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EMPLOYEE STOCK OWNERSHIP PLAN
OF
FRONTIER AIRLINES, INC.
amended and restated, effective January 1, 1997
executed February 5, 2002
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EMPLOYEE STOCK OWNERSHIP PLAN OF FRONTIER AIRLINES, INC. iv
TABLE OF CONTENTS
Page
PREAMBLE ..............................................................................................1
ARTICLE I Definitions...................................................................................2
1.1 "Affiliated Entity"...........................................................................2
1.2 "Alternate Payee".............................................................................2
1.3 "Annual Addition".............................................................................2
1.4 "Break in Service"............................................................................3
1.5 "Code"........................................................................................3
1.6 "Committee"...................................................................................3
1.7 "Company".....................................................................................3
1.8 "Company Contributions".......................................................................3
1.9 "Company ESOP Contributions"..................................................................3
1.10 "Company Stock Bonus Contributions"...........................................................3
1.11 "Compensation"................................................................................3
1.12 "Covered Employee"............................................................................5
1.13 "Determination Date"..........................................................................5
1.14 "Determination Year"..........................................................................5
1.15 "Disability"..................................................................................6
1.16 "Domestic Relations Order"....................................................................6
1.17 "Effective Date"..............................................................................6
1.18 "Employee"....................................................................................6
1.19 "ERISA".......................................................................................6
1.20 "ESOP Suspense Account".......................................................................6
1.21 "Exempt Loan".................................................................................6
1.22 "Fiscal Year".................................................................................7
1.23 "Five-Percent Owner"..........................................................................7
1.24 "Highly Compensated Employee".................................................................7
1.25 "Hour of Service".............................................................................7
1.26 "Key Employee"................................................................................8
1.27 "Leased Employee".............................................................................8
1.28 "Limitation Year".............................................................................9
1.29 "Look-Back Year"..............................................................................9
1.30 "Non-Highly Compensated Employee".............................................................9
1.31 "Non-Key Employee"............................................................................9
1.32 "Normal Retirement Age".......................................................................9
1.33 "Participant".................................................................................9
1.34 "Plan Administrator"..........................................................................9
1.35 "Plan Year"...................................................................................9
1.36 "Qualified Domestic Relations Order ("QDRO")"................................................10
1.37 "Required Beginning Date"....................................................................10
1.38 "Spouse".....................................................................................10
1.39 "Stock"......................................................................................10
1.40 "Taxable Year"...............................................................................10
1.41 "Top-Paid Group".............................................................................10
1.42 "Valuation Date".............................................................................11
1.43 "Year of Service"............................................................................11
ARTICLE II Participation................................................................................12
2.1 Participation................................................................................12
2.2 Break in Covered Employee Status.............................................................12
2.3 Enrollment-Procedure.........................................................................12
2.4 Absences.....................................................................................12
ARTICLE III Contributions................................................................................13
3.1 Company Contributions........................................................................13
3.2 Return of Contributions......................................................................13
3.3 Limitation on Annual Additions...............................................................14
3.4 Military Service.............................................................................16
ARTICLE IV Interests in the Trust Fund..................................................................17
4.1 Participants' Accounts.......................................................................17
4.2 Valuation of Trust Fund......................................................................17
4.3 Allocation of Increase or Decrease in Net Worth..............................................18
4.4 Allocation of Company Contributions..........................................................18
ARTICLE V Amount of Benefits...........................................................................20
5.1 Vesting Schedule.............................................................................20
5.2 Forfeitures..................................................................................20
5.3 Restoration of Forfeitures...................................................................21
5.4 Method of Forfeiture Restoration.............................................................21
5.5 Allocation of Forfeitures....................................................................21
5.6 Credits for Pre-Break Service................................................................22
5.7 Transfers - Portability......................................................................22
5.8 Reemployment - Separate Account..............................................................22
ARTICLE VI Distribution of Benefits.....................................................................23
6.1 Beneficiaries................................................................................23
6.2 Consent......................................................................................23
6.3 Distributable Amount.........................................................................24
6.4 Manner of Distribution.......................................................................24
6.5 Time of Distribution.........................................................................25
6.6 Separate Accounting for Distributable Amounts................................................27
ARTICLE VII Allocation of Responsibilities - Named Fiduciaries...........................................28
7.1 No Joint Fiduciary Responsibilities..........................................................28
7.2 The Company..................................................................................28
7.3 The Trustee..................................................................................28
7.4 Plan Administrator; Appeals Board............................................................28
7.5 Plan Administrator to Construe Plan..........................................................29
7.6 Organization of Appeals Board and Committee..................................................29
7.7 Agent for Process............................................................................29
7.8 Indemnification of Appeals Board and Committee Members.......................................29
ARTICLE VIII Trust Agreement..............................................................................30
8.1 Trust Agreement..............................................................................30
8.2 Expenses of Trust............................................................................30
ARTICLE IX Termination and Amendment....................................................................31
9.1 Termination of Plan or Discontinuance of Contributions.......................................31
9.2 Allocations upon Termination or Discontinuance of Company
Contributions...........................................................................................31
9.3 Procedure Upon Termination of Plan or Discontinuance of
Contributions...........................................................................................31
9.4 Amendment by Frontier........................................................................32
9.5 Amendment to Vesting Schedule................................................................32
ARTICLE X Special Provisions Regarding Company Stock...................................................33
10.1 Time of Distribution.........................................................................33
10.2 Put Option Requirements......................................................................33
10.3 Diversification and Early Distribution.......................................................34
10.4 Registration.................................................................................34
10.5 Investment of Trust Fund.....................................................................34
10.6 Dividends....................................................................................35
10.7 Voting of Stock..............................................................................35
10.8 Stock to Be Subject to Certain Conditions....................................................35
10.9 Valuation of Stock...........................................................................36
ARTICLE XI Company Stock Purchased With Exempt Loans....................................................37
11.1 Prohibition Against Non-Exempt Loans.........................................................37
11.2 Voting Rights................................................................................39
11.3 Allocation to Accounts of Participants.......................................................39
11.4 Non-Terminable Provisions....................................................................40
ARTICLE XII Plan Adoption by Affiliated Entities.........................................................41
12.1 Adoption of Plan.............................................................................41
12.2 Agent of Affiliated Entity...................................................................41
12.3 Disaffiliation and Withdrawal from Plan......................................................41
12.4 Effect of Disaffiliation or Withdrawal.......................................................41
12.5 Distribution Upon Disaffiliation or Withdrawal...............................................41
ARTICLE XIII Top-Heavy Provisions.........................................................................43
13.1 Application of Top-Heavy Provisions..........................................................43
13.2 Determination of Top-Heavy Status............................................................43
13.4 Special Minimum Contribution.................................................................44
13.5 Change in Top-Heavy Status...................................................................44
ARTICLE XIV Miscellaneous................................................................................45
14.1 Right to Dismiss Employees - No Employment Contract..........................................45
14.2 Claims Procedure.............................................................................45
14.2 Claims Procedure.............................................................................46
14.3 Source of Benefits...........................................................................47
14.4 Exclusive Benefit of Employees...............................................................47
14.5 Forms of Notices.............................................................................47
14.6 Notice of Adoption of the Plan...............................................................47
14.7 Plan Merger..................................................................................47
14.8 Inalienability of Benefits - Domestic Relations Orders.......................................47
14.9 Payments Due Minors or Incapacitated Individuals.............................................50
14.10 Uniformity of Application....................................................................50
14.11 Disposition of Unclaimed Payments............................................................51
14.12 Pronouns: Gender and Number.................................................................51
14.13 Applicable Law...............................................................................51
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EMPLOYEE STOCK OWNERSHIP PLAN OF FRONTIER AIRLINES, INC. 65
#789469 v1
EMPLOYEE STOCK OWNERSHIP PLAN OF FRONTIER AIRLINES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
OF
FRONTIER AIRLINES, INC.
PREAMBLE
Frontier Airlines, Inc., a Colorado corporation ("Frontier" or the
"Company"), established an Employee Stock Ownership Plan (the "Plan")
effective April 1, 1994. Frontier also established a trust (the "Trust") with
a trustee (the "Trustee") forming a part of the Plan to be effective at the
same time. The Plan is hereby amended and restated as set forth below,
effective as of January 1, 1997 unless provided otherwise. Any Participant
(as defined herein) who is credited with at least one Hour of Service (as
defined herein) after the effective date of this amendment and restatement
shall be subject to the provisions of this Plan as so amended and restated.
Any Participant in the Plan prior to the effective date of this amendment and
restatement who is not credited with an Hour of Service after the effective
date of this amendment and restatement shall continue to be governed by the
provisions of the Plan in effect prior to the effective date of this amendment
and restatement.
The Plan and Trust are intended to comply with the provisions of the
Code (as defined herein) and ERISA (as defined herein), to qualify as both a
stock bonus plan under Code section 401(a) and an employee stock ownership
plan under Code section 4975(e)(7).
* * * * end of Preamble * * * *
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EMPLOYEE STOCK OWNERSHIP PLAN OF FRONTIER AIRLINES, INC. 2
ARTICLE I
Definitions
The following words and phrases shall have the meaning set forth
below:
1.1 "Affiliated Entity" means:
(a)......for all Sections of the Plan except those listed in
subsection (b), any corporation or other entity, now or hereafter formed, that
is or shall become affiliated with the Company, either directly or indirectly,
through stock ownership or control, and which is (i) included in the
controlled group of corporations (within the meaning of Code section 1563(a)
without regard to Code section 1563(a)(4) and Code section 1563(e)(3)(C)) in
which the Company is also included; (ii) included in the group of entities
(whether or not incorporated) under common control (within the meaning of Code
section 414(c)) in which the Company is also included; (iii) included in an
affiliated service group (within the meaning of Code section 414(m)) in which
the Company is also included; or (iv) required to be aggregated with the
Company by Code section 414(o).
(b)......for purposes of determining Annual Additions under
Section 1.3, limiting Annual Additions to a Participant's account(s) under
Section 3.3, and construing the defined terms as they are used in Sections 1.3
and 3.3 (such as "Compensation" and "Employee"), the term "Affiliated Entity"
means any Affiliated Entity as determined in subsections (a)(iii) and (a)(iv),
and any entity that would be an Affiliated Entity under subsections (a)(i) and
(a)(ii) if the phrase "more than 50%" were substituted for the phrase "at
least 80%" each place it occurs in Code section 1563(a)(1).
1.2 "Alternate Payee" means a Participant's Spouse, former
spouse, child, or other dependent who is recognized by a QDRO as having a
right to receive all, or a portion of, the benefits payable under this Plan
with respect to such Participant.
1.3 "Annual Addition" means the allocations to a Participant's
account(s) for any Limitation Year, as described in detail below.
(a)......Annual Additions shall include: (i) Company
Contributions to this Plan and any other defined contribution plan maintained
by the Company or any Affiliated Entity; (ii) Participant before-tax or
after-tax contributions to any other defined contribution plan maintained by
the Company or any Affiliated Entity; (iii) forfeitures allocated to a
Participant's account(s) in this Plan and any other defined contribution plan
maintained by the Company or any Affiliated Entity (except as provided in
Paragraphs (b)(iii) and (b)(vi) below); (iv) all amounts paid or accrued after
December 31, 1985 in Taxable Years ending after December 31, 1985, to a
welfare benefit fund as defined in Code section 419(e) and allocated to the
separate account (under such welfare benefit fund) of a Key Employee to
provide post-retirement medical benefits; and (v) contributions allocated on
the Participant's behalf to any individual medical account as defined in Code
section 415(l)(2).
(b)......Annual Additions shall not include: (i) Rollover
contributions made pursuant to Code section 402(c), 403(a)(4), 403(b)(8),
405(d)(3), 408(d)(3), or 409(b)(3)(C), to any other defined contribution plan
maintained by the Company or an Affiliated Entity; (ii) repayments of loans
made to a Participant from a qualified plan maintained by the Company or any
Affiliated Entity; (iii) repayments of forfeitures for rehired Participants,
as described in Code sections 411(a)(7)(B) and 411(a)(3)(D); (iv) direct
transfer of employee contributions from one qualified plan to this Plan or any
other qualified defined contribution plan maintained by the Company or any
Affiliated Entity; (v) deductible employee contributions within the meaning of
Code section 72(o)(5); or (vi) repayments of forfeitures of missing
individuals pursuant to Section 14.11.
1.4 "Break in Service" means a Plan Year in which a Participant
fails to receive credit for more than 500 Hours of Service. A five-year Break
in Service means five consecutive one-year Breaks in Service. A leave of
absence in a non-paid status that is approved in writing by the Company or an
Affiliated Entity shall not constitute a Break in Service for eligibility or
vesting purposes. A leave of absence in a non-paid status that is approved in
writing by the Company shall not constitute a Break in Service for
participation purposes. A Participant shall be considered to have terminated
employment with the Company other than by reason of retirement, disability or
death, upon any separation from service with the Company, regardless of
whether the Participant receives a severance allowance by way of salary or
benefit continuation for any period or in any other form; provided, however,
that no such termination of employment shall be deemed to have occurred as a
result of any of the following:
(a)......Separation to enter the service of an Affiliated
Entity;
(b)......Leave of absence pursuant to Section 2.4;
(c)......Temporary disability, causing an absence, followed
by resumption of active work within 180 days following the first day of such
absence; or
(d)......Absence from employment for service in the armed
forces or other government service provided that, and only so long as,
reemployment rights are protected by law.
1.5 "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and rulings in effect thereunder from
time to time.
1.6 "Committee" means the administrative committee provided for
in Section 7.4, if one is appointed by the Company.
1.7 "Company" means Frontier Airlines, Inc., a Colorado
corporation, any successor thereto, and any Affiliated Entity that adopts the
Plan pursuant to Article XII.
1.8 "Company Contributions" means all contributions to the Plan
made by the Company pursuant to Section 3.1 for the Plan Year.
1.9 "Company ESOP Contributions" means all contributions to the
Plan made by the Company to pay interest and/or principal on an Exempt Loan
pursuant to subsection 3.1(a) and Article XI for the Plan Year.
1.10 "Company Stock Bonus Contributions" means all regular stock
bonus contributions to the Plan made by the Company pursuant to
subsection 3.1(a) for the Plan Year.
1.11 "Compensation" means:
(a)......Code Section 415 Compensation.
.........(i) Limitation Years Commencing Prior to
January 1, 1998. For purposes of determining the limitation on Annual
Additions under section 3.3 and the minimum contribution under section 13.4
when the Plan is top-heavy, Compensation shall mean those amounts reported as
"wages, tips, other compensation" on Form W-2 by the Company or an Affiliated
Entity. For purposes of section 3.3, Compensation shall be measured over a
Limitation Year. For purposes of section 13.4, Compensation shall be measured
over entire Plan Year. Compensation shall include amounts paid to the
Employee but shall not include any additional amounts accrued by the Employee
(except for de minimis amounts earned but not paid because of the timing of
pay periods, as provided in the regulations under Code section 415).
.........(ii) Limitation Years Commencing on and After
January 1, 1998 and Prior to January 1, 2001. For purposes of determining the
limitation on Annual Additions under section 3.3 and the minimum contribution
under 13.4 when the Plan is top-heavy, Compensation shall mean those amounts
reported as "wages, tips, other compensation" on Form W-2 by the Company or an
Affiliated Entity. Compensation shall include (A) any elective deferral (as
defined in Code section 402(g)(3)) and (B) any amount that is contributed or
deferred by the Company at the election of the Employee and that is not
includible in the gross income of the Employee by reason of Code section 125
or 457. For purposes of section 3.3, Compensation shall be measured over a
Limitation Year. For purposes of section 13.4, Compensation shall be measured
over the entire Plan Year. Compensation shall include amounts paid to the
Employee but shall not include any additional amounts accrued by the Employee
(except for de minimis amounts earned but not paid because of the timing of
pay periods, as provided in the regulations under Code section 415).
