<PAGE>
As filed with the Securities and Exchange Commission on December 22, 1997
Registration No. 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------------------
TELE-COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 84-1260157
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111-3000
(Address of Principal Executive Offices) (Zip Code)
TELE-COMMUNICATIONS, INC. EMPLOYEE STOCK PURCHASE PLAN
(TO BE RESTATED AND RENAMED THE "TCI 401(K) STOCK PLAN"
EFFECTIVE JANUARY 1,1998)
(Full title of the plan)
STEPHEN M. BRETT, ESQ.
TELE-COMMUNICATIONS, INC.
TERRACE TOWER II
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111-3000
(Name and address of agent for service)
(303) 267-5500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1)(2) PER SHARE (3) PRICE (3) FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tele-Communications, Inc. Series A
TCI Group Common Stock, par value 20,000,000 shares $27.875
$1.00 per share........................
Tele-Communications, Inc. Series A $1,454,687,500 $429,133
Liberty Media Group Common Stock, 15,000,000 shares $33.125
par value $1.00 per share..............
Tele-Communications, Inc. Series A TCI
Ventures Group Common Stock, par 15,000,000 shares $26.6875
value $1.00 per share..................
</TABLE>
(1) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the
"Securities Act"), this registration statement shall be deemed to cover
additional securities that may be offered or issued to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
(2) In addition, pursuant to Rule 416(c) under the Securities Act, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) and Rule 457(c) of the Securities Act on the basis of
the average of the high and low sales prices reported on the Nasdaq National
Market on December 17, 1997.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document(s) containing the employee benefit plan information
required by Item 1 of Part I of this Form and the statement of availability of
registrant information and other information required by Item 2 of Part I of
this Form will be sent or given to participants as specified by Rule 428(b)(1)
under the Securities Act. In accordance with Rule 428(a) and the requirements
of Part I of Form S-8, such documents are not being filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424
under the Securities Act. The Registrant shall maintain a file of such
documents in accordance with the provisions of Rule 428(a)(2) under the
Securities Act. Upon request, the Registrant shall furnish to the Commission or
its staff a copy or copies of any or all of the documents included in such file.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Tele-Communications, Inc. (the "Company"), and, where applicable, the Tele-
Communications, Inc. Employee Stock Purchase Plan (to be restated and renamed
the "TCI 401(k) Stock Plan" effective January 1, 1998 (the "Plan")) hereby
incorporate by reference in this Registration Statement the following documents
filed by the Company and, where applicable, the Plan with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(Commission File No. 0-20421):
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended on Form 10-K/A (Amendment No. 1).
(ii) The Company's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1997, June 30, 1997 and September 30, 1997 (as amended by
Form 10-Q/A (Amendment No. 1)), respectively.
(iii) The Company's Current Reports on Form 8-K, dated January 22, 1997, March
5, 1997, August 28, 1997 and September 9, 1997.
(iv) Item 1 of the Company's registration statement on Form 8-A/A (Amendment
No.1), dated August 28, 1997.
(v) The Plan's Annual Report on Form 11-K for the fiscal year ended December
31, 1996.
All documents filed by the Company and, where applicable, the Plan with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date hereof and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated in this Registration Statement by reference and to be
a part hereof from the respective dates of the filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
The validity of the shares registered hereby is being passed upon for the
Company by Stephen M. Brett, Esq., Executive Vice President and General Counsel
of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides, generally,
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (except actions by or in the
II-1
<PAGE>
right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation against all expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A corporation may similarly indemnify such person for
expenses actually and reasonably incurred by such person in connection with the
defense or settlement of any action or suit by or in the right of the
corporation, provided such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in the case of claims, issues and matters as to which such
person shall have been adjudged liable to the corporation, provided that a court
shall have determined, upon application, that, despite the adjudication of
liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of Title 8 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision may eliminate or limit the liability of a director for any act or
omission occurring prior to the date when such provision became effective.
Article V, Section E of the Company's Restated Certificate of Incorporation
provides as follows:
"1. Limitation On Liability.
-----------------------
To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a
director. Any repeal or modification of this paragraph 1 shall be
prospective only and shall not adversely affect any limitation, right
or protection of a director of the Corporation existing at the time of
such repeal or modification.
2. Indemnification.
---------------
(a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is
made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact
that he, or a person for whom he is the legal representative, is or
was a director or officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture,
trust, enterprise or nonprofit entity, including service with respect
to employee benefit plans, against all liability and loss suffered and
expenses (including attorneys' fees) reasonably incurred by such
person. Such right of indemnification shall inure whether or not the
claim asserted is based on matters which antedate the adoption of this
Section E. The Corporation shall be required to indemnify a person in
connection with a proceeding (or part thereof) initiated by such
person only if the proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation.
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<PAGE>
(b) PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in
advance of its final disposition, provided, however, that the payment
of expenses incurred by a director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced
if it should be ultimately determined that the director or officer is
not entitled to be indemnified under this paragraph or otherwise.
(c) Claims. If a claim for indemnification or payment of expenses
under this paragraph is not paid in full within 60 days after a
written claim therefor has been received by the Corporation, the
claimant may file suit to recover the unpaid amount of such claim and,
if successful in whole or in part, shall be entitled to be paid the
expense of prosecuting such claim. In any such action the Corporation
shall have the burden of proving that the claimant was not entitled to
the requested indemnification or payment of expenses under applicable
law.
(d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this paragraph shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of
this Certificate, the Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
(e) OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity
shall be reduced by any amount such person may collect as
indemnification from such other corporation, partnership, joint
venture, trust, enterprise or nonprofit entity.
3. Amendment or Repeal.
-------------------
Any repeal or modification of the foregoing provisions of this Section
E shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time
of such repeal or modification."
Article II, Section 2.9 of the Company's Bylaws also contains an indemnity
provision, requiring the Company to indemnify members of the Board of Directors
and officers of the Company and their respective heirs, personal representatives
and successors in interest for or on account of any action performed on behalf
of the Company, to the fullest extent provided by the laws of the State of
Delaware and the Company's Restated Certificate of Incorporation, as then or
thereafter in effect.
The Company has also entered into indemnification agreements with each of
its directors (each director, an "indemnitee"). The indemnification agreements
provide (i) for the prompt indemnification to the fullest extent permitted by
law against any and all expenses, including attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness or participating in (including on appeal), or in
preparing for ("Expenses"), any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation ("Claim"), related to the fact that
such indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company or is or was serving at the Company's request as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by a director or officer in any such
capacity, and against any and all judgments, fines, penalties and amounts paid
in settlement (including all interest, assessments and other charges paid or
payable in connection therewith) of any Claim, unless the Reviewing Party (one
or more members ofthe Board of Directors, who is not a party to the particular
claim, or independent legal counsel) determines that such indemnification is not
permitted under applicable law and (ii) for the prompt advancement of Expenses,
and for reimbursement to the Company if the Reviewing Party determines that such
indemnitee is not entitled to such indemnification under applicable law. In
addition, the indemnification agreements provide (i) a
II-3
<PAGE>
mechanism through which an indemnitee may seek court relief in the event the
Reviewing Party determines that the indemnitee would not be permitted to be
indemnified under applicable law (and therefore is not entitled to
indemnification or expense advancement under the indemnification agreement) and
(ii) indemnification against all expenses (including attorneys' fees), and
advancement thereof if requested, incurred by the indemnitee in seeking to
collect an indemnity claim or advancement of expenses from the Company or
incurred in seeking to recover under a directors' and officers' liability
insurance policy, regardless of whether successful or not. Furthermore, the
indemnification agreements provide that after there has been a "change in
control" in the Company (as defined in the indemnification agreements), other
than a change in control approved by a majority of directors who were directors
prior to such change, then, with respect to all determinations regarding a right
to indemnity and the right to advancement of Expenses, the Company will seek
legal advice only from independent legal counsel selected by the indemnitee and
approved by the Company.
The indemnification agreements impose upon the Company the burden of
proving that an indemnitee is not entitled to indemnification in any particular
case and negate certain presumptions that may otherwise be drawn against an
indemnitee seeking indemnification in connection with the termination of actions
in certain circumstances. Indemnities' rights under the indemnification
agreements are not exclusive of under Delaware law, the Company's Bylaws or
otherwise. Although not requiring the maintenance of directors' and officers'
liability insurance, the indemnification agreements require that an indemnitee
be provided with the maximum coverage available for any director or officer of
the Company if there is such a policy.
The Company may purchase liability insurance policies covering its
directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Registrant hereby undertakes that it will submit or has submitted the
Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and has made or will make all changes required by the IRS in order
to qualify the Plan under Section 401 of the Internal Revenue Code.
4.1 Restated Certificate of Incorporation of the Company dated August 4,
1994, as amended on August 4, 1994, August 16, 1994, October 11, 1994,
October 21, 1994, January 26, 1995, August 3, 1995, August 3, 1995,
January 25, 1996, January 25, 1996, April 7, 1997 and August 28, 1997
(Incorporated herein by reference to Exhibit 1 of the Company's
Registration Statement on Form 8-A/A (Amendment No. 1), dated August
28, 1997 (Commission File No. 0-20421)).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as amended by Form 10-K/A
(Commission File No. 0-20421)).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc. Series A
TCI Group Common Stock, par value $1.00 per share (Incorporated herein
by reference to Exhibit 4.3 of the initial filing of the Company's
registration statement on Form 8-A, which was subsequently amended by
Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)).
4.4 Specimen Stock Certificate for Tele-Communications, Inc. Series A
Liberty Media Group Common Stock, par value $1.00 per share
(Incorporated herein by reference to Exhibit 4.5 of the initial filing
of the Company's registration statement on Form 8-A, which was
subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3)
(Commission File No. 0-20421)).
II-4
<PAGE>
4.5 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI
Ventures Group Common Stock, par value $1.00 per share, of the Company
(Incorporated herein by reference to Exhibit 4.3 of the Company's
registration statement on Form S-8, filed with the Commission on
November 13, 1997 (No. 333-40141)).
4.6 Tele-Communications, Inc. Employee Stock Purchase Plan (Incorporated
herein by reference to Exhibit 99 to the Company's registration
statement on Form S-8, filed with the Commission on February 8, 1995
(No. 33-57635)).
4.7 Form of TCI 401(k) Stock Plan.
5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Audit Plc.
23.5 Consent of Deloitte & Touche LLP.
23.6 Consent of Price Waterhouse LLP.
23.7 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
24 Power of Attorney (included herein on page II-8).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of the prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (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
II-5
<PAGE>
with or furnished to the Commission by the Registrant pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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 Securities
Act, each filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Greenwood Village, State
of Colorado, on December 22, 1997.
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
_____________________________
Name: Stephen M. Brett
Title: Executive Vice President
and Secretary
II-7
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Stephen M. Brett, Esq. and Elizabeth M. Markowski,
Esq., and each of them, his true and lawful attorneys-in-fact and agents with
full power of substitution and re-substitution for him and in his name, place
and stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents and each of them
full power and authority, to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, to all intents and
purposes and as fully as they might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons (which persons
constitute a majority of the Board of Directors) in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John C. Malone Chairman of the Board, Chief December 22, 1997
- ------------------------- Executive Officer and
(John C. Malone) Director (Principal Executive
Officer)
/s/ Leo J. Hindery, Jr. President and Director December 22, 1997
- ------------------------- (Principal Operating Officer)
(Leo J. Hindery, Jr.)
/s/ Donne F. Fisher
- ------------------------- Director December 22, 1997
(Donne F. Fisher)
/s/ Kim Magness
- ------------------------- Director December 22, 1997
(Kim Magness)
/s/ John W. Gallivan
- ------------------------- Director December 22, 1997
(John W. Gallivan)
/s/ Robert A. Naify
- ------------------------- Director December 22, 1997
(Robert A. Naify)
/s/ Jerome H. Kern
- ------------------------- Director December 22, 1997
(Jerome H. Kern)
/s/ J.C. Sparkman
- ------------------------- Director December 22, 1997
(J.C. Sparkman)
/s/ Paul A. Gould
- ------------------------- Director December 22, 1997
(Paul A. Gould)
/s/ Bernard W. Schotters Senior Vice President and December 22, 1997
- ------------------------- Treasurer
(Bernard W. Schotters) (Principal Financial Officer)
Senior Vice President of TCI
/s/ Gary K. Bracken Communications, Inc. December 22, 1997
- ------------------------- (Principal Accounting
(Gary K. Bracken) Officer)
</TABLE>
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<PAGE>
The Plan. Pursuant to the requirements of the Securities Act, the persons who
administer the Plan have duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Greenwood Village, State of Colorado, on December 22, 1997.
TELE-COMMUNICATIONS, INC. EMPLOYEE STOCK
PURCHASE PLAN (to be restated and renamed the
"TCI 401(k) Plan" effective January 1, 1998)
By: /s/ Gary Bracken
----------------------
Name: Gary Bracken
Title: Plan Administrator
II-9
<PAGE>
EXHIBIT INDEX
4.1 Restated Certificate of Incorporation of the Company dated August 4,
1994, as amended on August 4, 1994, August 16, 1994, October 11, 1994,
October 21, 1994, January 26, 1995, August 3, 1995, August 3, 1995,
January 25, 1996, January 25, 1996, April 7, 1997 and August 28, 1997
(Incorporated herein by reference to Exhibit 1 of the Company's
Registration Statement on Form 8-A/A (Amendment No. 1), dated August
28, 1997 (Commission File No. 0-20421)).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as amended by Form 10-K/A
(Commission File No. 0-20421)).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc. Series A
TCI Group Common Stock, par value $1.00 per share (Incorporated herein
by reference to Exhibit 4.3 of the initial filing of the Company's
registration statement on Form 8-A, which was subsequently amended by
Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)).
4.4 Specimen Stock Certificate for Tele-Communications, Inc. Series A
Liberty Media Group Common Stock, par value $1.00 per share
(Incorporated herein by reference to Exhibit 4.5 of the initial filing
of the Company's registration statement on Form 8-A, which was
subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3)
(Commission File No. 0-20421)).
4.5 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI
Ventures Group Common Stock, par value $1.00 per share, of the Company
(Incorporated herein by reference to Exhibit 4.3 of the Company's
registration statement on Form S-8, filed with the Commission on
November 13, 1997 (No. 333-40141)).
4.6 Tele-Communications, Inc. Employee Stock Purchase Plan (Incorporated
herein by reference to Exhibit 99 to the Company's registration
statement on Form S-8, filed with the Commission on February 8, 1995
(No. 33-57635)).
4.7 Form of TCI 401(k) Stock Plan.
5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Audit Plc.
23.5 Consent of Deloitte & Touche LLP.
23.6 Consent of Price Waterhouse LLP.
23.7 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
24 Power of Attorney (included herein on page II-8).
<PAGE>
EXHIBIT 4.7
FORM OF THE TCI 401(K) STOCK PLAN
RESTATED EFFECTIVE 1/1/98
<PAGE>
I N D E X
---------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I NAME AND PURPOSE OF PLAN AND TRUST............ 1
ARTICLE II DEFINITIONS................................... 2
ARTICLE III PARTICIPATION................................. 9
ARTICLE IV CONTRIBUTIONS................................. 11
ARTICLE V DETERMINATION AND VESTING OF
PARTICIPANTS' ACCOUNTS....................... 19
ARTICLE VI RETIREMENT DATE--DESIGNATION OF BENEFICIARY... 24
ARTICLE VII DISTRIBUTION FROM TRUST FUND.................. 26
ARTICLE VIII ANNUAL ADDITIONS LIMITATIONS AND
TOP HEAVY RULES.............................. 36
ARTICLE IX FIDUCIARY OBLIGATIONS......................... 44
ARTICLE X PLAN ADMINISTRATOR AND PLAN COMMITTEE......... 48
ARTICLE XI POWERS AND DUTIES OF THE TRUSTEE.............. 54
ARTICLE XII CONTINUANCE, TERMINATION, AND AMENDMENT OF PLAN
AND TRUST................................... 58
ARTICLE XIII MISCELLANEOUS................................. 60
</TABLE>
<PAGE>
ARTICLE I
NAME AND PURPOSE OF PLAN AND TRUST
----------------------------------
The Company, by execution of this document, amends, restates, and renames
the qualified plan known as the Tele-Communications, Inc., Qualified Employee
Stock Purchase Plan. The amended and restated plan will be known as the TCI
401(k) Stock Plan. The Plan and Trust Fund are created for the exclusive
benefit of Employee-Participants and their Beneficiaries. The Plan is intended
to qualify under Sections 401(a) and 401(k) of the Code, and the Trust created
under the Plan is intended to be exempt under Section 501(a) of the Code. The
portion of the Plan which is invested in Qualifying Employer Securities will be
treated as a stock bonus plan, and the portion of the Plan which is not invested
in Qualifying Employer Securities will be treated as a profit-sharing plan.
<PAGE>
ARTICLE II
DEFINITIONS
-----------
When used herein, the following words shall have the following meanings,
unless the context clearly indicates otherwise:
2.1 "Account," unless otherwise indicated, means a Participant's entire
interest in the Trust Fund created by any Employer contributions and Participant
contributions, and the income, expenses, gains, and losses attributable to
contributions.
2.2 "Associated Company" means any corporation or entity which is deemed to be
a member of the group of corporations or trades or businesses under common
control of the Company, as determined under Code Sections 414(b) and 414(c) and
the regulations thereunder, and which adopts this Plan and Trust with the
consent of the Company. Any such company which subsequently is no longer a
member of the controlled group shall be deemed to have terminated its
participation in this Plan and Trust immediately upon such failure to be a
member of the controlled group.
2.3 "Beneficiary" means the person who, under this Plan, becomes entitled to
receive a Participant's Account upon the Participant's death.
2.4 "Board of Directors" means the Board of Directors of the Company.
2.5 "Break in Service" means a Period of Severance of at least twelve
consecutive months. For purposes of determining whether an Employee has
experienced a Break in Service, the twelve-consecutive-month period beginning on
the first anniversary of the first date of a maternity or paternity absence
shall not constitute a Break in Service. Maternity or paternity absences shall
include absence:
[a] by reason of the pregnancy of the Employee;
[b] by reason of the birth of a child of the Employee;
[c] by reason of the placement of a child with the Employee in connection with
the adoption of such child by such Employee; or
[d] for purposes of caring for such child for a period beginning immediately
following such birth or placement.
