated Participant who is subject
to the Family Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this
purpose Family Members shall include only the affected Participant's spouse and
any lineal descendants who have not attained age nineteen (19) before the close
of the year. If, as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then the limitation shall be prorated among
the affected Family Members in proportion to each such Family Member's
Compensation prior to the application of this limitation, or the limitation
shall be adjusted in accordance with any other method permitted by Regulation.
However, for purposes of Section 4.4(b), the preceding sentence shall not apply
in determining the portion of the Compensation of a Participant which is below
Excess Compensation.
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<PAGE> 10
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 Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 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 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision.
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.
If, as a result of such rules, the maximum "annual addition"
limit of Section 4.9(a) would be exceeded for one or more of the affected
Family Members, the prorated Compensation of all affected Family Members shall
be adjusted to avoid or reduce any excess. The prorated Compensation of any
affected Family Member whose allocation would exceed the limit shall be
adjusted downward to the level needed to provide an allocation equal to such
limit. The prorated Compensation of affected Family Members not affected by
such limit shall then be adjusted upward on a pro rata basis not to exceed each
such affected Family Member's Compensation as determined prior to application
of the Family Member rule. The resulting allocation shall not exceed such
individual's maximum "annual addition" limit. If, after these adjustments, an
"excess amount" still results, such "excess amount" shall be disposed of in the
manner described in Section 4.10(a) pro rata among all affected Family Members.
For purposes of this Section, if the Plan is a plan described
in Code Section 413(c) or 414(f) (a plan maintained by more than one Employer),
the $200,000 limitation applies separately with respect to the Compensation of
any Participant from each Employer maintaining the Plan.
1.9 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group or individual)
issued pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means
the amount of the Participant's total Compensation which has been contributed
to the Plan in accordance with the
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<PAGE> 11
Participant's deferral election pursuant to Section 4.2 excluding any such
amounts distributed as excess "annual additions" pursuant to Section 4.10(a).
1.11 "Early Retirement Date." This Plan does not provide for a
retirement date prior to Normal Retirement Date.
1.12 "Elective Contribution" means the Employer's contributions to
the Plan of Deferred Compensation excluding any such amounts distributed as
excess "annual additions" pursuant to Section 4.10(a). In addition, any
Employer Qualified Non-Elective Contribution made pursuant to Section 4.1(c)
and Section 4.6 shall be considered an Elective Contribution for purposes of
the Plan. Any such contributions deemed to be Elective Contributions shall be
subject to the requirements of Sections 4.2(b) and 4.2(c) and shall further be
required to satisfy the discrimination requirements of Regulation
1.401(k)-1(b)(5), the provisions of which are specifically incorporated herein
by reference.
1.13 "Eligible Employee" means any Employee.
Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this
Plan.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives (within the
meaning of Code Section 7701(a)(46)) and the Employer under which retirement
benefits were the subject of good faith bargaining between the parties will not
be eligible to participate in this Plan unless such agreement expressly
provides for coverage in this Plan or two percent or more of the Employees of
the Employer who are covered pursuant to that agreement are professionals as
defined in Regulation 1.410(b)-9.
Employees who are nonresident aliens (within the meaning of
Code Section 7701(b)(1)(B)) and who receive no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer which constitutes income
from sources within the United States (within the meaning of Code Section
861(a)(3)) shall not be eligible to participate in this Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employees shall include leased employees as defined in Section 1.35, below.
1.15 "Employer" means Heartland Wireless Communications, Inc. and
any Participating Employer (as defined in Section 10.1) which shall adopt this
Plan; any successor which shall maintain this Plan; and any predecessor which
has maintained this Plan. The Employer is a corporation, with principal offices
in the State of Texas.
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<PAGE> 12
1.16 "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the Employer matching
contributions made pursuant to Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over
the maximum amount of such contributions permitted under the limitations of
Section 4.7(a).
1.17 "Excess Compensation" with respect to any Participant means
the Participant's Compensation which is in excess of 80% of the Taxable Wage
Base plus $1.00. For any short year, 80% of the Taxable Wage Base plus $1.00
shall be reduced by a fraction, the numerator of which is the number of full
months in the short year and the denominator of which is twelve (12).
1.18 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such contributions
permitted under Section 4.5(a). Excess Contributions shall be treated as an
"annual addition" pursuant to Section 4.9(b).
1.19 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 4.2(f) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section 4.9(b) when contributed to the Plan
unless distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year. Additionally, for
purposes of Sections 2.2 and 4.4(g), Excess Deferred Compensation shall
continue to be treated as Employer contributions even if distributed pursuant
to Section 4.2(f). However, Excess Deferred Compensation of Non-Highly
Compensated Participants is not taken into account for purposes of Section
4.5(a) to the extent such Excess Deferred Compensation occurs pursuant to
Section 4.2(d).
1.20 "Family Member" means, with respect to an affected
Participant, such Participant's spouse and such Participant's lineal
descendants and ascendants and their spouses, all as described in Code Section
414(q)(6)(B).
1.21 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets, (b) 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 (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.22 "Fiscal Year" means the Employer's accounting year of 12
months commencing on January 1st of each year and ending the following December
31st.
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<PAGE> 13
1.23 "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion
of a Terminated Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in
Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to Section 6.4(e)(2). In addition, the term Forfeiture shall
also include amounts deemed to be Forfeitures pursuant to any other provision
of this Plan.
1.24 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 Compensation" must be determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
1.26 "414(s) Compensation" with respect to any Participant means
such Participant's "415 Compensation" paid during a Plan Year. The amount of
"414(s) Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and in such manner
as permitted under Code Section 415(d), except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year and the first adjustment to the
$200,000 limitation shall be effective on January 1, 1990. For any short Plan
Year the "414(s) Compensation" limit shall be an amount equal to the "414(s)
Compensation" limit for the
6
<PAGE> 14
calendar year in which the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by twelve (12). In
applying this limitation, the family group of a Highly Compensated Participant
who is subject to the Family Member aggregation rules of Code Section 414(q)(6)
because such Participant is either a "five percent owner" of the Employer or
one of the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, shall be treated as a single Participant, except
that for this purpose Family Members shall include only the affected
Participant's spouse and any lineal descendants who have not attained age
nineteen (19) before the close of the year.
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 Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 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 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision.
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.
1.27 "Highly Compensated Employee" means an Employee described in
Code Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the "determination
year" and is in one or more of the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five percent
owners" as defined in Section 1.33(c).
(b) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess of
$75,000.
(c) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess of
$50,000 and were in the Top Paid Group of Employees for the
Plan Year.
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<PAGE> 15
(d) Employees who during the "look-back year"
were officers of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) and
received "415 Compensation" during the "look-back year" from
the Employer greater than 50 percent of the limit in effect
under Code Section 415(b)(1)(A) for any such Plan Year. The
number of officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10 percent of
all employees. For the purpose of determining the number of
officers, Employees described in Section 1.57(a), (b), (c) and
(d) shall be excluded, but such Employees shall still be
considered for the purpose of identifying the particular
Employees who are officers. If the Employer does not have at
least one officer whose annual "415 Compensation" is in excess
of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of
the 100 Employees paid the greatest "415 Compensation" during
the "determination year" and are also described in (b), (c) or
(d) above when these paragraphs are modified to substitute
"determination year" for "look-back year."
The "look-back year" shall be the calendar year ending with or
within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period"). If the "lag period" is
less than twelve months long, the dollar threshold amounts specified in (b),
(c) and (d) above shall be prorated based upon the number of months in the "lag
period."
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amounts specified in (b) and (c) above shall be adjusted at
such time and in such manner as is provided in Regulations. In the case of such
an adjustment, the dollar limits which shall be applied are those for the
calendar year in which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such
Leased Employees are covered by a plan described in Code Section 414(n)(5) and
are not covered in any qualified plan maintained by the Employer. The exclusion
of Leased Employees for this purpose shall be applied on a uniform and
consistent basis for all of the Employer's retirement
8
<PAGE> 16
plans. Highly Compensated Former Employees shall be treated as Highly
Compensated Employees without regard to whether they performed services during
the "determination year."
1.28 "Highly Compensated Former Employee" means a former Employee
who had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55
(or the last year ending before the Employee's 55th birthday), the Employee
either received "415 Compensation" in excess of $50,000 or was a "five percent
owner." For purposes of this Section, "determination year," "415 Compensation"
and "five percent owner" shall be determined in accordance with Section 1.27.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees. The method set forth in this Section for determining who is a
"Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition
is applicable.
1.29 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.30 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2)
each hour for which an Employee is directly or indirectly compensated or
entitled to compensation by the Employer (irrespective of whether the
employment relationship has terminated) for reasons other than performance of
duties (such as vacation, holidays, sickness, jury duty, disability, lay-off,
military duty or leave of absence) during the applicable computation period;
(3) each hour for which back pay is awarded or agreed to by the Employer
without regard to mitigation of damages. These hours will be credited to the
Employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement or
payment is made. The same Hours of Service shall not be credited both under (1)
or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of
a period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer
9
<PAGE> 17
contributes or pays premiums and regardless of whether contributions made or
due to the trust fund, insurer, or other entity are for the benefit of
particular Employees or are on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for purposes of accrued
benefits, a 1-Year Break in Service, and employment commencement date (or
reemployment commencement date). In addition, Hours of Service will be credited
for employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.31 "Income" means the income or losses allocable to Excess
Deferred Compensation which amount shall be allocated in the same manner as
income or losses are allocated pursuant to Section 4.4(f).
1.32 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.33 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee if
he, at any time during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in one of the
following categories:
(a) an officer of the Employer defined within
the meaning of the Regulations under Code Section 416)
having annual "415 Compensation" greater than 50 percent of
the amount in effect under Code Section 415(b)(1)(A) for
any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning
of Code Section 318) both more than one-half percent interest
and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
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<PAGE> 18
(d) a "one percent owner" of the Employer having
an annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer or,
in the case of an unincorporated business, any person who owns
more than one percent (1%) of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.34 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.
1.35 "Leased Employee" means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or
for the recipient and related persons determined in accordance with Code
Section 414(n)(6)) on a substantially full time basis for a period of at least
one year, and such services are of a type historically performed by employees
in the business field of the recipient employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable
to services performed for the recipient employer shall be treated as provided
by the recipient employer. A Leased Employee shall not be considered an
Employee of the recipient:
(a) if such employee is covered by a money
purchase pension plan providing:
(1) a non-integrated employer contribution rate
of at least 10% of compensation, as defined in Code
Section 415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in
the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457,
and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
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<PAGE> 19
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more
than 20% of the recipient's non-highly compensated work force.
1.36 "Non-Elective Contribution" means the Employer's contributions
to the Plan excluding, however, contributions made pursuant to the
Participant's deferral election provided for in Section 4.2 and any Qualified
Non-Elective Contribution.
1.37 "Non-Highly Compensated Participant" means any Participant who
is neither a Highly Compensated Employee nor a Family Member.
1.38 "Non-Key Employee" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.
1.39 "Normal Retirement Age" means the Participant's 65th birthday,
or his 5th anniversary of joining the Plan, if later. A Participant shall
become fully Vested in his Participant's Account upon attaining his Normal
Retirement Age.
1.40 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
1.41 "1-Year Break in Service" means the applicable computation
period during which an Employee has not completed more than 500 Hours of
Service with the Employer. Further, solely for the purpose of determining
whether a Participant has incurred a 1-Year Break in Service, Hours of Service
shall be recognized for "authorized leaves of absence" and "maternity and
paternity leaves of absence." Years of Service and 1-Year Breaks in Service
shall be measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity or paternity
leave of absence" shall be those which would normally have been credited but
for such absence, or, in any case in which the Administrator is unable to
determine such hours normally credited, eight (8) Hours of Service per day. The
total Hours of Service required to be credited for a "maternity or paternity
leave of absence" shall not exceed 501.
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1.42 "Participant" means any Eligible Employee who participates in
the Plan as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.43 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b) and Employer discretionary
contributions made pursuant to Section 4.1(d).
1.44 "Participant's Combined Account" means the total aggregate
amount of each Participant's Elective Account and Participant's Account.
1.45 "Participant's Elective Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective
Contributions.
1.46 "Plan" means this instrument, including all amendments
thereto.
1.47 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January 1st of each year and ending the following December
31st.
1.48 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.1(c) and Section
4.6. Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and used to satisfy the "Actual Deferral Percentage"
tests.
In addition, the Employer's contributions to the Plan that are
made pursuant to Section 4.8(h) which are used to satisfy the "Actual
Contribution Percentage" tests shall be considered Qualified Non-Elective
Contributions and be subject to the provisions of Sections 4.2(b) and 4.2(c).