.........(iii) Limitation Years Commencing on and After
January 1, 2001. For purposes of determining the limitation on Annual
Additions under section 3.3 and the minimum contribution under section 13.4
when the Plan is top-heavy, Compensation shall mean those amounts reported as
"wages, tips, other compensation" on Form W-2 by the Company or an Affiliated
Entity. Compensation shall include (A) any elective deferral (as defined in
Code section 402(g)(3)), (B) any amount that is contributed or deferred by the
Company at the election of the Employee and that is not includible in the
gross income of the Employee by reason of Code section 125 or 457 and
(C) Compensation paid or made available during the Limitation Year shall
include elective amounts that are not includible in the gross income of the
Employee by reason of Code section 132(f)(4). For purposes of section 3.3,
Compensation shall be measured over a Limitation Year. For purposes of
section 13.4, Compensation shall be measured over the entire Plan Year.
Compensation shall include amounts paid to the Employee but shall not include
any additional amounts accrued by the Employee (except for de minimis amounts
earned but not paid because of the timing of pay periods, as provided in the
regulations under Code section 415)
(b)......Code Section 414(q) Compensation. For purposes of
identifying Highly Compensated Employees and Key Employees under sections 1.24
and 1.26, Compensation shall include the items described in subsection (a) and
shall also include elective contributions that are not includable in the
Employee's income pursuant to Code sections 125, 402(e)(3), 402(h), or
403(b). For purposes of identifying Key Employees, Compensation shall be
measured over a Plan Year; for purposes of identifying Highly Compensated
Employees, Compensation shall be measured over a Determination Year or
Look-Back Year, whichever is applicable. Compensation shall include amounts
paid to the Employee, but shall not include any additional amounts accrued by
the Employee (except for de minimis amounts earned but not paid because of the
timing of pay periods, as provided in the regulations under Code section 415).
(c)......Benefit Compensation. For purposes of determining
and allocating Company Contributions under subsection 3.1(a) and Section 4.4,
Compensation shall mean the amounts reported as "Wages, tips, other
compensation" on Form W-2 by the Company, plus elective contributions that are
not includable in the Employee's income pursuant to Code sections 125, 401(k),
402(e)(3), 402(h), 403(b), 414(h)(2), or 457(b) and amounts that are not
includible in the gross income of the Employee by reason of Code
section 132(f)(4), but excluding bonuses, expense reimbursements and other
expense allowances, per diem expense payments, fringe benefits, moving
expenses, deferred compensation, the value of any free or reduced rate
transportation, and welfare benefits. Compensation shall be measured over
that portion of a Plan Year after the Employee has satisfied the eligibility
requirements of subsection 2.1(a) and while the Employee is a Covered Employee.
(d)......Limit on Compensation. In addition to other
applicable limitations set forth in the Plan, and notwithstanding any other
provision of the Plan to the contrary, for Plan Years beginning on or after
January 1, 1994, the annual Compensation for each employee taken into account
under the Plan shall not exceed the OBRA '93 annual compensation limit. The
OBRA '93 annual compensation limit is $150,000, as adjusted by the
Commissioner of the Internal Revenue Service for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding twelve months, over which Compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than twelve months, the OBRA '93 annual compensation
limit will be multiplied by a fraction, the numerator of which is the number
of months in the determination period, and the denominator of which is twelve.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of the Code
shall mean the OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is subject to
the OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the
first day of the first Plan Year beginning on or after January 1, 1994, the
OBRA '93 annual compensation limit is $150,000.
1.12 "Covered Employee" means any Employee of the Company except
for:
(a)......A leased employee including but not limited to a
Leased Employee;
(b)......A non-resident alien who either (i) receives no
earned income (within the meaning of Code section 911(d)(2)) from the Company
or any Affiliated Entity that constitutes income from sources within the
United States (within the meaning of Code section 861(a)(3)) or (ii) receives
earned income from the Company or an Affiliated Entity that constitutes income
from sources within the United States, but such income is exempt from United
States income tax by an income tax treaty or convention; and
(c)......An Employee included in a unit of Employees covered
by a collective bargaining agreement that does not provide for such Employee's
participation in the Plan, provided that retirement benefits were the subject
of good faith bargaining during the negotiation of such collective bargaining
agreement.
(d)......A consultant to the Company (whether an Employee or
self-employed).
1.13 "Determination Date" means, with respect to each Plan Year,
the last day of the preceding Plan Year; provided however, that, in the case
of the first Plan Year of the Plan, the Determination Date shall be the last
day of such Plan Year.
1.14 "Determination Year" means the Plan Year.
1.15 "Disability" means a physical or mental condition of an
Employee of the Company or an Affiliated Entity that, in the judgment of the
Plan Administrator based upon medical reports and other evidence satisfactory
to the Plan Administrator, presumably permanently prevents him from
satisfactorily performing his usual duties for the Company or the Affiliated
Entity or the duties of such other position or job which the Company or any
Affiliated Entity makes available to him and for which such Employee is
qualified by reason of his training, education or experience.
1.16 "Domestic Relations Order" means any judgment, decree or
order (including approval of a property settlement agreement) issued by a
court of competent jurisdiction that relates to the provision of child
support, alimony payments, or marital property rights to a Spouse, former
spouse, child, or other dependent of the Participant and is made pursuant to a
state domestic relations law (including a community property law).
1.17 "Effective Date" means the effective date of this Plan,
April 1, 1994.
1.18 "Employee"
(i)......Plan Years Commencing Prior to January 1, 2001.
"Employee" means each individual who performs services for the Company or an
Affiliated Entity and whose wages are subject to withholding by the Company or
an Affiliated Entity. For the sole purpose of applying the nondiscrimination
requirements of Code section 414(n)(3), Employee shall include Leased
Employees; however if Leased Employees constitute twenty percent (20%) or less
of the Company's or Affiliated Entity's Non-Highly Compensated Employees and
if the leasing organization maintains a plan described in subsection 1.27(i)
below, the term "Employee" shall not included any Leased Employees described
in Section 1.27 below.
(ii).....Plan Years Commencing on and After January 1,
2001. "Employee" means any individual who provides services to the Company or
an Affiliated Entity as a common law employee and whose remuneration is
subject to the withholding of federal income tax pursuant to Code
section 3401. Employee shall not include any individual (a) who provides
services to the Company or an Affiliated Entity under an agreement, contract,
or any other arrangement pursuant to which the individual is initially
classified as an independent contractor or (b) whose remuneration for services
has not been treated initially as subject to the withholding of federal income
tax pursuant to Code section 3401 even if the individual is subsequently
reclassified as a common law employee as a result of a final decree of a court
of competent jurisdiction or the settlement of an administrative or judicial
proceeding. For the sole purpose of applying the nondiscrimination
requirements of Code section 414(n)(3), Employee shall include Leased
Employees; however if Leased Employees constitute twenty percent (20%) or less
of the Company's or Affiliated Entity's Non-Highly Compensated Employees and
if the leasing organization maintains a plan described in subsection 1.27(i)
below, the term "Employee" shall not include any Leased Employees described in
Section 1.27 below.
1.19 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations and rulings in effect thereunder from
time to time.
1.20 "ESOP Suspense Account" means that portion of the Trust Fund
containing Stock that secures the repayment of an Exempt Loan.
1.21 "Exempt Loan" means a loan that meets the requirements of
Treasury Regulation section 54.4975-7 and Article XI, and that is used to
purchase Stock.
1.22 "Fiscal Year" means the tax year of the Company which is the
year beginning April 1 and ending March 31 of the following year.
1.23 "Five-Percent Owner" means:
(a)......With respect to a corporation, any individual who
owns (either directly or indirectly according to the rules of Code
section 318) more than 5% of the value of the outstanding stock of the
corporation or stock possessing more than 5% of the total combined voting
power of all stock of the corporation.
(b)......With respect to a non-corporate entity, any
individual who owns (either directly or indirectly according to rules similar
to those of Code section 318) more than 5% of the capital or profits interest
in the entity.
An individual shall be a Five-Percent Owner for a particular year if such
individual is a Five-Percent Owner at any time during such year.
1.24 "Highly Compensated Employee" means any Employee who
(a)......during the Look-Back Year received Compensation
from the Company and Affiliated Entities in excess of $80,000 (as adjusted by
the Secretary of the Treasury) and was a member of the Top Paid Group; or
(b)......was a Five-Percent Owner during the Look-Back Year
or the Determination Year.
1.25 "Hour of Service" means:
(a)......Each hour for which an Employee is paid or entitled
to payment by the Company or an Affiliated Entity for the performance of
duties for the Company or an Affiliated Entity during the applicable
computation period. Hours of Service under this subsection shall be credited
to the Employee for the computation period or periods in which the duties are
performed, regardless of when the Employee is paid for such duties.
(b)......Each hour for which an Employee is paid or entitled
to payment by the Company or an Affiliated Entity on account of a period of
time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness,
incapacity (including Disability), layoff, jury duty, military duty or leave
of absence. Hours of Service under this subsection shall be credited to the
Employee for the computation period or periods in which the period during
which no duties are performed occurs, beginning with the first unit of time to
which the payment relates. Notwithstanding the preceding sentence:
.........(i) No more than 501 Hours of Service shall
be credited under this subsection to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period);
.........(ii) An hour for which an Employee is directly
or indirectly paid, or entitled to payment, on account of a period during
which no duties are performed shall not be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment compensation, or
disability insurance laws; and
.........(iii) Hours of Service shall not be credited
for a payment that solely reimburses an Employee for medical or medically
related expenses incurred by the Employee. For purposes of this subsection a
payment shall be deemed to be made by or due from the Company or an Affiliated
Entity regardless of whether such payment is made by or due from the Company
or Affiliated Entity directly, or indirectly through, among others, a Trust
Fund, or insurer, to which the Company or Affiliated Entity contributes or
pays premiums and regardless of whether contributions made or due to the Trust
Fund, insurer or other entity are for the benefit of particular Employees or
are on behalf of a group of Employees in the aggregate.
(c)......Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Company or an
Affiliated Entity. Hours of Service under this subsection shall be credited
to the Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made. The same Hours of Service shall not be credited
both under this subsection and either subsection (a) or subsection (b).
(d)......In the case of each Employee who is absent from
work for any period by reason of the pregnancy of the Employee, by reason of
the birth of a child of the Employee, by reason of the placement of a child
with the Employee in connection with the adoption of such child by such
Employee, by reason of the placement of a child with the Employee in
connection with the Employee's serving as a foster parent for such child, or
for purposes of caring for such child for a period beginning immediately
following such birth or placement, the Plan shall treat as Hours of Service,
solely for purposes of determining whether a one-year Break in Service has
occurred for purposes of vesting and participation (but not for purposes of
benefit accrual), the following hours: (i) the Hours of Service that
otherwise would normally have been credited to such Employee but for such
absence, or (ii) in any case in which the Plan is unable to determine the
hours described in paragraph (d)(i), eight Hours of Service per day of such
absence, provided, however, that the total number of hours treated as Hours of
Service under this subsection shall not exceed 501 Hours of Service. The
hours described in this subsection shall be treated as Hours of Service only
in the year in which the absence from work begins, if an Employee would be
prevented from incurring a one-year Break in Service in such year solely
because the period of absence is treated as Hours of Service as provided in
this subsection, or in any other case, in the immediately following year. For
purposes of this subsection, the term "year" means the period used in
computing a Break in Service. Notwithstanding the foregoing, the Committee
may determine that no credit will be given pursuant to this subsection unless
the Employee furnishes to the Committee such timely information as the
Committee may reasonably require to establish that the absence from work is
for reasons referred to in the first sentence of this subsection and the
number of days for which there was such an absence.
(e)......For purposes of calculating the Hours of Service to
be credited to periods during which no duties are performed and determining
the computation periods to which hours shall be credited, the rules set forth
in subsections (b) and (c) of Department of Labor Regulation
section 2530.200b-2 are hereby incorporated by reference as though such
provisions were fully set forth at this point.
1.26 "Key Employee" means an individual described in Code
section 416(i) and the regulations promulgated thereunder.
1.27 "Leased Employee" means an individual (other than a common
law employee of the Company or an Affiliated Entity) who, pursuant to an
agreement between the Company or an Affiliated Entity and a leasing
organization, has performed services for the Company or an Affiliated Entity
on a substantially full-time basis for a period of at least one year, and the
services are performed under the primary direction and control of the Company
or Affiliated Entity. However, if the Internal Revenue Service has determined
in a ruling issued before August 20, 1996 pursuant to Code
section 414(n)(2)(C) that a particular relationship did not involve a Leased
Employee under the requirement that an individual's service be of a type
historically performed by common law employees in the business field of the
Company or an Affiliated Entity, the change in the law will not affect that
prior determination. The Company or an Affiliated Entity shall treat
contributions or benefits provided to the Leased Employee by the leasing
organization as contributions or benefits provided by the Company or an
Affiliated Entity to the extent attributable to services the Leased Employees
performed for the Company or Affiliated Entity. Notwithstanding the preceding
provisions of this paragraph, the Plan shall not treat an individual as a
Leased Employee if:
(i)......the Leased Employee is covered by a money purchase
pension plan providing:
(1) a nonintegrated employer contribution rate
of at least 10% of Compensation (including
amounts that are excludable from the
Leased Employee's gross income under Code
sections 125, 402(e)(3), 402(h), or
403(b), and
(2) immediate participation, and
(3) full and immediate vesting, and
(ii).....Leased Employees do not constitute more than twenty
percent (20%) of the Company's or Affiliated Entity's Non-Highly Compensated
Employees.
1.28 "Limitation Year" means the Plan Year for purposes of Code
section 415.
1.29 "Look-Back Year" means the 12 months immediately preceding
the Determination Year.
1.30 "Non-Highly Compensated Employee" means an Employee of the
Company or an Affiliated Entity who is neither a Highly Compensated Employee
nor a Family Member.
1.31 "Non-Key Employee" means any Employee who is not a Key
Employee.
1.32 "Normal Retirement Age" means age 60.
1.33 "Participant" means any individual with an account balance
under the Plan except beneficiaries and Alternate Payees. The term
"Participant" shall also include any Covered Employee who has satisfied the
eligibility requirements of Section 2.1, but who does not yet have an account
balance.
1.34 "Plan Administrator" shall mean the Company, unless the
Company elects, pursuant to Section 7.4, to appoint a separate Committee to
act as plan administrator, in which case the Committee shall be the Plan
Administrator.
1.35 "Plan Year" means the 12-month period on which the records
of the Plan are kept. The first Plan Year of the Plan is the period from
April 1, 1994 through March 31, 1995. The second Plan Year of the Plan shall
be the short period from April 1, 1995 through December 31, 1995. The Plan
Year of the Plan thereafter shall be the calendar year. The short Plan Year
in 1995 shall be treated as a full Plan Year for all purposes of the Plan, but
for purposes of such calculations as the Limitation Year and for purposes of
computing any restrictions or limitations with respect to the Plan Year, all
such restrictions and limitations shall be prorated to reflect the short Plan
Year.
1.36 "Qualified Domestic Relations Order ("QDRO")" means a
Domestic Relations Order that creates or recognizes the existence of an
Alternate Payee's right to, or assigns to an Alternate Payee the right to,
receive all or a portion of the benefits payable with respect to a Participant
under the Plan and with respect to which the requirements of
subsection 14.8(c) are met.
1.37 "Required Beginning Date" means April 1 of the calendar year
following the later of the calendar year in which the Participant attains age
70 1/2or the calendar year in which the Participant terminates employment;
provided however, that the Required Beginning Date for a Participant who is a
Five-Percent Owner is April 1 of the calendar year following the calendar year
in which the Participant attains age 70 1/2.
1.38 "Spouse" means the individual to whom a Participant is
lawfully married according to the law of the state of the Participant's
domicile on any of the following dates, as applicable: the date of the
Participant's death, the date any election is filed pursuant to Article VI, or
the date the Participant's benefits commence. A former Spouse of a
Participant shall have no interest in this Plan, except as provided in a QDRO
or in a beneficiary designation form executed by the Participant after the
Spouse had become a former Spouse.