2.6 "Code" means the Internal Revenue Code of 1986, as amended, as it presently
is constituted, as it may be amended, or any successor statute of similar
purposes.
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<PAGE>
2.7 "Company" means Tele-Communications, Inc., a corporation with its principal
place of business at Denver, Colorado, or any successor in interest to it
resulting from merger, consolidation, or transfer of substantially all of its
assets, which expressly may agree in writing to continue this Plan.
2.8 "Compensation" means a Participant's wages, salaries, fees for professional
services, and other amounts received for personal services actually rendered in
the course of employment with the Employer including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, and bonuses.
Compensation also shall include [a] amounts paid or reimbursed by the Employer
for moving expenses incurred by the Employee, but only to the extent that these
amounts are not deductible by the Employee under Code Section 217, [b] amounts
described in Code Sections 104(a)(3), 105(a) and 105(h), but only to the extent
that these amounts are includable in the Employee's gross income and only to the
extent such amounts are not covered by the application of Code Section 125, [c]
amounts described in Code Section 105(d), whether or not includable in the
Employee's gross income, [d] amounts contributed to a cafeteria plan that are
not includable in gross income because of the application of Code Section 125,
[e] amounts includable in the gross income of the Employee as a result of the
grant of a non-qualified stock option to the Employee or as a result of the
Employee making an election described in Code Section 83(b), and [f] amounts
deferred upon the Employee's election pursuant to a plan or arrangement
qualified under Code Section 401(k) and maintained by the Employer.
Compensation shall not include [i] Employer contributions to a deferred
compensation plan that are not includable in the Employee's gross income in the
year in which contributed, [ii] Employer contributions to a simplified employee
pension plan described under Code Section 408(k) to the extent such
contributions are deductible by the Employee, [iii] any distributions from a
deferred compensation plan, other than amounts received from an unfunded non-
qualified plan, [iv] amounts realized from the exercise of a non-qualified stock
option or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to substantial risk of
forfeiture, [v] amounts realized from the sale, exchange, or other disposition
of stock acquired under a qualified stock option, or [vi] other amounts which
receive special tax benefits, or Employer contributions to purchase an annuity
contract described in Code Section 403(b), whether or not under a salary
reduction agreement and whether or not the amounts actually are excludable from
the gross income of the Employee.
Pursuant to Code Section 401(a)(17), Compensation taken into account for all
purposes under this Plan shall not exceed $160,000 (as adjusted by the Secretary
of the Treasury for cost of living increases each year) for any Plan Year.
Compensation will not include any severance payments made to an Employee after
the Employee's Termination of Employment with the Employer.
2.9 "Effective Date" of this restated Plan means January 1, 1998, except as
otherwise expressly provided in the Plan or under the requirements of law. For
any Associated Company which is not
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<PAGE>
participating on the restated Effective Date, Effective Date means that date
designated by the Associated Company.
2.10 "Employee" means any person, whether male or female, now or hereafter in
the employ of the Employer, including officers of the Employer, but excluding:
[a] directors who are not in the Employer's employ in any other capacity;
[b] independent contractors, and persons classified as independent contractors
on the books and records of the Employer, even if such person later is
classified as an employee of the Employer by the Internal Revenue Service
(or other administrative agency) or pursuant to a settlement agreement
between the Employer and such person or between the Employer and the
Internal Revenue Service (or other administrative agency);
[c] any individual whose services were obtained through a temporary employment
agency and who has not become an Employee of the Employer, as indicated on
the payroll records of the Employer, regardless of the period for which
such services are performed by the Employee, and
[d] any Employee who is included in a unit of Employees covered by a collective
bargaining agreement between Employee representatives and the Company, any
Associated Company, or any predecessor company (and a predecessor company
will include any company acquired by or merged with the Employer or any
member of the Employer's controlled group, as defined in Code Section 414,
whether such company is acquired by a stock or asset acquisition or in a
merger), which agreement does not provide for participation in the Plan and
provided further that retirement benefits were the subject of good faith
bargaining between such Employee representatives and the company, any
Associated Company, or any such predecessor company.
For purposes of the exclusion under paragraph [d], Employees included in a unit
of Employees covered under such a collective bargaining agreement will remain
excluded from the definition of "Employee" under this Section following the
expiration of such collective bargaining agreement and during the period between
the expiration of such collective bargaining agreement and the Effective Date of
any successor collective bargaining agreement covering such Employees.
2.11 "Employer" means the Company and any Associated Company which has adopted
the Plan and Trust.
2.12 "Employer Contribution Account" means the Account established for the
benefit of the Participant under Article V which consists of any Employer
contributions made on behalf of the Participant to the Plan, and the earnings on
such amounts.
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<PAGE>
2.13 "Employment Commencement Date" means the date on which an Employee
first performs an Hour of Service for the Employer.
2.14 "Fiduciary" means a 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 moneys 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. Such term
includes any person designated under Section 9.2. If any money or other
property of the Plan is invested in securities issued by an investment company
registered under the Investment Company Act of 1940, such investment by itself
shall not cause such investment company or such investment company's investment
adviser or principal underwriter to be deemed to be a Fiduciary or a party in
interest.
2.15 "Highly Compensated Employee" means, for the Plan Year beginning in 1997,
and subsequent Plan Years, any Employee who:
[a] was a five percent owner at any time during the year or the preceding year;
or
[b] for the preceding year, had Compensation in excess of $80,000 (as adjusted
by the Secretary of the Treasury for cost of living increases) and was in
the top-paid group of Employees for such preceding year. An Employee is in
the top-paid group of Employees for any Plan Year if such Employee is in
the group consisting of the top twenty percent (20%) of the Employees when
ranked on the basis of Compensation paid during the Plan Year.
In determining an individual's Compensation under this Section, Compensation
from each Company required to be aggregated under Code Sections 414(b), (c),
(m), and (o) will be taken into account.
2.16 "Hour of Service" means each hour for which an Employee is paid or is
entitled to payment for the performance of duties for the Employer, as
determined in accordance with 29 C.F.R. (S) 2530.200b-2(b) and (c).
2.17 "Named Fiduciary" means any Fiduciary who is named in this Plan, or who,
pursuant to a procedure specified in the Plan, is identified as a Fiduciary to
the Plan by the Company. Such Named Fiduciaries include, but are not limited
to, the Trustee, the Plan Committee, the Plan Administrator, and any Investment
Consultant appointed by the Committee.
2.18 "Normal Retirement Age" means the date a Participant attains age 65.
2.19 "Participant" means any Employee (as defined in Section 2.10) who has
become a Participant under Article III of this Plan. Participation shall cease
upon the later of [a] distribution of a Participant's entire vested Account and
forfeiture of a Participant's entire nonvested Account, or [b] Termination of
Employment.
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<PAGE>
2.20 "Participant Contribution Account" means the Account established for the
benefit of the Participant under Article V which consists of any Participant
contributions to the Plan, including salary reduction contributions, voluntary
after-tax contributions, rollover contributions, and the earnings on such
amounts.
2.21 "Period of Service" means the period beginning on the Employee's Employment
Commencement Date or Reemployment Commencement Date and ending on the date a
Break in Service begins. The Employee will receive credit for any Period of
Severance of less than twelve consecutive months. In addition, the Employee's
Period of Service will be determined in accordance with Treas. Reg. (S)
1.410(a)-7(c).
2.22 "Period of Severance" means a continuous period of time during which the
Employee is not employed by the Company. A Period of Severance begins on the
date the Employee retires, quits, is discharged, or dies, or, if earlier, the
twelve-month anniversary of the date on which the Employee was first absent from
service with the Company for any other reason; provided, however, that if an
Employee is absent from work for any other reason and retires, quits, is
discharged, or dies within twelve months, the Period of Severance begins on the
day the Employee quits, retires, is discharged, or dies.
2.23 "Plan" and "Plan and Trust" mean the TCI 401(k) Stock Plan set forth in and
by this document and all subsequent amendments to it.
2.24 "Plan Administrator" means the person appointed by the Board of Directors
whose duties are provided in this Plan and Trust. If the Board of Directors
does not appoint a Plan Administrator, the Company shall serve as Plan
Administrator.
2.25 "Plan Committee" means the Plan Administrative Committee appointed by the
Board of Directors whose duties are provided in this Plan and Trust.
2.26 "Plan Year" means the Company's fiscal (taxable) year, as presently
established (which ends on December 31 of each year), and such year shall be the
fiscal (taxable) year of the trust established under this Plan.
2.27 "Profit Sharing Plan Account" means the portion of the Participant's
Account which is not invested in Qualifying Employer Securities.
2.28 "Qualifying Employer Security" means the common stock of Tele-
Communications, Inc. or any affiliated entity, as described in ERISA Section
407(d)(5).
2.29 "Reemployment Commencement Date" means the first date after a Break in
Service on which an Employee performs an Hour of Service for the Employer.
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<PAGE>
2.30 "Stock Bonus Plan Account" means the portion of the Participant's
Account which is invested in Qualifying Employer Securities, pursuant to Code
Section 401(a)(23).
2.31 "Termination of Employment" means the termination of a person's status as
an employee of the Company and any Associated Company.
2.32 "Total Disability" means a disability that permanently renders a
Participant unable to perform satisfactorily the usual duties of his or her
employment with his Employer, as determined by a physician selected by the Plan
Committee or its delegatee, and which results in the Participant's termination
of active employment with the Employer.
2.33 "Trustee" means the person or persons appointed as Trustee of the Trust
Fund established by this Plan and Trust and any duly appointed and qualified
successor Trustee.
2.34 "Trustee Responsibility" means any responsibility provided in the Plan to
manage or control the assets of this Plan.
2.35 "Trust Fund" means the assets of the trust established by this Plan and
Trust from which the benefits under this Plan shall be paid and shall include
all income and losses of any nature earned or incurred by the fund and all
changes in fair market value.
2.36 "Valuation Date" means the dates on which Accounts are valued each Plan
Year, which will be every business day on which Qualifying Employer Securities
are traded on NASDAQ.
2.37 "Year of Service" has the following meanings:
[a] For purposes of eligibility to participate, vesting, and all other purposes
of this Plan, "Year of Service" will mean a one-year Period of Service.
[b] For purposes of this definition, Years of Service shall include service as
an Employee in any capacity (including commissioned salesman) and shall
include service as an Employee of an employer under common control with the
Company, as determined under Code Section 1563(a) and the regulations
thereunder, or any other Company designated by the Plan Committee from time
to time.
[c] Years of Service shall include all service with any company that is
acquired directly or indirectly by any Employer participating in this Plan
whether by acquisition of stock or assets if such company becomes part of
the controlled group of corporations or trades or businesses, as defined in
Code Section 1563(a) and the regulations thereunder, of which Tele-
Communications, Inc., is a part.
[d] An Employee will be credited with Years of Service under this provision,
for purposes of determining such Employee's eligibility to participate in
the Plan and for determining such
-7-
<PAGE>
Employee's vested percentage under the Plan, for all Years of Service
performed for Affiliated Regional Communications, Ltd. (also known as ARC);
provided that such former employee of ARC becomes an Employee of Tele-
Communications, Inc. as a result of the transfer of the employment of
certain employees from ARC to Tele-Communications, Inc. during 1995.
[e] Years of Service will be credited for purposes of eligibility and vesting
to the extent required under the Family and Medical Leave Act of 1993.
[f] Years of Service will be credited for accrual, eligibility, and vesting
credit for qualified military service to the extent required under the
Uniformed Services Employment and Reemployment Rights Act of 1994, in
accordance with Code Section 414(u).
2.38 The masculine gender shall include the feminine, and the singular shall
include the plural.
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<PAGE>
ARTICLE III
PARTICIPATION
-------------
3.1 WHO MAY BECOME A PARTICIPANT:
----------------------------
[a] Generally: Any Employee who is a Participant on the Effective Date of this
---------
amended and restated Plan will continue to participate in this Plan.
Effective January 1, 1998, any Employee who has completed three consecutive
months of employment with an Employer, and who has attained age 18, may
participate in this Plan; provided, however, that any Employee who has
attained age 18 and who has completed one Year of Service may become a
Participant even if such Employee has not completed three consecutive
months of employment with an Employer.
[b] Commencement of Participation: Upon completing the eligibility
-----------------------------
requirements under Section 3.1[a], such eligible Employee will become a
Participant as of the first day of the first payroll period commencing
within a reasonable period of time (as determined by the Committee) after
such completion of the eligibility requirements for participation in the
Plan, if the Employee still is employed by an Employer on that date.
[c] Determination of Months of Participation: For purposes of this Section
----------------------------------------
3.1, an Employee will be considered to have completed three consecutive
months of employment if the Employee remains employed for 90 consecutive
days after his Employment Commencement Date or his Reemployment
Commencement Date.
3.2 AGREEMENT TO PARTICIPATE: An Employee who has become eligible to
------------------------
participate in the Plan will commence participation in the Plan under procedures
promulgated by the Plan Committee from time to time. By electing to participate
in the Plan, an Employee agrees to the following:
[a] The Employee's acceptance of participation in the Plan;
[b] The Employee's consent to make contributions to the Trust Fund under
Section 4.1;
[c] The Employee's consent that Participant contributions be withheld from the
Participant's Compensation;
[d] The Employee's consent to be bound by the terms and conditions of the Plan
and all its amendments; and
[e] The Employee's consent to allow his or her personal identification number
(PIN), as assigned to the Employee pursuant to confidential procedures
promulgated by the Committee, to serve
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<PAGE>
as the Employee's signature for purposes of Plan forms, elections, and
other Plan items for which a signature may be required or recommended.
The failure to enroll as a Participant in the Plan under the enrollment
procedures promulgated by the Plan Committee will be deemed to be an election
not to become a Participant. An Employee may revoke this election and become a
Participant by enrolling as a Participant in the Plan under the enrollment
procedures promulgated by the Plan Committee before the first day of any
subsequent payroll period, if the Employee otherwise is eligible.
3.3 PARTICIPATION UPON REEMPLOYMENT: Any Employee who may participate in the
-------------------------------
Plan in accordance with the provisions of Section 3.1 at the time the Employee
incurs a Break in Service shall be eligible to participate in the Plan
immediately on his Reemployment Commencement Date if he or she then is an
Employee under Section 2.10.
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<PAGE>
ARTICLE IV
CONTRIBUTIONS
-------------
4.1 CONTRIBUTIONS BY PARTICIPANTS:
-----------------------------
[a] Generally: A Participant who is an active Employee shall make
---------
contributions to the Trust Fund only by means of regular payroll deductions
or by salary reductions. Participant after-tax contributions by payroll
deduction shall be referred to as voluntary contributions or after-tax
contributions and Participant pre-tax contributions shall be known as
salary reductions or pre-tax contributions. Subject to the limitations of
Section 4.8, each Participant shall designate as a voluntary contribution
or salary reduction an amount in percentages or even dollars up to 10% of
the Participant's Compensation in each payroll period, until changed by the
Participant. Upon Termination of Employment, Participants shall not be
permitted to make contributions to this Plan and any severance payments
shall not be considered "Compensation" which may be contributed to this
Plan.
[b] Changes in Participant Contributions: A Participant may change, suspend,
------------------------------------
or resume his or her contribution designation prospectively, but not
retroactively, effective for any payroll period by providing notice to the
Plan Committee; provided that such notice is received by the Plan Committee
at such time so as to provide the Plan Committee with an administratively
practical period of time prior to the start of the payroll period for which
such change, suspension, or resumption is to be effective in order to
process such request. Any such notice shall remain effective until the
Participant makes another contribution designation as provided above. No
Employer contributions shall be made on behalf of the Participant with
respect to any period in which the Participant's contributions are
suspended.
[c] Special Contribution Change Restrictions: Notwithstanding any other
----------------------------------------
provision of this Section 4.1, no election to resume Participant
contributions by a Participant who has suspended his or her contributions
to the Plan, and who is subject to the provisions of Section 16 of the
Securities Exchange Act of 1934, will be effective until the first calendar
quarter commencing six months after the end of the last calendar quarter
for which the Participant elected to suspend his or her contributions to
the Plan.
[d] Contribution Procedures and Forms: The Plan Committee will promulgate
---------------------------------
procedures, and prepare election forms, from time to time for the
designation, change, suspension, or resumption of Participant
contributions.
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<PAGE>
4.2 DETERMINATION OF CONTRIBUTION BY THE EMPLOYER:
---------------------------------------------
[a] Generally: The Plan Committee, on behalf of each Employer, shall pay into
---------
the Trust Fund at least annually an amount equal to up to 100% of each
Participant's contributions to the Plan for each payroll period, as the
Board of Directors of the Company shall determine by resolution. In such
case, the Employer's contribution on behalf of each Participant shall be
equal to a stated and nondiscriminatory percentage of each Participant's
contributions (both voluntary contributions and salary reductions) under
Section 4.1 for each payroll period.
[b] Forfeitures: Any amounts forfeited under Section 7.3 shall be used first
-----------
to pay Plan expenses under Section 9.6 and any remaining forfeitures after
the payment of Plan expenses will be used to reduce the Employer's
contribution under this Section.
4.3 TIME AND METHOD OF PAYMENT OF CONTRIBUTION BY THE EMPLOYER: The Employer
----------------------------------------------------------
may make payment of its contribution for any Plan Year in installments on any
date or dates it elects, provided that the amount of its contribution for any
year shall be paid in full within the time prescribed in order to qualify such
payment as an income tax deduction for such year under the Code or any other
provisions of law. Such contribution may be made in cash, in Qualifying
Employer Securities (as determined by the Company), or in property of the
character in which the Trustee is authorized to invest the Trust Fund.
Contributions of property other than cash or Qualifying Employer Securities
shall be subject to the approval of the Trustee and the Plan Committee.
4.4 TO WHOM CONTRIBUTIONS ARE TO BE PAID: The Employer's contributions for any
------------------------------------
Plan Year shall be paid to the Trustee and shall become a part of the Trust
Fund. The Employer shall pay the salary reductions and voluntary contributions
elected by the Participants to the Trustee at the earliest reasonable time but
no later than the fifteenth (15th) business day of the month following month in
which the Participants would have received the funds but for the Participants'
salary reduction or payroll deduction election.