1.49 "Regulation" means the Income Tax Regulations as promulgated
by the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.50 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under the Plan.
1.51 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date or Late Retirement
Date (see Section 6.1).
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1.52 "Super Top Heavy Plan" means a plan described in Section
2.2(b).
1.53 "Taxable Wage Base" means, with respect to any Plan Year, the
contribution and benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.54 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death,
Total and Permanent Disability or retirement.
1.55 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.56 "Top Heavy Plan Year" means a Plan Year during which the Plan
is a Top Heavy Plan.
1.57 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked
according to the amount of "415 Compensation" (determined for this purpose in
accordance with Section 1.27) received from the Employer during such year. All
Affiliated Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a
plan described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section 911(d)(2)) from
the Employer constituting United States source income within the meaning of
Code Section 861(a)(3) shall not be treated as Employees. Additionally, for the
purpose of determining the number of active Employees in any year, the
following additional Employees shall also be excluded; however, such Employees
shall still be considered for the purpose of identifying the particular
Employees in the Top Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six (6)
months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
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The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.58 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing any gainful occupation and
which condition constitutes total disability under the federal Social Security
Acts.
1.59 "Trustee" means the person or entity named as trustee herein
or in any separate trust forming a part of this Plan, and any successors.
1.60 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.61 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.62 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least
1000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service. The participation computation period beginning
after a 1-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The participation computation
period shall shift to the Plan Year which includes the anniversary of the date
on which the Employee first performed an Hour of Service. An Employee who is
credited with the required Hours of Service in both the initial computation
period (or the computation period beginning after a 1-Year Break in Service)
and the Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service, shall be credited with two (2)
Years of Service for purposes of eligibility to participate.
For vesting purposes, the computation period shall be the Plan
Year, including periods prior to the Effective Date of the Plan.
For all other purposes, the computation period shall be the
Plan Year.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with CableMaxx, Inc., American Wireless
Systems, Inc., and Technivision, Inc. shall be recognized.
Years of Service with any Affiliated Employer shall be
recognized.
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ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any
Plan Year in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2)
the sum of the Aggregate Accounts of Key Employees under
this Plan and all plans of an Aggregation Group, exceeds
sixty percent (60%) of the Present Value of Accrued Benefits
and the Aggregate Accounts of all Key and Non-Key Employees
under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee
for any Plan Year, but such Participant was a Key Employee
for any prior Plan Year, such Participant's Present Value of
Accrued Benefit and/or Aggregate Account balance shall not
be taken into account for purposes of determining whether
this Plan is a Top Heavy or Super Top Heavy Plan (or whether
any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former
Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period
ending on the Determination Date, any accrued benefit for
such Participant or Former Participant shall not be taken
into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan
for any Plan Year in which, as of the Determination Date,
(1) the Present Value of Accrued Benefits of Key Employees
and (2) the sum of the Aggregate Accounts of Key Employees
under this Plan and all plans of an Aggregation Group,
exceeds ninety percent (90%) of the Present Value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's
Aggregate Account as of the Determination Date is the sum
of:
(1) his Participant's Combined Account balance
as of the most recent valuation occurring within a
twelve (12) month period ending on the Determination
Date;
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(2) an adjustment for any contributions due as
of the Determination Date. Such adjustment shall be
the amount of any contributions actually made after
the valuation date but due on or before the
Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount
of any contributions made after the Determination
Date that are allocated as of a date in that first
Plan Year.
(3) any Plan distributions made within the Plan
Year that includes the Determination Date or within
the four (4) preceding Plan Years. However, in the
case of distributions made after the valuation date
and prior to the Determination Date, such
distributions are not included as distributions for
top heavy purposes to the extent that such
distributions are already included in the
Participant's Aggregate Account balance as of the
valuation date. Notwithstanding anything herein to
the contrary, all distributions, including
distributions made prior to January 1, 1984, and
distributions under a terminated plan which if it
had not been terminated would have been required to
be included in an Aggregation Group, will be
counted. Further, distributions from the Plan
(including the cash value of life insurance
policies) of a Participant's account balance because
of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether
voluntary or mandatory. However, amounts
attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be
a part of the Participant's Aggregate Account
balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both
initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by
another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always
consider such rollovers or plan-to-plan transfers as
a distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or
plan-to-plan transfers, it shall not consider such
rollovers or plan-to-plan transfers as part of the
Participant's Aggregate Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated by
the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted as
a distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance,
irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
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(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining
a Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a
participant in the Plan Year containing the
Determination Date or any of the four preceding Plan
Years, and each other plan of the Employer which
enables any plan in which a Key Employee
participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy
Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation
Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer
may also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would
continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a
Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only
a plan that is part of the Required Aggregation
Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group.
No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which
the Determination Dates fall within the same
calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was maintained
within the last five (5) years ending on the
Determination Date.
(e) "Determination Date" means (a) the last day
of the preceding Plan Year, or (b) in the case of the first
Plan Year, the last day of such Plan Year.
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(f) Present Value of Accrued Benefit: In the
case of a defined benefit plan, the Present Value of Accrued
Benefit for a Participant other than a Key Employee, shall
be as determined using the single accrual method used for
all plans of the Employer and Affiliated Employers, or if no
such single method exists, using a method which results in
benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall
be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the
Determination Date except as provided in Code Section 416
and the Regulations thereunder for the first and second plan
years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation
Group in which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of
Key Employees under all defined benefit plans
included in the group, and
(2) the Aggregate Accounts of Key Employees
under all defined contribution plans included in the
group,
exceeds sixty percent (60%) of a similar
sum determined for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint
and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of
the Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the
Code, and the Act.
(b) The Employer shall establish a "funding
policy and method," i.e., it shall determine whether the
Plan has a short run need for liquidity (e.g., to pay
benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and
goals to the Trustee, who shall coordinate such Plan needs
with its investment policy. The communication of such a
"funding policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust
Funds. Such "funding policy and method" shall be consistent
with the objectives of this Plan and with the requirements
of Title I of the Act.
(c) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions
of this Plan or pursuant to procedures established
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<PAGE> 27
hereunder. This requirement may be satisfied by formal
periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall signify
his acceptance by filing written acceptance with the Employer. An Administrator
may resign by delivering his written resignation to the Employer or be removed
by the Employer by delivery of written notice of removal, to take effect at a
date specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this
position. If the Employer does not appoint an Administrator, the Employer will
function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive
and binding upon all persons. The Administrator may establish procedures,
correct any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with
the terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to accomplish his
duties under this Plan.
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The Administrator shall be charged with the duties of the
general administration of the Plan and shall have sole discretionary authority
with respect to matters relating to the general administration of the plan,
including, but not limited to, the following:
(a) to determine all questions relating to the
eligibility of Employees to participate or remain a
Participant hereunder and to receive benefits under the
Plan;
(b) to compute, certify, and direct the Trustee
with respect to the amount and the kind of benefits to which
any Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with
respect to all nondiscretionary or otherwise directed
disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and
to make and publish such rules for regulation of the Plan as
are consistent with the terms hereof;
(f) to determine the size and type of any
Contract to be purchased from any insurer, and to designate
the insurer from which such Contract shall be purchased;
(g) to compute and certify to the Employer and
to the Trustee from time to time the sums of money necessary
or desirable to be contributed to the Plan;
(h) to consult with the Employer and the
Trustee regarding the short and long-term liquidity needs of
the Plan in order that the Trustee can exercise any
investment discretion in a manner designed to accomplish
specific objectives;
(i) to prepare and implement a procedure to
notify Eligible Employees that they may elect to have a
portion of their Compensation deferred or paid to them in
cash;
(j) to assist any Participant regarding his
rights, benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken
and shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal
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Revenue Service, Department of Labor, Participants, Beneficiaries and others as
required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the Administrator on all
matters relating to the Compensation of all Participants, their Hours of
Service, their Years of Service, their retirement, death, disability, or
termination of employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of such of the
foregoing facts as may be pertinent to the Trustee's duties under the Plan. The
Administrator may rely upon such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, including, but not limited
to, fees of accountants, counsel, and other specialists and their agents, and
other costs of administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund. However, the Employer may reimburse
the Trust Fund for any administration expense incurred.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be specifically set
forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
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2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to
Section 2.12 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator (on a form which
may be obtained from the Administrator) a request for a hearing. Such request,
together with a written statement of the reasons why the claimant believes his
claim should be allowed, shall be filed with the Administrator no later than 60
days after receipt of the written notification provided for in Section 2.12;
otherwise such claim denial shall become final and conclusive. The
Administrator shall then conduct a hearing within the next 60 days, at which
the claimant may be represented by an attorney or any other representative of
his choosing and at which the claimant shall have an opportunity to submit
written and oral evidence and arguments in support of his claim. At the hearing
(or prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all
documents in the possession of the Administrator which are pertinent to the
claim at issue and its disallowance. Either the claimant or the Administrator
may cause a court reporter to attend the hearing and record the proceedings. In
such event, a complete written transcript of the proceedings shall be furnished
to both parties by the court reporter. The full expense of any such court
reporter and such transcripts shall be borne by the party causing the court
reporter to attend the hearing. A final decision as to the allowance of the
claim shall be made by the Administrator within 60 days of receipt of the
appeal (unless there has been an extension of 60 days due to special
circumstances, provided the delay and the special circumstances occasioning it
are communicated to the claimant within the 60 day period). Such communication
shall be written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references to the
pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed six (6) Months of
Service and has attained age 21 shall be eligible to participate hereunder as
of the date he has satisfied such requirements. The Employer shall give each
prospective Eligible Employee written notice of his eligibility to participate
in the Plan prior to the close of the Plan Year in which he first becomes an
Eligible Employee.
For purposes of this Section, an Eligible Employee will be
deemed to have completed six (6) Months of Service if he is in the employ of
the Employer at any time six (6) months after his employment commencement date
and has been credited for at least 1,000 Hours of Service during such six (6)
month period. Employment commencement date shall be the first day that he is
entitled to be credited with an Hour of Service for the performance of duty.
Notwithstanding the above, any Eligible Employee who has
completed one Year of Service and has attained age twenty-one (21) shall be
eligible to participate hereunder as of
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the date he has satisfied such requirements. The Employer shall give each
prospective Eligible Employee written notice of his eligibility to participate
in the Plan prior to the close of the Plan Year in which he first becomes an
Eligible Employee.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible
Employee shall make application to the Employer for participation in the Plan
and agree to the terms hereof. Upon the acceptance of any benefits under this
Plan, such Employee shall automatically be deemed to have made application and
shall be bound by the terms and conditions of the Plan and all amendments
hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the first day of the month coinciding with or next following the date on
which such Employee met the eligibility requirements of Section 3.1, provided
said Employee was still employed as of such date (or if not employed on such
date, as of the date of rehire if a 1-Year Break in Service has not occurred).
In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such Employee will
participate immediately if such Employee has satisfied the minimum age and
service requirements and would have otherwise previously become a Participant.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to vest in
his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed
pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings
of the Trust Fund.
(b) In the event a Participant is no longer a
member of an eligible class of Employees and becomes
ineligible to participate but has not incurred a 1-Year
Break in Service, such Employee will participate immediately
upon returning to an eligible class of Employees. If such
Participant incurs a 1-Year
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Break in Service, eligibility will be determined under the
break in service rules of the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as
a Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Employee in the amount which the said Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year
has been made, the Employer shall not be entitled to recover the contribution
made with respect to the ineligible person regardless of whether or not a
deduction is allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall constitute a
Forfeiture (except for Deferred Compensation which shall be distributed to the
ineligible person) for the Plan Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee, subject to the approval of the Employer, may
elect voluntarily not to participate in any Employer Non-Elective Contributions
(other than Employer Matching Contributions) to the plan. The election not to
participate must be communicated to the employer in writing prior to such
participant's entry into the plan and shall be considered irrevocable subject
to exceptions permitted by Regulations.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the
Plan:
(a) The amount of the total salary reduction
elections of all Participants made pursuant to Section
4.2(a), which amount shall be deemed an Employer's Elective
Contribution.
(b) On behalf of each Participant who is
eligible to share in matching contributions for the Plan
Year, a discretionary matching contribution equal to a
percentage of each such Participant's Deferred Compensation,
the exact
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<PAGE> 33
percentage to be determined each year by the Employer, which
amount shall be deemed an Employer's Non-Elective
Contribution.