1.39 "Stock" means the $.01 par value voting common stock of
Frontier, which is an employer security described in Code sections 409(l) and
4975(e)(8) that has a combination of voting power and dividend rights equal to
or in excess of (a) that class of Frontier's common stock having the greatest
voting power and (b) that class of Frontier's common stock having the greatest
dividend rights.
1.40 "Taxable Year" means the accounting period of the Company
for federal income tax purposes.
1.41 "Top-Paid Group" means the top 20% of Employees ranked on
the basis of Compensation received during a Determination Year or Look-Back
Year. For purposes of determining the number of Employees in the Top-Paid
Group, the following Employees may be excluded:
(a)......any Employee who has not completed six months of
service before the end of the applicable year;
(b)......any Employee who normally works less than
17-1/2 hours per week, as defined in the regulations under Code section 414(q);
(c)......any Employee who normally works less than
six months during the applicable year, as defined in the regulations under Code
section 414(q);
(d)......any Employee who has not attained age 21 before the
end of the applicable year; and
(e)......any Employee who is a non-resident alien and who
receives no earned income (within the meaning of Code section 911(d)(2)) from
the Company or any Affiliated Entity that constitutes income from sources
within the United States (within the meaning of Code section 861(a)(3)) during
the applicable year.
Notwithstanding the foregoing, Frontier may elect, on a consistent and uniform
basis, to modify the permissible exclusions set forth above by substituting
any shorter period of service or lower age. Frontier may elect to include all
Employees in determining the Top-Paid Group.
1.42 "Valuation Date" means the last day of each Plan Year and
any other dates as specified in Section 4.2 as of which the assets of the
Trust Fund are valued at fair market value and as of which the increase or
decrease in the net worth of the Trust Fund is allocated among the
Participants' accounts.
1.43 "Year of Service" means a 12-consecutive-month period as
described below.
(a)......For purposes of vesting under Article V, an
Employee shall be credited with a Year of Service on the day he is credited
with at least 1,000 Hours of Service during a Plan Year. For rehired
Employees, Years of Service shall be calculated according to the rules in
Section 5.6. Service prior to the Effective Date shall be included. Years of
Service shall accrue while an Employee is on an approved leave of absence as
provided in Section 2.4; however, unless the Employee is absent because of
military service or jury duty, the Employee shall not be credited with more
than six months of service (or such longer period of service as satisfies the
safe-harbor rule in the regulations under Code section 401(a)(4)) towards his
Years of Service while he is absent, unless required by applicable federal
law. The short Plan Year from April 1, 1995 through December 31, 1995 shall
constitute a Year of Service, but the number of Hours of Service required
during that Plan Year shall be prorated.
(b)......A transfer of employment from one participating
Affiliated Entity to another shall not be an interruption of services for
purposes of this Plan. Periods of Service with an entity that is part of a
controlled or affiliated group plan (within the meaning of Code section 414)
of which the Company is a member, while such entity is a part of such
controlled or affiliated group with the Company, shall be treated as Years of
Service for all purposes of the Plan.
* * * * end of Article I * * * *
ARTICLE II
Participation
2.1 Participation.
Each Covered Employee shall become a Participant on the first day on
which the Employee first performs an Hour of Service with the Company or an
Affiliated Entity on initial employment or latest reemployment. Any Employee
whose employment status is changed so as to become a Covered Employee shall
become a Participant as of the day of such reclassification. In any event,
service while in an ineligible category shall be credited for all purposes of
the Plan.
2.2 Break in Covered Employee Status.
(a) No Termination of Employment. A Covered Employee who has
satisfied the requirements of Section 2.1 and whose employment status has
changed so as to be eliminated from the class of Covered Employees shall be
immediately eliminated from participation in the Plan. A Covered Employee who
has satisfied the requirements of Section 2.1 before ceasing to be a Covered
Employee, who ceases to be a Covered Employee without terminating employment
and who later becomes a Covered Employee again shall immediately be eligible
to participate in the Plan. In either event, service while in an ineligible
category shall be credited for all purposes of the Plan.
(b) Termination of Employment. In the case of any Participant
who has terminated employment, such Participant shall be eligible to
participate in the Plan on his date of reemployment if he is a Covered
Employee.
2.3 Enrollment-Procedure.
In order to participate in the Plan, each Covered Employee who has
satisfied the eligibility requirements of Sections 2.1 or 2.2 shall fill out
and sign an enrollment form supplied by the Plan Administrator (and such other
forms as the Plan Administrator may require) and return such form(s) to the
Plan Administrator. The form(s) shall include, among other information, the
date of birth of the Covered Employee, and the name, address, and date of
birth of each beneficiary of the Covered Employee.
2.4 Absences.
A leave of absence in a non-paid status approved in writing by the
Company or an Affiliated Entity shall not constitute a termination of
employment for eligibility for vesting purposes. A leave of absence in a
non-paid status approved in writing by the Company shall not constitute a
termination of employment for participation purposes.
* * * * end of Article II * * * *
ARTICLE III
Contributions
3.1 Company Contributions.
(a) Company Contributions. For each Plan Year, the Company
shall contribute to the Trust Fund such amount of Company Contributions, if
any, as may be authorized by the Company's Board of Directors. Such Company
Contributions shall be either Company ESOP Contributions made to pay interest
and/or principal on an Exempt Loan pursuant to Article XI or Company Stock
Bonus Contributions made as regular stock bonus contributions. The Company
may elect to treat any portion of forfeitures occurring during the Plan Year
as Company Contributions, pursuant to Section 5.5. Company Contributions
shall be allocated among eligible Participants in accordance with Section 4.4.
(b) Form of Contributions. Company Contributions may be made in
cash or in Stock, or partly in each, as determined by the Company's Board of
Directors.
(c) Miscellaneous Contributions.
(i)......The Company may make additional contributions to
the Plan to restore amounts forfeited from the Company Contributions accounts
of certain rehired Participants, pursuant to Section 5.4. This additional
contribution shall be required only when the forfeitures occurring during the
Plan Year are insufficient to restore such forfeited amounts, as described in
Section 5.5. This contribution shall be allocated to the Participant's
Company Contributions account.
(ii).....The Company may make additional contributions to
the Plan to satisfy the minimum contribution required by Section 13.4. The
Company may elect to use any portion of forfeitures occurring during the Plan
Year for this purpose, pursuant to Section 5.5. This contribution shall be
allocated to Company Contributions accounts.
(iii)....The Company may make additional contributions to
the Plan to restore the forfeited benefit of any missing individual, pursuant
to Section 14.11. This additional contribution shall be required only when
the forfeitures occurring during the Plan Year are insufficient to restore
such forfeited amounts, as described in Section 5.3.
(d) Contributions Contingent on Deductibility. Company
Contributions for a Plan Year (excluding forfeitures) shall not exceed the
amount allowable as a deduction for the Taxable Year ending with or within the
Plan Year pursuant to Code section 404. Company Contributions shall be paid
to the Trustee no later than the due date (including any extensions) for
filing the Company's federal income tax return for such year. Company
Contributions may be made without regard to current or accumulated earnings
and profits.
3.2 Return of Contributions.
Upon request of the Company, the Trustee shall return:
(a) To the Company, any Company Contribution made under a
mistake of fact. The amount that shall be returned shall not exceed the
excess of the amount contributed (reduced to reflect any decrease in the net
worth of the Trust Fund attributable thereto) over the amount that would have
been contributed without the mistake of fact. Appropriate reductions shall be
made in the accounts of Participants to reflect the return of any
contributions previously credited to such accounts. However, no contribution
shall be returned to the extent that such reduction would reduce the account
of a Participant to an amount less than the balance that would have been
credited to his account had the contribution not been made. Any contribution
made under a mistake of fact shall be returned within one year after the date
of payment.
(b) To the Company, any Company Contribution that is not
deductible under Code section 404. All contributions under the Plan are
expressly conditioned upon their deductibility for federal income tax
purposes. The amount that shall be returned shall be the excess of the amount
contributed (reduced to reflect any decrease in the net worth of the Trust
Fund attributable thereto) over the amount that would have been contributed if
there had not been a mistake in determining the deduction. Appropriate
reductions shall be made in the accounts of Participants to reflect the return
of any contributions previously credited to such accounts. However, no
contribution shall be returned to the extent that such reduction would reduce
the account(s) of a Participant to an amount less than the balance that would
have been credited to his account(s) had the contribution not been made. Any
contribution conditioned on its deductibility shall be returned within one
year after it is disallowed as a deduction.
3.3 Limitation on Annual Additions.
(a) General Limit. The Annual Additions to a Participant's
account(s) in this Plan and any other defined contribution plan maintained by
the Company or an Affiliated Entity for any Limitation Year shall not exceed
in the aggregate the lesser of (i) 25% of such Employee's Compensation or
(ii) the applicable Dollar Limitation, as modified by subsection (d). For
purposes of this Section, "Dollar Limitation" means $30,000, as adjusted by
the Secretary of the Treasury.
(b) ESOP Adjustment to General Limit. In any Plan Year in which
an Exempt Loan is outstanding and in which no more than one-third of the
Company ESOP Contribution is allocated to Highly Compensated Employees, the
term "Annual Additions" shall not include the following amounts that are
allocated to Participants' Company Contributions Accounts: (i) forfeitures of
shares of Stock that were acquired with the proceeds of an Exempt Loan as
described in Code section 404(a)(9)(A), or (ii) Company Contributions that are
deductible under Code section 404(a)(9)(B).
(c) Reduction in Annual Additions. If, as a result of a
reasonable error in estimating Compensation, or as a result of the allocation
of forfeitures, or as a result of other facts and circumstances as provided in
the regulations under Code section 415, the Annual Additions to a
Participant's account(s) would, but for this subsection, exceed the foregoing
limits, the Annual Additions shall be reduced, to the extent necessary. If
the Participant in question is a Participant both in this Plan and in any
other defined contribution plan maintained by the Company, the Participant's
Company Contributions shall first be reduced in such other plan and then, to
the extent necessary, shall be reduced in this Plan. The amount of any
reduction of Company Contributions shall be placed in a suspense account in
the Trust Fund and used to reduce Company Contributions to the Plan. The
following rules shall apply to such suspense account: (i) no further Company
Contributions may be made if the allocation thereof would be precluded by Code
section 415; (ii) any increase or decrease in the net value of the Trust Fund
attributable to the suspense account shall not be allocated to the suspense
account, but shall be allocated to the remainder of the Trust Fund; and
(iii) all amounts held in the suspense account shall be allocated as of each
succeeding allocation date on which forfeitures may be allocated pursuant to
Section 5.5 (and may be allocated more frequently if the Plan Administrator so
directs), until the suspense account is exhausted.
(d) Limits for Participation in Defined Benefit Plan. If a
Participant participates or ever participated in a defined benefit plan
maintained by the Company or an Affiliated Entity, the sum of the
Participant's "defined contribution plan fraction" and the "defined benefit
plan fraction," as defined below, shall not exceed 1.0 for any Limitation
Year. For purposes of this subsection, voluntary contributions to a qualified
defined benefit plan are treated as a separate defined contribution plan; all
defined contribution plans maintained by the Company or any Affiliated Entity
are treated as one defined contribution plan; and all defined benefit plans
currently maintained or ever maintained by the Company or any Affiliated
Entity are treated as one defined benefit plan, whether or not such plans have
been terminated. If the sum of the Participant's defined contribution plan
fraction and defined benefit plan fraction exceeds 1.0, the Participant's
benefit under first the defined benefit plan and then the Participant's
account(s) in this Plan shall be reduced, pursuant to subsection (b), to the
extent necessary such that the sum of the fractions does not exceed 1.0.
(i)......Defined contribution plan fraction. A
Participant's "defined contribution plan fraction" for any Limitation Year is
a fraction, the numerator of which is the sum of the Annual Additions to the
Participant's account(s) for the Limitation Year, 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:
.........(A) 125% of the Dollar Limitation in effect
for such Limitation Year (without regard to the special Dollar Limitations
under Code section 415(c)(6)), or
.........(B) 35% of the Employee's Compensation for
each Limitation Year.
If the Plan is "top-heavy," as described in Article XIII, the special
adjustments set forth in Article XIII may be required to compute this defined
contribution plan fraction.
(ii).....Defined benefit plan fraction. A Participant's
"defined benefit plan fraction" for any Limitation Year is a fraction, the
numerator of which is the sum of the Participant's projected annual benefit
(determined as of the last day of the Limitation Year) under all defined
benefit plans currently maintained or ever maintained by the Company or any
Affiliated Entity, and the denominator of which is the lesser of 125% of the
Dollar Limitation for such Limitation Year, or 140% of the Participant's
highest three-year average Compensation.
(iii)....Top Heavy Adjustments.
.........(A) In any Limitation Year that contains any
portion of a Plan Year for which the top-heavy ratio, as computed in
accordance with Section 13.2, exceeds 60% but does not exceed 90%, either
(I) the denominators of the defined benefit plan fraction and the defined
contribution plan fraction shall be computed using 100% of the Dollar
Limitation instead of 125%, or (II) the minimum contribution required in
subsection 13.4(a) shall be increased to 7-1/2% of the Non-Key Employee's
Compensation.
.........(B) In any Limitation Year that contains any
portion of a Plan Year for which the top-heavy ratio, as computed in
accordance with Section 13.2, exceeds 90%, the denominators of the defined
benefit plan fraction and the defined contribution plan fraction shall be
computed using 100% of the Dollar Limitation instead of 125%.
(iv).....Repeal of Combined Plan Limit. For Limitation
Years commencing on and after December 31, 1999, the provisions of
Section 3.3(d) shall not apply. The provisions of Code section 415 shall be
applied to this Plan and any other defined contribution plan of the Company or
an Affiliated Entity in which a Participant participates in such Limitation
Years without regard to any defined benefit plans in which the Participant
accrues a benefit for such Limitation Year or for any prior Limitation Year.
3.4 Military Service.
Notwithstanding any provision of this plan to the contrary,
contributions, benefits, and service credit with respect to qualified military
service will be provided in accordance with Code section 414(u) for
individuals who initiate reemployment on and after December 12, 1994.
* * * * end of Article III * * * *
ARTICLE IV
Interests in the Trust Fund
4.1 Participants' Accounts.
The Plan Administrator shall establish and maintain separate accounts
in the name of each Participant, but the maintenance of such accounts shall
not require any segregation of assets of the Trust Fund. Each Participant's
share of the Company ESOP Contributions and Company Stock Bonus Contributions
under subsection 3.1(a) as well as forfeitures, together with any increase or
decrease in the net worth of the Trust Fund attributable to such Company
Contributions and forfeitures, shall be credited to his Company Contributions
Accounts. Shares of Stock contributed to or purchased by the Trust Fund shall
be allocated directly to the appropriate Participant accounts.
4.2 Valuation of Trust Fund.
(a) General. The Trustee shall value the assets of the Trust
Fund at least annually as of the last day of the Plan Year, and as of any
other dates determined by the Plan Administrator, at their current fair market
value and determine the net worth of the Trust Fund. The Trustee shall deduct
any expenses of the Trust Fund occurring since the preceding Valuation Date
(if the expenses are not paid by the Company), pursuant to Section 8.2, and
then determine the increase or decrease in the net worth of the Trust Fund
that has occurred since the preceding Valuation Date. The Trustee shall
separately determine the share of the increase or decrease attributable to any
amount separately accounted for under subsections (c) and (d). In addition,
the Plan Administrator may direct the Trustee to have a special valuation of
the assets of the Trust Fund when the Plan Administrator determines, in its
sole discretion, that such valuation is necessary or appropriate or in the
event of unusual market fluctuations of such assets. Valuations and special
valuations shall not include any Company Contributions for the current Plan
Year, or any unallocated forfeitures.
(b) Appraisal of Stock. Stock that is not readily tradeable on
an established securities market shall be valued by an independent appraiser,
pursuant to Section 10.9. The Plan Administrator may order a special
valuation of Stock as of the end of any calendar month if the Plan
Administrator believes that its fair market value has changed substantially
since the most recent Valuation Date. Any decision made under this subsection
in good faith shall be final and conclusive.