4.5 RETURN OF EMPLOYER CONTRIBUTIONS: A contribution by the Employer to the
--------------------------------
Plan shall be returned to the Company, at the Employer's discretion, under any
of the following circumstances:
[a] if a contribution is made by the Employer by a mistake of fact, including a
mistaken excess contribution, within one year of its payment to the Plan;
or
[b] if all or any part of the deduction of the contribution is disallowed, to
the extent of the disallowance, within one year after the disallowance of
the deduction.
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<PAGE>
The Employer shall state by written request to the Trustee the amount of the
contribution to be returned and the reason for such return. Such amount shall
not include any earnings attributable to the contribution and shall be reduced
by any losses attributable to the contribution. Upon sending such request to
the Trustee, the Employer simultaneously shall send to the Plan Committee a copy
of the request. The Trustee shall return such contribution to the Employer
immediately upon receipt of the written request by the Employer. All
contributions by the Employer to the Plan are declared to be conditioned upon
both the qualification of the Plan under Code Section 401 and the deductibility
of such contributions under Code Section 404.
4.6 EMPLOYER'S OBLIGATIONS: The adoption and continuance of the Plan shall not
----------------------
be deemed to constitute a contract between the Employer and any Employee or
Participant, nor to be consideration for, or an inducement or condition of, the
employment of any person. Nothing in this Plan shall be deemed to give any
Employee or Participant the right to be retained in the employ of the Employer,
or to interfere with the right of the Employer to discharge any Employee or
Participant at any time, nor shall it be deemed to give the Employer the right
to require the Employee or Participant to remain in its employ, nor shall it
interfere with the right of any Employee or Participant to terminate his
employment at any time.
4.7 ROLLOVER CONTRIBUTIONS AND TRANSFERS:
------------------------------------
[a] General Rollover Rules: Notwithstanding the limits imposed upon
----------------------
Participant contributions, an Employee may contribute any amount of funds
(in the form of cash, check or, if approved by the Plan Committee,
Qualifying Employer Securities) to the Plan in any year if such
contribution satisfies the requirements under law for rollover
contributions and if the Plan Committee agrees in writing to accept such
contribution on behalf of the Plan and the Employer. The Employer shall
not be required to make any matching contributions under Section 4.2 for
such rollover contributions. Rollover contributions shall be added to a
separate Account for such Participant, shall be nonforfeitable, and shall
be distributable under Article VII.
[b] General Trustee-to-Trustee Transfer Rules: Subject to the direction of the
-----------------------------------------
Plan Committee, the Trustee is authorized to receive and add to the Trust
Fund as a direct transfer assets attributable to the vested interest of any
Participant in a retirement plan qualified under Code Section 401(a) if
such individual is a Participant in this Plan; provided, however, that a
direct transfer from a qualified plan subject to Code Section 417 shall not
be permitted. The Employer shall not be required to make any matching
contributions under Section 4.2 for such transfers. Transfers shall be
added to a separate Account for such Participant, and shall be
distributable under Article VII.
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<PAGE>
4.8 SALARY REDUCTION RULES:
----------------------
[a] Election To Reduce Salary: Subject to the rules of Section 4.1, an
-------------------------
Employee eligible to participate in this Plan may elect to reduce his
Compensation by an amount determined at his discretion but which amount may
not exceed $9,500 (as adjusted for increases in the cost of living) in each
calendar year. A Participant must make this election according to the
procedures prescribed by the Plan Committee. Amounts contributed by an
Employee in excess of this limitation are referred to as "Excess Elective
Deferrals."
[b] Nonforfeitability Of Elective Contributions: All salary reduction
-------------------------------------------
contributions made on behalf of Participants to this Plan shall be vested
immediately.
[c] Distributions Restriction: Salary reduction contributions shall be subject
-------------------------
to the restrictions on withdrawals under Sections 7.3 and 7.4.
[d] Limit On Actual Deferral Percentage: The actual deferral percentage for
-----------------------------------
Highly Compensated Employees for each Plan Year must be no greater than
either [1] 1.25 times the actual deferral percentage for all other
Employees for the immediately preceding Plan Year, or [2] 2.0 times the
actual deferral percentage for all other Employees for the immediately
preceding Plan Year if the actual deferral percentage for Highly
Compensated Employees is not more than two percentage points higher than
the actual deferral percentage for all other Employees for the immediately
preceding Plan Year. Amount contributed by or on behalf of an Employee in
excess of these limitations are referred to as "Excess Employer
Contributions."
[e] Adjustments to Comply with Contribution Limits: In the event that the
----------------------------------------------
limitations set forth in paragraphs [a] or [d] are not met, the Plan
Committee shall adjust either the salary reductions or the Employer
contributions pursuant to one or more of the options set forth in
subparagraphs [1], [2], or [3] below, as determined by the Company:
[1] Distribution of Excess Elective Deferrals and Excess Employer
Contributions: On or before the 15th day of the third month following
the end of each Plan Year, but in no event later than the close of the
following Plan Year, each Highly Compensated Employee, beginning with
the Employee having the highest salary reduction contribution amount,
shall have his or her portion of the Excess Elective Deferral or the
Excess Employer Contribution (and any income allocable to such portion
as determined below) distributed to him or her until the limitations
set forth in paragraphs [a] and [d] are satisfied. Income or losses
attributable to Excess Elective Deferrals or Excess Employer
Contributions will be determined under any reasonable method used by
the Plan to allocate income and losses on Plan assets. Distribution of
Excess Elective Deferrals or Excess Employer Contributions will be
made in cash.
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<PAGE>
[2] Recharacterization of Excess Elective Deferrals or Excess Employer
Contributions: A Participant may elect to treat his or her Excess
Elective Deferrals or Excess Employer Contributions as an amount
distributed to the Participant and then contributed by the Participant
to the Plan as a voluntary after-tax contribution, to the extent such
recharacterized excess contributions in combination with other
Participant contributions made under the Plan do not exceed the
limitations on Participant contributions provided in the Plan,
including the average contribution percentage limitation.
Recharacterized contributions will be nonforfeitable and will be
subject to the distribution and withdrawal provisions applicable to
salary reduction contributions. Recharacterization must occur within
two and one-half months after the close of the Plan Year in which the
excess contributions arose and recharacterization is deemed to occur
no earlier than the date the last Highly Compensated Employee is
provided with notification of the amount recharacterized and the
consequences of such recharacterization. Recharacterized amounts will
be taxable to the Participant in the Participant's taxable year in
which the Participant would have received such amounts in cash but for
the salary reduction election.
[3] Contribution of Qualified Non-Elective Employer Contributions: Within
30 days after the end of the Plan Year, the Employer may make a
qualified non-elective employer contribution on behalf of non-Highly
Compensated Employees in an amount sufficient to satisfy the
limitations set forth in paragraph [d]. Such contribution shall be
allocated to the Account of each non-Highly Compensated Employee in
the same proportion that each Non-Highly Compensated Employee's salary
reduction contributions for the year bears to the total salary
reduction contributions of all Non-Highly Compensated Employees.
[4] Any matching Employer contribution that is attributable to Excess
Elective Deferrals distributed to a Participant under subparagraph [1]
will be forfeited as of the distribution date of the Excess Elective
Deferrals and such forfeited amount will be used to reduce the
Employer contribution to this Plan under Section 4.2 for the Plan Year
in which such forfeiture occurs.
[5] A Participant may assign to this Plan any Excess Elective Deferrals by
notifying the Plan Committee on or before the March 15 of the year
following the Participant's fiscal year in which such excess was
contributed. A Participant is deemed to have notified the Plan
Committee of any Excess Elective Deferrals that arise taking into
account only those elective deferrals made to this Plan and any other
Plan maintained by the Company.
[6] If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
will be treated as a single arrangement. In the event that this Plan
satisfies the requirements of Code Sections 401(k), 401(a)(4), or
-15-
<PAGE>
410(b) only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of such Code Sections only
if aggregated with this Plan, then this Section will be applied by
determining the actual deferral percentage of Participants as if all
such plans were a single plan. Plans may be aggregated in order to
satisfy Code Section 401(k) only if they have the same Plan Year. The
Company will maintain records sufficient to demonstrate satisfaction
of the actual deferral percentage test and the amount of qualified
non-elective contributions or qualified matching contributions, or
both, used in such test. The determination of the actual deferral
percentage test will meet such other requirements as may be prescribed
by the Secretary of the Treasury from time to time.
[f] Definitions:
[1] The "actual deferral percentage" for a specified group of Employees
for a Plan Year shall be the average of the ratios (calculated
separately for each Employee in such group) of the amount of
Compensation deferred under the Plan on behalf of each such Employee
for the Plan Year to the Employee's Compensation for such Plan Year.
For purposes of determining the actual deferral percentage, salary
reduction contributions shall be considered, and the Plan Committee
shall determine whether vested Employer contributions shall be
considered as qualified non-elective employer contributions.
[2] "Salary Reductions" are those reductions in salary that each Employee
elects to defer.
4.9 NONDISCRIMINATION REQUIREMENTS FOR EMPLOYEE AND MATCHING EMPLOYER
-----------------------------------------------------------------
CONTRIBUTIONS:
- -------------
[a] Limit on Average Contribution Percentage: The average contribution
----------------------------------------
percentage for Highly Compensated Employees for each Plan Year must be no
greater than either [1] 1.25 times the average contribution percentage for
all other Employees for the immediately preceding Plan Year, or [2] 2.0
times the average contribution percentage for all other Employees for the
immediately preceding Plan Year if the average contribution percentage for
Highly Compensated Employees is not more than two percentage points higher
than the average contribution percentage for all other Employees for the
immediately preceding Plan Year. Amounts contributed in excess of this
limitation are referred to as "Excess Aggregate Contributions."
[b] Adjustments to Comply with Average Contribution Percentage Limits: On or
-----------------------------------------------------------------
before the 15th day of the third month following the end of each Plan Year,
but in no event later than the close of the following Plan Year, each
Highly Compensated Employee, beginning with the Employee having the highest
amount of contributions made by or on behalf of such Employee, shall have
his or her portion of the Excess Aggregate Contribution (and any
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<PAGE>
income allocable to such portion as determined below) distributed to him or
her until the limitations set forth in paragraph [a] are satisfied. Income
or losses attributable to Excess Aggregate Contributions will be determined
under any reasonable method used by the Plan to allocate income and losses
on Plan assets. Distribution of Excess Aggregate Contributions will be
made in cash.
[c] Average Contribution Percentage: The "average contribution percentage" for
-------------------------------
a specified group of Employees for a Plan Year shall be the average of the
ratios (calculated separately for each Employee in such group) of the sum
of the matching Employer contributions and the Participant voluntary after-
tax contributions made on behalf of each such Employee for the Plan Year to
the Employee's Compensation for such Plan Year. For purposes of
determining the contribution percentage, the Plan Committee may elect to
treat salary reduction contributions as Company matching contributions.
[d] Multiple Use: If the sum of the average contribution percentage and the
------------
actual deferral percentage for Highly Compensated Employees exceeds the
aggregate limit described below, such excess amount will be treated as an
Excess Employer Contribution or an Excess Aggregate Contribution, as
determined by the Plan Committee, and such excess contributions will be
distributed to Highly Compensated Employees, beginning with the Highly
Compensated Employee with the highest amount of contributions made by, or
on behalf of the Employee, in the same manner as Excess Employer
Contributions and Excess Aggregate Contributions are distributed as
provided in Section 4.8[e] or in Section 4.9[b]. The aggregate limit is the
greater of [1] the sum of [A] 1.25 times the greater of the actual deferral
percentage for Non-Highly Compensated Employees or the average contribution
percentage for Non-Highly Compensated Employees for the Plan Year plus [B]
the lesser of two times or two plus the lesser of such actual deferral
percentage or average contribution percentage; or [2] the sum of [A] 1.25
times the lesser of the actual deferral percentage for Non-Highly
Compensated Employees or the average contribution percentage for Non-Highly
Compensated Employees for the Plan Year plus [B] the lesser of two times or
two plus the greater of such actual deferral percentage or average
contribution percentage.
[e] The average contribution percentage for the Plan Year for any Highly
Compensated Employee who is eligible to have contribution percentage
amounts allocated to his or her Account under two or more arrangements
described in Code Section 401(k) that are maintained by the Company will be
determined as if such contribution percentage amounts were made under a
single arrangement. If a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within the same calendar year
will be treated as a single arrangement. In the event that this Plan
satisfies the requirements of Code Sections 401(m), 401(a)(4), or 410(b)
only if aggregated with one or more other Plans, or if one or more other
Plans satisfy the requirements of such Code Sections only if aggregated
with this Plan, then this Section will be applied by determining the
contribution percentage of Participants as if all such Plans were a single
Plan. Plans may be aggregated in order to
-17-
<PAGE>
satisfy Code Section 401(m) only if they have the same Plan Year. The
Company will maintain records sufficient to demonstrate satisfaction of the
average contribution percentage test and the amount of qualified non-
elective contributions or qualified matching contributions, or both, used
in such test. The determination of the average contribution percentage
test will meet such other requirements as may be prescribed by the
Secretary of the Treasury from time to time.
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<PAGE>
ARTICLE V
DETERMINATION AND VESTING OF PARTICIPANTS' ACCOUNTS
---------------------------------------------------
5.1 DETERMINATION OF PARTICIPANTS' ACCOUNTS:
---------------------------------------
[a] Allocation of Contributions: As of the last day of each payroll period,
---------------------------
the Plan Committee shall allocate to the Account of each Participant any
amounts contributed by the Employer to the trust on behalf of such
Participant under Section 4.2 for the payroll period then ended.
Forfeitures remaining after the payment of Plan expenses under Section 9.6
may be used to reduce Employer contributions for any payroll period
following the date on which the forfeitures occur. Voluntary contributions
and salary reductions under Section 4.1 shall be allocated to the Account
of the Participant making such contribution.
[b] Allocation of Earnings, Losses and Changes in Fair Market Value of Net
----------------------------------------------------------------------
Assets of the Trust Fund; Allocations on Qualifying Employer Securities:
-----------------------------------------------------------------------
[1] Qualifying Employer Securities: Any dividends, cash or stock, paid on
Qualifying Employer Securities shall be allocated along with the Qualifying
Employer Securities on which they are paid. Once Qualifying Employer
Securities are allocated to a Participant's Accounts, any dividends, cash,
or stock paid on such allocated Qualifying Employer Securities shall be
allocated directly to such Accounts.
[2] Directed Investment Accounts: Each Participant Contribution Account
is a directed investment account which will receive all income it earns and
bear all expense or loss it incurs (except for income, losses, or changes
in fair market value attributable to investments in Qualifying Employer
Securities, as described above) as of each Valuation Date.
[3] Assets Other Than Qualifying Employer Securities and Directed
Investment Accounts: Except with respect to directed investment accounts
and investments in Qualifying Employer Securities, earnings and losses of
the Trust Fund shall be computed and allocated to the Participants in the
ratio which the total dollar value of the Account (excluding directed
investment accounts and investments in Qualifying Employer Securities) of
each Participant in the Trust Fund bears to the aggregate dollar value of
the Accounts (excluding directed investment accounts and investments in
Qualifying Employer Securities) of all Participants as of each Valuation
Date. Only Participants in the Plan on the Valuation Date shall share in
the allocation of earnings, losses and changes in fair market value of the
net assets of the Trust Fund (excluding directed investment accounts and
investments in Qualifying Employer Securities).
-19-
<PAGE>
[c] Participants' Accounts: The Plan Committee shall maintain a Participant
----------------------
Contribution Account and an Employer Contribution Account for each
Participant. The Employer Contribution Account and the Participant
Contribution Account shall be considered separate contracts for purposes of
Code Section 72(e). The Plan Committee shall distribute, or cause to be
distributed, to each Participant at least annually a written statement
setting forth the value of such Participant's Accounts as of the most
recent Valuation Date, and such other information as the Plan Committee
shall determine.
[d] Valuation of Qualifying Employer Securities: Qualifying Employer
-------------------------------------------
Securities shall be valued at the closing dealer "bid" price of the
securities in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc., or National Quotation Bureau, Inc.
[e] Valuation Dates: As of each Valuation Date, the Plan Committee shall
---------------
determine the value of the net assets of the Trust Fund (i.e., the value of
----
all the assets of the Trust Fund at their then current fair market value,
less all liabilities) and the value of contributions by each Employer and
all Participants as of such Valuation Date. For distribution or withdrawal
of Qualifying Employer Securities in kind, the value of the Participant's
Accounts will equal the number of shares of Qualifying Employer Securities
allocated to the Participant's Account as of the Valuation Date as of which
such distribution or withdrawal is processed by the Plan Committee plus the
dollar value of any assets other than Qualifying Employer Securities which
are allocated to the Participant's Account as of such Valuation Date. For
distribution or withdrawal of Participant Accounts in cash, the value of
the Participant's Accounts will equal the cash proceeds from the sale of
the Qualifying Employer Securities allocated to the Participant's Account
as of the Valuation Date on which such distribution or withdrawal is
processed by the Plan Committee plus the dollar value of any assets other
than Qualifying Employer Securities which are allocated to the
Participant's Account as of such Valuation Date. The sale of Qualifying
Employer Securities pursuant to this Section 5.1[e] will be made by the
Trustee within a reasonable period of time after the Participant's request
for a distribution or withdrawal is processed by the Plan Committee, as
expressly provided under Article VII.
[f] Allocation Of Employer Contributions For Payroll Period Of Withdrawal Or
------------------------------------------------------------------------
Termination of Employment: Any Participant who withdraws all or any part
-------------------------
of his own contributions under Section 7.6 shall receive an allocation of
Employer contributions for the bi-weekly payroll period of such withdrawal,
if such Participant otherwise is entitled to share in the Employer
contribution. Any Participant who terminates employment for any reason
shall receive an allocation of Employer contributions for the bi-weekly
payroll period of his termination if he otherwise is entitled to share in
the Employer contribution.