(c) On behalf of each Non-Highly Compensated
Participant who is eligible to share in the Qualified
Non-Elective Contribution for the Plan Year, a discretionary
Qualified Non-Elective Contribution equal to a percentage of
each eligible individual's Compensation, the exact
percentage to be determined each year by the Employer. The
Employer's Qualified Non-Elective Contribution shall be
deemed an Employer's Elective Contribution.
(d) A discretionary amount, which amount shall
be deemed an Employer's Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the
Employer's contributions for any Plan Year in excess of the
maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404 shall not be
allocated in such Plan Year but shall be carried over to the
subsequent Plan Year subject to the right of a return of
such contribution as provided in Section 9.14. All
contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee, subject to
the restrictions imposed under the Code and the Act.
(f) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer
shall make a contribution even if it exceeds the amount
which is deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 2%
to 10% of his Compensation which would have been received in
the Plan Year, but for the deferral election. A deferral
election (or modification of an earlier election) may not be
made with respect to Compensation which is currently
available on or before the date the Participant executed
such election or, if later, the latest of the date the
Employer adopts this cash or deferred arrangement, or the
date such arrangement first became effective.
The amount by which Compensation is reduced
shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated
to that Participant's Elective Account.
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective
Account may not be distributable earlier than:
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<PAGE> 34
(1) a Participant's termination of employment,
Total and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan," as
that term is described in Regulation
1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to
an entity that is not an Affiliated Employer of
substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation
continues to maintain this Plan after the
disposition with respect to a Participant who
continues employment with the corporation acquiring
such assets;
(5) the date of disposition by the Employer or
an Affiliated Employer who maintains the Plan of its
interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an
Affiliated Employer but only with respect to a
Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a
Participant, subject to the limitations of Section
6.10.
(d) For each Plan Year, a Participant's
Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining
this Plan shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g),
as in effect at the beginning of such taxable year. If such
dollar limitation is exceeded, a Participant will be deemed
to have notified the Administrator of such excess amount
which shall be distributed in a manner consistent with
Section 4.2(f). The dollar limitation shall be adjusted
annually pursuant to the method provided in Code Section
415(d) in accordance with Regulations.
(e) In the event a Participant has received a
hardship distribution from his Participant's Elective
Account pursuant to Section 6.10 or pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by
the Employer, then such Participant shall not be permitted
to elect to have Deferred Compensation contributed to the
Plan on his behalf for a period of twelve (12) months
following the receipt of the distribution. Furthermore, the
dollar limitation under Code Section 402(g) shall be
reduced, with respect to the Participant's taxable year
following the taxable year in which the hardship
distribution was made, by the amount of such Participant's
Deferred Compensation, if any, pursuant to this Plan (and
any other plan maintained by the Employer) for the taxable
year of the hardship distribution.
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<PAGE> 35
(f) If a Participant's Deferred Compensation
under this Plan together with any elective deferrals (as
defined in Regulation 1.402(g)-1(b)) under another qualified
cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code
Section 408(k)), a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457, or a trust
described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted
annually in accordance with the method provided in Code
Section 415(d) pursuant to Regulations) for such
Participant's taxable year, the Participant may, not later
than March 1 following the close of the Participant's
taxable year, notify the Administrator in writing of such
excess and request that his Deferred Compensation under this
Plan be reduced by an amount specified by the Participant.
In such event, the Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to
such excess amount) to the Participant not later than the
first April 15th following the close of the Participant's
taxable year. Any distribution of less than the entire
amount of Excess Deferred Compensation and Income shall be
treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the
Plan for the taxable year. Any distribution on or before the
last day of the Participant's taxable year must satisfy each
of the following conditions:
(1) the distribution must be made after the
date on which the Plan received the Excess Deferred
Compensation;
(2) the Participant shall designate the
distribution as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as
a distribution of Excess Deferred Compensation.
Matching contributions which relate to
Excess Deferred Compensation which is distributed pursuant
to this Section 4.2(f) shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other
date when the Participant shall be entitled to receive
benefits, the fair market value of the Participant's
Elective Account shall be used to provide additional
benefits to the Participant or his Beneficiary.
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<PAGE> 36
(i) All amounts allocated to a Participant's
Elective Account may be treated as a Directed Investment
Account pursuant to Section 4.12.
(j) Employer Elective Contributions made
pursuant to this Section may be segregated into a separate
account for each Participant in a federally insured savings
account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other
short-term debt security acceptable to the Trustee until
such time as the allocations pursuant to Section 4.4 have
been made.
(k) The Employer and the Administrator shall
implement the salary reduction elections provided for herein
in accordance with the following:
(1) A Participant may commence making elective
deferrals to the Plan only after first satisfying
the eligibility and participation requirements
specified in Article III. However, the Participant
must make his initial salary deferral election
within a reasonable time, not to exceed thirty (30)
days, after entering the Plan pursuant to Section
3.3. If the Participant fails to make an initial
salary deferral election within such time, then such
Participant may thereafter make an election in
accordance with the rules governing modifications.
The Participant shall make such an election by
entering into a written salary reduction agreement
with the Employer and filing such agreement with the
Administrator. Such election shall initially be
effective beginning with the pay period following
the acceptance of the salary reduction agreement by
the Administrator, shall not have retroactive effect
and shall remain in force until revoked.
(2) A Participant may modify a prior election
during the Plan Year and concurrently make a new
election by filing a written notice with the
Administrator within a reasonable time before the
pay period for which such modification is to be
effective. However, modifications to a salary
deferral election shall only be permitted quarterly,
during election periods established by the
Administrator prior to the first day of each Plan
Year quarter. Any modification shall not have
retroactive effect and shall remain in force until
revoked.
(3) A Participant may elect to prospectively
revoke his salary reduction agreement in its
entirety at any time during the Plan Year by
providing the Administrator with thirty (30) days
written notice of such revocation (or upon such
shorter notice period as may be acceptable to the
Administrator). Such revocation shall become
effective as of the beginning of the first pay
period coincident with or next following the
expiration of the notice period. Furthermore, the
termination of the Participant's employment, or the
cessation of participation for any reason, shall be
deemed to revoke any salary reduction agreement then
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<PAGE> 37
in effect, effective immediately following the close
of the pay period within which such termination or
cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer's federal income
tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest date on
which such contributions can reasonably be segregated from the Employer's
general assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are incorporated
herein by reference. Furthermore, any additional Employer contributions which
are allocable to the Participant's Elective Account for a Plan Year shall be
paid to the Plan no later than the twelve-month period immediately following
the close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and
maintain an account in the name of each Participant to which
the Administrator shall credit as of each Anniversary Date
all amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the
Administrator with all information required by the
Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period
of time after the date of receipt by the Administrator of
such information, the Administrator shall allocate such
contribution as follows:
(1) With respect to the Employer's Elective
Contribution made pursuant to Section 4.1(a), to
each Participant's Elective Account in an amount
equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(b), to
each Participant's Account in accordance with
Section 4.1(b).
Any Participant actively employed during the Plan
Year shall be eligible to share in the matching
contribution for the Plan Year.
(3) With respect to the Employer's Qualified
Non-Elective Contribution made pursuant to Section
4.1(c), to each Participant's Elective Account in
accordance with Section 4.1(c).
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<PAGE> 38
Any Non-Highly Compensated Participant actively
employed during the Plan Year shall be eligible to
share in the Qualified Non-Elective Contribution for
the Plan Year.
(4) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(d), in the
following manner:
(i) A dollar amount equal to 5.4% of the
sum of each Participant's total
Compensation plus Excess Compensation shall
be allocated to each Participant's Account.
If the Employer does not contribute such
amount for all Participants, each
Participant will be allocated a share of
the contribution in the same proportion
that his total Compensation plus his total
Excess Compensation for the Plan Year bears
to the total Compensation plus the total
Excess Compensation of all Participants for
that year.
(ii) The balance of the Employer's
Non-Elective Contribution over the amount
allocated above, if any, shall be allocated
to each Participant's Account in the same
proportion that his total Compensation for
the Plan Year bears to the total
Compensation of all Participants for such
year.
Only Participants who are actively employed on the
last day of the Plan Year or who complete more than
500 Hours of Service during the Plan Year prior to
terminating employment shall be eligible to share in
the discretionary contribution for the year. In
determining whether a Participant has completed more
than 500 Hours of Service during a short Plan Year,
the number of the Hours of Service required shall be
proportionately reduced based on the number of full
months in the short Plan Year.
(c) As of each Anniversary Date any amounts
which became Forfeitures since the last Anniversary Date
shall first be made available to reinstate previously
forfeited account balances of Former Participants, if any,
in accordance with Section 6.4(e)(2). The remaining
Forfeitures, if any, shall be allocated to Participants'
Accounts and used to reduce the contribution of the Employer
hereunder for the Plan Year in which such Forfeitures occur
in the following manner:
(1) Forfeitures attributable to Employer
matching contributions made pursuant to Section
4.1(b) shall be used to reduce the Employer's
contribution for the Plan Year in which such
Forfeitures occur.
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<PAGE> 39
(2) Forfeitures attributable to Employer
discretionary contributions made pursuant to Section
4.1(d) shall be added to the Employer's
discretionary contribution for the Plan Year in
which such Forfeitures occur and allocated among the
Participants' Accounts in the same manner as the
Employer's discretionary contributions.
Provided, however, that in the event the
allocation of Forfeitures provided herein shall cause the
"annual addition" (as defined in Section 4.9) to any
Participant's Account to exceed the amount allowable by the
Code, the excess shall be reallocated in accordance with
Section 4.10.
(d) For any Top Heavy Plan Year, Non-Key
Employees not otherwise eligible to share in the allocation
of contributions and Forfeitures as provided above, shall
receive the minimum allocation provided for in Section
4.4(g) if eligible pursuant to the provisions of Section
4.4(i).
(e) Participants who are not actively employed
on the last day of the Plan Year due to Retirement (Normal
or Late), Total and Permanent Disability or death shall
share in the allocation of contributions and Forfeitures for
that Plan Year only if otherwise eligible in accordance with
this Section.
(f) As of each Anniversary Date or other
valuation date, before allocation of one-half of the
Employer contributions for the entire Plan Year and after
allocation of Forfeitures, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and
Former Participant's nonsegregated accounts bear to the
total of all Participants' and Former Participants'
nonsegregated accounts as of such date.
Participants' transfers from other
qualified plans deposited in the general Trust Fund shall
share in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner provided
above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate
earnings and losses.
(g) Minimum Allocations Required for Top Heavy
Plan Years: Notwithstanding the foregoing, for any Top Heavy
Plan Year, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account
of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key Employee's "415 Compensation"
(reduced by contributions and forfeitures, if any, allocated
to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group).
However, if (1) the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account
of each Key Employee for such Top Heavy Plan Year is less
than three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be
included in an
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<PAGE> 40
Aggregation Group to enable a defined benefit plan to meet
the requirements of Code Section 401(a)(4) or 410, the sum
of the Employer's contributions and Forfeitures allocated to
the Participant's Combined Account of each Non-Key Employee
shall be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However,
in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's
Deferred Compensation and matching contributions needed to
satisfy the "Actual Contribution Percentage" tests pursuant
to Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall
be required in this Plan for any Non-Key Employee who
participates in another defined contribution plan subject to
Code Section 412 providing such benefits included with this
Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set
forth above, the percentage allocated to the Participant's
Combined Account of any Key Employee shall be equal to the
ratio of the sum of the Employer's contributions and
Forfeitures allocated on behalf of such Key Employee divided
by the "415 Compensation" for such Key Employee.
(i) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Non-Key Employees who
are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Year of Service; and (2)
declined to make mandatory contributions (if required) or,
in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(j) For the purposes of this Section, "415
Compensation" shall be limited to $200,000. Such amount
shall be adjusted at the same time and in the same manner as
permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall
be effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000
limitation shall be effective on January 1, 1990. For any
short Plan Year the "415 Compensation" limit shall be an
amount equal to the "415 Compensation" limit for the
calendar year in which the Plan Year begins multiplied by
the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (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
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<PAGE> 41
in accordance with Code Section 401(a)(17)(B). The cost of
living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which Compensation
is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer
than 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 12.
For Plan Years beginning on or after
January 1, 1994, any reference in this Plan to the
limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
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.