(c) Mandatory Separate Accounting. The Trustee shall separately
account for amounts subject to a Domestic Relations Order, to provide a more
equitable allocation of any increase or decrease in the net worth of the Trust
Fund.
(d) Permissible Separate Accounting. The Trustee may separately
account for the following amounts to provide a more equitable allocation of
any increase or decrease in the net worth of the Trust Fund:
(i)......the distributable account of a Participant,
pursuant to Section 6.6, including any amount distributable to an Alternate
Payee or to a beneficiary of a deceased Participant; and
(ii).....Any other amounts for which separate accounting
will provide a more equitable allocation of the increase or decrease in the
net worth of the Trust Fund.
4.3 Allocation of Increase or Decrease in Net Worth.
(a) Separate Accounting. As of each Valuation Date, the Plan
Administrator shall allocate the increase or decrease in the net worth of the
Trust Fund that has occurred since the preceding Valuation Date between the
non-separately accounted for portion of the Trust Fund and the amounts
separately accounted for that are identified in Section 4.2.
(b) Non-Stock Amounts. As of each Valuation Date, the Plan
Administrator shall allocate the increase or decrease attributable to the
non-separately accounted for portion of the Trust Fund among the non-Stock
investments in the Company Contributions Accounts in the ratio that the dollar
value of each such account bore to the aggregate dollar value of all such
accounts on the preceding Valuation Date after all allocations and credits
made as of such date had been completed.
(c) Stock.
(i)......Dividends in Stock. As of each Valuation Date, the
Plan Administrator shall allocate among the Company Contributions Accounts any
dividends on the Stock paid in the form of Stock. The allocation shall be
proportional to the number of shares in such accounts on the record date for
the payment of the dividend.
(ii).....ESOP Suspense Account. Dividends (other than
dividends in the form of Stock) received on Stock held in the ESOP Suspense
Account shall be used to make payments on any outstanding Exempt Loans. The
shares of Stock thereby released from the ESOP Suspense Account under
Sections 11.1(f) and 11.3 shall be allocated among the Participant's Company
Contributions Accounts as specified in Section 4.4.
(iii)....Company Contributions Accounts. If an Exempt Loan
is outstanding, then dividends (other than dividends in the form of Stock)
received on Stock previously allocated to Company Contributions Accounts shall
be used to repay the Exempt Loan(s). The Stock thereby released from the ESOP
Suspense Account under Sections 11.1(f) and 11.4 shall be allocated among
Company Contributions Accounts in proportion to the number of shares of Stock
in each such account on the date of the dividend. The number of shares of
Stock thereby allocated shall have a fair market value of at least the amount
of the dividend. This allocation of Stock released from the ESOP Suspense
Account shall take priority over the other allocations of such Stock provided
for by the Plan; only the shares of Stock remaining after this allocation
shall be allocated pursuant to Section 4.4. If no Exempt Loan is outstanding,
then dividends (other than dividends in the form of Stock) received on Stock
previously allocated to Company Contributions Accounts shall be allocated on
the next Valuation Date to such accounts, in proportion to the number of
shares in such accounts on the date of the dividend.
(d) Other Amounts. After the allocation in subsections (b) and
(c) are completed, the Trustee shall allocate any amounts separately accounted
for (including the increase or decrease in the net worth of the Trust Fund
attributable to such amounts) to the appropriate account(s) if such separate
accounting is no longer necessary.
4.4 Allocation of Company Contributions.
Allocations under this Section 4.4 shall be made after the
allocations under Section 4.3. If an Exempt Loan is outstanding, the Company
ESOP Contribution shall be used to repay the Exempt Loan. The number of
shares of Stock thereby released under Sections 11.1(f) and 11.4, as well as
any forfeitures occurring during the Plan Year that are not used to restore
the accounts of rehired Participants or missing individuals, shall be
allocated as of the last day of each Plan Year. If no Exempt Loan is
outstanding, the Company ESOP Contribution and forfeitures occurring during
the Plan Year shall be allocated as of the last day of each Plan Year. These
amounts shall be allocated among the Company Contributions accounts of
Participants who were employed on the last day of the Plan Year or who died,
retired or terminated employment because of a Disability during such Year.
For purposes of this Section 4.4, shares of Stock released from an encumbrance
pursuant to subsection 11.1(f), or the net proceeds resulting from the sale of
such Stock or the receipt of liquidating distributions with respect to such
Stock shall be allocated as a Company Contribution for the Plan Year to which
the payment of the amount under Article XI relates. Each Participant eligible
to share in the Company Contribution shall receive an allocation in the
proportion that each such Participant's Compensation for such Plan Year bears
to the aggregate Compensation of all such Participants with respect to such
Plan Year.
* * * * end of Article IV * * * *
ARTICLE V
Amount of Benefits
5.1 Vesting Schedule.
(a) A Participant shall have a fully vested and nonforfeitable
interest in all his account(s) upon his Normal Retirement Age if he is an
Employee on such date, his death while an Employee or while on an approved
leave of absence from the Company or an Affiliated Entity, or his termination
of employment with the Company or an Affiliated Entity because of a
Disability. In all other instances, a Participant shall become vested in his
Company Contributions account in accordance with the following schedule.
Years of Service Vested Percentage
1 20
2 40
3 60
4 80
5 or more 100
Notwithstanding the foregoing, all Participants who shared in the
allocation of the Company Contribution for the Plan Year ended March 31, 1995
shall be 100% vested in such Company Contribution.
(b) Notwithstanding the foregoing, in the event of the merger,
consolidation or liquidation of the Company, or the acquisition of its assets
or Stock pursuant to a non-taxable reorganization, if the Company is not the
surviving entity as a result of any such transaction, all Participants in the
Plan shall, upon the occurrence of any such event, become 100% vested in their
Company Contribution account.
5.2 Forfeitures.
(a) Notwithstanding the vesting rules of Section 5.1, Annual
Additions to a Participant's accounts and any increase or decrease in the net
worth of the Trust Fund attributable to such Annual Additions may be reduced
to satisfy the limits described in Section 3.3. Any such reduction shall be
allocated as specified in Section 3.3.
(b) Notwithstanding the vesting rules of Section 5.1, a missing
individual's vested accounts may be forfeited as of the last day of any Plan
Year, as provided in Section 14.11. Any such forfeiture shall be allocated as
specified in Section 5.5.
(c) A Participant's non-vested interest in his Company
Contributions account shall be forfeited as soon as administratively
practicable after the first to occur of the following:
(i)......the date on which the Participant receives a
distribution of his entire vested interest in his Company Contributions
account; or
(ii).....the date on which the Participant terminates
employment, if the Participant terminates employment with the Company and all
Affiliated Entities while he is 0% vested (in such case the Participant shall
be deemed to have received a distribution of his entire vested interest in
such account on the day he terminated employment); or
(iii)....the last day of the Plan Year in which the
Participant incurs a five-year Break in Service.
5.3 Restoration of Forfeitures.
The forfeiture of a missing individual's account(s), as described in
Section 14.11, shall be restored to such individual if he makes a claim for
such amount. Forfeitures of a Participant's non-vested interest in his Company
Contributions account shall be restored under the following conditions if the
Participant is rehired.
(a) If a Participant is rehired before he incurs a five-year
Break in Service, and the Participant has received a distribution of his
entire vested interest in his Company Contributions account (with the result
that the Participant forfeited his non-vested interest in such account), then
the Participant may repay to the Plan the entire distribution, without
interest, within five years of his date of reemployment. The required
repayment shall consist of the number of shares of Stock previously
distributed to the Participant, together with any cash distributed; if the
Participant no longer owns the Stock that was distributed to him, he may
contribute cash equal to the current fair market value of the number of shares
previously distributed and the Trustee shall use such cash to purchase shares
of Stock. If timely repayment is made, the exact amount of the forfeiture
shall be restored to the Participant's account. If timely repayment is not
made, no forfeiture shall be restored.
(b) If a Participant was 0% vested at the time he terminated
employment with the Company and Affiliated Entities, and he is rehired before
he incurs a five-year Break in Service, then the Company shall restore the
exact amount forfeited from his Company Contributions account.
(c) If a Participant is rehired after he incurs a five-year
Break in Service, then no amount forfeited from his Company Contributions
account shall be restored to such account.
All the rights, benefits, and features available to the Participant when the
forfeiture occurred shall be available with respect to the restored forfeiture.
5.4 Method of Forfeiture Restoration.
Forfeitures that are restored pursuant to Section 5.3 shall be
accomplished by an allocation of the forfeitures occurring during the Plan
Year, pursuant to Section 5.5, or if such forfeitures are insufficient, by a
special Company Contribution, pursuant to subsection 3.1(c)(i).
5.5 Allocation of Forfeitures.
As of the last day of each Plan Year, the forfeitures attributable to
Company Contributions that occurred during the Fiscal Year shall be allocated
as follows. If more than one employer has adopted this Plan pursuant to
Article XII, forfeitures arising in accounts of Employees of each
participating employer shall be aggregated and allocated as follows.
Forfeitures shall be first used to restore forfeitures pursuant to
Section 5.4. Any remaining amount of forfeitures shall be allocated as though
it were an additional Company Contribution to the Plan.
5.6 Credits for Pre-Break Service.
(a) Company Contributions Made After Reemployment.
(i)......A Participant who is vested in any portion of his
Company Contributions account, who incurs a Break in Service, and who is
thereafter reemployed, shall receive credit for vesting purposes for Years of
Service prior to his Break in Service upon completing a Year of Service after
such Break in Service.
(ii).....A Participant who is not vested in any portion of
his Company Contributions account, who incurs a Break in Service, and who is
thereafter reemployed, shall receive credit for vesting purposes for Periods
of Service prior to his Break in Service upon completing a Year of Service
after such Break in Service provided the number of consecutive one-year Breaks
in Service is less than the greater of (A) five or (B) the aggregate number of
Years of Service before such break.
(b) Company Contributions Made Prior to Termination. Years of
Service after a Participant has incurred a five-year Break in Service shall be
disregarded in determining the vested percentage in a Participant's Company
Contributions account at the time of the break.
5.7 Transfers - Portability.
If any other employer adopts this or a similar employee stock
ownership plan and enters into a reciprocal agreement with the Company that
provides that (a) the transfer of a Participant from such employer to the
Company (or vice versa) shall not be deemed a termination of employment for
purposes of the plans, and (b) service with either or both employers shall be
credited for purposes of vesting under both plans, then the transferred
Participant's account shall be unaffected by the transfer, except, if deemed
advisable by the Plan Administrator, it may be transferred to the trustee of
the other plan.
5.8 Reemployment - Separate Account.
If a Participant returns to employment with the Company or an
Affiliated Entity before receiving the entire vested portion of his Company
Contributions account, the vested portion that has not been distributed shall
be held in a separate Company Contributions account for such Participant. The
Participant shall be fully vested in such account and no further Company
Contributions shall be allocated to that account. In all other respects, such
account shall be treated as a Company Contributions account. A new Company
Contributions account shall be established to which all appropriate Company
Contributions made after the date of reemployment shall be allocated. If a
Participant becomes fully vested in two or more Company Contributions
accounts, all such accounts shall be merged into one account.
* * * * end of Article V * * * *
ARTICLE VI
Distribution of Benefits
6.1 Beneficiaries.
(a) General. Each Participant (or, if the Participant has died,
his beneficiary) shall file with the Committee a designation of the
beneficiaries and contingent beneficiaries to whom the distributable amount
(determined in section 6.3) shall be paid in the event of his death. A
beneficiary designation may be changed by the Participant or beneficiary at
any time and without the consent of any previously designated beneficiary;
however, if the Participant is married, his Spouse shall be the beneficiary
designated to receive the benefits payable under this Article VI unless his
Spouse has consented to the designation of a different beneficiary. To be
effective, the Spouse's consent must be in writing, witnessed by a notary
public, and filed with the Committee. Any such election shall be effective
only as to the Spouse who signed the election.
(b) Divorce. If a Participant has designated his Spouse as his
beneficiary, and the Participant and this Spouse subsequently divorce, then
the beneficiary designation shall be void and of no effect on the day such
divorce is final. The Participant may designate a former Spouse as a
beneficiary in a beneficiary designation signed after the divorce is final;
provided however, that if the Participant remarries, the new Spouse shall be
the sole designated beneficiary unless the new Spouse consents to the
designation of a new beneficiary.
(c) Default: No Effective Beneficiary Designation. In the
absence of an effective beneficiary designation as to any portion of the
distributable amount of the deceased Participant's account(s), such amount
shall be paid to the Participant's surviving Spouse; or if none, to his estate.
6.2 Consent.
(a) $5,000 or Less. If a Participant's account(s) are
immediately distributable, under section 6.5, and if the nonforfeitable
portion of the Participant's account(s) has an aggregate value of $5,000 or
less (calculated in accordance with applicable Treasury regulations), and if
distributions pursuant to section 6.5 have not begun, then the Committee shall
distribute the distributable amount (determined in section 6.3) of the
Participant's account(s) without the Participant's consent. Any such
distribution shall be in the form of a lump sum. Any such distribution shall
be made to the Participant, or, if deceased, to his beneficiary determined in
section 6.1. Effective for Plan Years beginning before August 6, 1997, the
dollar figure in the first sentence shall be $3,500.
(b) More Than $5,000. If a Participant's account(s) are
immediately distributable under section 6.5, and if the nonforfeitable portion
of a Participant's account(s) has an aggregate value greater than $5,000
(calculated in accordance with applicable Treasury regulations), then, except
as provided in subsection 6.5(c) or 6.5(d), any distribution of such
account(s) shall only be made with the consent of the Participant or, if the
Participant is deceased, the beneficiary determined under section 6.1. To be
effective, the consent to the form of distribution and the time of
distribution must be in writing or in an electronic or telephonic form that
satisfies the requirements of Treas. Reg.ss. 1.411(a)-11, signed by the
Participant (or beneficiary), and filed with the Committee not more than 90,
and not less than 30, days prior to the date the distribution is to occur;
provided however, that the distribution may be made, or commence, fewer than
30 days after the consent is given if (i) the Committee clearly informs the
Participant (or beneficiary) that the Participant (or beneficiary) has a right
to a period of at least 30 days to consider whether to elect a distribution
and the form of distribution and (ii) the Participant (or beneficiary)
affirmatively elects a distribution. A consent once given shall be
irrevocable once distribution has begun. Effective for Plan Years beginning
before August 6, 1997, the dollar figure in the first sentence shall be $3,500.
(c) Transition Rules. This subsection provides transitional
rules with regard to the cashout limits for distributions prior to October 17,
2000. The following provisions shall apply for purposes of sections 6.2(a)
and (b) and shall supersede the provisions of those sections to the extent
applicable.
(i)......If payment in the form of a qualified joint and
survivor annuity is required with regard to a Participant, the rule in this
section is substituted for the rule otherwise applicable in sections 6.2(a)
and (b). If the value of a Participant's vested account balance derived from
employer and employee contributions exceeds (or at the time of any prior
distribution (A) in Plan Years beginning before August 6, 1997, exceeded
$3,500 or (B) in Plan Years beginning after August 5, 1997, exceeded) $5,000,
and the account balance is immediately distributable, the Participant and the
Participant's Spouse (or where either the Participant or the Spouse has died,
the survivor) must consent to any distribution of such account balance.
(ii).....If payment in the form of a qualified joint and
survivor annuity is not required with respect to a Participant, the rule in
this section is substituted for the rules otherwise applicable in
sections 6.2(a) and (b). If the value of a Participant's vested account
balance derived from employer and employee contributions:
(A) for Plan Years beginning before August 6,
1997, exceeds $3,500 (or exceeded $3,500 at the time of any
prior distribution);
(B) for Plan Years beginning after August 5,
1997, and for a distribution made prior to March 22, 1999,
exceeds $5,000 (or exceeded $5,000 at the time of any prior
distribution), and
(C) for Plan Years beginning after August 5,
1997 and for a distribution made after March 21, 1999 that
either exceeds $5,000 or is a remaining payment under a
selected optional form of payment that exceeded $5,000 at
the time the selected form of payment began, and the account
balance is immediately distributable, the Participant must
consent to any distribution of such account balance.