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<PAGE>
5.2 VESTING OF PARTICIPANTS' ACCOUNTS:
---------------------------------
[a] General Rules: If any Participant reaches his or her Normal Retirement
-------------
Age, dies, or suffers Total Disability while employed with the Employer,
the Participant's entire Account shall become fully vested without regard
to the number of Years of Service such Participant has had with the
Employer. Any Account, whether vested or forfeitable, shall become payable
to a Participant or his or her Beneficiaries only to the extent provided in
this Plan. A Participant or former Participant who has designated a
Beneficiary and who dies shall cease to have any interest in this Plan or
in his or her Account, and his or her Beneficiary shall become entitled to
distribution of the Participant's Account under this Plan and not as a
result of any transfer of the interest or Account. A Participant's Account
attributable to his or her own salary reduction contributions, voluntary
contributions, and rollover contributions shall be fully vested at all
times.
[b] Vesting Schedule: A Participant shall have a vested interest in the
----------------
portion of his Account attributable to Employer contributions, in
accordance with the following schedule:
Percentage of Account
Years of Service Which Is Vested
---------------- ---------------------
Fewer than 1 0%
1 or more but fewer than 2 33%
2 or more but fewer than 3 66%
3 or more 100%
5.3 FULL VESTING UPON TERMINATION OR PARTIAL TERMINATION OF PLAN OR UPON
--------------------------------------------------------------------
COMPLETE DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS: Upon the termination or
- -------------------------------------------------
partial termination of this Plan or upon complete discontinuance of Employer
contributions, the Accounts of all Participants affected, as of the date such
termination, partial termination, or complete discontinuance of Employer
contributions occurred, shall be fully vested.
5.4 SERVICE INCLUDED IN DETERMINATION OF VESTED ACCOUNTS: All Years of Service
----------------------------------------------------
with the Company and any Associated Company shall be included for the purpose of
determining a Participant's vested Account under Section 5.2, except Years of
Service excluded by reason of a Break in Service under Section 5.5.
5.5 EFFECT OF BREAK IN SERVICE ON VESTING: With respect to a Participant who
-------------------------------------
has five or more consecutive one-year Breaks in Service, Years of Service after
such Break in Service shall not be taken into account for purposes of computing
the Participant's vested Account balance attributable to Employer contributions
made before such five or more year period.
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<PAGE>
5.6 EFFECT OF CERTAIN DISTRIBUTIONS: The provisions of this Section shall not
-------------------------------
apply to any Participant contributions (including salary reductions) or rollover
contributions.
[a] Repayment Of Distribution: A Participant who terminates participation for
-------------------------
any reason prior to attainment of Normal Retirement Age, disability, or
death while any portion of his Account in the Trust Fund is forfeitable and
who receives a distribution of his vested Account attributable to Employer
contributions not later than the close of the second Plan Year following
the Plan Year in which such termination of participation occurs, shall have
the right to pay back such distribution to the Plan. Such repayment may be
made [1] only if the Participant has returned to the employ of the Company
or any Associated Company at the time of such repayment, and [2] in the
case of a distribution upon Termination of Employment, before the earlier
of the date on which the Participant experiences five consecutive one-year
Breaks in Service or five years from the date of reemployment with the
Company or any Associated Company, or, in the case of any other
distribution, five years from the date of distribution. Repayment of a
Participant's Account attributable to his or her salary reduction
contributions or his or her voluntary contributions, if any, shall not be
permitted under this Section. A Participant who desires to make repayment
of a distribution under this paragraph [a] shall make repayment directly to
the Plan Committee. If a Participant repays a distribution under this
Section, the value of his or her Employer Contribution Account shall be the
amount of his or her Employer Contribution Account prior to distribution,
unadjusted for any subsequent gains or losses. The amount of the
Participant's Employer Contribution Account that was forfeited previously
shall be restored from one or more of the following sources, at the
discretion of the Plan Committee: income or gain to the Plan, forfeitures
or Employer contributions.
[b] Nonrestoration Of Forfeited Account When Repayment Of Distribution Is Not
-------------------------------------------------------------------------
Made: If distribution is made to a Participant and the Participant does
----
not repay such distribution under the terms of paragraph [a], when the time
limit for repayment expires under paragraph [a] above, the Participant's
nonvested Account which was not distributed will not be restored. The
Account will be unadjusted for any increased vesting for service during the
repayment period.
5.7 DETERMINATION OF SERVICE FOR YEARS PRIOR TO 1998: For each Participant who
------------------------------------------------
does not complete at least one Hour of Service with the Company or any
Associated Company on or after January 1, 1998, the provisions of the Plan which
was in effect prior to the Effective Date of this restated Plan will apply in
determining the Years of Service credited to such Participant and the vested
percentage of such Participant's Accounts. If a Participant has at least one
Hour of Service on or after January 1, 1998, the following provisions of this
Section 5.7 will apply. In such event, all of a Participant's service with the
Company or any Associated Company will be determined under the provisions of
this Plan, including service prior to the Effective Date of this Plan; provided,
however, that in no event will any Participant's vested percentage under this
Plan as
-22-
<PAGE>
of January 1, 1998, be less than the Participant's vested percentage determined
as of December 31, 1997, determined under the provisions of the Plan in effect
prior to January 1, 1998.
-23-
<PAGE>
ARTICLE VI
RETIREMENT DATE--DESIGNATION OF BENEFICIARY
-------------------------------------------
6.1 NORMAL RETIREMENT DATE: A Participant shall be entitled to retire
----------------------
voluntarily, for purposes of this Plan, at any time on or after that date on
which the Participant attains Normal Retirement Age. Until retirement, a
Participant shall continue to participate in the Plan unless the Participant
elects otherwise.
6.2 DESIGNATION OF BENEFICIARY: A Participant's entire vested Account balance
--------------------------
shall be payable, on the death of the Participant, to the Participant's
surviving spouse or to the Participant's designated Beneficiary if there is no
surviving spouse or if the spouse consents to such Beneficiary designation in
writing. This spousal consent shall acknowledge the effect of such consent and
shall be witnessed by a Plan representative or a notary public. If there is no
surviving spouse or, in the case of a spousal election not to receive the
Account, a Participant shall designate a Beneficiary to receive his or her
Account in the Trust Fund upon the Participant's death on the form prescribed by
and delivered to the Plan Committee. The Participant shall have the right to
change or revoke a designation at any time by filing a new designation or notice
of revocation with the Plan Administrator. No notice to any Beneficiary other
than the spouse nor consent by any Beneficiary other than the spouse shall be
required to effect any change of designation or revocation. If a Participant
fails to designate a Beneficiary before his or her death, or if no designated
Beneficiary survives the Participant, the Plan Committee shall direct the
Trustee to pay the Participant's Account in the Trust Fund to the Participant's
surviving spouse, or if none, to the Participant's personal representative. If
no personal representative has been appointed, and if the benefit payable does
not exceed the minimum amount for which an estate or inheritance tax release is
required under applicable state law, or for which a personal representative must
be appointed under applicable state law, the Plan Committee may direct the
Trustee to pay the benefit to the person or persons entitled to it under the
laws of the state where such Participant was domiciled at the date of his or her
death. In such case, the Plan Committee may require such proof of right or
identity from such person as the Plan Committee may deem necessary. If the
benefit exceeds the minimum amount for which an estate or inheritance tax
release or the appointment of a personal representative is required under
applicable state law, the Plan Committee may direct the Trustee to hold the
benefit in a segregated account until a personal representative has been
appointed.
6.3 PARTICIPANT OR BENEFICIARY WHOSE WHEREABOUTS ARE UNKNOWN: In the case of
--------------------------------------------------------
any Participant or Beneficiary whose whereabouts are unknown, the Plan Committee
shall notify such Participant or Beneficiary at his last known address by
certified mail with return receipt requested advising such Participant of his or
her right to a pending distribution. If the Participant or Beneficiary cannot
be located in this manner, the Plan Committee may direct the Trustee to
establish a custodial account for such Participant or Beneficiary for the
purpose of holding
-24-
<PAGE>
the Participant's Account until it is claimed by the Participant or Beneficiary
or until proof of death satisfactory to the Plan Committee is received by the
Plan Committee. If such proof of death is received, the Plan Committee shall
direct the Trustee to distribute the Participant's Account in accordance with
the provisions of Section 6.2. Any Trustee fees or other administrative
expenses attributable to a custodial account established and maintained under
this Section shall be charged against such account. Alternatively, after
reasonable search efforts have been expended, as determined by the Plan
Committee, the Plan Committee may direct the Plan Administrator to forfeit the
Account of the missing Participant or the missing Beneficiary, in which event
such forfeited Account shall be treated as provided under Article V. If the
missing Participant or Beneficiary subsequently is located, such forfeited
Account, unadjusted for earnings or losses from the date of such forfeiture,
will be restored for the benefit of such Participant or Beneficiary from Plan
earnings, other forfeitures, or additional Employer contributions.
-25-
<PAGE>
ARTICLE VII
DISTRIBUTIONS AND WITHDRAWALS FROM TRUST FUND
---------------------------------------------
7.1 WHEN ACCOUNTS BECOME DISTRIBUTABLE AND EFFECT OF DISTRIBUTION: To the
-------------------------------------------------------------
extent permitted under Section 7.9, if a Participant dies, suffers Total
Disability, retires, or separates from service with the Employer for any other
reason, the portion of the Participant's vested Account attributable to Employer
contributions, to Participant contributions, and to any rollover contributions
shall be distributable under Section 7.2. When his or her Account becomes
distributable, such Participant shall cease to have any further interest or
participation in the Trust Fund or any subsequent accruals or contributions to
the Trust Fund except as provided below:
[a] a Participant shall retain the right to receive allocations of earnings and
losses on his or her Account an to receive a distribution of his or her
Account as determined under Article V; and
[b] as provided in Article V, a Participant who makes contributions during any
payroll period shall retain the right to receive his or her share in the
Employer's contribution allocated to the Participant's Account for such
payroll period.
7.2 DISTRIBUTION OF ACCOUNTS:
------------------------
[a] Notification of Trustee and Form of Distribution: When a Participant's
-------------------------------------------------
vested Account becomes distributable under Section 7.1, the Plan Committee
will notify the Trustee of the Participant's name and address, the amount
of the vested Account which is distributable, and the reason for its being
distributable. A Participant's Account will be distributed in cash;
provided that the Participant may demand to receive his or her Stock Bonus
Plan Account in shares of Qualifying Employer Securities. Cash always will
be distributed in lieu of fractional shares of Qualifying Employer
Securities.
[b] Distribution Upon Retirement or Total Disability: If a Participant's
------------------------------------------------
Account becomes distributable upon his or her Termination of Employment
with the Employer because such Participant has attained Normal Retirement
Age or because of his or her Total Disability, the Trustee will distribute
to the Participant his or her vested Account balance in a lump sum within a
reasonable time after the close of the month (or earlier, if
administratively feasible) in which occurs the latest of: [1] the date the
Participant provides his or her consent to the distribution, if necessary;
or [2] in the case of a distribution for which Participant consent is not
required, when the time period set by the Committee for making an eligible
rollover distribution election expires. If the Participant dies before
receiving his or her vested Account, the remaining Account balance will be
paid to his or her Beneficiary under this Section.
-26-
<PAGE>
[c] Distribution Upon Death: If a Participant's Account becomes distributable
-----------------------
because of his or her death, the Trustee shall distribute to the
Participant's Beneficiary the Participant's total vested Account balance in
a lump sum within a reasonable time after the close of the month (or
earlier, if administratively feasible) in which occurs the latest of: [1]
the date the Beneficiary provides his or her consent to the distribution,
if necessary; [2] in the case of a distribution for which consent is not
required and which is an eligible rollover distribution, when the time
period set by the Committee for making an eligible rollover distribution
election expires, or [3] in the case of a distribution for which consent is
not required and which is not an eligible rollover distribution, the date
all documentation relating to the Participant's death is received and
processed by the Committee. If the Beneficiary dies before receiving the
Participant's vested Account, the Account balance shall be paid to the
contingent Beneficiary, if any. If the Participant has not designated a
Beneficiary, or if the Participant has designated a Beneficiary who dies
and the Participant has not designated a contingent Beneficiary, the
Participant's vested Account will be paid in a lump sum under Section 6.2.
[d] Distribution Upon Other Termination of Employment: If a Participant's
-------------------------------------------------
Account becomes distributable upon his or her Termination of Employment for
any reason other than retirement, disability, or death, the Trustee will
distribute to the Participant his or her vested Account balance in a lump
sum within a reasonable time after the close of the month (or earlier, if
administratively feasible) in which occurs the latest of: [1] the date the
Participant provides his or her consent to the distribution, if necessary;
or [2] in the case of a distribution for which Participant consent is not
required, when the time period set by the Committee for making an eligible
rollover distribution election expires. If the Participant dies before
receiving his or her vested Account, the remaining Account balance will be
paid to his or her Beneficiary under this Section.
[e] Cash-Out Distributions of Small Accounts: No amount (taking into
----------------------------------------
consideration both Employer and Employee contributions) may be distributed
to a Participant prior to Normal Retirement Age (or age 62, if later)
unless the amount is distributed in a lump sum of $5,000 or less, or the
Participant consents to the distribution. If, upon Termination of
Employment for any reason, the Participant's vested Account is $5,000 or
less, the Committee may direct the Trustee to distribute such amount in a
lump sum in cash; provided that the Participant may demand to receive his
or her Stock Bonus Plan Account in shares of Qualifying Employer
Securities. Cash always will be distributed in lieu of fractional shares
of Qualifying Employer Securities.
7.3 DISPOSITION OF FORFEITABLE ACCOUNT ON TERMINATION OF EMPLOYMENT: If a
---------------------------------------------------------------
Participant's employment is terminated for any reason prior to attainment of
Normal Retirement Age, death, or Total Disability, while any part of the
Participant's Account is forfeitable, then that portion of his or her Account
which is forfeitable shall be forfeited on the earlier of the date the
Participant receives a distribution of his or her Account or the date on which
the
-27-
<PAGE>
Participant experiences five or more consecutive one-year Breaks in Service.
Any amount forfeited by a Participant shall be treated as provided in Section
4.2[b]. If any such Participant returns to the employment of the Employer and
has not incurred five or more consecutive one-year Breaks in Service, the
Employer shall restore to the Participant's Account out of its next contribution
the exact number of shares of Qualifying Employer Securities plus any other
amounts that the Participant forfeited, if the Participant repays the
distributed amount pursuant to Section 5.6.
7.4 ASSIGNMENT OF BENEFITS:
----------------------
[a] General Rules: Except as provided below, all amounts payable by the
-------------
Trustee shall be paid only to the person entitled to them, and all such
payments shall be paid directly to such person and not to any other person
or corporation. Such payments shall not be subject to the claim of any
creditor of a Participant, nor shall such payments be taken in execution by
attachment or garnishment or by any other legal or equitable proceedings.
No person shall have any right to alienate, anticipate, commute, pledge,
encumber, or assign any payments or benefits which he may expect to
receive, contingently or otherwise, under this Plan, except the right to
designate a Beneficiary or beneficiaries; provided, that this Section shall
not affect, restrict, or abridge any right of setoff or lien which the
Trust may have by law.
[b] Qualified Domestic Relations Orders: Paragraph [a] shall not apply with
-----------------------------------
respect to payments in accordance with the requirements of a qualified
domestic relations order. A qualified domestic relations order creates or
recognizes the existence of an alternate payee's right to, or assigns to an
alternate payee the right to, receive all or a portion of the benefits
otherwise payable to a Participant under the Plan. A domestic relations
order means any judgment, decree, or order (including approval of a
property settlement agreement) that relates to the provision of child
support, alimony payments, or marital property rights to a spouse, former
spouse, child, or other dependent of a Participant, and is made pursuant to
a state domestic relations law (including a community property law). To
qualify, the domestic relations order must:
[1] clearly state the name and last known mailing address of the
Participant and the name and mailing address of each alternate payee
covered by the order;
[2] clearly state the amount or percentage of the Participant's benefits
to be paid by the Plan to each alternate payee, or the manner in which
the amount or percentage is to be determined;
[3] clearly state the number of payments or period to which the order
applies;
[4] identify each Plan to which the order applies;
-28-
<PAGE>
[5] not require the Plan to provide any type or form of benefits, or any
option, not otherwise provided under the Plan;
[6] not require the Plan to provide increased benefits (determined on the
basis of actuarial value); and
[7] not require the payment of benefits to an alternate payee that are
required to be paid to another alternate payee under another order
previously determined to be a qualified domestic relations order.
In the case of any distribution before a Participant has separated from
service, a qualified domestic relations order shall not fail to meet the
requirements of Section 7.4[b][5] solely because such order requires that
payment of benefits be made to an alternate payee [A] on or after the date
the Participant attains the earliest retirement age, [B] as if the
Participant had retired on the date on which such payment is to begin under
such order, and [C] in any form in which benefits may be paid under the
Plan to the Participant (other than in the form of a qualified joint and
survivor annuity with respect to the alternate payee and his subsequent
spouse). Payment of benefits before Termination of Employment solely by
reason of payments to an alternate payee under a qualified domestic
relations order shall not be deemed to be a violation of Code Section
401(a) or (k). Notwithstanding any other provision of this Plan, payments
to an alternate payee pursuant to a qualified domestic relations order may
be made at any time prescribed by such order without violating the terms of
this Plan or the Code.
[c] Definitions:
-----------
[1] "Alternate payee" means any spouse, former spouse, child, or other
dependent of a Participant who is recognized by a qualified domestic
relations order as having a right to receive all, or a portion of, the
benefits payable under a Plan with respect to such Participant.
[2] "Earliest retirement age" means the earliest of the date on which the
Participant's Account becomes distributable or the date the
Participant attains age 50.
7.5 MINIMUM REQUIRED DISTRIBUTIONS: Notwithstanding any other provisions of
------------------------------
this Plan, the following distribution rules shall apply (unless a different
method of distribution applies under Section 242(b) of the Tax Equity and Fiscal
Responsibility Act of 1982):
[a] Before Death: The entire Account of each Participant will be distributed
------------
to him not later than the required beginning date.
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<PAGE>
[b] After Death: If a Participant dies before distribution of the
-----------
Participant's Account has been made, the total vested Account balance of
the Participant shall be distributed within five years after the death of
the Participant. If the designated Beneficiary is the surviving spouse of
the Participant, the date on which the distributions are required shall not
be earlier than the date on which the Participant would have attained age
70 1/2, and if the surviving spouse dies before the distribution to such
spouse, distributions shall be made as if the surviving spouse were the
Participant.