(k) Notwithstanding anything herein to the
contrary, Participants who terminated employment for any
reason during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(l) If a Former Participant is reemployed after
five (5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the
Plan attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan
Year, the annual allocation derived from Employer Elective
Contributions to a Participant's Elective Account shall
satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the
Highly Compensated Participant group shall not be
more than the "Actual Deferral Percentage" of the
Non-Highly Compensated Participant group multiplied
by 1.25, or
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<PAGE> 42
(2) The excess of the "Actual Deferral
Percentage" for the Highly Compensated Participant
group over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group shall not
be more than two percentage points. Additionally,
the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The
provisions of Code Section 401(k)(3) and Regulation
1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in
Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals
pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained
by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual
Deferral Percentage" means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated
Participant group for a Plan Year, the average of the
ratios, calculated separately for each Participant in such
group, of the amount of Employer Elective Contributions
allocated to each Participant's Elective Account for such
Plan Year, to such Participant's "414(s) Compensation" for
such Plan Year. The actual deferral ratio for each
Participant and the "Actual Deferral Percentage" for each
group shall be calculated to the nearest one-hundredth of
one percent. Employer Elective Contributions allocated to
each Non-Highly Compensated Participant's Elective Account
shall be reduced by Excess Deferred Compensation to the
extent such excess amounts are made under this Plan or any
other plan maintained by the Employer.
(c) For the purpose of determining the actual
deferral ratio of a Highly Compensated Employee who is
subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a "five
percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual deferral ratio for the
family group (which shall be treated as one Highly
Compensated Participant) shall be determined by
aggregating Employer Elective Contributions and
"414(s) Compensation" of all eligible Family Members
(including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s)
Compensation," Family Members shall include only the
affected
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<PAGE> 43
Employee's spouse and any lineal descendants who
have not attained age 19 before the close of the
Plan Year.
(2) The Employer Elective Contributions and
"414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into
account in paragraph (1) above.
(3) If a Participant is required to be
aggregated as a member of more than one family group
in a plan, all Participants who are members of those
family groups that include the Participant are
aggregated as one family group in accordance with
paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.5(a) and
4.6, a Highly Compensated Participant and a Non-Highly
Compensated Participant shall include any Employee eligible
to make a deferral election pursuant to Section 4.2, whether
or not such deferral election was made or suspended pursuant
to Section 4.2.
(e) For the purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k), if two or more plans
which include cash or deferred arrangements are considered
one plan for the purposes of Code Section 401(a)(4) or
410(b) (other than Code Section 410(b)(2)(A)(ii)), the cash
or deferred arrangements included in such plans shall be
treated as one arrangement. In addition, two or more cash or
deferred arrangements may be considered as a single
arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and
401(k). In such a case, the cash or deferred arrangements
included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one
plan for purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k). Plans may be aggregated under
this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee
stock ownership plan described in Code Section 4975(e)(7) or
409 may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan or
this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a
Highly Compensated Participant is a Participant under two or
more cash or deferred arrangements (other than a cash or
deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) or 409)
of the Employer or an Affiliated Employer, all such cash or
deferred arrangements shall be treated as one cash or
deferred arrangement for the purpose of determining the
36
<PAGE> 44
actual deferral ratio with respect to such Highly
Compensated Participant. However, if the cash or deferred
arrangements have different plan years, this paragraph shall
be applied by treating all cash or deferred arrangements
ending with or within the same calendar year as a single
arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
Elective Contributions made pursuant to Section 4.4 do not satisfy one of the
tests set forth in Section 4.5(a), the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third
month following the end of each Plan Year, the Highly
Compensated Participant having the highest actual deferral
ratio shall have his portion of Excess Contributions
distributed to him until one of the tests set forth in
Section 4.5(a) is satisfied, or until his actual deferral
ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual
deferral ratio. This process shall continue until one of the
tests set forth in Section 4.5(a) is satisfied. For each
Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions on
behalf of such Highly Compensated Participant (determined
prior to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated
Participant's actual deferral ratio (determined after
application of this paragraph) by his "414(s) Compensation."
However, in determining the amount of Excess Contributions
to be distributed with respect to an affected Highly
Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated
Participant for his taxable year ending with or within such
Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than
the close of the Plan Year following the
Plan Year to which they are allocable;
(ii) shall cause matching contributions
which relate to such Deferred Compensation
to be forfeited;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer
as a distribution of Excess Contributions
(and Income).
(2) Any distribution of less than the entire
amount of Excess Contributions shall be treated as a
pro rata distribution of Excess Contributions and
Income.
37
<PAGE> 45
(3) The determination and correction of Excess
Contributions of a Highly Compensated Participant
whose actual deferral ratio is determined under the
family aggregation rules shall be accomplished by
reducing the actual deferral ratio as required
herein, and the Excess Contributions for the family
unit shall then be allocated among the Family
Members in proportion to the Elective Contributions
of each Family Member that were combined to
determine the group actual deferral ratio.
(b) Within twelve (12) months after the end of
the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated to the Participant's
Elective Account of each Non-Highly Compensated Participant
in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
(c) If during a Plan Year the projected
aggregate amount of Elective Contributions to be allocated
to all Highly Compensated Participants under this Plan
would, by virtue of the tests set forth in Section 4.5(a),
cause the Plan to fail such tests, then the Administrator
may automatically reduce proportionately or in the order
provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2
by an amount necessary to satisfy one of the tests set forth
in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for
the Highly Compensated Participant group shall not exceed
the greater of:
(1) 125 percent of such percentage for the
Non-Highly Compensated Participant group; or
(2) the lesser of 200 percent of such
percentage for the Non-Highly Compensated
Participant group, or such percentage for the
Non-Highly Compensated Participant group plus 2
percentage points. However, to prevent the multiple
use of the alternative method described in this
paragraph and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 or any other cash
or deferred arrangement maintained by the Employer
or an Affiliated Employer and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained
by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2.
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<PAGE> 46
The provisions of Code Section 401(m) and
Regulations 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and
Section 4.8, "Actual Contribution Percentage" for a Plan
Year means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant
group, the average of the ratios (calculated separately for
each Participant in each group) of:
(1) the sum of Employer matching contributions
made pursuant to Section 4.1(b) on behalf of each
such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for
such Plan Year.
(c) For purposes of determining the "Actual
Contribution Percentage" and the amount of Excess Aggregate
Contributions pursuant to Section 4.8(d), only Employer
matching contributions (excluding Employer matching
contributions forfeited pursuant to Sections 4.2(f) and
4.6(a)(1) or forfeited pursuant to Section 4.8(a))
contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the
Administrator may elect to take into account, with respect
to Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) allocated to their
accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as
defined in Code Section 401(m)(4)(C)) contributed to any
plan maintained by the Employer. Such elective deferrals and
qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation
1.401(m)-1(b)(5) which is incorporated herein by reference.
However, the Plan Year must be the same as the plan year of
the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual
contribution ratio of a Highly Compensated Employee who is
subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual contribution ratio for
the family group (which shall be treated as one
Highly Compensated Participant) shall be determined
by aggregating Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation"
of all eligible Family Members (including Highly
Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation", Family
Members shall include only the affected Employee's
spouse and
39
<PAGE> 47
any lineal descendants who have not attained age 19
before the close of the Plan Year.
(2) The Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation"
of all Family Members shall be disregarded for
purposes of determining the "Actual Contribution
Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into
account in paragraph (1) above.
(3) If a Participant is required to be
aggregated as a member of more than one family group
in a plan, all Participants who are members of those
family groups that include the Participant are
aggregated as one family group in accordance with
paragraphs (1) and (2) above.
(e) For purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(m), if two or more plans
of the Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Sections 401(a)(4) or 410(b) (other than
the average benefits test under Code Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan.
In addition, two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are
made may be considered as a single plan for purposes of
determining whether or not such plans satisfy Code Sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated
plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a
single plan. Plans may be aggregated under this paragraph
(e) only if they have the same plan year.
Notwithstanding the above, an employee
stock ownership plan described in Code Section 4975(e)(7) or
409 may not be aggregated with this Plan for purposes of
determining whether the employee stock ownership plan or
this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)
or 409) which are maintained by the Employer or an
Affiliated Employer to which matching contributions,
Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated
Participant shall be aggregated for purposes of determining
such Highly Compensated Participant's actual contribution
ratio. However, if the plans have different plan years, this
paragraph shall be applied by treating all plans ending with
or within the same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a
Highly Compensated Participant and Non-Highly Compensated
Participant shall include any Employee eligible to have
Employer matching contributions pursuant to Section 4.1(b)
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<PAGE> 48
(whether or not a deferral election was made or suspended
pursuant to Section 4.2(e)) allocated to his account for the
Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution
Percentage" for the Highly Compensated Participant group
exceeds the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section
4.7(a), the Administrator (on or before the fifteenth day of
the third month following the end of the Plan Year, but in
no event later than the close of the following Plan Year)
shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual
contribution ratio, his Vested portion of Excess Aggregate
Contributions (and Income allocable to such contributions)
and, if forfeitable, forfeit such non-Vested Excess
Aggregate Contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures)
until either one of the tests set forth in Section 4.7(a) is
satisfied, or until his actual contribution ratio equals the
actual contribution ratio of the Highly Compensated
Participant having the second highest actual contribution
ratio. This process shall continue until one of the tests
set forth in Section 4.7(a) is satisfied.
(b) Any distribution and/or forfeiture of less
than the entire amount of Excess Aggregate Contributions
(and Income) shall be treated as a pro rata distribution
and/or forfeiture of Excess Aggregate Contributions and
Income. Distribution of Excess Aggregate Contributions shall
be designated by the Employer as a distribution of Excess
Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions, including
forfeited matching contributions, shall be treated as
Employer contributions for purposes of Code Sections 404 and
415 even if distributed from the Plan.
Forfeited matching contributions that are
reallocated to Participants' Accounts for the Plan Year in
which the forfeiture occurs shall be treated as an "annual
addition" pursuant to Section 4.9(b) for the Participants to
whose Accounts they are reallocated and for the Participants
from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant,
the amount of Excess Aggregate Contributions is equal to the
Employer matching contributions made pursuant to Section
4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section
4.7(c) on behalf of the Highly Compensated Participant
(determined prior to the application of this paragraph)
minus the amount determined by multiplying the Highly
Compensated Participant's actual contribution ratio
(determined after application
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<PAGE> 49
of this paragraph) by his "414(s) Compensation." The actual
contribution ratio must be rounded to the nearest
one-hundredth of one percent. In no case shall the amount of
Excess Aggregate Contribution with respect to any Highly
Compensated Participant exceed the amount of Employer
matching contributions made pursuant to Section 4.1(b) and
any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c) on
behalf of such Highly Compensated Participant for such Plan
Year.
(e) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall
be made after first determining the Excess Contributions, if
any, to be treated as voluntary Employee contributions due
to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code
Section 401(k)) maintained by the Employer that ends with or
within the Plan Year.
(f) If the determination and correction of
Excess Aggregate Contributions of a Highly Compensated
Participant whose actual contribution ratio is determined
under the family aggregation rules, then the actual
contribution ratio shall be reduced and the Excess Aggregate
Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer
matching contributions made pursuant to Section 4.1(b) and
any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c) of
each Family Member that were combined to determine the group
actual contribution ratio.
(g) If during a Plan Year the projected
aggregate amount of Employer matching contributions to be
allocated to all Highly Compensated Participants under this
Plan would, by virtue of the tests set forth in Section
4.7(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in
the order provided in Section 4.8(a) each affected Highly
Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the
tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve
(12) months after the end of the Plan Year, the Employer may
make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section
4.7(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly
Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Compensation for the
year bears to the total Compensation of all Non-Highly
Compensated Participants. A separate accounting shall be
maintained for the purpose of excluding such contributions
from the "Actual Deferral Percentage" tests pursuant to
Section 4.5(a).
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<PAGE> 50
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts for
any "limitation year" shall equal the lesser of: (1) $30,000
adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations, or (2) twenty-five percent
(25%) of the Participant's "415 Compensation" for such
"limitation year." For any short "limitation year," the
dollar limitation in (1) above shall be reduced by a
fraction, the numerator of which is the number of full
months in the short "limitation year" and the denominator of
which is twelve (12).
(b) For purposes of applying the limitations of
Code Section 415, "annual additions" means the sum credited
to a Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit plan (as defined
in Code Section 419(e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation
referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the
meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition,"
or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(l)(1).
(c) For purposes of applying the limitations of
Code Section 415, the transfer of funds from one qualified
plan to another is not an "annual addition." In addition,
the following are not Employee contributions for the
purposes of Section 4.9(b)(2): (1) rollover contributions
(as defined in Code Sections 402(a)(5), 403(a)(4), 403(b)(8)
and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions
received by an Employee pursuant to Code Section
411(a)(7)(B) (cash-outs); (4) repayments of distributions
received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable
from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of
Code Section 415, the "limitation year" shall be the Plan
Year.