6.3 Distributable Amount.
The distributable amount of a Participant's account(s) is the vested
portion of his account(s) (as determined pursuant to Article V) as of the
Valuation Date coincident with or next preceding the date distribution is made
to the Participant or beneficiary, reduced by any amount that is payable to an
Alternate Payee pursuant to Section 14.8. Notwithstanding the foregoing,
distributions in the form of Stock shall be valued at the fair market value of
the Stock on the date that the Trustee directs the transfer agent for the
Stock to transfer the shares of Stock into the name of the Participant or
beneficiary.
6.4 Manner of Distribution.
All distributions shall be made in shares of Stock, provided,
however, that the Plan Administrator may, in its sole discretion, cause the
Trustee to convert a fractional share to cash and distribute the cash
attributable thereto. The distributable amount shall be paid in a lump sum
distribution (other than an annuity).
6.5 Time of Distribution.
All distributions except immediate cash-outs under Section 6.2 shall
be subject to the following rules. Immediate cash-outs shall be subject to
the direct transfer rules discussed in subsection (f).
(a) Earliest Date of Distribution. Unless an earlier
distribution is permitted by subsection (b) or required by subsection (c), the
earliest date that a Participant may elect to receive a distribution is as
follows.
(i)......Disability, Retirement, Death. If an Employee
terminates employment with the Company or Affiliated Entity because of
Disability, death or after attaining Normal Retirement Age, he (or his
beneficiary) may elect to receive a distribution as soon as practicable after
the allocations are completed for the Plan Year in which the Participant
terminated employment.
(ii).....Termination of Employment. If a Participant
terminates employment other than by dying, retiring, or incurring a
Disability, he may elect to receive a distribution as soon as practicable
after the allocations are completed for the Plan Year in which the Participant
terminated employment. In all events, a Participant may elect to receive a
distribution at any time during or after the sixth plan year after his
termination of employment. If distribution from the Trust Fund is to be made
after the Plan Year in which a Participant terminates employment, such
distribution shall include the full amount of the Participant's share of the
Company Contributions for such Plan Year, if he is eligible for such
allocation under Sections 3.1 and 4.4. If distribution from the Trust Fund is
made before the allocation of a Participant's share of the Company
Contributions for the Plan Year in which he terminates employment and if he is
otherwise eligible for such allocation under Sections 3.1 and 4.4, then the
full amount of the Participant's share of the Company Contributions for such
Plan Year, if any, shall be distributed to the Participant, if living and, if
not, to his beneficiary, in a lump sum not later than 60 days after the date
on which such amount is allocated.
(iii)....During Employment. A Participant may not obtain a
distribution while employed by the Company or an Affiliated Entity, except as
provided in subsection (c) (relating to the required minimum distribution at a
Participant's Required Beginning Date).
(iv).....Code Section 409(o). Notwithstanding
subsections (i), (ii) and (iii), a Participant may elect to receive a
distribution, after separating from service, no later than the times required
by Code section 409(o).
(b) Alternate Earliest Date of Distribution. Notwithstanding
Subsection (a), unless a Participant elects otherwise, his distribution shall
commence no later than 60 days after the close of the latest of: (i) the Plan
Year in which the Participant attains Normal Retirement Age; (ii) the Plan
Year in which occurs the tenth anniversary of the year in which the
Participant commenced participation in the Plan; and (iii) the Plan Year in
which the Participant terminates employment with the Company and Affiliated
Entities.
(c) Latest Date of Distribution. Distribution must be made in a
lump sum no later than the Required Beginning Date.
With respect to distributions under the Plan in calendar
years beginning and after January 1, 2001, the Plan will apply the minimum
distribution requirements of section 401(a)(9) of the Internal Revenue Code in
accordance with the regulations under section 401(a)(9) that were proposed in
January 2001, notwithstanding any provision of the Plan to the contrary. This
paragraph shall continue in effect until the end of the last calendar year
beginning with the effective date of the final regulations under
section 401(a)(9) or such other date specified in guidance published by the
Internal Revenue Service.
(d) Distribution Upon Participant's Death. Distribution shall
be made in a lump sum to the Participant's beneficiary by the end of the
calendar year in which falls the fifth anniversary of the Participant's death.
(e) Alternate Payee. The earliest date that an Alternate Payee
may receive a distribution shall be determined pursuant to Section 14.8.
(f) Direct Rollover Option.
(i)......A Participant, an Alternate Payee who is the spouse
or former spouse of a Participant, or a surviving spouse of a deceased
Participant (collectively, the "distributee") may direct the Trustee to pay
all or any portion of his "eligible rollover distribution" to an "eligible
retirement plan" in a "direct rollover." Within a reasonable period of time
before an eligible rollover distribution, the Plan Administrator shall inform
the distributee of this direct rollover option, the appropriate withholding
rules, other rollover options, the options regarding income taxation, and any
other information required by Code section 402(f). If a distribution is one
to which sections 401(a)(11) and 417 of the Internal Revenue Code do not
apply, such distribution may commence less than 30 days after the notice
required under section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that (i) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and (ii) the
Participant, after receiving the notice, affirmatively elects a distribution.
For purposes of the foregoing sentence, a distributee is treated as a
Participant.
(ii).....An "eligible rollover distribution" is any
distribution or in-service withdrawal other than (i) distributions required
under Code section 401(a)(9), (ii) distributions of amounts that have already
been subject to federal income tax (such as defaulted loans),
(iii) installment payments in a series of substantially equal payments made at
least annually and (A) made over a specified period of ten or more years,
(B) made for the life or life expectancy of the distributee, or (C) made for
the joint life or life expectancy of the distributee and his designated
beneficiary, or (iv) any other actual or deemed distribution specified in the
regulations issued under Code section 402(c).
(iii)....For a Participant or an Alternate Payee who is the
spouse or former spouse of a former or current Participant, an "eligible
retirement plan" is an individual retirement account or annuity described in
Code section 408(a) or 408(b), an annuity plan described in Code
section 403(a), or the qualified trust of a defined contribution plan that
accepts eligible rollover distributions. For a surviving spouse of a deceased
Participant, an "eligible retirement plan" is an individual retirement account
or annuity.
(iv).....A "direct rollover" is a payment by the Trustee to
the eligible retirement plan specified by the distributee.
(v)......An "Alternate Payee" is a former or current
Participant's spouse, former spouse, child, or other dependent who is
recognized by a qualified domestic relations order (within the meaning of Code
section 414(p)) as having a right to receive all, or a portion of, the
benefits payable under this Plan with respect to the Participant or former
Participant.
6.6 Separate Accounting for Distributable Amounts.
When a Participant's account(s) have become distributable, in whole
or in part, the Plan Administrator may direct the Trustee to separately
account for and separately invest the account(s), or the distributable portion
thereof. All distributions shall be paid solely from the separate account.
Amounts thus separately accounted for shall not share in the increase or
decrease in the net worth of the remainder of the Trust Fund.
* * * * end of Article VI * * * *
ARTICLE VII
Allocation of Responsibilities - Named Fiduciaries
7.1 No Joint Fiduciary Responsibilities.
The Company, the Trustee, the Plan Administrator and the Appeals
Board (as established pursuant to Section 7.4) shall be the named fiduciaries
under the Plan and Trust Agreement and shall be the only named fiduciaries
thereunder. The fiduciaries shall have only the responsibilities specifically
allocated to them herein or in the Trust Agreement. Such allocations are
intended to be mutually exclusive and there shall be no sharing of fiduciary
responsibilities. Whenever one named fiduciary is required by the Plan or
Trust Agreement to follow the directions of another named fiduciary, the two
named fiduciaries shall not be deemed to have been assigned a shared
responsibility, but the responsibility of the named fiduciary giving the
directions shall be deemed his sole responsibility, and the responsibility of
the named fiduciary receiving those directions shall be to follow them insofar
as such instructions are on their face proper under applicable law.
7.2 The Company.
The Company shall be responsible for: (a) making Company
Contributions; (b) certifying to the Trustee the names and specimen signatures
of the members of the Committee appointed to serve as the Plan Administrator
pursuant to Section 7.4, if a Committee is appointed, and the Appeals Board,
acting from time to time; (c) keeping accurate books and records with respect
to its Employees and the appropriate components of each Employee's
Compensation and furnishing such data to the Plan Administrator; (d) selecting
agents and fiduciaries to operate and administer the Plan and Trust;
(e) appointing an investment manager if it determines that one should be
appointed; and (f) reviewing periodically the performance of such agents,
managers, and fiduciaries.
7.3 The Trustee.
The Trustee shall be responsible for: (a) in the absence of
investment direction from the Plan Administrator, the investment of the Trust
Fund to the extent and in the manner provided in the Trust Agreement; (b) the
custody and preservation of Trust assets delivered to it; (c) the purchase of
shares of Stock in accordance with the written directions of the Plan
Administrator; and (d) the payment of such amounts from the Trust Fund as the
Plan Administrator shall direct.
7.4 Plan Administrator; Appeals Board.
The Company shall serve as the Plan Administrator, unless the Board
of Directors of the Company or the Compensation Committee of the Board of
Directors of the Company appoints a separate Committee to serve as the Plan
Administrator, in which case the Committee shall have all of the duties and
obligations established by this Plan with respect to the Plan Administrator.
The Board of Directors of the Company or the Compensation Committee of the
Board of Directors of the Company shall appoint a separate Appeals Board,
consisting of three or more individuals who may be, but need not be,
Participants, officers, directors, or Employees of the Company. The members
of the Appeals Board (and the Committee, if one is created) shall hold office
at the pleasure of the Board of Directors and shall serve without
compensation. The Plan Administrator shall be the "plan administrator" as
defined in section 3(16)(A) of ERISA. It shall be responsible for
establishing and implementing a funding policy consistent with the objectives
of the Plan and with the requirements of ERISA. This responsibility shall
include establishing (and revising as necessary) short-term and long-term
goals and requirements pertaining to the financial condition of the Plan,
communicating such goals and requirements to the persons responsible for the
various aspects of Plan operations and monitoring periodically the
implementation of such goals and requirements. The Appeals Board shall be
responsible for reviewing and deciding all claims appeals in accordance with
the provisions of Section 14.2 and shall have full discretion and power to
determine all claims appeals.
7.5 Plan Administrator to Construe Plan.
(a) The Plan Administrator shall administer the Plan and shall
have all power and authority necessary for that purpose, including, but not by
way of limitation, the discretion and power to interpret the Plan, to
determine the eligibility, status, and rights of all individuals under the
Plan, and in general to decide any dispute and all questions arising in
connection with the Plan. The Plan Administrator shall also be responsible
for (a) directing the Trustee concerning the investment of assets in the Trust
Fund, other than Stock; (b) directing the Trustee with respect to the purchase
of Stock and with respect to entering into Exempt Loans under Article XI;
(c) directing the Trustee with respect to voting shares of Stock to the extent
that Participants do not so direct such voting as provided for in the Plan and
the Trust Agreement; and (d) valuing the Stock in accordance with Article X.
The Plan Administrator shall direct the Trustee concerning all distributions
from the Trust Fund, in accordance with the provisions of the Plan, and shall
have such other powers in the administration of the Trust Fund as may be
conferred upon it by the Trust Agreement. The Plan Administrator shall
maintain all Plan records except records of the Trust Fund. The Plan
Administrator may appoint agents to whom it may delegate such powers as it
deems appropriate, except that any dispute shall be determined by the Plan
Administrator.
(b) The Plan Administrator may adjust the account(s) of any
Participant, delay distributions from the Plan, and take other appropriate
actions in order to correct errors, rectify omissions, and protect all assets
of the Plan from market fluctuations in such manner as the Plan Administrator
believes will best result in the equitable and nondiscriminatory
administration of the Plan.
7.6 Organization of Appeals Board and Committee.
The Appeals Board and the Committee shall each elect a chairman and
shall adopt such rules as it deems desirable for the conduct of its affairs
and for the administration of the Plan. The Appeals Board may appoint agents
to whom it may delegate such powers as it deems appropriate, except that any
dispute shall be determined by the Appeals Board. The Appeals Board may make
its determination with or without meetings, and may authorize one or more of
its members or agents to sign instructions, notices and determinations on its
behalf. The action of a majority of the Appeals Board shall constitute the
action of the Appeals Board.
7.7 Agent for Process.
The Plan Administrator shall be agent of the Plan for service of all
process.
7.8 Indemnification of Appeals Board and Committee Members.
The Company shall indemnify each member of the Appeals Board (and
each member of the Committee, if one is appointed to act as Plan
Administrator) and Employees who perform services for the Plan Administrator
and the Appeals Board against any and all claims, loss, damages, expense and
liability arising from any action or failure to act, except when the same is
judicially determined to be due to the gross negligence or willful misconduct
of such member or Employee.
* * * * end of Article VII * * * *
ARTICLE VIII
Trust Agreement
8.1 Trust Agreement.
The Company has entered into a Trust Agreement to provide for the
holding, investment and administration of the funds of the Plan. The Trust
Agreement shall be part of the Plan, and the rights and duties of any
individual under the Plan shall be subject to all terms and provisions of the
Trust Agreement.
8.2 Expenses of Trust.
All taxes upon or in respect of the Trust shall be paid by the
Trustee out of the Trust assets. All reasonable expenses of administering the
Trust shall be paid by the Trustee out of the Trust assets to the extent they
are not paid by the Company. No fiduciary shall receive any compensation for
services rendered to the Plan if the fiduciary is being compensated on a full
time basis by the Company.
* * * * end of Article VIII * * * *
ARTICLE IX
Termination and Amendment
9.1 Termination of Plan or Discontinuance of Contributions.
Frontier expects to continue the Plan indefinitely, but the
continuance of the Plan and the payment of contributions are not assumed as
contractual obligations. Frontier may terminate the Plan or discontinue
contributions at any time. Upon the termination (or partial termination) of
the Plan or the complete discontinuance of contributions, the interests of all
affected Participants in the Trust Fund shall become fully vested,
notwithstanding any other provision hereof.
9.2 Allocations upon Termination or Discontinuance of Company
Contributions.
Upon the termination or partial termination of the Plan or upon the
complete discontinuance of contributions, the Plan Administrator shall
promptly notify the Trustee of such termination or discontinuance. The
Trustee shall then determine, in the manner prescribed in Section 4.2, the net
worth of the Trust Fund as of the close of the last business day of the
calendar month in which such notice was received by the Trustee. The Trustee
shall advise the Plan Administrator of any increase or decrease in such net
worth that has occurred since the preceding Valuation Date. The Plan
Administrator shall thereupon allocate, in the manner described in
Section 4.3, among the remaining Plan accounts, any such increase or decrease
in the net worth of the Trust Fund. Immediately after the allocation of such
increase or decrease in net worth, the Plan Administrator shall allocate among
the remaining Plan accounts, in the manner described in Articles III, IV, and
V, any Company Contributions or forfeitures occurring since the preceding
Valuation Date.
9.3 Procedure Upon Termination of Plan or Discontinuance of Contributions.
If the Plan has been terminated or partially terminated, or if a
complete discontinuance of contributions to the Plan has occurred, then after
the allocations required under Section 9.2 have been completed, the Trustee
shall distribute or transfer the account(s) of affected Employees as follows.
(a) If the affected Employee's account(s) have an aggregate
value of $5,000 or less (calculated in accordance with applicable Treasury
regulations), then the Trustee shall distribute the Employee's account(s) to
the Employee in a lump sum (other than an annuity).
(b) If the affected Employee's account(s) have an aggregate
value of more than $5,000 (calculated in accordance with applicable Treasury
regulations), and if the Company or an Affiliated Entity does not maintain
another defined contribution plan (other than an employee stock ownership plan
within the meaning of Code section 4975(e)(7)), then the Trustee shall
distribute the Employee's account(s) to the Employee in a lump sum (other than
an annuity).