[c] Required Beginning Date: Required beginning date means April 1 of the
-----------------------
calendar year following the calendar year in which occurs the later of [1]
the date the Participant attains age 70 1/2, or [2] the date the
Participant retires from employment with the Employer. Notwithstanding the
above, in the case of a 5% owner of the Employer, required beginning date
means April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
[d] Designated Beneficiary: Designated Beneficiary means any individual
----------------------
designated as a Beneficiary by the Participant.
[e] Treatment Of Payments To Children: Under regulations prescribed by the
---------------------------------
Secretary of Treasury, any amount paid to a child shall be treated as if it
had been paid to the surviving spouse if such amount will become payable to
the surviving spouse upon such child reaching majority (or such other
designated event permitted under regulations).
[f] Spouse, Trust For Benefit Of Spouse, Or Estate As Beneficiary: If
------------------------------------------------- -----------
distribution prior to a Participant's death has not commenced and if the
Participant designates his or her spouse, a trust for the benefit of his or
her spouse, or the Participant's estate as his or her Beneficiary, the
provisions of this paragraph shall apply (subject to the limitations in
this Section):
[1] Spouse As Beneficiary: If a Participant designates his or her spouse
---------------------
as his or her Beneficiary, upon the death of the Participant the
spouse shall receive the entire Account of the Participant in a lump
sum distribution.
[2] QTIP Trust As Beneficiary: If a Participant designates as his or her
-------------------------
Beneficiary a qualified terminable interest property (QTIP) trust for
the benefit of his or her spouse, upon the death of the Participant
the Trustee of the QTIP trust shall receive the entire Account of the
Participant in a lump sum distribution.
[3] General Power Of Appointment Trust As Beneficiary: If the Participant
-------------------------------------------------
designates as his or her Beneficiary a trust over which the
Participants' spouse has a general power of appointment, upon the
death of the Participant the spouse shall receive the entire Account
of the Participant in a lump sum distribution.
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<PAGE>
[4] Estate As Beneficiary: If the Participant designates his or her
---------------------
estate as his or her Beneficiary with a specific bequest of his income
in respect of decedent to his or her spouse, upon the death of the
Participant the personal representative of the Participant (or the
successor of the personal representative) shall receive the entire
Account of the Participant in a lump sum distribution.
7.6 WITHDRAWALS:
-----------
[a] Employer Contributions: A Participant may withdraw all or any part of his
----------------------
or her Account attributable to Employer contributions, including any
earnings, losses, and changes in fair market value of such contributions,
upon attaining age 59 1/2, but only if the Participant is 100% vested in
his or her total Account balance. Such withdrawal upon attaining age 59
1/2 may be made only once in each Plan Year and such withdrawal upon age 59
1/2 may be made without any suspension of Plan participation as a result of
such withdrawal.
[b] Voluntary After-Tax Contributions: A Participant may request withdrawal of
---------------------------------
all or any part of his or her Account attributable to voluntary after-tax
contributions. Such withdrawal requests will be processed monthly and the
requested amount will be distributed within a reasonable period of time
after the end of the month in which the Participant requests the
withdrawal. In the event the withdrawal is a result of a serious financial
hardship, as defined in Section 7.6[c][1] below, the Plan Committee, in its
discretion, may process such withdrawal request bi-weekly, in which event
the requested amount will be distributed within a reasonable period of time
after the request is processed. A Participant who has not attained age 59
1/2 and who makes withdrawal of any portion of his or her voluntary after-
tax contributions under this paragraph [b], including any hardship
withdrawal, may not again contribute to the Trust Fund under Section 4.1
until the first payroll period commencing six months after the withdrawal
is made, but such Participant shall receive an allocation of Employer
contributions for the payroll period in which occurs the withdrawal date.
Any expenses attributable to any withdrawal under this Section 7.6[b] may
be charged to the Account of the Participant requesting the withdrawal.
Vested benefits under the Plan may not be forfeited because a Participant
withdraws his or her voluntary after-tax contributions.
[c] Salary Reductions: Salary reduction contributions may be withdrawn in the
-----------------
following circumstances:
[1] A Participant may withdraw his or her salary reduction contributions
to this Plan, excluding any earnings on such contributions, upon
serious financial hardship. Serious financial hardship means an
immediate and heavy financial need of the Participant on account of
medical expenses of the Participant or the Participant's dependents,
the purchase of the Participant's principal residence, the prevention
of the eviction of the Participant from his or her principal
residence, the prevention of the foreclosure on the mortgage on the
Participant's principal residence (excluding normal mortgage
payments), the payment of the next twelve months of post-
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<PAGE>
secondary tuition and related educational expenses (including room and
board) for the Participant or the Participant's dependents, or the
occurrence of any other event deemed by the Secretary of the Treasury
to create an immediate and heavy financial need under Income Tax
Regulation Section 1.401(k)-1(d)(2)(iv)(C). No other event shall be
considered a serious financial hardship under the terms of the Plan. A
hardship distribution cannot exceed the amount required to meet the
immediate financial need and cannot be reasonably available to the
Participant from other resources, including insurance reimbursement,
reasonable asset liquidation, cessation of Participant contributions
to this Plan, or borrowing from commercial sources on reasonable
terms. The Company adopts the deemed hardship standards of Income Tax
Regulation Sections 1.401(k)-1(d)(2)(iv), as described above, as the
sole means of hardship withdrawal of salary reduction contributions.
If the Plan Committee determines in accordance with a uniform and
nondiscriminatory policy that serious financial hardship exists, it
may direct the Trustee to distribute the amount requested to the
Participant. A Participant who makes a hardship withdrawal under this
Section may not contribute to the Trust Fund under Section 4.1 until
the first calendar quarter commencing twelve months after such
hardship withdrawal, but shall receive an allocation of Employer
contributions for the payroll period in which occurs the withdrawal
date. A Participant who makes a hardship withdrawal in a Plan Year
under this Section may not make salary reduction contributions in the
next succeeding year in excess of the maximum deferral amounts
provided in Section 4.11[a] less the salary reductions made in the
year of the hardship withdrawal. Any expenses attributable to the
hardship withdrawal may be charged to the Account of the Participant
requesting the withdrawal.
[2] A Participant may withdraw all or any part of his or her salary
reduction contributions, including any earnings, losses, and changes
in fair market value of such contributions, upon attaining age 59 1/2,
but only if the Participant is 100% vested in his or her total Account
balance. Such withdrawal requests upon attaining age 59 1/2 will be
processed monthly and the requested amount will be distributed within
a reasonable period of time after the end of the month in which the
Participant requests the withdrawal. A withdrawal upon attaining age
59 1/2 may be made only once in each Plan Year and such withdrawal
upon age 59 1/2 may be made without any suspension of Plan
participation as a result of such withdrawal.
[d] Withdrawals From Other Plans: To the extent required by law, any
----------------------------
withdrawal from any Plan maintained by any Company which is a member of a
group of corporations or trades or businesses under common control with the
Company will be deemed to be a withdrawal from this Plan for purposes of
applying the withdrawal limitations and suspension of Plan participation
provisions of this Section 7.6. Common control will be determined pursuant
to Code Section 414(b) and the regulations thereunder.
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<PAGE>
[e] Rollovers: A Participant may request a lump-sum withdrawal of all amounts
---------
rolled over to this Plan from another qualified plan, including any
earnings thereon. Such withdrawal request will be processed monthly and
the requested amount will be distributed within a reasonable period of time
after the end of the month in which the Participant requests the
withdrawal. A withdrawal of rollover contributions under this Section will
not result in any suspension of participation in this Plan.
[f] Form of Withdrawal: Withdrawals under this Section 7.6 will be made in
------------------
cash, and such cash will be obtained by liquidating, on a pro rata basis
and to the extent necessary to cover the requested withdrawal amount, each
investment fund in which the Participant's Account is invested on the date
the withdrawal request is processed. However, the Participant may demand
that the requested withdrawal amount be made in the form of Qualifying
Employer Securities to the extent such requested withdrawal amount is
attributable to the Participant's Stock Bonus Plan Account.
[g] Participants Ineligible for Distribution May Request Withdrawal: In the
---------------------------------------------------------------
event a Participant has terminated employment with the Company, but is not
eligible to receive a distribution from the Plan because the Participant
has not "separated from service" or because of the restrictions on
distributions under Code Section 401(k)(10), such Participant will be
eligible to request any distribution under this Section 7.6 as if such
Participant still were employed by the Company.
7.7 OPTIONAL FORMS OF BENEFITS FOR TRANSFERRED PENSION ASSETS: Notwithstanding
---------------------------------------------------------
any provision of this Plan to the contrary, to the extent that any optional form
of benefit under this Plan permits a distribution prior to the employee's
retirement, death, disability, or severance from employment, or prior to Plan
termination, the optional form of benefit is not available with respect to
benefits attributable to assets (including the post-transfer earnings thereon)
and liabilities that are transferred, within the meaning of Code Section 414(1),
to this Plan from a money purchase pension plan qualified under Code Section
401(a) (other than any portion of those assets and liabilities attributable to
voluntary employee contributions).
7.8 ELIGIBLE ROLLOVER DISTRIBUTIONS:
-------------------------------
[a] General Rule: Notwithstanding any provision of the Plan to the contrary
------------
that otherwise would limit a Participant's distribution election under this
Article, a Participant may elect, at the time and in the manner prescribed
by the Plan Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement Plan specified by the
Participant in a direct rollover.
[b] Limitations on Direct Rollover Distributions: This Plan will not be
--------------------------------------------
required to make, but the Committee in its discretion may permit, any
direct rollover distribution if the total amount to be distributed to the
Participant during the Plan Year is less than $200. If the amount of
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<PAGE>
the distribution is $500 or less, any direct rollover distribution must
consist of the entire distribution amount. The Participant may elect only
one eligible retirement Plan to which a direct rollover distribution will
be made.
[c] Definitions:
-----------
[1] An "eligible rollover distribution" is any distribution of all or any
portion of the balance to the credit of the Participant, except that
an eligible rollover distribution does not include [A] 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; [B] any
distribution to the extent such distribution is required under Code
Section 401(a)(9); and [C] 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 a
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
[3] A "distributee" includes a Participant or former Participant. In
addition, the Participant's or former Participant's surviving spouse
and the Participant's or former Participant'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.
7.9 RESTRICTIONS ON DISTRIBUTIONS OR WITHDRAWALS OF ELECTIVE DEFERRAL
-----------------------------------------------------------------
CONTRIBUTIONS: Notwithstanding any other provision of this Plan, elective
- -------------
deferrals, qualified non-elective contributions, qualified matching
contributions, and income allocable to each are not distributable to a
Participant or Beneficiary, in accordance with such Participant's or Beneficiary
or beneficiaries' election, earlier than upon separation from service, death, or
disability. Such amounts may also be distributed upon:
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<PAGE>
[a] Termination of the Plan without the establishment or maintenance of another
defined contribution plan;
[b] The disposition by a company that is a corporation to an unrelated
corporation 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, but only
with respect to Employees who continue employment with the corporation
acquiring such assets;
[c] The disposition by a company that is a corporation to an unrelated entity
of such corporation's interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) if such corporation continues to maintain this Plan, but
only with respect to Employees who continue employment with such
subsidiary;
[d] The attainment of age 59-1/2; or
[e] The hardship of the Participant as provided in Section 7.6[c][1].
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<PAGE>
ARTICLE VIII
ANNUAL ADDITIONS LIMITATIONS AND TOP HEAVY RULES
------------------------------------------------
8.1 DEFINITIONS FOR ANNUAL ADDITIONS RULES: For purposes of Sections 8.1
--------------------------------------
through 8.4, the following terms will be defined as follows:
[a] "Annual Addition" means the sum of the Company contributions, forfeitures,
and Participant contributions allocated to a Participant's Account during
any Limitation Year. Amounts allocated to an individual medical account,
as defined in Code Section 415(l)(2), that is part of a pension or annuity
plan maintained by the Company will be treated as an annual addition to a
defined contribution plan. Amounts attributable to post-retirement medical
benefits that are allocated to the separate account of a Key Employee, as
defined in Code Section 419A(d)(3), under a welfare benefit fund, as
defined in Code Section 419(e), maintained by the Company will be treated
as an annual addition to a defined contribution plan. Annual additions
will not include a direct transfer or any contribution made by a
Participant that qualifies under law as a rollover contribution.
[b] "Company," for purposes of this Article, means the Company that adopts this
Plan, and all members of a controlled group of corporations (as defined in
Code Section 414(b) as modified by Code Section 415(h)), all commonly
controlled trades or businesses (as defined in Code Section 414(c) as
modified by Code Section 415(h)), and all affiliated service groups (as
defined in Code Section 414(m)), in which the adopting Company is a member,
and any other entity required to be aggregated with the Company pursuant to
Code Section 414(o) and the final regulations thereunder.
[c] "Compensation," for purposes of limiting annual additions and combined
benefits and contributions under this Article, means compensation, as
defined in subparagraphs [1], [2], [3], or [4] below, as determined by the
Company in its discretion.
[1] Compensation means a Participant's wages, salaries, fees for
professional services, and other amounts received (without regard to
whether an amount is paid in cash) for personal services actually
rendered in the course of employment with the Company to the extent
that the amounts are includible in gross income including, but not
limited to, commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, reimbursements, expense
allowances, and cash received upon the exercise of a stock
appreciation right. Compensation also will include [A] amounts paid or
reimbursed by the Company for moving expenses incurred by the
Employee, but only to the extent that these amounts are not deductible
by the Employee under Code Section 217; [B] amounts described in Code
Sections 104(a)(3), 105(a) and 105(h), but only to the extent that
these amounts are includible in the Employee's gross
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<PAGE>
income; and [C] amounts includible in the income of the Employee as a
result of the grant of a non-qualified stock option to the Employee or
as a result of the Employee making an election described in Code
Section 83(b). Compensation will not include [i] Company contributions
to a deferred compensation plan that are not includible in the
Employee's gross income in the year in which contributed; [ii] Company
contributions to a simplified employee pension plan described under
Code Section 408(k) to the extent such contributions are deductible by
the Employee; [iii] any distributions from a deferred compensation
plan other than amounts received from an unfunded nonqualified plan;
[iv] amounts realized from the exercise of a nonqualified stock option
or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to substantial
risk of forfeiture; [v] amounts realized from the sale, exchange, or
other disposition of stock acquired under a qualified stock option; or
[vi] other amounts that receive special tax benefits, or Company
contributions to purchase an annuity contract described in Code
Section 403(b), whether or not under a salary reduction agreement and
whether or not the amounts actually are excludible from the gross
income of the Employee. For purposes of this Article, compensation for
a Limitation Year includes only the compensation that actually is paid
to the Participant during the Limitation Year and compensation that is
includible in the Participant's gross income during the Limitation
Year.
[2] Compensation means wages, as defined in Code Section 3121(a) for
purposes of calculating social security taxes but determined without
regard to [A] the wage base limitation in Code Section 3121(a)(1); [B]
the special rules in Code Section 3121(v) applicable to certain
elective contributions and nonqualified deferred compensation; [C] any
rules that limit covered employment based on the type or location of
an employee's employer; and [D] any rules that limit the remuneration
included in wages based on familial relationship or based on the
nature or location of the employment or the services performed (such
as the exceptions to the definition of employment in Code Sections
3121(b)(1) through (20)).
[3] Compensation means wages, as defined in Code Section 3401(a) for
purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in
Code Section 3401(a)(2)).
[4] Any other definition of compensation determined to satisfy Code
Section 415(c)(3) by the Secretary of the Treasury.
[d] "Limitation Year" means the Plan Year.
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<PAGE>
8.2 LIMITATION ON ANNUAL ADDITION: If the annual addition to the account of
-----------------------------
any Participant attributable to all defined contribution plans (including money
purchase pension plans, profit-sharing plans, and welfare benefit funds of the
Company), would exceed the lesser of [a] $30,000 (as adjusted for cost of living
increases by the Secretary of the Treasury as of each January 1 for any
Limitation Year ending during such calendar year), or [b] 25% of such
Participant's compensation, the excess amount will be disposed of as follows:
[1] Any nondeductible voluntary employee contributions under any plan
maintained by the Company, to the extent that the return would reduce
the excess amount, will be returned to the Participant.
[2] Any employee elective deferral contributions under Code Section 401(k)
under any plan maintained by the Company, to the extent that the
return would reduce the excess amount, will be returned to the
Participant.
[3] If an excess amount still exists after the application of paragraph
[1] and the Participant is still a Plan Participant at the end of the
Limitation Year, the amount of any such excess will be used to reduce
the Company contributions (including any allocation of forfeitures)
for such Participant in the next Limitation Year and in each
succeeding Limitation Year, if necessary.
[4] If an excess amount still exists after the application of paragraph
[1] and the Participant is not a Plan Participant at the end of the
Limitation Year, any excess amount will be allocated to a suspense
account and the suspense account will be used to reduce Company
contributions for all remaining Plan Participants in the next
Limitation Year and for each succeeding Limitation Year, as necessary.
If a suspense account exists for any Limitation Year, all amounts in
such suspense account must be allocated and reallocated to the
Participants' Accounts before any Company or Participant contributions
may be made to the Plan for that Limitation Year. Excess amounts may
not be distributed to Participants or former Participants. If a
suspense account is in existence at any time during the Limitation
Year pursuant to this paragraph [3], such suspense account will not
share in the allocation of the gains and losses of the Trust Fund. In
the event of a Plan termination, the balance of such suspense account
will be returned to the Company.