(e) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations. The adjusted limitation is
effective as of
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<PAGE> 51
January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(f) For the purpose of this Section, all
qualified defined benefit plans (whether terminated or not)
ever maintained by the Employer shall be treated as one
defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined contribution plan.
(g) For the purpose of this Section, if the
Employer is a member of a controlled group of corporations,
trades or businesses under common control (as defined by
Code Section 1563(a) or Code Section 414(b) and (c) as
modified by Code Section 415(h)), is a member of an
affiliated service group (as defined by Code Section
414(m)), or is a member of a group of entities required to
be aggregated pursuant to Regulations under Code Section
414(o), all Employees of such Employers shall be considered
to be employed by a single Employer.
(h) For the purpose of this Section, if this
Plan is a Code Section 413(c) plan, all Employers of a
Participant who maintain this Plan will be considered to be
a single Employer.
(i)(1) If a Participant participates in more than
one defined contribution plan maintained by the Employer
which have different Anniversary Dates, the maximum "annual
additions" under this Plan shall equal the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited to such Participant's
accounts during the "limitation year."
(2) If a Participant participates in both a
defined contribution plan subject to Code Section
412 and a defined contribution plan not subject to
Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions"
will be credited to the Participant's accounts under
the defined contribution plan subject to Code
Section 412 prior to crediting "annual additions" to
the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than
one defined contribution plan not subject to Code
Section 412 maintained by the Employer which have
the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product
of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2)
above, multiplied by (B) a fraction (i) the
numerator of which is the "annual additions" which
would be credited to such Participant's accounts
under this Plan without regard to the limitations of
Code Section 415 and (ii) the denominator of which
is such "annual additions" for all plans described
in this subparagraph.
44
<PAGE> 52
(j) If an Employee is (or has been) a
Participant in one or more defined benefit plans and one or
more defined contribution plans maintained by the Employer,
the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any "limitation year" may not
exceed 1.0.
(k) The defined benefit plan fraction for any
"limitation year" is a fraction, the numerator of which is
the sum of the Participant's projected annual benefits under
all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation
determined for the "limitation year" under Code Sections
415(b) and (d) or 140 percent of the highest average
compensation, including any adjustments under Code Section
415(b).
Notwithstanding the above, if the
Participant was a Participant 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
Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans
which the Participant 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 Code Section 415 for
all "limitation years" beginning before January 1, 1987.
(l) The defined contribution plan fraction for
any "limitation year" is a fraction, the numerator of which
is the sum of the annual additions to the Participant's
Account under all the defined contribution plans (whether or
not terminated) maintained by the Employer for the current
and all prior "limitation years" (including the annual
additions attributable to the Participant's nondeductible
Employee contributions to all defined benefit plans, whether
or not terminated, maintained by the Employer, and the
annual additions attributable to all welfare benefit funds,
as defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(l)(2), maintained
by the Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior
"limitation years" of service with the Employer (regardless
of whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect
under Code Section 415(c)(1)(A) or 35 percent of the
Participant's Compensation for such year.
If the Employee was a Participant 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 Employer which were in
existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under
45
<PAGE> 53
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 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 Code Section 415
limitation applicable to the first "limitation year"
beginning on or after January 1, 1987. The annual addition
for any "limitation year" beginning before January 1, 1987
shall not be recomputed to treat all Employee contributions
as annual additions.
(m) Notwithstanding the foregoing, for any
"limitation year" in which the Plan is a Top Heavy Plan, 100
percent shall be substituted for 125 percent in Sections
4.9(k) and 4.9(l) unless the extra minimum allocation is
being provided pursuant to Section 4.4. However, for any
"limitation year" in which the Plan is a Super Top Heavy
Plan, 100 percent shall be substituted for 125 percent in
any event.
(n) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of
Forfeitures, a reasonable error in estimating a
Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9
or other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions"
to be exceeded for any Participant, the Administrator shall
(1) distribute any elective deferrals (within the meaning of
Code Section 402(g)(3)) or return any voluntary Employee
contributions credited for the "limitation year" to the
extent that the return would reduce the "excess amount" in
the Participant's accounts (2) hold any "excess amount"
remaining after the return of any elective deferrals or
voluntary Employee contributions in a "Section 415 suspense
account" (3) use the "Section 415 suspense account" in the
next "limitation year" (and succeeding "limitation years" if
necessary) to reduce Employer contributions for that
Participant if that Participant is covered by the Plan as of
the end of the "limitation year," or if the Participant is
not so covered, allocate and reallocate the "Section 415
suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to all
Participants in the Plan before any Employer or Employee
contributions which would constitute "annual additions" are
made to the Plan for such "limitation
46
<PAGE> 54
year" (4) reduce Employer contributions to the Plan for such
"limitation year" by the amount of the "Section 415 suspense
account" allocated and reallocated during such "limitation
year."
(b) For purposes of this Article, "excess
amount" for any Participant for a "limitation year" shall
mean the excess, if any, of (1) the "annual additions" which
would be credited to his account under the terms of the Plan
without regard to the limitations of Code Section 415 over
(2) the maximum "annual additions" determined pursuant to
Section 4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator,
amounts may be transferred from other qualified plans by
Employees, provided that the trust from which such funds are
transferred permits the transfer to be made and the transfer
will not jeopardize the tax exempt status of the Plan or
Trust or create adverse tax consequences for the Employer.
The amounts transferred shall be set up in a separate
account herein referred to as a "Participant's Rollover
Account." Such account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account
shall be held by the Trustee pursuant to the provisions of
this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations
(including Regulation 1.411(d)-4), amounts attributable to
elective contributions (as defined in Regulation
1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation
1.401(k)-1(d).
(d) At Normal Retirement Date, or such other
date when the Participant or his Beneficiary shall be
entitled to receive benefits, the fair market value of the
Participant's Rollover Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder. Furthermore, such amounts shall be
47
<PAGE> 55
considered as part of a Participant's benefit in determining
whether an involuntary cash-out of benefits without
Participant consent may be made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other
short term debt security acceptable to the Trustee until
such time as the allocations pursuant to this Plan have been
made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined
by the Administrator.
(f) For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan under
Code Section 401(a). The term "amounts transferred from
other qualified plans" shall mean: (i) amounts transferred
to this Plan directly from another qualified plan; (ii)
distributions from another qualified plan which are eligible
rollover distributions and which are either transferred by
the Employee to this Plan within sixty (60) days following
his receipt thereof or are transferred pursuant to a direct
rollover; (iii) amounts transferred to this Plan from a
conduit individual retirement account provided that the
conduit individual retirement account has no assets other
than assets which (A) were previously distributed to the
Employee by another qualified plan as a lump-sum
distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit
individual retirement account within sixty (60) days of
receipt thereof and other than earnings on said assets; and
(iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of
clause (iii) above, and transferred by the Employee to this
Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account.
(g) Prior to accepting any transfers to which
this Section applies, the Administrator may require the
Employee to establish that the amounts to be transferred to
this Plan meet the requirements of this Section and may also
require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(h) This Plan shall not accept any direct or
indirect transfers (as that term is defined and interpreted
under Code Section 401(a)(11) and the Regulations
thereunder) from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit
sharing plan which would otherwise have provided for a life
annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the
contrary, a transfer directly to this Plan from another
qualified plan (or a transaction having the effect of such a
transfer) shall only be permitted if it will not result in
the
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<PAGE> 56
elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion,
may determine that all Participants be permitted to direct
the Trustee as to the investment of all or a portion of the
interest in their Participants' Elective Accounts and
Matching Accounts. If such authorization is given,
Participants may, subject to a procedure established by the
Administrator and applied in a uniform nondiscriminatory
manner, direct the Trustee in writing to invest any portion
of their account in specific assets, specific funds or other
investments permitted under the Plan and the directed
investment procedure. That portion of the account of any
Participant so directing will thereupon be considered a
Directed Investment Account, which shall not share in Trust
Fund earnings.
(b) A separate Directed Investment Account
shall be established for each Participant who has directed
an investment. Transfers between the Participant's Elective
Account and Matching Account and his Directed Investment
Account shall be charged and credited as the case may be to
each account. The Directed Investment Account shall not
share in Trust Fund earnings, but it shall be charged or
credited as appropriate with the net earnings, gains, losses
and expenses as well as any appreciation or depreciation in
market value during each Plan Year attributable to such
account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date," to determine the net worth of
the assets comprising the Trust Fund as it exists on the "valuation date." In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in
the Trust Fund which are listed on a registered stock exchange, the
Administrator shall direct the Trustee to value the same at the prices they
were last traded on such exchange preceding the close of business on the
"valuation date." If such securities were not traded on the "valuation date,"
or if the exchange on which they are traded was not open for business on the
"valuation date," then the securities shall be valued at the prices at which
they were last traded prior to the "valuation date." Any unlisted security held
in the Trust Fund shall be valued at its bid price next preceding the close
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of business on the "valuation date," which bid price shall be obtained from a
registered broker or an investment banker. In determining the fair market
value of assets other than securities for which trading or bid prices can be
obtained, the Trustee may appraise such assets itself, or in its discretion,
employ one or more appraisers for that purpose and rely on the values
established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal Retirement Date.
However, a Participant may postpone the termination of his employment with the
Employer to a later date, in which event the participation of such Participant
in the Plan, including the right to receive allocations pursuant to Section
4.4, shall continue until his Late Retirement Date. Upon a Participant's
Retirement Date or attainment of his Normal Retirement Date without termination
of employment with the Employer, or as soon thereafter as is practicable, the
Trustee may distribute all amounts credited to such Participant's Combined
Account in accordance with Section 6.5 pursuant to the election of the
Participant.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account
shall become fully Vested. The Administrator shall direct
the Trustee, in accordance with the provisions of Sections
6.6 and 6.7, to distribute the value of the deceased
Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with
the provisions of Sections 6.6 and 6.7, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) The Administrator may require such proper
proof of death and such evidence of the right of any person
to receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death
and of the right of any person to receive payment shall be
conclusive.
(d) The Beneficiary of the death benefit
payable pursuant to this Section shall be the Participant's
spouse. Except, however, the Participant may designate a
Beneficiary other than his spouse if:
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(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law) and
the Participant has a court order to such effect
(and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which
provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by
filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right
to limit consent only to a specific Beneficiary and that the
spouse voluntarily elected to relinquish such right. In the
event no valid designation of Beneficiary exists at the time
of the Participant's death, the death benefit shall be
payable to his estate.
(e) Any consent by the Participant's spouse to
waive any rights to the death benefit must be in writing,
must acknowledge the effect of such waiver, and be witnessed
by a Plan representative or a notary public. Further, the
spouse's consent must be irrevocable and must acknowledge
the specific nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent
Disability prior to his Retirement Date or other termination of his employment,
all amounts credited to such Participant's Combined Account shall become fully
Vested. In the event of a Participant's Total and Permanent Disability, the
Trustee, in accordance with the provisions of Sections 6.5 and 6.7, shall
distribute to such Participant all amounts credited to such Participant's
Combined Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of the
Employer (upon the Participant's death, Total and Permanent
Disability or Normal Retirement). However, at the election
of the Participant, the Administrator shall direct the
Trustee to cause the entire Vested portion of the Terminated
Participant's
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Combined Account to be payable to such Terminated
Participant on or after the calendar quarter coinciding with
or next following termination of employment. Any
distribution under this paragraph shall be made in a manner
which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
If the value of a Terminated Participant's
Vested benefit derived from Employer and Employee
contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire
Vested benefit to be paid to such Participant in a single
lump sum.
(b) The Vested portion of any Participant's
Account shall be a percentage of the total amount credited
to his Participant's Account determined on the basis of the
Participant's number of Years of Service according to the
following schedule:
<TABLE>
<S> <C> <C>
Vesting Schedule
Years of Service Percentage
1 20 %
2 40 %
3 60 %
4 80 %
5 100 %
</TABLE>
(c) Notwithstanding the vesting schedule above,
upon the complete discontinuance of the Employer's
contributions to the Plan or upon any full or partial
termination of the Plan, all amounts credited to the account
of any affected Participant shall become 100% Vested and
shall not thereafter be subject to Forfeiture.