(c) If the affected Employee's account(s) have an aggregate
value of more than $5,000 (calculated in accordance with applicable Treasury
regulations), and if the Company or an Affiliated Entity maintains another
defined contribution plan (other than an employee stock ownership plan within
the meaning of Code section 4975(e)(7)), then the Trustee shall transfer the
Employee's account(s) to the other plan unless the Employee consents to an
immediate distribution of such account(s) in a lump sum (other than an
annuity).
(d) For Plan Years beginning before August 6, 1997, the $5,000
figure in subsections (a), (b), and (c) shall be $3,500.
Subject to the provisions of Article X, any distribution or transfer made
pursuant to this Section may be in cash, in kind, or partly in cash and partly
in kind. After all such distributions or transfers have been made, the
Trustee shall be discharged from all obligation under the Trust; no
Participant or beneficiary who has received any such distribution, or for whom
any such transfer has been made, shall have any further right or claim under
the Plan or Trust.
9.4 Amendment by Frontier.
Frontier may at any time amend the Plan in any respect, subject to
Section 9.5, but no amendment shall be made that would have the effect of
vesting in the Company any part of the Trust Fund or of diverting any part of
the Trust Fund to purposes other than for the exclusive benefit of
Participants, Alternate Payees, or their beneficiaries, and the rights of any
Participant, Alternate Payee, or beneficiary with respect to contributions
previously made shall not be adversely affected by any amendment; no amendment
shall reduce or restrict, either directly or indirectly, the accrued benefit
(within the meaning of Code section 411(d)(6)) provided to any Participant
before the amendment. The Plan shall be amended by a writing approved by the
Company's Board of Directors and signed on behalf of the Company by an officer
of the Company duly authorized by the Board of Directors. The Plan may also
be amended in writing by an officer of the Company to whom the Company's Board
of Directors delegates the authority to amend the Plan. Notwithstanding the
foregoing, if the Company is subject to Section 16(b) of the Securities
Exchange Act of 1934, no amendment may be made unless in compliance with the
Rules thereunder.
9.5 Amendment to Vesting Schedule.
If the vesting schedule is amended, each Participant with at least
three Years of Service may elect, within the period specified in the following
sentence after the adoption of the amendment, to have his nonforfeitable
percentage computed under the Plan without regard to such amendment. The
period during which the election may be made shall commence with the date the
amendment is adopted and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of
the amendment by the Company or the Plan Administrator.
Furthermore, the amendment shall not decrease the non-forfeitable percentage,
measured as of the later of the date the amendment is adopted or effective, of
any Participant's accounts.
* * * * end of Article IX * * * *
ARTICLE X
Special Provisions Regarding Company Stock
10.1 Time of Distribution.
Notwithstanding any other provision under Section 6.5 of the Plan, a
Participant may elect to have the portion of his account attributable to Stock
distributed (i) not later than one year after the close of the Plan Year in
which such Participant separates from service by reason of the attainment of
Normal Retirement Age under the Plan, death, or Disability; or (ii) not later
than one year after the close of the fifth Plan Year following the Plan Year
in which the Participant separated from service, if the Participant separated
from service for any reason other than those enumerated in paragraph (i)
above, and is not reemployed by the Company at the end of the fifth Plan Year
following the Plan Year of such separation from service. If the Participant
separates from service for a reason other than those described in
paragraph (i) above, and is employed by the Company as of the last day of the
fifth Plan Year following the Plan Year of such separation from service,
distribution to the Participant, prior to any subsequent separation from
service, shall be in accordance with terms of the Plan other than this
Section 10.1. For purposes of this Section 10.1, Stock shall not include any
Stock acquired with the proceeds of a loan described in Code section 404(a)(9)
until the close of the Plan Year in which such loan is repaid in full.
10.2 Put Option Requirements.
(a) Notwithstanding any other provisions of the Plan, in the
case of a distribution of Stock when it is not readily tradeable on an
established securities market, the Participant receiving such distribution
shall have the right to exercise a put option that complies with the
requirements of Code section 409(h). Such put option shall provide that if
the Participant exercises the put option, the Company, or the Plan if the Plan
so elects, shall repurchase all or any portion of the distributed Stock. The
put option may be exercised during the six-month period beginning on the day
after the Participant receives the Stock. If the Participant does not
exercise the option to sell such Stock, the option shall lapse temporarily.
(b) After the end of the Plan Year in which the option described
in subsection (a) occurred, and following the valuation of the Stock as of
such year end, the Plan Administrator shall notify each Participant who was
eligible to, but did not, exercise the option described in subsection (a) of
the updated valuation and the opportunity to once again exercise the put
option during the three-month period beginning on the date the notice is
received. If the Participant again fails to exercise such option, it shall
lapse permanently.
(c) To exercise his put option, the Participant must deliver to
the Company a written notice of his election to sell such Stock, together with
the certificates representing the shares to be sold duly endorsed for transfer
with applicable transfer tax stamps attached thereto. Upon such delivery, the
Participant shall have sold, and the Company shall have purchased, the number
of shares specified in such notice.
(d) The purchase price per share shall be the fair market value
per share as of the Valuation Date under Section 10.9 immediately preceding
the date of sale.
(e) Stock purchased pursuant to a put option shall be paid for
as follows:
(i)......If the distribution of the Stock constituted a
"Total Distribution" (as defined in paragraph (iii)), payment for the Stock
shall be made in five substantially equal annual payments. The first payment
shall be made not later than 30 days after the Participant exercises the put
option. The remaining payments shall bear a reasonable rate of interest and
shall be adequately secured.
(ii).....If the distribution of Stock does not constitute a
Total Distribution, payment for the Stock shall be made in one cash payment no
later than 30 days after the Participant exercises the put option.
(iii)....A "Total Distribution" is a distribution to a
Participant or his beneficiary, or a series of such distributions within one
taxable year of the recipient, of the Participant's entire balance in this
Plan.
(f) At the option of the Trustee, pursuant to written directions
from the Plan Administrator, the Plan may assume the rights and obligations of
the Company under the above subsections as to all or any part of the shares of
Stock tendered to the Company.
(g) If the Participant has contributed the Stock to an
individual retirement account or annuity ("IRA"), the IRA trustee shall have
the option to sell described in this Section 10.2.
10.3 Diversification and Early Distribution.
Each Participant who has both attained age 55 and completed at least
ten years of participation in the Plan (a "Qualified Participant") may elect
to receive a special, early distribution of Stock. This special election may
be made only within 90 days after the end of one of the first six Plan Years
beginning with the Plan Year the Participant became a Qualified Participant.
After the first Plan Year the Qualified Participant may elect to receive a
distribution of up to 25% of those shares in his Company Contributions
Account. After the second through fifth Plan Years, the Qualified Participant
may elect to receive an additional number of shares, provided that the total
number of shares distributed pursuant to these special elections does not
exceed 25% of the sum of the number of shares in his account plus the number
of shares previously distributed. After the sixth Plan Year, the Qualified
Participant may elect to receive an additional number of shares, provided that
the total number of shares distributed pursuant to these special elections
does not exceed 50% of the sum of the number of such shares in his account
plus the number of shares previously distributed. The Stock received in these
distributions is subject to the put options described in Section 10.2. No
distribution may be made under this section without the consent of the
Participant and his Spouse (if the Participant has a Spouse). Distributions
pursuant to this section shall be made as soon as practicable, and in no event
later than 180 days after the close of the Plan Year.
10.4 Registration.
Notwithstanding any other provision hereof, no Stock shall be
distributed to any person unless such distribution is at that time effectively
registered or exempt from registration under the Securities Act of 1933, as
amended. If the distribution of Stock to a Participant, Alternate Payee, or
beneficiary is prohibited by the foregoing limitation, the Company shall take
such steps as are necessary to permit the distribution of such Participant's
interest in the Trust Fund.
10.5 Investment of Trust Fund.
The Plan is designed to invest primarily in Stock. Up to 100% of the
assets of the Trust may be invested in shares of Stock. All cash received by
the Trustee shall, at the written direction of the Company, be used to pay
interest and principal on an Exempt Loan or to purchase Stock at the fair
market value of the Stock, as determined under Section 10.9. At the written
direction of the Company, the Trustee shall temporarily invest Trust assets,
pending the purchase of Stock, as provided in the Trust Agreement. In the
absence of written direction from the Company, the Trustee may temporarily
invest Trust assets, pending the purchase of Stock, in savings accounts,
certificates of deposit and high-grade short-term securities, or such funds
may be held in cash or cash equivalents.
10.6 Dividends.
The Company may from time to time declare and pay dividends, either
in cash or in shares of Stock, with respect to shares of Stock in the Trust
Fund. Dividends paid with respect to Stock shall be allocated under
subsection 4.3(c).
10.7 Voting of Stock.
(a) If the Stock is a "registration-type class of securities,"
as defined in Code section 409(e), each Participant, Alternate Payee or
beneficiary shall be entitled to vote the shares of Stock, including
fractional shares, allocated to his account and shall be entitled to receive
all proxy materials and other information distributed to shareholders in the
same manner as the other shareholders.
(b) If the Plan owns any Stock that is not a registration-type
class of securities (as defined in Code section 409(e)(4)), a Participant,
Alternate Payee or beneficiary also shall be entitled to direct the Trustee,
in accordance with the provisions of the Trust Agreement, to exercise the
voting rights of that Stock in his Company Contributions Account, in the
following types of transactions involving the Company: merger, consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or any similar transaction as
may be prescribed in Treasury Regulations. While an Exempt Loan is
outstanding, a Participant, Alternate Payee, or beneficiary shall also be
entitled to direct the exercise of the voting rights on any shareholder vote
of the Stock in his Company Contributions Account that was purchased or
transferred to the Plan in connection with the Exempt Loan. In any case in
which the voting rights with respect to Stock are not required to be passed
through to a Participant, Alternate Payee or beneficiary in accordance with
the foregoing, such Stock shall be voted by the Trustee pursuant to the
written directions of the Plan Administrator, as provided in the Trust
Agreement.
10.8 Stock to Be Subject to Certain Conditions.
All shares of Stock distributed to a Participant, Alternate Payee or
beneficiary shall bear such legends and statements as the Company may deem
advisable to assure compliance with applicable federal and state securities
laws and regulations. If the Company requests, a recipient of shares of Stock
shall, prior to receipt of such shares, deliver to the Company such written
statements as the Company or its counsel may reasonably require to indicate
that (a) the recipient is acquiring such shares for his own account, for
investment and not with the view to disposing of such shares, (b) the
recipient of such shares understands that the shares have not been registered
under the Securities Act of 1933 (the "Act") and that neither the shares nor
any interest therein may be transferred, sold, assigned or conveyed except in
accordance with the Act and applicable state securities laws and must
therefore be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available. Such written
statements may also require the recipient's acknowledgment that he understands
that if, after the Stock has been held for a period of at least two years and
if the provisions of Rule 144 of the General Rules and Regulations adopted
under the Act are otherwise available (there being no representations by the
Company that the provisions of Rule 144 will be applicable), then he may make
routine sales of such shares in limited amounts, in a specified manner, in
accordance with other terms and conditions of Rule 144. In the case of Stock
to which Rule 144 is not applicable, any sales by a recipient would have to be
made in compliance with Regulation A or some other exception from the
registration requirements of the Act.
10.9 Valuation of Stock.
With respect to all activities carried on by the Plan, all valuations
of Stock, while the Stock is not readily tradeable on an established
securities market, shall be made by an independent appraiser meeting
requirements similar to those contained in Treasury Regulations under Code
section 170(a)(1). The fees of such appraisers shall be paid by the Company
or the Trust, or may be shared by each, as determined by the Company; all such
decisions shall be made in compliance with ERISA. Shares of Stock held in the
Trust Fund which are not readily tradeable on an established securities market
shall be valued annually by the Plan Administrator (using an independent
appraiser), for all purposes of the Plan, at their fair market value as of the
last day of each Plan Year, in accordance with the applicable provisions of
ERISA. Shares of Stock that are readily tradeable on an established
securities market shall be valued as of the last day of each Plan Year and at
such other dates as may be required or provided by the Plan, in accordance
with the applicable provisions of ERISA. If the Stock is traded on an
established securities market, distributions in the form of Stock shall be
valued at the fair market value of the Stock on the date the Trustee directs
the transfer agent for the Stock to transfers the shares of Stock into the
name of a Participant or a Beneficiary. In the case of purchases of Stock
from "disqualified persons" as defined in Code section 4975(e)(2)), the value
of the purchased Stock must be determined as of the date of the transaction.
* * * * end of Article X * * * *
ARTICLE XI
Company Stock Purchased With Exempt Loans
11.1 Prohibition Against Non-Exempt Loans.
In general, the term "loan" refers to a loan made to the Plan by a
disqualified person (as defined in Code section 4975(e)(2)) or a loan to the
Plan that is guaranteed by a disqualified person. It includes a direct loan
of cash, a purchase-money transaction, and an assumption of the obligation of
the Plan. "Guarantee" includes an unsecured guarantee and the use of assets
of a disqualified person as collateral for a loan, even though the use of
assets may not be a guarantee under applicable state law. An amendment of a
loan in order to qualify as an Exempt Loan is not a refinancing of the loan or
the making of another loan. Notwithstanding anything to the contrary
contained in the Plan or Trust Agreement, no loan shall be made to the Plan
unless such loan is an Exempt Loan which satisfies all of the following
requirements:
(a) Primary Benefit Requirement. The loan must be primarily for
the benefit of the Plan Participants and their beneficiaries. In addition, at
the time the loan is made, the interest rate for the loan and the price of the
Stock to be acquired with the loan proceeds should not be such that Plan
assets might be drained off and the terms of the loan, whether or not between
independent parties, must be at least as favorable to the Plan as the terms of
a comparable loan resulting from arm's-length negotiations between independent
parties.
(b) Use of Loan Proceeds. The proceeds of the loan must be used
within a reasonable time after their receipt by the Plan only for any or all
of the following purposes:
(i)......To acquire Stock.
(ii).....To repay such loan.
(iii)....To repay a prior Exempt Loan. A new loan, the
proceeds of which are so used, must satisfy all of the provisions of this
subsection 11.1. Except as provided in subsection 11.1(g) below, or as
otherwise required by applicable law, no Stock acquired with the proceeds of
the loan may be subject to a put, call, or other option, or buy-sell or
similar arrangement while held by and when distributed from the Plan, whether
or not the Plan is still an ESOP at such time and whether any Exempt Loans
remain outstanding.
(c) Liability and Collateral of Plan for Loan. The loan must be
without recourse against the Plan and the only assets of the Plan that may be
given as collateral on the loan are assets acquired with the proceeds of the
loan and assets that were used as collateral on a prior Exempt Loan repaid
with the proceeds of the current loan. No person entitled to payment under
the loan shall have any right to assets of the Plan other than:
(i)......collateral given for the loan;
(ii).....Company Contributions (other than contributions of
Stock) that are made under the Plan to meet its obligations under the loan;
(iii)....earnings attributable to such collateral and the
investment of such contributions; and
(iv).....earnings attributable to all other Stock provided
the required allocation of shares of Stock released from the ESOP Suspense
Account is made pursuant to subsection 4.3(c).
The payments made by the Plan with respect to an Exempt Loan during a Plan
Year must not exceed an amount equal to the sum of such contributions and
earnings received during or prior to the Plan Year less such payments in prior
years. Such contributions and earnings must be accounted for separately in
the books of account of the Plan until the loan is repaid.
(d) Default. In the event of default upon an Exempt Loan, the
value of Plan assets transferred in satisfaction of the loan must not exceed
the amount of default. If the lender is a disqualified person, the loan must
provide for a transfer of Plan assets upon default only upon and to the extent
of the failure of the Plan to meet the payment schedule of the loan. For the
purposes of this subsection (d), the making of a guarantee does not make a
person a lender.
(e) Reasonable Rate of Interest. The interest rate of Exempt
Loan must not be in excess of a reasonable rate of interest. All relevant
factors will be considered in determining a reasonable rate of interest,
including the amount and duration of the loan, the security and guarantee (if
any) involved, the credit standing of the Plan and the guarantor (if any), and
the interest rate prevailing for comparable loans. When these factors are
considered, a variable interest rate may be reasonable.