8.3 LIMITATION ON COMBINED BENEFITS AND CONTRIBUTIONS OF ALL DEFINED
----------------------------------------------------------------
CONTRIBUTION PLANS: This Section applies if, in addition to this Plan, the
- ------------------
Participant is covered under another defined contribution plan maintained by the
Company, a welfare benefit fund, as defined in Code Section 419(e), maintained
by the Company, or an individual medical account, as defined in Code Section
415(1)(2), maintained by the Company, that provides an annual addition during
any Limitation Year. The annual additions that may be credited to a
Participant's Account under this Plan for any such Limitation Year will not
exceed the limitation described in Section 8.2 reduced by the annual additions
credited to a Participant's account under the other defined
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<PAGE>
contribution plans and welfare benefit funds for the same Limitation Year. If
the annual additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Company are less
than the limitation described in Section 8.2 and the Company contribution that
would otherwise be contributed or allocated to the Participant's Account under
this Plan would cause the annual additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced so that the
annual additions under all such plans and funds for the Limitation Year will
equal the limitation described in Section 8.2. If the annual additions with
respect to the Participant under such other defined contribution plans and
welfare benefit funds in the aggregate are equal to or greater than the
limitation described in Section 8.2, the Company will specify the plan or plans
to which the contribution will be reduced. If a Participant's annual additions
under this Plan and such other plans would result in an excess amount for a
Limitation Year, the excess amount will be deemed to consist of the annual
additions last allocated, except that annual additions attributable to a welfare
benefit fund or an individual medical account will be deemed to have been
allocated first regardless of the actual Allocation Date. If an excess amount
is allocated to a Participant on an Allocation Date of this Plan that coincides
with an Allocation Date of another plan, the excess amount attributed to this
Plan will be the product of the total excess amount allocated as of such date
multiplied by a fraction, the numerator of which is the annual additions
allocated to the Participant for the Limitation Year as of such date under this
Plan and the denominator of which is the total annual additions allocated on the
Participant's behalf for the Limitation Year as of such date under this and all
the other defined contribution plans. Any excess amount attributed to this Plan
will be disposed of in the manner described in Section 8.2.
8.4 LIMITATION ON COMBINED BENEFITS AND CONTRIBUTIONS OF ALL DEFINED BENEFIT
------------------------------------------------------------------------
AND DEFINED CONTRIBUTION PLANS OF THE COMPANY: If the Company maintains or has
- ---------------------------------------------
ever maintained a defined benefit plan covering any Employee who also is a
Participant in this Plan, then the sum of the defined benefit plan fraction and
the defined contribution plan fraction (both as prescribed by law and as defined
below) for such Employee for such year will not exceed 1.0 in any Limitation
Year. In any Limitation Year, if the sum of the defined benefit plan fraction
and the defined contribution plan fraction on behalf of a Participant does
exceed 1.0, the Company's contribution on behalf of such Participant to this
Employees' Stock Ownership Plan and Trust will be reduced to the extent
necessary to prevent the sum of the defined contribution plan fraction and the
defined benefit plan fraction from exceeding 1.0.
[a] Defined Benefit Plan Fraction: The defined benefit plan fraction is a
-----------------------------
fraction, the numerator of which is the projected annual benefit of the
Participant under all defined benefit plans of the Company (whether or not
terminated) and the denominator of which is the lesser of [1] the product
of 1.25 times the maximum benefit dollar limitation determined for the
Limitation Year under Code Sections 415(b) and (d); or [2] the product of
1.4 times 100% of the Participant's average Compensation for his or her
high three consecutive calendar years, including any adjustments under Code
Section 415(b).
The projected annual benefit is the annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life
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<PAGE>
annuity) to which the Participant would be entitled under the terms of the
plan at Normal Retirement Age assuming that the Participant will continue
employment until Normal Retirement Age under the plan (or, if later, using
the Participant's current age) and further assuming that the Participant's
Compensation for the current Limitation Year and all other relevant factors
used to determine benefits under the plan will remain constant for all
future Limitation Years.
[b] Defined Contribution Plan Fraction: The defined contribution plan fraction
----------------------------------
is a fraction, the numerator of which is the sum of the annual additions to
the Participant's Account under all defined contribution plans (whether or
not terminated) maintained by the Company 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 Company, 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 Company), and the denominator of which is the
sum of the lesser of the following amounts determined for such year and for
each prior Limitation Year of Service with the Company: [1] the product of
1.25 times the dollar limitation determined under Code Sections 415(b) and
(d) in effect under Code Section 415(c)(1)(A) for the Limitation Year; or
[2] 35% of the Participant's Compensation for the Limitation Year.
8.5 TOP HEAVY RULES: For any year in which the Plan is top heavy, as
---------------
determined under Code Section 416, the provisions of Sections 8.5 through 8.7
shall apply
[a] If the Company maintains one or more defined contribution plans (including
any simplified employee pension plan) and the Company has not maintained
any defined benefit plan that, during the five-year period ending on the
Determination Date, has or has had accrued benefits, the top heavy ratio
for this Plan alone (or for the required or permissive aggregation group,
as appropriate) is a fraction, the numerator of which is the sum of the
Account balances of all Key Employees as of the Determination Date
(including any part of any Account balance distributed in the five-year
period ending on the Determination Date), and the denominator of which is
the sum of all Account balances (including any part of any Account balance
distributed in the five-year period ending on the Determination Date), both
computed in accordance with Code Section 416 and the regulations
thereunder. Both the numerator and the denominator of the top heavy ratio
will be increased to reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into account on that
date under Code Section 416 and the regulations thereunder.
[b] If the Company maintains one or more defined contribution plans (including
any simplified employee pension plan) and the Company maintains or has
maintained one or more defined benefit plans that during the five-year
period ending on the Determination Date has or has had any accrued
benefits, the top heavy ratio for any required or permissive aggregation
group, as appropriate, is a fraction, the numerator of which is the sum of
Account balances
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<PAGE>
under the aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with [a] above, plus the present value
of accrued benefits under the aggregated defined benefit plan or plans for
all Key Employees as of the Determination Date, and the denominator of
which is the sum of the Account balances under the aggregated defined
contribution plan or plans for all Participants, determined in accordance
with [a] above, plus the present value of accrued benefits under the
defined benefit plan or plans for all Participants as of the Determination
Date, all determined in accordance with Code Section 416 and the
regulations thereunder. The accrued benefits under a defined benefit plan
in both the numerator and the denominator of the top heavy ratio will be
increased for any distribution of an accrued benefit made in the five-year
period ending on the Determination Date.
[c] For purposes of paragraphs [a] and [b] above, the value of Account balances
and the present value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date for the first and second Plan Years of a
defined benefit plan, except as provided in Code Section 416. The account
balances and accrued benefits of a Participant [1] who is not a Key
Employee but who was a Key Employee in a prior year, or [2] who has not
been credited with at least one Hour of Service with any Company
maintaining the Plan at any time during the five-year period ending on the
Determination Date, will be disregarded. The calculation of the top heavy
ratio, and the extent to which distributions, rollovers, and transfers are
taken into account, will be made in accordance with Code Section 416.
Deductible employee contri butions will not be taken into account for
purposes of computing the top heavy ratio. When aggregating plans, the
value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar
year.
The accrued benefit of a Participant other than a Key Employee will be
determined under [A] the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Company, or [B]
if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C).
8.6 TOP HEAVY DEFINITIONS:
---------------------
[a] "Permissive Aggregation Group" means the required aggregation group of
plans plus any other plan or plans of the Company that, when considered as
a group with the required aggregation group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
[b] "Required Aggregation Group" means [1] each qualified plan of the Company
in which at least one Key Employee participates or participated at any time
during the Plan Year or any of the four preceding Plan Years (regardless of
whether the plan has terminated), and [2] any
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<PAGE>
other qualified plan of the Company that enables a plan described in [1] to
meet the requirements of Code Sections 401(a)(4) or 410.
[c] "Determination Date" for any Plan Year subsequent to the first Plan Year
means the last day of the preceding Plan Year. For the first Plan Year of
the Plan, "Determination Date" means the last day of that year.
[d] "Valuation Date," for purposes of computing the top heavy ratio, means the
date or dates designated in Article V.
[e] "Present Value" means the present value of a Participant's interest
determined in accordance with the interest and mortality assumptions
specified in the defined benefit plan of the Company, if any.
[f] "Compensation," for purposes of this Article, means compensation as defined
in Section 8.1[c], up to the limit under Code Section 401(a)(17).
[g] "Key Employee" means any Employee or former Employee (or Beneficiary of
either) who, at any time during the Plan Year or any of the four preceding
Plan Years, is or was:
[1] An officer of the Company if the officer's compensation exceeds 50% of
the dollar limitation in effect under Code Section 415(b)(1)(A);
[2] One of the ten Employees owning, or considered to own under Code
Section 318, the largest interests in the Company if the individual's
compensation exceeds 100% of the dollar limitation in effect under
Code Section 415(c)(1)(A);
[3] A five percent owner of the Company; or
[4] A one percent owner of the Company having annual compensation from the
Company of more than $150,000.
For purposes of this paragraph, annual compensation means compensation as
defined in Code Section 415(c)(3), including amounts contributed by the Company
pursuant to a salary reduction agreement that are excluded from the Employee's
gross income under Code Section 125, 402(a)(8), 402(h), or 403(b).
For purposes of paragraph [1], no more than 50 Employees (or, if fewer, the
greater of three Employees or ten percent of the Employees) will be treated as
officers. For purposes of paragraph [2], if two Employees have the same
interest in the Company, the Employee having the greater annual compensation
from the Company will be treated as having the larger interest in the Company.
The determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1). Non-Key Employee means any Employee who is not a Key
Employee.
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<PAGE>
8.7 TOP HEAVY MINIMUM CONTRIBUTIONS: Notwithstanding any other provision in
-------------------------------
the Company's Plan, for any Plan Year in which the Plan is top heavy and in
which the Company maintains no defined benefit plan which designates this Plan
to satisfy Code Section 416, the aggregate Company contributions and forfeitures
allocated on behalf of any Participant (without regard to any integration
feature) under this Plan and any other defined contribution plan of the Company
will be the lesser of:
[a] Three percent of such Participant's compensation; or
[b] The largest percentage of Company contributions and forfeitures, as a
percentage of Compensation (as limited by Code Section 401(a)(17)),
allocated on behalf of any Key Employee for such year.
Elective deferrals and Company matching contributions used in the actual
contribution percentage test may not be used to satisfy the minimum
contribution required under Code Section 416. If, in any top-heavy year,
the highest percentage of Company contributions and forfeitures allocated
to any Key Employee is less than three percent, amounts allocated as a
result of any Key Employee's elective deferrals must be included in
determining the Company contribution made on behalf of such Key Employees.
Each Participant who is employed by the Company on the last day of the Plan
Year will be entitled to receive an allocation of the Company's minimum
contribution for such Plan Year. The minimum allocation applies even
though under other Plan provisions the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser
allocation for the year because the Participant fails to make mandatory
contributions to the Plan, the Participant's compensation is less than a
stated amount, or the Participant fails to complete 1,000 Hours of Service
during the Plan Year. If the Company maintains this Plan and any other
qualified defined contribution plan, the contribution described above will
be provided under the other defined contribution plan maintained by the
Company. If the Company maintains a qualified defined benefit plan in
which any Participant in this Plan participates and if the Code Section 416
minimum contribution requirements are to be provided under this Plan, for
any Plan Year in which the Plan is Top Heavy the aggregate Company
contributions and forfeitures allocated on behalf of any Participant who is
not a Key Employee will be at least five percent of such Participant's
compensation.
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<PAGE>
ARTICLE IX
FIDUCIARY OBLIGATIONS
---------------------
9.1 GENERAL FIDUCIARY DUTIES: A Fiduciary shall discharge his or her duties
------------------------
under the Plan solely in the interest of the Participants and the beneficiaries
and for the exclusive purpose of providing benefits to Participants and to their
beneficiaries and defraying reasonable expenses of administering the Plan. All
fiduciaries shall act with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims. Except as authorized by regulations of the
Secretary of Labor, no Fiduciary may maintain the indicia of ownership of any
assets of the Plan outside the jurisdiction of the district courts of the United
States. A Fiduciary shall act in accordance with the documents and instruments
governing the Plan to the extent such documents and instruments are consistent
with the requirements of law.
9.2 ALLOCATION OF FIDUCIARY RESPONSIBILITY: A Named Fiduciary may designate
--------------------------------------
persons other than named fiduciaries to carry out Fiduciary responsibilities
(other than Trustee responsibilities) under the Plan.
9.3 LIABILITY OF FIDUCIARIES:
------------------------
[a] Extent Of Liability: A Fiduciary who breaches any of the responsibilities,
-------------------
obligations, or duties imposed upon him or her by this Plan or by the
requirements of law shall be personally liable only [1] to make good to the
Plan any losses resulting from his or her breach [2] to restore to the Plan
any profits the Fiduciary has made through the use of Plan assets for his
or her personal Account, and [3] to pay those penalties prescribed by law
arising from his or her breach. A Fiduciary shall be subject to such other
equitable or remedial relief as a court of law may deem appropriate,
including removal of the Fiduciary. A Fiduciary also may be removed for a
violation of Section 9.8 (prohibition against certain persons holding
certain positions). No Fiduciary shall be liable with respect to the
breach of a Fiduciary duty if such breach was committed before he became a
Fiduciary or after he ceased to be a Fiduciary.
[b] Liability Of Fiduciary For Breach By Co-Fiduciary: A Fiduciary shall be
-------------------------------------------------
liable for a breach of Fiduciary responsibility of another Fiduciary of
this Plan, only if he [1] participates knowingly in, or knowingly
undertakes to conceal, an act or omission of the other Fiduciary, and knows
such act or omission by the other Fiduciary is a breach of the other
Fiduciary's duties, [2] enables another Fiduciary to commit a breach, by
his failure to comply with Section 9.1 in the administration of the
specific responsibilities which give rise to his status
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<PAGE>
as a Fiduciary, or [3] has knowledge of a breach of another Fiduciary and
does not make reasonable efforts under the circumstances to remedy the
breach.
[c] Liability For Improper Delegation Of Fiduciary Responsibility: A Named
-------------------------------------------------------------
Fiduciary who allocates any of his Fiduciary responsibilities to any person
or designates any person to carry out any of his Fiduciary responsibilities
shall be liable for the act or omission of such person in carrying out the
responsibility only to the extent that the Named Fiduciary fails to satisfy
his or her general Fiduciary duties of Section 9.1 with respect to the
allocation or designation, with respect to the establishment or
implementation of the procedure by which he allocates the responsibilities,
or in continuing the allocation or designation. Nothing in this paragraph
shall prevent a Named Fiduciary from being liable if he or she otherwise
would be liable for an act or omission under paragraph [b].
[d] Fiduciary To Whom Responsibilities Are Allocated: Any person who has been
------------------------------------------------
designated to carry out Fiduciary responsibilities under Section 9.2 shall
be liable for such responsibilities under this section to the same extent
as any Named Fiduciary.
[e] Liability Insurance And Indemnification: Nothing in this Plan shall
---------------------------------------
preclude a Fiduciary from purchasing insurance to cover liability from and
for his own Account. The Company may purchase insurance to cover potential
liability of those persons who serve in a Fiduciary capacity with regard to
the Plan or may indemnify a Fiduciary against liability and expenses
reasonably incurred by him in connection with any action to which such
Fiduciary may be made a party by reason of his being or having been a
Fiduciary.
9.4 PROHIBITED TRANSACTIONS: No Fiduciary shall cause the Plan to engage in a
-----------------------
transaction if the Fiduciary knows or should know that the transaction
constitutes a prohibited transaction under law. No disqualified person under
law (other than a Fiduciary acting only as such) shall engage in a prohibited
transaction as prescribed by law.
9.5 RECEIPTS OF BENEFITS BY FIDUCIARIES: Nothing shall prohibit any Fiduciary
-----------------------------------
from receiving any benefit to which he may be entitled as a Participant or
Beneficiary in the Plan, if such benefit is computed and paid on a basis which
is consistent with the terms of the Plan as applied to all other Participants
and beneficiaries. The determination of any matters affecting the payment of
benefits to any Fiduciary other than the Plan Committee shall be determined by
the Plan Committee. If the Plan Committee is an individual, the determination of
any matters affecting the payment of benefits to the Plan Committee shall be
made by a temporary Plan Committee who shall be appointed by the Board of
Directors for such purpose. If the Plan Committee is a group of individuals,
the determination of any matters affecting the payment of benefits to any
individual Plan Committee member shall be made by the remaining Plan Committee
members without the vote of such individual Plan Committee member. If the
remaining Plan Committee members are unable to
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<PAGE>
agree on any matter affecting the payment of such benefits, the Board of
Directors shall appoint a temporary Plan Committee to decide the matter.
9.6 COMPENSATION AND EXPENSES OF FIDUCIARIES:
----------------------------------------
[a] General Rules: A Fiduciary shall be entitled to receive any reasonable
-------------
Compensation for services rendered or for the reimbursement of expenses
properly and actually incurred in the performance of his duties under the
Plan. However, no Fiduciary who already receives full-time pay from an
Employer shall receive Compensation from the Plan, except for reimbursement
of expenses properly and actually incurred. All Compensation and expenses
shall be paid by the Plan, unless the Company, in its discretion, elects to
pay all or any part of such Compensation and expenses. In its discretion,
the Plan Committee may direct that all such Compensation and expenses be
paid from forfeitures under the Plan or from general Plan assets.
[b] Compensation of Plan Committee and Plan Administrator: A Plan Administrator
-----------------------------------------------------
who is not a full-time Employee of an Employer shall be entitled to such
reasonable Compensation as the Plan Committee and the Plan Administrator
mutually shall determine. A Plan Committee member who is not a full-time
Employee of an Employer shall be entitled to such reasonable Compensation
as the Company and the Plan Committee mutually shall determine. Any
expenses properly and actually incurred by the Plan Committee or the Plan
Administrator due to a request by a Participant shall be charged to the
Account of the Participant on whose behalf such expenses are incurred.
[c] Compensation Of Trustee: A Trustee who is not a full-time Employee of an
-----------------------
Employer shall be entitled to such reasonable Compensation for its services
as the Plan Committee and the Trustee mutually shall determine.
[d] Compensation Of Persons Retained Or Employed By Named Fiduciary: The
---------------------------------------------------------------
Compensation of all agents, counsel, or other persons retained or employed
by a Named Fiduciary shall be determined by the Named Fiduciary employing
such person, with the Plan Committee's approval, provided that a person who
is a full-time Employee of an Employer shall receive no Compensation from
the Plan.
9.7 SERVICE BY FIDUCIARIES AND DISQUALIFIED PERSONS: Nothing in this Plan
-----------------------------------------------
shall prohibit anyone from serving as a Fiduciary in addition to being an
officer, Employee, agent, or other representative of a disqualified person as
defined in the Code.