(d) The computation of a Participant's
nonforfeitable percentage of his interest in the Plan shall
not be reduced as the result of any direct or indirect
amendment to this Plan. For this purpose, the Plan shall be
treated as having been amended if the Plan provides for an
automatic change in vesting due to a change in top heavy
status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least
three (3) Years of Service as of the expiration date of the
election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election,
then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence
on the adoption date of the amendment and shall end 60 days
after the latest of:
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<PAGE> 60
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
(e)(1) If any Former Participant shall be
reemployed by the Employer before a 1-Year Break in Service
occurs, he shall continue to participate in the Plan in the
same manner as if such termination had not occurred.
(2) If any Former Participant shall be
reemployed by the Employer before five (5)
consecutive 1-Year Breaks in Service, and such
Former Participant had received a distribution of
his entire Vested interest prior to his
reemployment, his forfeited account shall be
reinstated only if he repays the full amount
distributed to him before the earlier of five (5)
years after the first date on which the Participant
is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the
distribution. In the event the Former Participant
does repay the full amount distributed to him, the
undistributed portion of the Participant's Account
must be restored in full, unadjusted by any gains or
losses occurring subsequent to the Anniversary Date
or other valuation date coinciding with or preceding
his termination. The source for such reinstatement
shall first be any Forfeitures occurring during the
year. If such source is insufficient, then the
Employer shall contribute an amount which is
sufficient to restore any such forfeited Accounts
provided, however, that if a discretionary
contribution is made for such year pursuant to
Section 4.1(d), such contribution shall first be
applied to restore any such Accounts and the
remainder shall be allocated in accordance with
Section 4.4.
(3) If any Former Participant is reemployed
after a 1-Year Break in Service has occurred, Years
of Service shall include Years of Service prior to
his 1-Year Break in Service subject to the following
rules:
(i) If a Former Participant has a 1-Year
Break in Service, his pre-break and
post-break service shall be used for
computing Years of Service for eligibility
and for vesting purposes only after he has
been employed for one (1) Year of Service
following the date of his reemployment with
the Employer;
(ii) Any Former Participant who under the
Plan does not have a nonforfeitable right
to any interest in the Plan resulting from
Employer contributions shall lose credits
otherwise allowable under (i) above if his
consecutive 1-Year Breaks in Service equal
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<PAGE> 61
or exceed the greater of (A) five (5) or
(B) the aggregate number of his pre-break
Years of Service;
(iii) After five (5) consecutive 1-Year
Breaks in Service, a Former Participant's
Vested Account balance attributable to
pre-break service shall not be increased as
a result of post-break service;
(iv) If a Former Participant who has not
had his Years of Service before a 1-Year
Break in Service disregarded pursuant to
(ii) above completes one (1) Year of
Service for eligibility purposes following
his reemployment with the Employer, he
shall participate in the Plan retroactively
from his date of reemployment;
(v) If a Former Participant who has not
had his Years of Service before a 1-Year
Break in Service disregarded pursuant to
(ii) above completes a Year of Service (a
1-Year Break in Service previously
occurred, but employment had not
terminated), he shall participate in the
Plan retroactively from the first day of
the Plan Year during which he completes one
(1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election
of the Participant, shall direct the Trustee to distribute
to a Participant or his Beneficiary any amount to which he
is entitled under the Plan in one or more of the following
methods:
(1) One lump-sum payment in cash;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments.
In order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount
thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings
and loan association, money market certificate or
other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain
(with no life contingencies) providing for such
payment. The period over which such payment is to be
made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the
Participant and his designated Beneficiary).
(b) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded, $3,500 at the
time of any prior distribution shall require
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<PAGE> 62
such Participant's consent if such distribution commences
prior to the later of his Normal Retirement Age or age 62.
With regard to this required consent:
(1) The Participant must be informed of his
right to defer receipt of the distribution. If a
Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any
benefit. However, any election to defer the receipt
of benefits shall not apply with respect to
distributions which are required under Section
6.5(c).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and
no more than 90 days before the first day on which
all events have occurred which entitle the
Participant to such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than
90 days before the first day on which all events
have occurred which entitle the Participant to such
benefit.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the
distribution.
If a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such distribution
may commence less than 30 days after the notice
required under Regulation 1.411(a)-11(c) is given,
provided that: (1) the Administrator clearly informs
the Participant that the Participant has a right to
a period of at least 30 days after receiving the
notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a
particular distribution option), and (2) the
Participant, after receiving the notice,
affirmatively elects a distribution.
(c) Notwithstanding any provision in the Plan
to the contrary, the distribution of a Participant's
benefits shall be made in accordance with the following
requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder (including
Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be
distributed to him not later than April 1st of the
calendar year following the later of (i) the
calendar year in which the Participant attains age
70 1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this
clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any
time during the five (5) Plan Year period ending in
the calendar year in which he attains age 70 1/2 or,
in the case of a Participant who becomes a "five (5)
percent owner" during any
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subsequent Plan Year, clause (ii) shall no longer
apply and the required beginning date shall be the
April 1st of the calendar year following the
calendar year in which such subsequent Plan Year
ends. Alternatively, distributions to a Participant
must begin no later than the applicable April 1st as
determined under the preceding sentence and must be
made over a period certain measured by the life
expectancy of the Participant (or the life
expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations.
Notwithstanding the foregoing, clause (ii) above
shall not apply to any Participant unless the
Participant had attained age 70 1/2 before January
1, 1988 and was not a "five (5) percent owner" at
any time during the Plan Year ending with or within
the calendar year in which the Participant attained
age 66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with
the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations thereunder.
(d) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse may,
at the election of the Participant or the Participant's
spouse, be redetermined in accordance with Regulations. The
election, once made, shall be irrevocable. If no election is
made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation
1.72-9.
(e) All annuity Contracts under this Plan shall
be non-transferable when distributed. Furthermore, the
terms of any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of the Plan.
(f) If a distribution is made at a time when a
Participant is not fully Vested in his Participant's Account
(employment has not terminated) and the Participant may
increase the Vested percentage in such account:
(1) a separate account shall be established for
the Participant's interest in the Plan as of the
time of the distribution; and
(2) at any relevant time, the Participant's
Vested portion of the separate account shall be
equal to an amount ("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
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<PAGE> 64
For purposes of applying the formula: P is the
Vested percentage at the relevant time, AB is the
account balance at the relevant time, D is the
amount of distribution, and R is the ratio of the
account balance at the relevant time to the account
balance after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a)(1) The death benefit payable pursuant to
Section 6.2 shall be paid to the Participant's Beneficiary
within a reasonable time after the Participant's death by
either of the following methods, as elected by the
Participant (or if no election has been made prior to the
Participant's death, by his Beneficiary) subject, however,
to the rules specified in Section 6.6(b):
(i) One lump-sum payment in cash;
(ii) Payment in monthly, quarterly,
semi-annual, or annual cash installments
over a period to be determined by the
Participant or his Beneficiary. After
periodic installments commence, the
Beneficiary shall have the right to direct
the Trustee to reduce the period over which
such periodic installments shall be made,
and the Trustee shall adjust the cash
amount of such periodic installments
accordingly.
(2) In the event the death benefit payable
pursuant to Section 6.2 is payable in installments,
then, upon the death of the Participant, the
Administrator may direct the Trustee to segregate
the death benefit into a separate account, and the
Trustee shall invest such segregated account
separately, and the funds accumulated in such
account shall be used for the payment of the
installments.
(b) Notwithstanding any provision in the Plan
to the contrary, distributions upon the death of a
Participant shall be made in accordance with the following
requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder. If it is
determined pursuant to Regulations that the distribution of
a Participant's interest has begun and the Participant dies
before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution
selected pursuant to Section 6.5 as of his date of death. If
a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to
his Beneficiaries by December 31st of the calendar year in
which the fifth anniversary of his date of death occurs.
However, the 5-year distribution
requirement of the preceding paragraph shall not apply to
any portion of the deceased Participant's interest
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<PAGE> 65
which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion may, at the
election of the Participant (or the Participant's designated
Beneficiary), be distributed over a period not extending
beyond the life expectancy of such designated Beneficiary
provided such distribution begins not later than December
31st of the calendar year immediately following the calendar
year in which the Participant died. However, in the event
the Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement
that distributions commence within one year of a
Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December
31st of the calendar year in which the Participant would
have attained age 70 1/2. If the surviving spouse dies
before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if
the spouse was the Participant.
(c) For purposes of Section 6.6(b), the
election by a designated Beneficiary to be excepted from the
5-year distribution requirement must be made no later than
December 31st of the calendar year following the calendar
year of the Participant's death. Except, however, with
respect to a designated Beneficiary who is the Participant's
surviving spouse, the election must be made by the earlier
of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died
or, if later, the calendar year in which the Participant
would have attained age 70 1/2; or (2) December 31st of the
calendar year which contains the fifth anniversary of the
date of the Participant's death. An election by a designated
Beneficiary must be in writing and shall be irrevocable as
of the last day of the election period stated herein. In the
absence of an election by the Participant or a designated
Beneficiary, the 5-year distribution requirement shall
apply.
(d) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse may,
at the election of the Participant or the Participant's
spouse, be redetermined in accordance with Regulations. The
election, once made, shall be irrevocable. If no election is
made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation
1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of payments on or as
of an Anniversary Date, the distribution or series of payments may be made or
begun on such date or as soon thereafter as is practicable. However, unless a
Former Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than incidental), the
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<PAGE> 66
payment of benefits shall begin not later than the 60th day after the close of
the Plan Year in which the latest of the following events occurs: (a) the date
on which the Participant attains the earlier of age 65 or the Normal Retirement
Age specified herein; (b) the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or (c) the date the
Participant terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then
the Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible adult
with whom the Beneficiary maintains his residence, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such
is permitted by the laws of the state in which said Beneficiary resides. Such a
payment to the legal guardian, custodian or parent of a minor Beneficiary shall
fully discharge the Trustee, Employer, and Plan from further liability on
account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of
the Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a
Forfeiture pursuant to the Plan. In the event a Participant or Beneficiary is
located subsequent to his benefit being reallocated, such benefit shall be
restored.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of 50% of
his Participant's Elective Account valued as of the last
Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need
of the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of
the Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the Participant's
Elective Account shall be reduced accordingly. Withdrawal
under this Section shall be authorized only if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the
Participant, his spouse, or any of his dependents
(as defined in Code Section 152) or necessary for
these persons to obtain medical care;
(2) The costs directly related to the purchase
of a principal residence for the Participant
(excluding mortgage payments);
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(3) Payment of tuition and related educational
fees for the next twelve (12) months of
post-secondary education for the Participant, his
spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction
of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) No distribution shall be made pursuant to
this Section unless the Administrator, based upon the
Participant's representation and such other facts as are
known to the Administrator, determines that all of the
following conditions are satisfied:
(1) The distribution is not in excess of the
amount of the immediate and heavy financial need of
the Participant. The amount of the immediate and
heavy financial need may include any amounts
necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result
from the distribution;
(2) The Participant has obtained all
distributions, other than hardship distributions,
and all nontaxable (at the time of the loan) loans
currently available under all plans maintained by
the Employer;
(3) The Plan, and all other plans maintained by
the Employer, provide that the Participant's
elective deferrals and voluntary Employee
contributions will be suspended for at least twelve
(12) months after receipt of the hardship
distribution or, the Participant, pursuant to a
legally enforceable agreement, will suspend his
elective deferrals and voluntary Employee
contributions to the Plan and all other plans
maintained by the Employer for at least twelve (12)
months after receipt of the hardship distribution;
and
(4) The Plan, and all other plans maintained by
the Employer, provide that the Participant may not
make elective deferrals for the Participant's
taxable year immediately following the taxable year
of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such
next taxable year less the amount of such
Participant's elective deferrals for the taxable
year of the hardship distribution.
(c) Notwithstanding the above, distributions
from the Participant's Elective Account pursuant to this
Section shall be limited solely to the Participant's total
Deferred Compensation as of the date of distribution,
reduced by the amount of any previous distributions pursuant
to this Section.
(d) Any distribution made pursuant to this
Section shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5,
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including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age"
shall have the meaning set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and
method" determined by the Employer, to invest, manage, and
control the Plan assets subject, however, to the direction
of an Investment Manager if the Trustee should appoint such
manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to
pay benefits required under the Plan to be paid to
Participants, or, in the event of their death, to their
Beneficiaries;
(c) To maintain records of receipts and
disbursements and furnish to the Employer and/or
Administrator for each Plan Year a written annual report per
Section 7.6; and
(d) If there shall be more than one Trustee,
they shall act by a majority of their number, but may
authorize one or more of them to sign papers on their
behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the
Trust Fund to keep the Trust Fund invested without
distinction between principal and income and in such
securities or property, real or personal, wherever situated,
as the Trustee shall deem advisable, including, but not
limited to, stocks, common or preferred, bonds and other
evidences of indebtedness or ownership, and real estate or
any interest therein. The Trustee shall at all times in
making investments of the Trust Fund consider, among other
factors, the short and
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long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such
investments, the Trustee shall not be restricted to
securities or other property of the character expressly
authorized by the applicable law for trust investments;
however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all
times the Plan may qualify as a qualified Profit Sharing
Plan and Trust.