(f) Release From Encumbrance. Shares of Stock purchased with an
Exempt Loan shall be allocated to a special ESOP Suspense Account and released
from the ESOP Suspense Account (and the encumbrance) in accordance with this
subsection (f). Shares of Stock released from the ESOP Suspense Account shall
be allocated to the Participants' Company Contributions Accounts. In general,
an Exempt Loan must provide for the release from encumbrance under this
subsection of Plan assets used as collateral for an Exempt Loan. The number
of shares of Stock released each Plan Year because of a Company ESOP
Contribution shall equal the number of encumbered shares of Stock held
immediately before release for the current Plan Year multiplied by a
fraction. The numerator of the fraction is the amount of principal and
interest paid for the year. The denominator of the fraction is the sum of the
numerator plus the principal and interest to be paid for all future years.
The number of future years under the loan must be definitely ascertainable and
must be determined without taking into account any possible extensions or
renewal periods. If the interest rate under an Exempt Loan is variable, the
interest to be paid in future years must be computed by using the interest
rate applicable as of the end of the Plan Year. If collateral includes more
than one class of Stock, the number of shares of Stock of each class to be
released for a Plan Year must be determined by applying the same fraction to
each class. Notwithstanding the foregoing, a loan will not fail to satisfy
this subsection (f) merely because the number of shares of Stock to be
released from encumbrance is determined solely with reference to principal
payments. However, if release is determined with reference to principal
payments only, the following three additional rules apply:
(i)......the loan shall provide for annual payments of
principal and interest at a cumulative rate that is not less rapid at any time
than level annual payments of such amounts for 10 years;
(ii).....the interest included in any payment with respect
to the loan shall be disregarded only to the extent that it would be
determined to be interest under standard loan amortization tables; and
(iii)....these additional rules shall not apply from the
time that, because of a renewal, extension, or refinancing, the sum of the
expired duration of the Exempt Loan, the renewal period, the extension period,
and the duration of a new loan exceeds 10 years.
(g) Put Option. Stock acquired by the Plan with the proceeds of
the loan shall be subject to a put option described in Section 10.2, if it
meets the requirements thereof, or if it is subject to a "trading limitation"
when distributed. For purposes of this subsection, a trading limitation on a
security is a restriction under any federal or state securities law, any
regulation thereunder, or an agreement, not prohibited by this Article, which
would make the security not as freely tradeable as one not subject to such
restriction. The put option shall be exercisable only by a Participant,
Alternate Payee or beneficiary, by their donees, or by a person (including an
estate or its distributee) to whom the Stock passes by reason of their death.
The put option shall permit a Participant, Alternate Payee or beneficiary to
put the stock to the Company as described in Section 10.2. At the option of
the Trustee, the Plan may assume the rights and obligations of the Company as
to all or any part of the shares tendered to the Company. If it is known at
the time an Exempt Loan is made that federal or state law will be violated by
the Company's honoring such put option, the put option must permit the Stock
to be put, in a manner consistent with such law, to a third party (e.g., an
affiliate of the Company or a shareholder other than the Plan) that has
substantial net worth at the time the loan is made and whose net worth is
reasonably expected to remain substantial.
11.2 Voting Rights.
Stock acquired with the proceeds of an Exempt Loan that is allocated
to Participants' Company Contributions Accounts shall be subject to the voting
rights described in Section 10.7. Stock acquired with the proceeds of an
Exempt Loan that has been allocated to the ESOP Suspense Account, or for any
other reason has not been allocated to Participants' accounts shall be voted
by the Trustee in accordance with the written direction of the Plan
Administrator.
11.3 Allocation to Accounts of Participants.
(a) Except as provided in this Section 11.3, amounts contributed
to the Plan shall be allocated as provided under Treasury Regulations
sections 1.401-1(b)(ii) and (iii), and Stock acquired by the Plan shall be
accounted for as provided under Treasury Regulations
section 1.402(a)-1(b)(2)(ii).
(b) As of the end of each Plan Year, the Plan shall consistently
allocate to the Participants' accounts nonmonetary units representing
Participants' interests in assets withdrawn from the ESOP Suspense Account.
(c) Income with respect to Stock acquired with the proceeds of
an Exempt Loan shall be allocated as income of the Plan except to the extent
that the Plan provides for the use of cash dividends paid on Stock to pay the
principal or interest on Exempt Loans. The use of such dividends (as well as
cash dividends paid on Stock not acquired with the proceeds of an Exempt Loan)
is hereby specifically permitted, regardless of whether the dividends are paid
on Stock previously allocated to Participants' Company Contributions Accounts
pursuant to subsection (b). This allocation shall satisfy the requirements of
subsection 4.3(c).
(d) If a portion of a Participant's Company Contributions
account is forfeited, Stock allocated under subsection (b) above shall be
forfeited only after other assets. If interests in more than one class of
Stock have been allocated to the Participant's Company Contributions account,
the Participant must be treated as forfeiting the same proportion of each such
class.
11.4 Non-Terminable Provisions.
Stock acquired with proceeds of an Exempt Loan shall continue to be
subject to the provisions of this Article, even after all Exempt Loans have
been paid in full and even if the Plan ceases to be an Employee Stock
Ownership Plan.
* * * * end of Article XI * * * *
ARTICLE XII
Plan Adoption by Affiliated Entities
12.1 Adoption of Plan.
Frontier may permit any Affiliated Entity to adopt the Plan and Trust
for its Employees. Thereafter, such Affiliated Entity shall deliver to the
Trustee a certified copy of the resolutions or other documents evidencing its
adoption of the Plan and Trust, but such Affiliated Entity shall not be
required to execute a copy of the Trust Agreement.
12.2 Agent of Affiliated Entity.
By becoming a party to the Plan, each Affiliated Entity appoints
Frontier as its agent with authority to act for the Affiliated Entity in all
transactions in which Frontier believes such agency will facilitate the
administration of the Plan. Frontier shall have the sole authority to amend
and terminate the Plan.
12.3 Disaffiliation and Withdrawal from Plan.
(a) Disaffiliation. Any Affiliated Entity that has adopted the
Plan and thereafter ceases for any reason to be an Affiliated Entity shall
forthwith cease to be a party to the Plan.
(b) Withdrawal. Any Affiliated Entity may, by appropriate
action and written notice thereof to Frontier, provide for the discontinuance
of its participation in the Plan. Such withdrawal from the Plan shall not be
effective until the end of the Plan Year.
12.4 Effect of Disaffiliation or Withdrawal.
If at the time of disaffiliation or withdrawal, the disaffiliating or
withdrawing entity, by appropriate action, adopts a substantially identical
plan that provides for direct transfers from this Plan, then, as to employees
of such entity, no plan termination shall have occurred; the new plan shall be
deemed a continuation of this Plan for such employees. In such case, the
Trustee shall transfer to the trustee of the new plan all of the assets held
for the benefit of employees of the disaffiliating or withdrawing entity, and
no forfeitures or acceleration of vesting shall occur solely by reason of such
action. Such payment shall operate as a complete discharge of the Trustee,
and of all organizations except the disaffiliating or withdrawing entity, of
all obligations under this Plan to employees of the disaffiliating or
withdrawing entity and to their beneficiaries. A new plan shall not be deemed
substantially identical to this Plan if it provides slower vesting than this
Plan. Nothing in this Section shall authorize the divesting of any vested
portion of a Participant's account(s).
12.5 Distribution Upon Disaffiliation or Withdrawal.
(a) Disaffiliation. If an entity disaffiliates from the Company
and the provisions of Section 12.4 are not followed, then the following rules
apply to the account(s) of employees of the disaffiliating entity.
(i)......If the disaffiliating entity maintains a defined
contribution plan (other than an employee stock ownership plan within the
meaning of Code section 4975(e)(7)), then, if the other plan will accept such
a transfer, the Trustee shall transfer the employee's account(s) to the other
plan unless the employee consents to an immediate distribution in a lump sum
(other than an annuity) of the vested portion of his account(s); if the other
plan will not accept such a transfer, the account(s) shall remain in this Plan
until the employee elects to receive a distribution pursuant to Article VI.
(ii).....If the disaffiliating entity does not maintain a
defined contribution plan (other than an employee stock ownership plan within
the meaning of Code section 4975(e)(7)), then the Trustee shall distribute the
vested portion of the employee's account(s) to the employee in a lump sum
(other than an annuity), upon the consent of the employee. If the employee
does not consent to an immediate distribution, then distribution may only be
made according to Article VI.
(b) Withdrawal. If an Affiliated Entity withdraws from the Plan
and the provisions of Section 12.4 are not followed, then the following rules
apply to the account(s) of Employees of the withdrawing entity.
(i)......If the withdrawing entity maintains a defined
contribution plan that accepts transfers from this Plan, then the Employee may
transfer his account(s) from this Plan to such plan. No forfeitures or
acceleration of vesting shall occur solely by reason of such transfer.
(ii).....If the withdrawing entity does not maintain a
defined contribution plan that accepts transfers from this Plan, then the
Employee's account(s) shall remain in this Plan.
(c) Distributions. Any distribution or transfer made pursuant
to this Section shall be in shares of Stock, provided, however, that
fractional shares of Stock may be converted to and paid in cash. After such
distribution or transfer has been made, no Participant or beneficiary who has
received any such distribution, or for whom any such transfer has been made,
shall have any further right or claim under the Plan or Trust.
* * * * end of Article XII * * * *
ARTICLE XIII
Top-Heavy Provisions
13.1 Application of Top-Heavy Provisions.
The provisions of this Article shall be applicable only if the Plan
becomes "top-heavy" as defined below for any Plan Year. If the Plan becomes
"top-heavy" as of the Determination Date for a Plan Year, the provisions of
this Article shall apply to the Plan effective as of the first day of such
Plan Year and shall continue to apply to the Plan (whether or not the Plan
ceases to be "top-heavy") until the Plan is terminated or otherwise amended.
13.2 Determination of Top-Heavy Status.
The Plan shall be considered "top-heavy" for a Plan Year if, as of
the Determination Date for that Plan Year, the aggregate of the account
balances (as calculated according to the regulations under Code section 416)
of Key Employees under this Plan (and under all other plans required or
permitted to be aggregated with this Plan) exceeds 60% of the aggregate of the
account balances (as calculated according to the regulations under Code
section 416) in this Plan (and under all other plans required or permitted to
be aggregated with this Plan) of all current Employees and all former
Employees who terminated employment within five years of the Determination
Date. This ratio shall be referred to as the "top-heavy ratio". For purposes
of determining the account balance of any Participant, distributions made with
respect to such individual within a five-year period ending on the
Determination Date shall be included. This shall also apply to distributions
under a terminated plan that, if it had not been terminated, would have been
required to be included in an aggregation group. The account balances of a
Participant who had once been a Key Employee, but who is not a Key Employee
during the Plan Year, shall not be taken into account. The following plans
must be aggregated with this Plan for the top-heavy test: (a) a qualified
plan maintained by the Company or an Affiliated Entity in which a Key Employee
participated during this Plan Year or during the previous four Plan Years and
(b) any other qualified plan maintained by the Company or an Affiliated Entity
that enables this Plan or any plan described in clause (a) to meet the
requirements of Code sections 401(a) and 410. The following plans may be
aggregated with this Plan for the top-heavy test: any qualified plan
maintained by the Company or an Affiliated Entity that, in combination with
the Plan or any plan required to be aggregated with this Plan when testing
this Plan for top-heaviness, would satisfy the requirements of Code
sections 401(a) and 410. If one or more of the plans required or permitted to
be aggregated with this Plan is a defined benefit plan, a Participant's
"account balance" shall equal the present value of his accrued benefit,
including any distributions within five years of the Determination Date. If
the aggregation group includes more than one defined benefit plan, the same
actuarial assumptions shall be used with respect to each such defined benefit
plan. The foregoing top-heavy ratio shall be computed in accordance with the
provisions of Code section 416(g), together with the regulations and rulings
thereunder.
13.3 Special VestingP. .1 provides for faster vesting, the amount credited
to the Participant's Company Contributions account shall vest in accordance
with the following schedule during any top-heavy Plan Year:
Years of Service Vested Percentage
1 20
2 40
3 60
4 80
5 or more 100
13.4 Special Minimum Contribution.
(a) Amount of Minimum Contribution. Notwithstanding the
provisions of Section 3.1 and Article IV to the contrary, and subject to
subsection (b), in every top-heavy Plan Year, a minimum allocation is required
for each Non-Key Employee who both (i) performed one or more Hours of Service
during the Plan Year as a Covered Employee after satisfying any eligibility
requirement of Section 2.1, and (ii) was an Employee on the last day of the
Plan Year. This minimum allocation is required regardless of whether such
Non-Key Employee received credit for 1,000 or more Hours of Service or made
any required contributions to the Plan for such Plan Year. The minimum
allocation shall be a percentage of such Non-Key Employee's Compensation. The
percentage shall be the lesser of 3% or the largest percentage of any Key
Employee's Compensation. For all Key and Non-Key Employees, this percentage
takes into account all Company Contributions and forfeitures, except for
amounts used to restore the accounts of a rehired or missing Participant,
allocated for the Plan Year. If this minimum allocation is not satisfied for
any Non-Key Employee, the Company shall contribute the additional amount
needed to satisfy this requirement to such Non-Key Employee's Company
Contributions account.
(b) Coordination With 401(k) Plan. The Company also maintains
the Frontier Airlines, Inc. Retirement Savings Plan, a defined contribution
profit sharing plan with a cash or deferred arrangement (the "401(k) Plan").
A Participant who participates in both this Plan and the 401(k) Plan shall
receive the top heavy minimum contribution in this Plan.
13.5 Change in Top-Heavy Status.
If the Plan ceases to be a "top-heavy" plan as defined in this
Article XIII, and if any change in the benefit structure, vesting schedule or
other component of a Participant's accrued benefit shall occur as a result of
such change in top-heavy status, the nonforfeitable percentage of each
Participant's benefit attributable to Company Contributions shall not be
decreased as a result of such change. In addition, each Participant with at
least three Years of Service with the Company and Affiliated Entities on the
date of such change, may elect to have his nonforfeitable percentage computed
under the Plan without regard to such change in status. The period during
which the election may be made shall commence on the date the Plan ceases to
be a top-heavy plan and shall end on the later of (a) 60 days after the change
in status occurs, (b) 60 days after the change in status becomes effective, or
(c) 60 days after the Participant is issued written notice of the change by
the Company or the Plan Administrator.
* * * * end of Article XIII * * * *
ARTICLE XIV
Miscellaneous
14.1 Right to Dismiss Employees - No Employment Contract.
The Company and Affiliated Entities may terminate the employment of
any Employee as freely and with the same effect as if this Plan were not in
existence. Participation in this Plan by an Employee shall not constitute an
express or implied contract of employment between the Company or an Affiliated
Entity and the Employee.
This section 14.2 shall apply to claims filed prior to January 1, 2002:
14.2 Claims Procedure.
(a) All claims shall be filed in writing by the Participant, his
beneficiary, or the authorized representative of the claimant, by completing
the procedures that the Plan Administrator requires. The procedures shall be
reasonable and may include the completion of forms and the submission of
documents and additional information. For purposes of this Section, a request
for an in-service withdrawal shall be considered a claim.