9.8 PROHIBITION AGAINST CERTAIN PERSONS HOLDING CERTAIN POSITIONS: No person
-------------------------------------------------------------
who has been convicted of a felony shall be permitted to serve as an
administrator, Fiduciary,
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<PAGE>
officer, Trustee, custodian, counsel, agent, or Employee of this Plan, or as a
consultant to this Plan, unless permitted under law. The Plan Committee shall
ascertain to the extent practical that no violation of this Section occurs. In
any event, no person knowingly shall permit any other person to serve in any
capacity which would violate this Section.
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<PAGE>
ARTICLE X
PLAN ADMINISTRATOR AND PLAN COMMITTEE
-------------------------------------
10.1 APPOINTMENT OF PLAN ADMINISTRATOR AND PLAN COMMITTEE: The Board of
----------------------------------------------------
Directors by resolution shall appoint a Plan Administrator and a Plan Committee,
each of whom shall hold office until resignation, death, or removal by the Board
of Directors. If the Board of Directors fails to appoint the Plan Committee or
Plan Administrator, or both, the Board of Directors shall be the Plan Committee,
the Plan Administrator, or both. Any person may serve in more than one
Fiduciary capacity, including service as Plan Administrator and Plan Committee
member. Any group of persons appointed by the Board of Directors may serve in
the capacity of Plan Committee, Plan Administrator, or both.
10.2 ORGANIZATION AND OPERATION OF OFFICES OF PLAN ADMINISTRATOR AND PLAN
--------------------------------------------------------------------
COMMITTEE: The Plan Administrator and Plan Committee may adopt such procedures
- ---------
as each deems desirable for the conduct of its respective affairs and may
appoint or employ a secretary or other agents, any of whom may be, but need not
be, an officer or Employee of the Company or any Associated Company. Any agent
may be removed at any time by the person appointing or employing him.
10.3 INFORMATION TO BE MADE AVAILABLE TO PLAN COMMITTEE AND PLAN ADMINISTRATOR:
-------------------------------------------------------------------------
To enable the Plan Committee and the Plan Administrator to perform all of their
respective duties under the Plan, each Employer shall provide the Plan Committee
and the Plan Administrator with access to the following information for each
Employee: [a] name and address, [b] social security number, [c] birthdate, [d]
dates of commencement and Termination of Employment, [e] reason for Termination
of Employment, [f] hours worked during each year,[g] annual Compensation, [h]
Employer contributions, and such other information as the Plan Committee or the
Plan Administrator may require. To the extent the information is available in
Employer records, an Employer shall provide the Plan Committee and Plan
Administrator with access to information relating to each Employee's Participant
contributions, benefits received under the Plan, and marital status. If such
information is not available from the Employer records, the Plan Committee shall
obtain such information from the Participants. The Plan Committee, the Plan
Administrator and the Employer may rely on and shall not be liable because of
any information which an Employee provides, either directly or indirectly. As
soon as possible following any Participant's death, Total Disability,
retirement, or other Termination of Employment, his Employer shall certify in
writing to the Plan Committee and Plan Administrator such Participant's name and
the date and reason for his Termination of Employment, if needed.
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10.4 RESIGNATION AND REMOVAL OF PLAN ADMINISTRATOR OR PLAN COMMITTEE
---------------------------------------------------------------
MEMBER; APPOINTMENT OF SUCCESSORS: Any Plan Administrator or Plan Committee
- ---------------------------------
member may resign at any time by giving written notice to the Board of
Directors, effective as stated in such notice, otherwise upon receipt of such
notice. At any time the Plan Administrator or any Plan Committee member may be
removed by the Board of Directors without cause. As soon as practical,
following the death, resignation, or removal of any Plan Administrator or Plan
Committee member, the Board of Directors shall appoint a successor by
resolution. Written notice of the appointment of a successor Plan Administrator
or successor Plan Committee member shall be given by the Company to the Trustee.
Until receipt by the Trustee of such written notice, the Trustee shall not be
charged with knowledge or notice of such change.
10.5 DUTIES AND POWERS OF PLAN ADMINISTRATOR--REPORTING AND DISCLOSURE:
-----------------------------------------------------------------
[a] General Requirements: The Plan Administrator shall be responsible for all
--------------------
applicable reporting and disclosure requirements of law. The Plan
Administrator shall prepare, file with the Secretary of Labor, the
Secretary of the Treasury, or the Pension Benefit Guaranty Corporation,
when applicable, and furnish to Plan Participants and beneficiaries, when
applicable, the following:
[1] summary plan description;
[2] description of modifications and changes;
[3] annual report;
[4] terminal and supplementary reports;
[5] registration statement; and
[6] any other return, report, or document required by law.
[b] Statement Of Benefits Accrued And Vested: The Plan Administrator is to
----------------------------------------
furnish, or cause to be furnished, to any Plan Participant or Beneficiary
who so requests in writing, a statement indicating, on the basis of the
latest available information, the total benefits accrued and the vested
benefits, if any, which have accrued, or the earliest date on which
benefits will become vested. The Plan Administrator shall furnish, or
cause to be furnished, a written statement to any Participant who
terminates employment during the Plan Year and is entitled to a deferred
vested benefit under the Plan as of the end of the Plan Year, if no
retirement benefits have been paid with respect to such Participant during
the Plan Year. The statement shall be an individual statement and shall
contain the information required in the annual registration statement which
the Plan Administrator is required to file with the Secretary of
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<PAGE>
the Treasury. The Plan Administrator shall furnish the individual
statement to the Participant before the expiration of the time prescribed
for filing the annual registration statement with the Secretary of the
Treasury.
[c] Inspection Of Documents: Upon written request by any Participant or
-----------------------
Beneficiary, the Plan Administrator is to furnish a copy of the latest
updated summary plan description, the latest annual report, any terminal
report, and any agreements under which the Plan is established or operated,
to the extent required by law. In addition, the Plan Administrator is to
comply with every other requirement imposed on him by law.
[d] Employment Of Advisers And Persons To Carry Out Responsibilities: The Plan
----------------------------------------------------------------
Administrator may appoint one or more persons to render advice with regard
to any responsibility the Plan Administrator has under the Plan and may
employ one or more persons (other than a Named Fiduciary) to carry out any
of his responsibilities under the Plan.
10.6 DUTIES AND POWERS OF PLAN COMMITTEE--IN GENERAL: The Plan Committee shall
-----------------------------------------------
decide all questions arising in the administration, interpretation, and
application of the Plan and Trust, including all questions relating to
eligibility, vesting, and distribution, except as may be reserved under this
Plan to the Company, its Board of Directors or any Associated Company. The Plan
Committee may designate any person (other than the Plan Administrator or
Trustee) to carry out any of the Plan Committee's Fiduciary responsibilities
under the Plan (other than a Trustee Responsibility) and may appoint one or more
persons to render advice with regard to any responsibility the Plan Committee
has under the Plan. The Plan Committee from time to time shall direct the
Trustee concerning the payments to be made out of the Trust Fund pursuant to
this Plan. All notices, directions, information, and other communications from
the Plan Committee shall be in writing.
10.7 DUTIES AND POWERS OF PLAN COMMITTEE--KEEPING OF RECORDS: The Plan
-------------------------------------------------------
Committee shall keep a record of all the Plan Committee's proceedings and shall
keep all such books of Account, records, and other data as may be necessary or
advisable in its judgment for the administration of this Plan and Trust,
including records to reflect the affairs of this Plan, to determine the amount
of vested and/or forfeitable interests of the respective Participants in the
Trust Fund, and to determine the amount of all benefits payable under this Plan.
The Plan Committee shall maintain separate accounts for each Participant as
provided under Article V. Subject to the requirements of law, any person
dealing with the Plan Committee may rely on, and shall incur no liability in
relying on, a certificate or memorandum in writing signed by the Plan Committee
as evidence of any action taken or resolution adopted by the Plan Committee.
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<PAGE>
10.8 DUTIES AND POWERS OF PLAN COMMITTEE--CLAIMS PROCEDURE:
-----------------------------------------------------
[a] Filing And Initial Determination Of Claim: Any Participant, Beneficiary or
-----------------------------------------
his duly authorized representative may file a claim for a Plan benefit to
which the claimant believes that he is entitled. Such a claim must be in
writing and delivered to the Plan Committee in person or by certified mail,
postage prepaid. Within 90 days after receipt of such claim, the Plan
Committee shall send to the claimant by certified mail, postage prepaid,
notice of the granting or denying, in whole or in part, of such claim
unless special circumstances require an extension of time for processing
the claim. In no event may the extension exceed 90 days from the end of
the initial period. If such extension is necessary the claimant will
receive a written notice to this effect prior to the expiration of the
initial 90-day period. The Plan Committee shall have full discretion
pursuant to the Plan to deny or grant a claim in whole or in part. If
notice of the denial of a claim is not furnished in accordance with this
paragraph [a], the claim shall be deemed denied and the claimant shall be
permitted to exercise his right of review pursuant to paragraphs [c] and
[d] of this Section.
[b] Duty Of Plan Committee Upon Denial Of Claim: The Plan Committee shall
-------------------------------------------
provide to every claimant who is denied a claim for benefits written notice
setting forth in a manner calculated to be understood by the claimant:
[1] the specific reason or reasons for the denial;
[2] specific reference to pertinent Plan provisions on which the denial is
based;
[3] a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material
is necessary; and
[4] an explanation of the Plan's claim review procedure.
[c] Request For Review Of Claim Denial: Within 60 days after receipt by the
----------------------------------
claimant of written notification of the denial in whole or in part of his
claim, the claimant or his duly authorized representative, upon written
application to the Plan Committee in person or by certified mail, postage
prepaid, may request a review of such denial, may review pertinent
documents and may submit issues and comments in writing. Upon its receipt
of the request for review, the Plan Committee shall notify the Board of
Directors of the request.
[d] Claims Reviewer: Upon its receipt of notice of a request for review, the
---------------
Board of Directors shall appoint a person other than a Plan Committee
member to be the claims reviewer. The Plan Committee shall deliver to the
claims reviewer all documents submitted by the claimant and all other
documents pertinent to the review. The claims reviewer shall make a prompt
decision on the review. The decision on review 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. The decision on
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<PAGE>
review shall be made not later than 60 days after the Plan Committee's
receipt of a request for a review, unless special circumstances require an
extension of time for processing, in which case a decision shall be
rendered not later than 120 days after receipt of a request for review. If
such extension is necessary the claimant shall be given written notice of
the extension prior to the expiration of the initial 60-day period. If
notice of the decision on review is not furnished in accordance with this
paragraph [d], the claim shall be deemed denied and the claimant shall be
permitted to exercise his right to legal remedy pursuant to paragraph [e]
of this Section.
[e] Legal Remedy: After exhaustion of the claims procedure as provided under
------------
this Plan, nothing shall prevent any person from pursuing any other legal
remedy.
10.9 DUTIES AND POWERS OF PLAN COMMITTEE--FUNDING AND INVESTMENT POLICY: The
------------------------------------------------------------------
policy of each Employer is that this Plan shall be funded with Employer
contributions and Participant contributions. The Plan Committee may adopt an
investment policy which shall provide the Trustee with guidance on the
investments appropriate for Plan assets.
10.10 DUTIES AND POWERS OF PLAN COMMITTEE--BONDING OF FIDUCIARIES AND PLAN
--------------------------------------------------------------------
OFFICIALS: The Plan Committee shall procure bonds for every Fiduciary of the
- ---------
Plan and every Plan Official, if he handles funds of the Plan, in an amount not
less than 10% of the amount of funds handled and in no event less than $1,000,
except the Plan Committee shall not be required to procure such bonds if [a] the
person is excepted from the bonding requirement by law, or [b] the Secretary of
Labor exempts the Plan from the bonding requirements. The bonds shall conform
to the requirements of law.
10.11 DUTIES AND POWERS OF PLAN COMMITTEE--QUALIFIED DOMESTIC RELATIONS
-----------------------------------------------------------------
ORDERS: The Plan Committee shall establish reasonable procedures for
- ------
determining the qualification status of a domestic relations order. Such
procedures:
[a] shall be in writing;
[b] shall provide to each person specified in a domestic relations order as
entitled to payment of Plan benefits notification of such procedures
promptly upon receipt by the Plan of the order; and
[c] shall permit an alternate payee to designate a representative for receipt
of copies of notices that are sent to the alternate payee.
Such procedures shall provide such additional information as required by law, or
as deemed necessary or convenient for the proper administration of qualified
domestic relations orders, as
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<PAGE>
determined by the Plan Committee. If a Plan Fiduciary acts in accordance with
the Fiduciary responsibility provisions of ERISA, then the Plan's obligation to
the Participant and each alternate payee shall be discharged to the extent of
any payment made.
10.12 ADVICE TO DESIGNATED FIDUCIARIES: Any Fiduciary designated by the
--------------------------------
Plan Committee or Plan Administrator may appoint with the consent of the Plan
Committee or Plan Administrator, respectively, one or more persons to render
advice with regard to any responsibility such designated Fiduciary has under the
Plan.
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<PAGE>
ARTICLE XI
POWERS AND DUTIES OF THE TRUSTEE
--------------------------------
11.1 INVESTMENT OF TRUST FUND:
------------------------
[a] Duties of Trustee: The duty of the Trustee is to hold in trust the funds
-----------------
it receives. Except as expressly set forth in this Section 11.1, the
Trustee shall have exclusive authority and discretion to manage and control
the assets of the Plan and to manage, invest, and reinvest the Trust Fund
and the income from it under this article, without distinction between
principal and income, and shall be responsible only for such sums that it
actually receives as Trustee. The Trustee shall have no duty to collect
any sums from the Plan Committee.
[b] Trustee Investment of Employer Contributions: Any Employer contributions,
--------------------------------------------
and any earnings thereon, now or in the future received or held by the
Trustee shall be applied primarily to the purchase of shares of Qualifying
Employer Securities, and the Trustee may invest in Qualifying Employer
Securities, up to 100% of the value of Plan assets, without regard to the
diversification requirement or the prudence requirement to the extent it
requires diversification. Purchases of Qualifying Employer Securities may
be made by the Trustee in the open market or by private purchase, or, if
available, from the Company, or as the Trustee may determine in its sole
discretion, provided only that no private purchase or purchase from the
Company may be made at a price greater than the current market price for
qualifying Employer securities on the day of such purchase. The Trustee
also may purchase Qualifying Employer Securities from Participants who
receive distributions from this Trust, provided that all such purchases
shall be made at the current market price on the day of such purchase.
[c] Participant Directed Investment of Participant Contributions: Each
------------------------------------------------------------
Participant may direct the Trustee's investment of his or her Account
attributable to Participant voluntary after-tax contributions, Participant
deductible contributions, Participant rollover contributions, and
Participant elective deferral contributions, and the earnings thereon, as
provided in paragraph [c].
[1] Trustee to Follow Participant Investment Direction: The Trustee shall
--------------------------------------------------
comply with any Participant exercise of investment control as provided
in this Section. The Trustee is under no duty to question any
direction by a Participant or his or her duly authorized agent with
respect to investments, or to make suggestions to the Participant or
his or her duly authorized agent with respect to investments.
[2] Investment Instructions Necessary: As a condition of participation in
---------------------------------
this Plan, a Participant must direct the Trustee as to the investment
of the Participant's Participant Contributions Account. The right to
direct investments under this Section will be the
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<PAGE>
sole and exclusive investment power granted to Participants. The
exercise of investment direction by a Participant will not cause the
Participant to be a fiduciary solely by reason of such exercise, and
neither the Trustee, the Plan Committee, nor any other fiduciary of
this Plan will be liable for any loss, or by reason of any breach,
that results from exercise of investment direction by a Participant.
It is the intent of the Plan, the Company, and the Trustee that this
Plan and the Participant direction of investment under this Section
(except for investments in Qualifying Employer Securities) comply with
and be administered in accordance with ERISA Section 404(c) and the
final regulations thereunder. To the extent Participant Accounts are
directed in Qualifying Employer Securities, such Accounts will be
administered in compliance with ERISA Section 404(c) only to the
extent determined by the Plan Committee.
[3] Investment Categories: The Plan Committee will select investment
---------------------
categories for Participant direction of investment under this Plan,
which may include fixed income obligations of a secure nature, such as
savings accounts, certificates of deposit, and fixed income government
and corporate obligations. The investment categories also may include
common stock (including Qualifying Employer Securities), notes,
mortgages, commercial paper, preferred stocks, mutual funds, or other
securities, rights, obligations, or property, real or personal,
including shares or certificates of participation issued by regulated
investment trusts and shares or units of participation in qualified
common Trust Funds or pooled funds. Participant Accounts in investment
categories offered by the Plan Committee may be commingled. Investment
categories may not include collectibles within the meaning of Code
Section 408(m). The Plan Committee will, at all times, offer at least
three investment alternatives that will provide Participants with a
broad range of investment alternatives and that provide materially
different risk and return characteristics.
[4] Expenses: Any expense incurred by the Trust will be charged directly
--------
against the value of the Account of the Participant on whose behalf
such expense is incurred. The Trustee may allocate expenses to
individual Accounts or commingled Accounts on a nondiscriminatory
basis.
[d] Diversification and Prudence Requirements: Except to the extent the
-----------------------------------------
Trustee invests in the Qualifying Employer Securities, the Trustee shall
diversify the investments of the Plan to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do so. The
Trustee shall act with the care skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of
a like character and with like aims.
[e] Trustee Vote of Qualifying Employer Securities: The Trustee shall vote all
----------------------------------------------
proxies, and make decisions with respect to all tender offers, with respect
to Qualifying Employer
-55-
<PAGE>
Securities held in the Trust Fund, including Qualifying Employer Securities
purchased at the direction of the Participant.