(b) The Trustee may employ a bank or trust
company pursuant to the terms of its usual and customary
bank agency agreement, under which the duties of such bank
or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) The Trustee may from time to time with the
consent of the Employer transfer to a common, collective, or
pooled trust fund maintained by any corporate Trustee
hereunder, all or such part of the Trust Fund as the Trustee
may deem advisable, and such part or all of the Trust Fund
so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund
which contemplate the commingling for investment purposes of
such trust assets with trust assets of other trusts. The
Trustee may, from time to time with the consent of the
Employer, withdraw from such common, collective, or pooled
trust fund all or such part of the Trust Fund as the Trustee
may deem advisable.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of the
Plan, shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any
securities or other property and to retain the same. In
conjunction with the purchase of securities, margin accounts
may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant
options to purchase, or otherwise dispose of any securities
or other property held by the Trustee, by private contract
or at public auction. No person dealing with the Trustee
shall be bound to see to the application of the purchase
money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition, with or
without advertisement;
(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other
options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers,
and to pay
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any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with
respect to stocks, bonds, securities, or other property;
(d) To cause any securities or other property
to be registered in the Trustee's own name or in the name of
one or more of the Trustee's nominees, and to hold any
investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments
are part of the Trust Fund;
(e) To borrow or raise money for the purposes
of the Plan in such amount, and upon such terms and
conditions, as the Trustee shall deem advisable; and for any
sum so borrowed, to issue a promissory note as Trustee, and
to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the
Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) To keep such portion of the Trust Fund in
cash or cash balances as the Trustee may, from time to time,
deem to be in the best interests of the Plan, without
liability for interest thereon;
(g) To accept and retain for such time as the
Trustee may deem advisable any securities or other property
received or acquired as Trustee hereunder, whether or not
such securities or other property would normally be
purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver
any and all documents of transfer and conveyance and any and
all other instruments that may be necessary or appropriate
to carry out the powers herein granted;
(i) To settle, compromise, or submit to
arbitration any claims, debts, or damages due or owing to or
from the Plan, to commence or defend suits or legal or
administrative proceedings, and to represent the Plan in all
suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and
to pay their reasonable expenses and compensation, and such
agent or counsel may or may not be agent or counsel for the
Employer;
(k) To apply for and procure from responsible
insurance companies, to be selected by the Administrator, as
an investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to
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collect, receive, and settle for the proceeds of all such
annuity or other Contracts as and when entitled to do so
under the provisions thereof;
(l) To invest funds of the Trust in time
deposits or savings accounts bearing a reasonable rate of
interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms
of United States government obligations;
(n) To invest in shares of investment companies
registered under the Investment Company Act of 1940;
(o) To sell, purchase and acquire put or call
options if the options are traded on and purchased through a
national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by
a member firm of the New York Stock Exchange;
(p) To deposit monies in federally insured
savings accounts or certificates of deposit in banks or
savings and loan associations;
(q) To pool all or any of the Trust Fund, from
time to time, with assets belonging to any other qualified
employee pension benefit trust created by the Employer or an
affiliated company of the Employer, and to commingle such
assets and make joint or common investments and carry joint
accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such
investments or accounts or any pooled assets of the two or
more trusts in accordance with their respective interests;
(r) To do all such acts and exercise all such
rights and privileges, although not specifically mentioned
herein, as the Trustee may deem necessary to carry out the
purposes of the Plan.
(s) Directed Investment Account. The powers
granted to the Trustee shall be exercised in the sole
fiduciary discretion of the Trustee. However, if
Participants are so empowered by the Administrator, each
Participant may direct the Trustee to separate and keep
separate all or a portion of his Elective Account; and
further each Participant is authorized and empowered, in his
sole and absolute discretion, to give directions to the
Trustee pursuant to the procedure established by the
Administrator and in such form as the Trustee may require
concerning the investment of the Participant's Directed
Investment Account. The Trustee shall comply as promptly as
practicable with directions given by the Participant
hereunder. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in
its sole and absolute discretion, deems such directions
improper by virtue of applicable law. The Trustee shall not
be responsible or liable for any loss or expense which may
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result from the Trustee's refusal or failure to comply with
any directions from the Participant. Any costs and expenses
related to compliance with the Participant's directions
shall be borne by the Participant's Directed Investment
Account.
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall,
from time to time, in accordance with the terms of the Plan, make payments out
of the Trust Fund. The Trustee shall not be responsible in any way for the
application of such payments.
7.5 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon in writing by the Employer and the
Trustee. An individual serving as Trustee who already receives full-time pay
from the Employer shall not receive compensation from the Plan. In addition,
the Trustee shall be reimbursed for any reasonable expenses, including
reasonable counsel fees incurred by it as Trustee. Such compensation and
expenses shall be paid from the Trust Fund unless paid or advanced by the
Employer. All taxes of any kind and all kinds whatsoever that may be levied or
assessed under existing or future laws upon, or in respect of, the Trust Fund
or the income thereof, shall be paid from the Trust Fund.
7.6 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan Year,
the Trustee shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust
Fund upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of
the Trust Fund;
(d) all payments and distributions made from
the Trust Fund; and
(e) such further information as the Trustee
and/or Administrator deems appropriate. The Employer,
forthwith upon its receipt of each such statement of
account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or
disapproval thereof. Failure by the Employer to disapprove
any such statement of account within thirty (30) days after
its receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall
be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent
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as if the account of the Trustee had been settled by
judgment or decree in an action for a judicial settlement of
its account in a court of competent jurisdiction in which
the Trustee, the Employer and all persons having or claiming
an interest in the Plan were parties; provided, however,
that nothing herein contained shall deprive the Trustee of
its right to have its accounts judicially settled if the
Trustee so desires.
7.7 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of
the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a
report of his audit setting forth his opinion as to whether
any statements, schedules or lists that are required by Act
Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied
consistently. All auditing and accounting fees shall be an
expense of and may, at the election of the Administrator, be
paid from the Trust Fund.
(b) If some or all of the information necessary
to enable the Administrator to comply with Act Section 103
is maintained by a bank, insurance company, or similar
institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year or
by such other date as may be prescribed under regulations of
the Secretary of Labor.
7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by
delivering to the Employer, at least thirty (30) days before
its effective date, a written notice of his resignation.
(b) The Employer may remove the Trustee by
mailing by registered or certified mail, addressed to such
Trustee at his last known address, at least thirty (30) days
before its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such
appointment in writing and delivering same to the Employer,
shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were
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originally named as a Trustee herein. Until such a successor
is appointed, the remaining Trustee or Trustees shall have
full authority to act under the terms of the Plan.
(d) The Employer may designate one or more
successors prior to the death, resignation, incapacity, or
removal of a Trustee. In the event a successor is so
designated by the Employer and accepts such designation, the
successor shall, without further act, become vested with all
the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally
named as Trustee herein immediately upon the death,
resignation, incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to
serve as such, he shall furnish to the Employer and
Administrator a written statement of account with respect to
the portion of the Plan Year during which he served as
Trustee. This statement shall be either (i) included as part
of the annual statement of account for the Plan Year
required under Section 7.6 or (ii) set forth in a special
statement. Any such special statement of account should be
rendered to the Employer no later than the due date of the
annual statement of account for the Plan Year. The
procedures set forth in Section 7.6 for the approval by the
Employer of annual statements of account shall apply to any
special statement of account rendered hereunder and approval
by the Employer of any such special statement in the manner
provided in Section 7.6 shall have the same effect upon the
statement as the Employer's approval of an annual statement
of account. No successor to the Trustee shall have any duty
or responsibility to investigate the acts or transactions of
any predecessor who has rendered all statements of account
required by Section 7.6 and this subparagraph.
7.9 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.10 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the
time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) For purposes of this Section the following
definitions shall apply:
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(1) An eligible rollover distribution is any
distribution of all or any portion of the balance to
the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and
the distributee's designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under Code Section 401(a)(9); and the
portion of any distribution that is not includible
in gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities).
(2) An eligible retirement plan is an
individual retirement account described in Code
Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), 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.
(3) A distributee includes an Employee or
former Employee. In addition, the Employee's or
former Employee's surviving spouse and the
Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code Section
414(p), are distributees with regard to the interest
of the spouse or former spouse.
(4) A direct rollover is a payment by the plan
to the eligible retirement plan specified by the
distributee.
7.11 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold
"qualifying Employer securities" and "qualifying Employer real property," as
those terms are defined in the Act, provided, however, that the Trustee shall
not be permitted to acquire any qualifying Employer securities or qualifying
Employer real property if, immediately after the acquisition of such securities
or property, the fair market value of all qualifying Employer securities and
qualifying Employer real property held by the Trustee hereunder should amount
to more than 100% of the fair market value of all the assets in the Trust Fund.
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ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any
time to amend the Plan, subject to the limitations of this
Section. Any such amendment shall be adopted by formal
action of the Employer's board of directors and executed by
an officer authorized to act on behalf of the Employer.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the
amendment affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective
if it authorizes or permits any part of the Trust Fund
(other than such part as is required to pay taxes and
administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes
any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust
Fund to revert to or become property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar
transaction) shall be effective to the extent it eliminates
or reduces any "Section 411(d)(6) protected benefit" or adds
or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits
are preserved with respect to benefits accrued as of the
later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A), early
retirement benefits and retirement-type subsidies, and
optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any
time to terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100%
Vested as provided in Section 6.4 and shall not thereafter
be subject to forfeiture, and all unallocated amounts shall
be allocated to the accounts of all Participants in
accordance with the provisions hereof.
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(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or
through the purchase of irrevocable nontransferable deferred
commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in
the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c).
8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or
its assets and/or liabilities may be transferred to any other plan and trust
only if the benefits which would be received by a Participant of this Plan, in
the event of a termination of the plan immediately after such transfer, merger
or consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract
between the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing contained
in this Plan shall be deemed to give any Participant or Employee the right to
be retained in the service of the Employer or to interfere with the right of
the Employer to discharge any Participant or Employee at any time regardless of
the effect which such discharge shall have upon him as a Participant of this
Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below,
no benefit which shall be payable out of the Trust Fund to
any person (including a Participant or his Beneficiary)
shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge,
and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements,
or torts of any such person, nor shall it be subject to
attachment or legal process for or against such person, and
the same shall not be recognized by the Trustee, except to
such extent as may be required by law.
(b) This provision shall not apply to a
"qualified domestic relations order" defined in Code Section
414(p), and those other domestic relations orders
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permitted to be so treated by the Administrator under the
provisions of the Retirement Equity Act of 1984. The
Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders
and to administer distributions under such qualified orders.
Further, to the extent provided under a "qualified domestic
relations order," a former spouse of a Participant shall be
treated as the spouse or surviving spouse for all purposes
under the Plan.