11.2 ADMINISTRATIVE POWERS OF THE TRUSTEE: Subject to the requirements imposed
------------------------------------
by law, the Trustee shall have all powers necessary or advisable to carry out
the provisions of this Plan and Trust and all inherent, implied, and statutory
powers now or subsequently provided by law, including specifically the power to
do any of the following:
[a] to cause any securities or other property to be registered and held in its
name as Trustee, or in the name of one or more of its nominees, without
disclosing the Fiduciary capacity, or to keep the same in unregistered form
payable to bearer;
[b] to sell, grant options to sell, exchange, pledge, encumber, mortgage, deed
in trust, or use any other form of hypothecation, or otherwise dispose of
the whole or any part of the Trust Fund on such terms and for such property
or cash, or part cash and credit, as it may deem best; to retain, hold,
maintain, or continue any securities or investments which it may hold as
part of the Trust Fund for such length of time as it may deem advisable;
and generally, in all respects, to do all things and exercise each and
every right, power, and privilege in connection with and in relation to the
Trust Fund as could be done, exercised, or executed by an individual
holding and owning such property in absolute and unconditional ownership;
[c] to abandon, compromise, contest, and arbitrate claims and demands; to
institute, compromise, and defend actions at law (but without obligation to
do so); in connection with such powers, to employ counsel as the Trustee
shall deem advisable and as approved by the Plan Committee; and to exercise
such powers all at the risk and expense of the Trust Fund;
[d] to borrow money for this trust upon such terms and conditions as the
Trustee shall deem advisable, and to secure the repayment of such by the
mortgage or pledge of any assets of the Trust Fund, provided that the
Trustee may not borrow money to purchase qualifying Employer securities;
[e] to vote in person or by proxy any shares of stock or rights held in the
Trust Fund; to participate in and to exchange securities or other property
in reorganization, liquidation, or dissolution of any corporation, the
securities of which are held in the Trust Fund; and
[f] to pay any amount due on any loan or advance made to the Trust Fund, to
charge against and pay from the Trust Fund all taxes of any nature levied,
assessed, or imposed upon the Trust Fund, and to pay all reasonable
expenses and attorney fees necessarily incurred by the Trustee and approved
by the Plan Committee with respect to any of the foregoing matters.
11.3 ADVICE OF COUNSEL: The Trustee may consult with legal counsel, who may be
-----------------
counsel for the Company or any Associated Company, or Trustee's own counsel,
with respect to the meaning
-56-
<PAGE>
or construction of the Plan and Trust or Trustee's obligations or duties. The
Trustee shall be protected from any responsibility with respect to any action
taken or omitted by it in good faith pursuant to the advice of such counsel, to
the extent permitted by law.
11.4 RECORDS AND ACCOUNTS OF THE TRUSTEE: The Trustee shall keep all such
-----------------------------------
records and accounts which may be necessary in the administration and conduct of
this trust. The Trustee's records and accounts shall be open to inspection by
the Company, any Associated Company, the Plan Committee, and the Plan
Administrator, at all reasonable times during business hours. All income,
profits, recoveries, contributions, forfeitures, and any and all moneys,
securities, and properties of any kind at any time received or held by the
Trustee shall be held for investment purposes as a commingled Trust Fund.
Separate accounts or records may be maintained for operational and accounting
purposes, but no such account or record shall be considered as segregating any
funds or property from any other funds or property contained in the commingled
fund, except as otherwise provided. After the close of each year of the trust,
the Trustee shall render to the Company and the Plan Committee a statement of
assets and liabilities of the Trust Fund for such year.
11.5 APPOINTMENT, RESIGNATION, REMOVAL, AND SUBSTITUTION OF TRUSTEE: The Board
--------------------------------------------------------------
of Directors by resolution shall appoint a Trustee or Trustees, each of which
shall hold office until resignation or removal by the Board of Directors. The
Trustee may resign at any time upon 30 days' written notice to the Company. The
Trustee may be removed at any time by the Company upon written notice to the
Trustee with or without cause. Upon resignation or removal of the Trustee, the
Company, by action of its Board of Directors, shall appoint a successor Trustee
which shall have the same powers and duties as are conferred upon the Trustee
appointed under this Plan. The resigning or removed Trustee shall deliver to
its successor Trustee all property of the Trust Fund, less a reasonable amount
necessary to provide for its Compensation, expenses, and any taxes or advances
chargeable or payable out of the Trust Fund. If the Trustee is an individual,
death shall be treated as a resignation, effective immediately. If any
corporate Trustee at any time shall be merged, or consolidated with, or shall
sell or transfer substantially all of its assets and business to another
corporation, whether state or federal, or shall be reorganized or reincorporated
in any manner, then the resulting or acquiring corporation shall be substituted
for such corporate Trustee without the execution of any instrument and without
any action upon the part of the Company, any Participant or Beneficiary, or any
other person having or claiming to have an interest in the Trust Fund or under
the Plan.
11.6 APPOINTMENT OF TRUSTEE--ACCEPTANCE IN WRITING: The Trustee shall accept
---------------------------------------------
its appointment as soon as practical by executing this Plan or by delivering a
signed document to the Company, a copy of which shall be sent to the Plan
Committee by the Trustee. The Board of Directors shall appoint a new Trustee if
the Trustee fails to accept its appointment in writing.
-57-
<PAGE>
ARTICLE XII
CONTINUANCE, TERMINATION, AND AMENDMENT OF PLAN AND TRUST
---------------------------------------------------------
12.1 TERMINATION OF PLAN: The expectation of each Employer is to continue this
-------------------
Plan indefinitely, but the continuance of the Plan is not assumed as a
contractual obligation by the Employer and the right is reserved to each
Employer, by action of its Board of Directors, to terminate its participation in
this Plan at any time. The Company will have the right to terminate this Plan
at any time. The termination of this Plan by an Employer in no event shall have
the effect of revesting any part of the Trust Fund in the Employer. The Plan
created by execution of this agreement with respect to any Employer shall be
terminated automatically in the event of the dissolution, consolidation, or
merger of such Employer or the sale by such Employer of substantially all of its
assets, if the resulting successor corporation or business entity shall fail to
adopt the Plan and Trust under Section 12.3. If this Plan is disqualified, the
Board of Directors of the Company, in its discretion, may terminate this Plan.
12.2 TERMINATION OF TRUST: The trust created by execution of this agreement
--------------------
shall continue in full force and effect for such time as may be necessary to
accomplish the purposes for which it is created, unless sooner terminated and
discontinued by the Company's Board of Directors. Notice of such termination
shall be given to the Trustee by the Plan Committee in the form of an instrument
in writing executed by the Company pursuant to the action of its Board of
Directors, together with a certified copy of the resolution of the Board of
Directors to that effect. In its discretion, the Plan Committee may receive a
favorable determination letter from the Internal Revenue Service stating that
the prior qualified status of the Plan has not been affected by such
termination. Such termination shall take effect as of the date of the delivery
of the notice of termination and favorable determination letter, if obtained, to
the Trustee. The Plan Administrator shall file such terminal reports as are
required in Article X.
12.3 CONTINUANCE OF PLAN AND TRUST BY SUCCESSOR BUSINESS: With the approval of
---------------------------------------------------
the Company, a successor business may continue this Plan and Trust by proper
action of the proprietor or partners, if not a corporation, and, if a
corporation, by resolution of its Board of Directors, and by executing a proper
supplemental agreement to this Plan and Trust with the Trustee. Within 90 days
from the effective date of such dissolution, consolidation, merger, or sale of
assets of a Employer, if such successor business does not adopt and continue
this Plan and Trust, this Plan shall be terminated automatically as of the end
of such 90-day period.
12.4 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS OR LIABILITIES OF THE PLAN:
-----------------------------------------------------------------------
The Board of Directors of the Company may merge or consolidate this Plan with
any other plan or may transfer the assets or liabilities of the Plan to any
other plan if each Participant in the
-58-
<PAGE>
Plan (if the Plan then terminated) would receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated). If any merger,
consolidation, or transfer of assets or liabilities occurs, the Plan
Administrator shall file such reports as are required in Article X.
12.5 DISTRIBUTION OF TRUST FUND ON TERMINATION OF TRUST: If the trust is
--------------------------------------------------
terminated under this article, the Trustee shall determine the value of the
Trust Fund and the respective interests of the Participants and beneficiaries
under Article V. The value of the Account of each respective Participant or
Beneficiary in the Trust Fund shall be vested in its entirety as of the date of
the termination of the Plan. The Trustee then shall transfer to each
Participant or Beneficiary the net balance of the Participant's Account unless
the Plan Committee directs the Trustee to retain the assets and pay them under
the terms of this Plan as if no termination had occurred.
12.6 AMENDMENTS TO PLAN AND TRUST: At any time the Company, by action of its
----------------------------
Board of Directors, or the Plan Committee may amend this Plan and Trust,
provided that no amendment shall cause the Trust Fund to be diverted to purposes
other than for the exclusive benefit of the Participants and their beneficiaries
and provided further that the provisions of the Plan that satisfy the
requirements of subparagraph (C)(2)(ii)(A) under Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended, shall not be
amended more frequently than once every six months, unless otherwise necessary
to comply with changes in the Code, ERISA, or the rules and regulations
promulgated thereunder. No amendment shall decrease the vested interest of any
Participant. If an amended vesting schedule is adopted, any Participant who has
three or more years of service at the later of the date the amendment is adopted
or becomes effective and who is disadvantaged by the amendment, may elect to
remain under the Plan's prior vesting schedule. Such election must be made
within a period established by the Plan Committee, in accordance with applicable
regulations, and on a form provided by and delivered to the Plan Committee. No
amendment to the Plan (including a change in the actuarial basis for determining
optional benefits) shall be effective to the extent that it has the effect of
decreasing a Participant's accrued benefit. For purposes of this paragraph, a
Plan amendment that has the effect of [a] eliminating or reducing an early
retirement benefit or a retirement-type subsidy, or [b] eliminating an optional
form of benefit, with respect to benefits attributable to service before the
amendment will be treated as reducing accrued benefits. No amendment shall
discriminate in favor of Employees who are officers, shareholders, or Highly
Compensated Employees. Notwithstanding anything in this Plan and Trust to the
contrary, the Plan and Trust may be amended at any time to conform to the
provisions and requirements of federal and state law with respect to Employees'
trusts or any amendments to such laws or regulations or rulings issued pursuant
to them. No such amendment shall be considered prejudicial to the interest of
any Participant or Beneficiary under this Plan.
-59-
<PAGE>
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 BENEFITS TO BE PROVIDED SOLELY FROM THE TRUST FUND: All benefits payable
--------------------------------------------------
under this Plan shall be paid or provided solely from the Trust Fund, and no
Employer assumes liability or responsibility for payment of benefits.
13.2 NOTICES FROM PARTICIPANTS TO BE FILED WITH PLAN COMMITTEE: Whenever
---------------------------------------------------------
provision is made in the Plan that a Participant may exercise any option or
election or designate any Beneficiary, the action of each Participant shall be
evidenced pursuant to procedures promulgated by the Plan Committee. If a form
is furnished by the Plan Committee for such purpose, a Participant shall give
written notice of his exercise of any option or election or of his designation
of any Beneficiary on the form provided for such purpose. Any required written
notice under this Plan shall not be effective until received by the Plan
Committee. The Plan Committee may promulgate procedures, consistent with the
requirements of ERISA and the Code, whereby paperless transactions and elections
may be initiated by the Participants, such as for enrollment in the Plan,
election changes, investment decisions, and other designations required under
the Plan.
13.3 TEXT TO CONTROL: The headings of Articles and Sections are included solely
---------------
for convenience of reference. If any conflict between any heading and the text
of this Plan and Trust exists, the text shall control.
13.4 SEVERABILITY: If any provision of this Plan and Trust is illegal or
------------
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions. On the contrary, such remaining provisions shall be fully
severable, and this Plan and Trust shall be construed and enforced as if such
illegal or invalid provisions never had been inserted in the agreement.
13.5 JURISDICTION: This Plan shall be construed and administered under the laws
------------
of the State of Colorado when the laws of that jurisdiction are not in conflict
with federal substantive law.
13.6 PLAN FOR EXCLUSIVE BENEFIT OF PARTICIPANTS; REVERSION PROHIBITED: This Plan
----------------------------------------------------------------
and Trust has been established for the exclusive benefit of the Participants and
their beneficiaries. Under no circumstances shall any funds contributed to or
held by the Trustee at any time revert to or be used by or enjoyed by an
Employer except to the extent permitted by Article IV.
-60-
<PAGE>
This Plan and Trust has been approved by the Board of Directors of the
Company and is accepted by the Plan Administrator and the Trustees as of the
dates indicated below.
------------------------------------------
Gary K. Bracken, Plan Administrator
Date: -------------------------------------
COLORADO NATIONAL BANK
By:________________________________________
Date:______________________________________
-61-
<PAGE>
TELE-COMMUNICATIONS, INC.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
EXHIBIT 5
---------
December 22, 1997
Board of Directors
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Dear Sirs:
I am Executive Vice President and General Counsel of Tele-Communications,
Inc., a Delaware corporation (the "Company"), and this opinion is being
delivered in connection with the filing of the Company's Registration Statement
on Form S-8 (the "Registration Statement"), with respect to the registration
under the Securities Act of 1933, as amended (the "Act"), of 20,000,000 shares
of the Company's Tele-Communications, Inc. Series A TCI Group Common Stock, par
value $1.00 per share (the "TCOMA Shares"), 15,000,000 shares of the Company's
Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par value
$1.00 per share (the "LBTYA Shares") and 15,000,000 shares of the Company's
Tele-Communications, Inc. Series A TCI Ventures Group Common Stock, par value
$1.00 per share (the "TCIVA Shares" and, collectively with the TCOMA Shares and
the LBTYA Shares, the "Shares"), that are issuable to the Company's Employee
Stock Purchase Plan (to be restated and renamed the "TCI 401(k) Stock Plan"
effective January 1, 1998) (the "Plan").
In connection therewith, I have examined, among other things, the
originals, certified copies or copies otherwise identified to my satisfaction as
being copies of originals, of the Restated Certificate of Incorporation and By-
Laws of the Company, as amended; minutes of the proceedings of the Company's
Board of Directors; and such other documents, records, certificates of public
officials and questions of law as I deemed necessary or appropriate for the
purpose of this opinion. In rendering this opinion, I have relied, to the extent
I deemed such reliance appropriate, on certificates of officers of the Company
as to factual matters. I have assumed the authenticity of all documents
submitted to me as originals and the conformity to authentic original documents
of all documents submitted to me as certified, conformed or reproduction copies.
I have further assumed that there will be no changes in applicable law between
the date of this opinion and the date the Shares are actually issued and sold to
the Plan.
Based upon the foregoing, I am of the opinion that each of the TCOMA
Shares, LBTYA Shares and TCIVA Shares are or will be duly authorized and, when
issued and sold to the Plan pursuant to the terms thereof, will be validly
issued, fully paid and non-assessable.
<PAGE>
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to me contained therein under the
heading "Item 5. Interest of Named Experts and Counsel" in Part II of the
Registration Statement. In giving the foregoing consent, I do not admit that I
am in the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Stephen M. Brett
Stephen M. Brett
Executive Vice President and
General Counsel
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-8 of Tele-Communications, Inc. of our reports, dated March 24, 1997,
relating to the consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1996 and 1995, 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, 1996, and all related
financial statement schedules, which reports appear in the December 31, 1996
Annual Report on Form 10-K of Tele-Communications, Inc., as amended by Form 10-
K/A (Amendment No. 1).
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
December 17, 1997
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-8 of Tele-Communications, Inc. of our report, dated March 24, 1997,
relating to the combined balance sheets of TCI Group as of December 31, 1996 and
1995, and the related combined statements of operations, equity, and cash flows
for each of the years in the three-year period ended December 31, 1996, which
report appears in the December 31, 1996 Annual Report on Form 10-K of Tele-
Communications, Inc., as amended by Form 10-K/A (Amendment No. 1). Our report
covering the combined financial statements refers to the effects of not
consolidating TCI Group's interest in Liberty Media Group for all periods that
TCI Group has an interest in Liberty Media Group.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
December 17, 1997
<PAGE>
Exhibit 23.3
------------
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-8 of Tele-Communications, Inc. of our report, dated March 24, 1997,
relating to the combined balance sheets of Liberty Media Group as of December
31, 1996 and 1995, and the related combined statements of operations, equity,
and cash flows for each of the years in the three-year period ended December 31,
1996, which report appears in the December 31, 1996 Annual Report on Form 10-K
of Tele-Communications, Inc., as amended by Form 10-K/A (Amendment No. 1).
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
December 17, 1997
<PAGE>
Exhibit 23.4
------------
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders of
Telewest Communications plc:
We consent to the incorporation by reference in the registration statement on
Form S-8 of Tele-Communications, Inc. of our report, dated March 11, 1997,
relating to the consolidated balance sheet of Telewest Communications plc and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations and cash flows for each of the years in the three year
period ended December 31, 1996, which report appears in the December 31, 1996
Annual Report on Form 10-K of Tele-Communications, Inc., as amended by Form 10-
K/A (Amendment No. 1).
/s/ KPMG Audit Plc
KPMG Audit Plc
Chartered Accountants
Registered Auditors
London, England
December 17, 1997
<PAGE>
Exhibit 23.5
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the registration statement on
Form S-8 of Tele-Communications, Inc. of our report dated March 14, 1997 on the
consolidated financial statements of Sprint Spectrum Holding Company, L.P. and
subsidiaries (which expresses an unqualified opinion and includes an explanatory
paragraph referring to the developmental stage of Sprint Spectrum Holding
Company, L.P. and subsidiaries) for each of the two years in the period ended
December 31, 1996, for the period from October 24, 1994 (date of inception) to
December 31, 1994 and for the cumulative period from October 24, 1994 (date of
inception) to December 31, 1996 appearing in the Annual Report on Form 10-K of
Tele-Communications, Inc., as amended by Form 10-K/A (Amendment No. 1), for the
year ended December 31, 1996.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Kansas City, Missouri
December 16, 1997
<PAGE>
Exhibit 23.6
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8 of Tele-
Communications, Inc. of our report dated March 7, 1997 on the financial
statements of American PCS, L.P. (A Delaware Limited Partnership) as of and for
the year ended December 31, 1996 referred to in the consolidated financial
statements of Sprint Spectrum Holding Company, L.P. and subsidiaries, which
appears in the Annual Report on Form 10-K of Tele-Communications, Inc., as
amended by Form 10-K/A (Amendment No. 1), for the year ended December 31, 1996.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Washington, D.C.
December 16, 1997