9.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced
according to the Act and the laws of the State of Texas, other than its laws
respecting choice of law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine,
feminine or neuter gender, they shall be construed as though they were also
used in another gender in all cases where they would so apply, and whenever any
words are used herein in the singular or plural form, they shall be construed
as though they were also used in the other form in all cases where they would
so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs, attorney's fees, and
other expenses pertaining thereto incurred by them for which they shall have
become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or
by any other means, for any part of the corpus or income of
any trust fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make an
excessive contribution under a mistake of fact pursuant to
Act Section 403(c)(2)(A), the Employer may demand repayment
of such excessive contribution at any time within one (1)
year following the time of payment and the Trustees shall
return such amount to the Employer within the one (1) year
period. Earnings of the Plan attributable
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to the excess contributions may not be returned to the
Employer but any losses attributable thereto must reduce the
amount so returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company,
unless exempted by the Act and regulations thereunder, shall be bonded in an
amount not less than 10% of the amount of the funds such Fiduciary handles;
provided, however, that the minimum bond shall be $1,000 and the maximum bond,
$500,000. The amount of funds handled shall be determined at the beginning of
each Plan Year by the amount of funds handled by such person, group, or class
to be covered and their predecessors, if any, during the preceding Plan Year,
or if there is no preceding Plan Year, then by the amount of the funds to be
handled during the then current year. The bond shall provide protection to the
Plan against any loss by reason of acts of fraud or dishonesty by the Fiduciary
alone or in connivance with others. The surety shall be a corporate surety
company (as such term is used in Act Section 412(a)(2)), and the bond shall be
in a form approved by the Secretary of Labor. Notwithstanding anything in the
Plan to the contrary, the cost of such bonds shall be an expense of and may, at
the election of the Administrator, be paid from the Trust Fund or by the
Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or for
the failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not
have any responsibility for the validity of this Plan or for the tax or legal
aspects of this Plan. The insurer shall be protected and held harmless in
acting in accordance with any written direction of the Trustee, and shall have
no duty to see to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Trustee. Regardless of any
provision of this Plan, the insurer shall not be required to take or permit any
action or allow any benefit or privilege contrary to the terms of any Contract
which it issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee
and the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition precedent to
such payment, to execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
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9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is
permitted or required to do or perform any act or matter or thing, it shall be
done and performed by a person duly authorized by its legally constituted
authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer,
(2) the Administrator and (3) the Trustee. The named Fiduciaries shall have
only those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Section
4.1; and shall have the sole authority to appoint and remove the Trustee and
the Administrator; to formulate the Plan's "funding policy and method"; and to
amend or terminate, in whole or in part, the Plan. The Administrator shall have
the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The Trustee shall have
the sole responsibility of management of the assets held under the Trust,
except those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan. Each named Fiduciary
warrants that any directions given, information furnished, or action taken by
it shall be in accordance with the provisions of the Plan, authorizing or
providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or
action. It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under the Plan. No named Fiduciary shall guarantee the Trust
Fund in any manner against investment loss or depreciation in asset value. Any
person or group may serve in more than one Fiduciary capacity. In the
furtherance of their responsibilities hereunder, the "named Fiduciaries" shall
be empowered to interpret the Plan and Trust and to resolve ambiguities,
inconsistencies and omissions, which findings shall be binding, final and
conclusive.
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the
contrary, contributions to this Plan are conditioned upon
the initial qualification of the Plan under Code Section
401. If the Plan receives an adverse determination with
respect to its initial qualification, then the Plan may
return such contributions to the Employer within one year
after such determination, provided the application for the
determination is made by the time prescribed by law for
filing the Employer's
73
<PAGE> 81
return for the taxable year in which the Plan was adopted,
or such later date as the Secretary of the Treasury may
prescribe.
(b) Notwithstanding any provisions to the
contrary, except Sections 3.6, 3.7, and 4.1(f), any
contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by
the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may, within one (1)
year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee
shall return such contribution within one (1) year following
the disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Employer, but
any losses attributable thereto must reduce the amount so
returned.
(c) Notwithstanding anything herein to the
contrary, if a contribution is made by the Employer by a
reason of mistake of fact, the contribution shall be
returned to the Employer upon written demand to the Trustee,
provided that such return can be effected within one (1)
year after the payment of the contribution. The amount of
the mistaken contribution which may be returned is equal to
the excess of (a) the amount contributed over (b) the amount
that would have been contributed had there not occurred a
mistake of fact. Earnings attributable to mistaken
contributions may not be returned to the Employer, but
losses attributable thereto shall reduce the amount to be
returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between
the terms of this Plan and any Contract purchased hereunder, the Plan
provisions shall control.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any other corporation or entity, whether
an affiliate or subsidiary or not, may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be
required to use the same Trustee as provided in this Plan.
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<PAGE> 82
(b) The Trustee may, but shall not be required
to, commingle, hold and invest as one Trust Fund all
contributions made by Participating Employers, as well as
all increments thereof. However, the assets of the Plan
shall, on an ongoing basis, be available to pay benefits to
all Participants and Beneficiaries under the Plan without
regard to the Employer or Participating Employer who
contributed such assets.
(c) The transfer of any Participant from or to
an Employer participating in this Plan, whether he be an
Employee of the Employer or a Participating Employer, shall
not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Combined Account as
well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan,
shall continue to his credit.
(d) All rights and values forfeited by
termination of employment shall inure only to the benefit of
the Participants of the Employer or Participating Employer
by which the forfeiting Participant was employed, except if
the Forfeiture is for an Employee whose Employer is an
Affiliated Employer, then said Forfeiture shall inure to the
benefit of the Participants of those Employers who are
Affiliated Employers. Should an Employee of one ("First")
Employer be transferred to an associated ("Second") Employer
which is an Affiliated Employer, such transfer shall not
cause his account balance (generated while an Employee of
"First" Employer) in any manner, or by any amount to be
forfeited. Such Employee's Participant Combined Account
balance for all purposes of the Plan, including length of
service, shall be considered as though he had always been
employed by the "Second" Employer and as such had received
contributions, forfeitures, earnings or losses, and
appreciation or depreciation in value of assets totaling the
amount so transferred.
(e) Any expenses of the Trust which are to be
paid by the Employer or borne by the Trust Fund shall be
paid by each Participating Employer in the same proportion
that the total amount standing to the credit of all
Participants employed by such Employer bears to the total
standing to the credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to
this Plan; provided, however, that with respect to all of its relations with
the Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
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<PAGE> 83
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred
between Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and eligibility.
No such transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
Any contribution subject to allocation during each Plan Year
shall be allocated only among those Participants of the Employer or
Participating Employer making the contribution, except if the contribution is
made by an Affiliated Employer, in which event such contribution shall be
allocated among all Participants of all Participating Employers who are
Affiliated Employers in accordance with the provisions of this Plan. On the
basis of the information furnished by the Administrator, the Trustee shall keep
separate books and records concerning the affairs of each Participating
Employer hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is the interested Employer
hereunder, but in the event of an Employee transfer from one Participating
Employer to another, the employing Employer shall immediately notify the
Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when
there shall be a Participating Employer hereunder shall only be by the written
action of each and every Participating Employer and with the consent of the
Trustee where such consent is necessary in accordance with the terms of this
Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue
or revoke its participation in the Plan. At the time of any such
discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee. The Trustee
shall thereafter transfer, deliver and assign Contracts and other Trust Fund
assets allocable to the Participants of such Participating Employer to such new
Trustee as shall have been designated by such Participating Employer, in the
event that it has established a separate pension plan for its Employees,
provided however, that no such transfer shall be made if the result is the
elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c). If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating Employer
pursuant to the provisions of Article VII hereof. In no such event shall any
part of the corpus or income of the Trust as it relates to such Participating
Employer be used for or diverted to purposes other than for the exclusive
benefit of the Employees of such Participating Employer.
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<PAGE> 84
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and
all Participants, to effectuate the purpose of this Article.
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<PAGE> 85
IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Heartland Wireless Communications, Inc.
By /s/ L. ALLEN WHEELER
-----------------------------------
L. Allen Wheeler
EMPLOYER
A.G. Edwards Trust Company
By /s/ PETER J. OSTER
-----------------------------------
Peter J. Oster,
Associate Vice President
TRUSTEE
ATTEST /s/ CARROLL D. LAWSON
-------------------------------
Carroll D. Lawson
78
<PAGE> 1
[LOCKE PURNELL RAIN HARRELL LETTERHEAD]
EXHIBIT 5.1
June 13, 1996
Heartland Wireless Communications, Inc.
903 North Bowser
Suite 140
Richardson, Texas 75081
Re: Registration of 500,000 shares of Common Stock, par value
$.001, pursuant to a Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Heartland Wireless Communications, Inc.,
a Delaware corporation (the "Company"), in connection with the registration
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant
to a Registration Statement on Form S-8 (the "Registration Statement"), of
500,000 shares of Common Stock, par value $.001 per share, of the Company (the
"Common Stock") to be offered to employees of the Company pursuant to the
Heartland Wireless Communications, Inc. 401(k) Plan (the "Plan").
Based upon our examination of such papers and documents as we have
deemed relevant or necessary in rendering this opinion, and based on our review
of the Delaware General Corporation Law, we hereby advise you that we are of
the opinion that assuming, with respect to shares of Common Stock issued after
the date hereof, (i) the receipt of proper consideration for the issuance
thereof in excess of the par value thereof, (ii) the availability of a
sufficient number of shares of Common Stock authorized by the Company's
Certificate of Incorporation then in effect, (iii) compliance with the terms of
any agreement entered into in connection with any options or shares of Common
Stock issued or allocated in connection with the Plan, and (iv) no change
occurs in the applicable law or the pertinent facts, shares of Common Stock
allocable to participants' accounts under the Plan will be legally issued,
fully paid and non-assessable shares of Common Stock.
<PAGE> 2
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement filed by the Company with the Securities and Exchange
Commission. By so consenting, we do not thereby admit that our firm's consent
is required by Section 7 of the Securities Act.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /S/ KENT JAMISON
--------------------------
Kent Jamison
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Heartland Wireless Communications, Inc.:
We consent to the incorporation by reference herein of our reports dated March
8, 1996, on the consolidated balance sheets of Heartland Wireless
Communications, Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1995, and the
related schedule, which reports are included in the December 31, 1995 annual
report on Form 10-K of Heartland Wireless Communications, Inc.
Our report relating to the consolidated financial statements of Heartland
Wireless Communications, Inc. refers to a change in 1995 in the method of
accounting for direct costs and installation fees related to subscriber
installations.
/S/ KPMG PEAT MARWICK LLP
-------------------------
KPMG Peat Marwick LLP
Dallas, Texas
June 12, 1996
<PAGE> 1
EXHIBIT 23.2
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 23,
1996, included in Heartland Wireless Communications, Inc.'s current report on
Form 8-K/A-2 dated February 23, 1996 and to all references to our firm included
in or made part of this registration statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------------------
Arthur Andersen LLP
Phoenix, Arizona,
June 12, 1996.
<PAGE> 1
[COOPERS & LYBRAND LETTERHEAD]
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Form S-8 (Registration No.
333-___________) to be filed by Heartland Wireless Communications, Inc., of our
report, which includes an explanatory paragraph which states that specified
circumstances raise substantial doubt about CableMaxx, Inc's ability to
continue as a going concern, dated August 25, 1995, on our audits of the
consolidated balance sheets of CableMaxx, Inc. as of June 30, 1994 and 1995,
and the related consolidated statements of operations, stockholders' equity and
cash flows for the period December 18, 1992 to June 30, 1993 and for the years
ended June 30, 1994 and 1995, and of the consolidated statements of operations
and cash flows of Supreme Cable Co., Inc. and Subsidiaries (the "Predecessor")
for the period from July 1, 1992 to December 17, 1992.
/S/ COOPERS & LYBRAND
- ---------------------
Coopers & Lybrand
Austin, Texas
June 12, 1996
<PAGE> 1
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Heartland Wireless Communications, Inc.:
We consent to the incorporation by reference herein of our report dated July
28, 1995, on the balance sheets of Cross Country Division as of December 31,
1994 and 1993, and the related statements of operations, division equity and
cash flows for the year ended December 31, 1993, the period from January 1,
1994 to August 18, 1994 and the period from August 19, 1994 to December 31,
1994, which report appears in the Form 8-K/A-2 of Heartland Wireless
Communications, Inc. filed with the Securities and Exchange Commission on April
26, 1996.
Our report relating to the financial statements of Cross Country Division
contains an explanatory paragraph that refers to a business combination in 1994
accounted for as a purchase involving assets comprising a portion of Cross
Country Division. As a result of the acquisition, financial information of
Cross Country Division for periods after August 18, 1994 is presented on a
different cost basis than that for periods before August 18, 1994 and,
therefore, such information is not comparable.
/S/ KPMG PEAT MARWICK LLP
---------------------------
KPMG Peat Marwick LLP
Dallas, Texas
June 12, 1996
<PAGE> 1
EXHIBIT 23.5
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Heartland Wireless Communications, Inc.:
We consent to the incorporation by reference herein of our report dated October
25, 1995, on the balance sheets of TechniVision, Inc. as of May 31, 1995 and
1994, and the related statements of operations, stockholders' deficit and cash
flows for each of the years in the three-year period ended May 31, 1995, which
report appears in the Form 8-K/A-2 of Heartland Wireless Communications, Inc.
filed with the Securities and Exchange Commission on April 26, 1996.
Our report relating to the financial statements of TechniVision, Inc. contains
an explanatory paragraph that states that TechniVision, Inc.'s recurring losses
from operations and excess of current liabilities over current assets raise
substantial doubt about the entity's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of that uncertainty.
/S/ KPMG PEAT MARWICK LLP
----------------------------
KPMG Peat Marwick LLP
Dallas, Texas
June 12, 1996