(b) The Plan Administrator shall review all materials and shall
decide whether to approve or deny the claim. If a claim is denied in whole or
in part, written notice of denial shall be furnished by the Plan Administrator
to the claimant within 90 days after the receipt of the claim by the Plan
Administrator, unless special circumstances require an extension of time for
processing the claim, in which event notification of the extension shall be
provided to the claimant and the extension shall not exceed 90 days. The
written notice shall set forth the specific reasons for such denial, specific
reference to pertinent Plan provisions, a description of any additional
material or information necessary for the claimant to perfect his claim and an
explanation of why such material or information is necessary, all written in a
manner calculated to be understood by the claimant. The notice shall include
appropriate information as to the steps to be taken if the claimant wishes to
submit his denied claim for review. The claimant may request a review upon
written application, may review pertinent documents, and may submit issues or
comments in writing. The claimant must request a review within the reasonable
period of time prescribed by the Plan Administrator. In no event shall such a
period of time be less than 60 days. The Appeals Board shall decide all
reviews of denied claims. A decision on review shall be rendered within
60 days of the receipt of request for review by the Appeals Board. If special
circumstances require a further extension of time for processing, a decision
shall be rendered not later than 120 days following the Appeals Board's
receipt of the request for review. If such an extension of time for review is
required, written notice of the extension shall be furnished to the claimant
prior to the commencement of the extension. The Appeals Board's decision on
review shall be furnished to the claimant. Such decision shall be in writing
and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, as well as specific references to
the pertinent Plan provisions on which the decision is based.
(c) The Plan Administrator, when initially deciding claims, and
the Appeals Board, when deciding appeals of denied claims, shall have total
discretionary authority to determine eligibility, status, and the rights of
all individuals under the Plan and to construe any and all terms of the Plan.
This section 14.2 shall apply to claims filed on and after January 1, 2002:
14.2 Claims Procedure.
(a) Filing a Claim. All claims shall be filed in writing by the
Participant, his beneficiary, or the authorized representative of the
claimant, by completing the procedures that the Committee requires. The
procedures shall be reasonable and may include the completion of forms and the
submission of documents and additional information. All claims under this
Plan shall be filed in writing with the Committee according to the Committee's
procedures no later than one year after the occurrence of the event that gives
rise to the claim. If the claim is not filed within the time described in the
preceding sentence, the claim shall be barred.
(b) Review of Initial Claim.
(i)......Initial Period for Review of Claim. The Committee
shall review all materials and shall decide whether to approve or deny the
claim. If a claim is denied in whole or in part, written notice of denial
shall be furnished by the Committee to the claimant within a reasonable time
after the claim is filed but not later than 90 days after the Committee
receives the claim. The notice shall set forth the specific reason(s) for the
denial, reference to the specific plan provisions on which the denial is
based, a description of any additional material or information necessary for
the claimant to perfect his claim and an explanation of why such material or
information is necessary, and a description of the Plan's review procedures,
including the applicable time limits and a statement of the claimant's right
to bring a civil action under ERISA section 502(a) following a denial of the
appeal.
(ii).....Extension. If the Committee determines that
special circumstances require an extension of time for processing the claim,
it shall give written notice to the claimant and the extension shall not
exceed 90 days. The notice shall be given before the expiration of the 90 day
period described in section 14.2(b)(i) above and shall indicate the special
circumstances requiring the extension and the date by which the Committee
expects to render its decision.
(c) Appeal of Denial of Initial Claim. The claimant may request
a review upon written application, may review pertinent documents, and may
submit issues or comments in writing. The claimant must request a review
within the reasonable period of time prescribed by the Committee. In no event
shall such a period of time be less than 60 days. The Committee shall forward
all appeals, including all material submitted by the claimant, to the Appeals
Board.
(d) Review of Appeal.
(i)......Initial Period for Review of Appeal. The Appeals
Board shall conduct all reviews of denied claims and shall render its decision
within a reasonable time, but not less than 60 days of the receipt of the
appeal by the Committee, which shall forward the appeal to the Appeals Board
promptly. The claimant shall be notified of the Appeals Board's decision in a
notice, which shall set forth the specific reason(s) for the denial, reference
to the specific plan provisions on which the denial is based, a statement that
the claimant is entitled to receive, upon request and free of charge,
reasonable access to and copies of all documents, records, and other
information relevant to the claimant's claim, and a statement of the
claimant's right to bring a civil action under ERISA section 502(a) following
a denial of the appeal.
(ii).....Extension. If the Appeals Board determines that
special circumstances require an extension of time for reviewing the appeal,
it shall give written notice to the claimant and the extension shall not
exceed 60 days. The notice shall be given before the expiration of the 60 day
period described in section 14.2(d)(i) above and shall indicate the special
circumstances requiring the extension and the date by which the Appeals Board
expects to render its decision.
(e) Form of Notice to Claimant. The notice to the claimant
shall be given in writing or electronically and shall be written in a manner
calculated be understood by the claimant. If the notice is given
electronically, it shall comply with the requirements of Department of Labor
Regulation section 2520.104b-1(c)(1)(i), (iii), and (iv).
(f) Discretionary Authority of Committee and Appeals Board. The
Committee and the Appeals Board shall have full discretionary authority to
determine eligibility, status, and the rights of all individuals under the
Plan, to construe any and all terms of the Plan, and to find and construe all
facts.
14.3 Source of Benefits.
All benefits payable under the Plan shall be paid solely from the
Trust Fund, and the Company and Affiliated Entities assume no liability or
responsibility therefor.
14.4 Exclusive Benefit of Employees.
It is the intention of the Company that no part of the Trust, other
than as provided in Sections 3.2, 8.2, and 14.8 hereof and Section 4.2 of the
Trust Agreement, ever to be used for or diverted to purposes other than for
the exclusive benefit of Participants, Alternate Payees, and their
beneficiaries, and that this Plan shall be construed to follow the spirit and
intent of the Code and ERISA.
14.5 Forms of Notices.
Wherever provision is made in the Plan for the filing of any notice,
election, or designation by a Participant, Spouse, Alternate Payee, or
beneficiary, the action of such individual shall be evidenced by the execution
of such form as the Plan Administrator may prescribe for the purpose.
14.6 Notice of Adoption of the Plan.
The Company shall provide each of its Employees with notice of the
adoption of this Plan, notice of any amendments to the Plan, and notice of the
salient provisions of the Plan prior to the end of the first Plan Year. A
complete copy of the Plan shall also be made available for inspection by
Employees or any other individual with an account balance under the Plan.
14.7 Plan Merger.
If this Plan is merged or consolidated with, or its assets or
liabilities are transferred to, any other qualified plan of deferred
compensation, each Participant shall be entitled to receive a benefit
immediately after the merger, consolidation, or transfer that is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer if this Plan had then been
terminated.
14.8 Inalienability of Benefits - Domestic Relations Orders.
(a) No Assignment of Benefits. Except as provided in
subsections (b) and (g) below, no Participant or beneficiary shall have any
right to assign, alienate, transfer, hypothecate, encumber or anticipate his
interest in any benefits under this Plan, nor shall such benefits be subject
to any legal process to levy upon or attach the same for payment of any claim
against any such Participant or beneficiary.
(b) Exception: QDROs. Subsection (a) shall apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a Domestic Relations Order unless such
Domestic Relations Order is a QDRO in which case the Plan shall make payment
of benefits in accordance with the applicable requirements of any such QDRO.
(c) Requirements for QDROs. In order to be a QDRO, the Domestic
Relations Order: (i) must clearly specify the name and the last known mailing
address of the Participant; (ii) must specify the name and mailing address of
each Alternate Payee covered by the order; (iii) must specify either the
amount or percentage of the Participant's benefits to be paid by the Plan to
each such Alternate Payee, or the manner in which such amount or percentage is
to be determined; (iv) must specify the number of payments or period to which
such order applies; (v) must specify each plan to which such order applies;
(vi) may not require the Plan to provide any type or form of benefit, or any
option, not otherwise provided under the Plan, subject to the provisions of
Paragraphs (f)(ii) and (f)(iii); (vii) may not require the Plan to provide
increased benefits (determined on the basis of actuarial value); (viii) may
not require the payment of benefits to an Alternate Payee if such benefits
have already been designated to be paid to another Alternate Payee under
another order previously determined to be a QDRO.
(d) Payments Prior to Participant's Separation From Service. In
the case of any payment before an Employee has separated from service, a
Domestic Relations Order shall not be treated as failing to meet the
requirements of Subsection (c) solely because such order requires that payment
of benefits be made to an Alternate Payee (i) on or after the date on which
the Employee attains (or would have attained) his earliest retirement age,
(ii) as if the Employee had retired on the date on which such payment is to
begin under such order (but taking into account only the account balance on
such date), and (iii) in any form in which such benefits may be paid under the
Plan to the Employee. The earliest retirement age is the earlier of (i) the
date on which the Employee is entitled to a distribution under the Plan, or
(ii) the later of (A) the date the Employee attains age 50, or (B) the
earliest date on which the Employee could begin receiving benefits under the
Plan if the Employee separated from service. For purposes of this Subsection,
the account balance as of the date specified in the QDRO shall be the vested
portion of the Employee's account(s) on such date.
(e) Procedures.
(i)......General. The Plan Administrator shall establish
reasonable procedures to determine the qualified status of Domestic Relations
Orders and to administer distributions under QDRO's. Such procedures shall be
in writing and shall permit an Alternate Payee to designate a representative
to receive copies of notices.
(ii).....Notice to Participant and Prospective Alternate
Payee(s); Review. When the Plan Administrator receives a Domestic Relations
Order, it shall promptly notify the Participant and each Alternate Payee of
such receipt and provide them with copies of the Plan's procedures for
determining the qualified status of the order. Within a reasonable period
after receipt of a Domestic Relations Order, the Plan Administrator shall
determine whether such order is a QDRO and notify the Participant and each
Alternate Payee of such determination.
(iii)....Separate Accounting. During any period in which
the issue of whether a Domestic Relations Order is a QDRO is being determined
(by the Plan Administrator, by a court of competent jurisdiction, or
otherwise), the Plan Administrator shall separately account for the amounts
payable to the Alternate Payee if the order is determined to be a QDRO. If
the order (or modification thereof) is determined to be a QDRO within
18 months after the date the first payment would have been required by such
order, the Plan Administrator shall pay the amounts separately accounted for
(plus any interest thereon) to the individual(s) entitled thereto. However,
if the Plan Administrator determines that the order is not a QDRO, or if the
issue as to whether such order is a QDRO has not been resolved within
18 months after the date the first payment would have been required by such
order, then the Plan Administrator shall pay the amounts separately accounted
for (plus any interest thereon) to the individual(s) who would have been
entitled to such amounts if there had been no order. Any determination that
an order is a QDRO that is made after the close of the 18-month period shall
be applied prospectively only. If the Plan's fiduciaries act in accordance
with fiduciary provisions of ERISA in treating a Domestic Relations Order as
being (or not being) a QDRO or in taking action in accordance with this
Subsection, then the Plan's obligation to the Participant and each Alternate
Payee shall be discharged to the extent of any payment made pursuant to the
acts of such fiduciaries.
(iv).....Participant Distributions. Upon receiving a
Domestic Relations Order (either in draft form or entered by a court) or upon
receiving information that causes the Plan Administrator to reasonably believe
that a Domestic Relations Order will be submitted, the Plan Administrator
shall place a hold on the affected Participant's accounts that prohibits the
Participant from receiving a distribution upon termination of employment.
However, the Participant may receive a distribution upon termination of
employment if all prospective Alternate Payees consent in writing to the
distribution or if the court that is hearing the domestic relations proceeding
approves the distribution. If the Plan Administrator places the hold on the
account as a result of receiving information that causes the Plan
Administrator to believe that a Domestic Relations Order will be submitted and
if the Plan Administrator does not receive a Domestic Relations Order (either
in draft form or entered by a court) within 180 days after the Plan
Administrator placed the hold on the Participant's accounts, the hold will be
removed from the Participant's accounts. If the Plan Administrator places the
hold on the Participant's accounts as a result of receiving a Domestic
Relations Order (either in draft form or entered by a court), the hold shall
remain on the Participant's accounts until the first to occur of (A) the
120th day after the date the Plan Administrator responds to the parties with
its comments on the Domestic Relations Order, or (B) the date the Plan
Administrator determines that the Domestic Relations Order is a Qualified
Domestic Relations Order and the Participant's accounts are divided between
the Participant and the Alternate Payee in the records of the Plan. However,
if the Participant's accounts are affected by the separate accounting
requirement of subsection 14.8(e)(iii) above, the hold shall continue to the
extent necessary for the Plan and the Plan Administrator to comply with the
separate accounting requirement. Nothing in this subsection 14.8(e)(iv) shall
prevent the Participant from exercising investment control over the assets in
his accounts during the pendency of a hold on the accounts.
(f) The Alternate Payee shall have the following rights under
the Plan:
(i)......The Alternate Payee may designate beneficiaries in
the same manner as a Participant, pursuant to Section 6.1. However, any such
beneficiary designation shall be effective without the consent of the spouse
of the Alternate Payee. In the absence of an effective beneficiary
designation, the distributable amount of the Alternate Payee's account(s)
shall be paid to his surviving spouse; or if none, in equal shares to his
surviving children and issue of deceased children by right of representation;
or if none, in equal shares to each surviving parent; or if none, to his
estate.
(ii).....Notwithstanding any other provisions of this
Section 14.8, an alternate payee shall receive a distribution of his or her
Plan assets as soon as administratively practicable after any necessary
valuation of his or her account balance and after the Plan Administrator
determines that the domestic relations order is a qualified domestic relations
order. An alternate payee may only receive a distribution in the form of a
lump sum of his or her entire interest in the Plan.
(iii)....Distribution to an Alternate Payee shall begin on
or before the Participant's Required Beginning Date. An Alternate Payee may
only receive a distribution in the form of a lump sum (other than an annuity).
(iv).....Upon the death of an Alternate Payee, the Alternate
Payee's entire interest in the Plan shall be distributed in a lump sum by the
end of the calendar year containing the fifth anniversary of the Alternate
Payee's death.
(v)......The Alternate Payee (or his beneficiary) may bring
claims against the Plan in the same manner as a Participant pursuant to
Section 14.2.
(g) Certain Judgments and Settlements. This subsection 14.8(g)
shall apply to judgments, orders, and decrees issued, and settlement
agreements entered into, on or after August 5, 1997. Subsection (a) shall not
apply to any offset of the Participant' s account balance(s) in an amount
equal to an amount that the Participant is ordered or required to pay to the
Plan if:
(i)......the order or requirement to pay arises
.........(1) under a judgment of conviction of a crime
involving the Plan, or
.........(2) under a civil judgment, including a
consent decree, entered by a court in an action brought in connection with a
violation (or an alleged violation) of the fiduciary responsibility
requirements of Title I of ERISA, or
.........(3) pursuant to a settlement agreement between
the Secretary of Labor and the Participant in connection with a violation (or
an alleged violation) of the fiduciary responsibility requirements of Title I
of ERISA, and
(ii).....the judgment, order, decree, or settlement
agreement expressly provides for the offset of all or a part of the amount
ordered or required to be paid to the Plan against the Participant's account
balance(s) under the Plan.
14.9 Payments Due Minors or Incapacitated Individuals.
If any individual entitled to a payment under the Plan is a minor, or
if the Plan Administrator determines that any such individual is incapacitated
by reason of physical or mental disability, whether or not legally adjudicated
as such, the Plan Administrator shall have the power to cause the payments
becoming due to such individual to be made to his personal representative or
to another for his benefit, without responsibility of the Plan Administrator
or the Trustee to see to the application of such payments. Payments made
pursuant to such power shall operate as a complete discharge of the Trust
Fund, the Trustee and the Plan Administrator.
14.10 Uniformity of Application.
The provisions of this Plan shall be applied in a uniform and
non-discriminatory manner in accordance with rules adopted by the Plan
Administrator which rules shall be systematically followed and consistently
applied so that all individuals similarly situated shall be treated alike.
14.11 Disposition of Unclaimed Payments.
Each Participant, Alternate Payee, or beneficiary with an account
balance in this Plan must file with the Plan Administrator from time to time
in writing his address, the address of each of his beneficiaries (if
applicable), and each change of address. Any communication, statement or
notice addressed to such individual at his last address filed with the Plan
Administrator (or if no address is filed with the Plan Administrator then at
his last address as shown on the Company's records) will be binding on such
individual for all purposes of the Plan. Neither the Plan Administrator nor
the Trustee shall be required to search for or locate any missing individual.
If the Plan Administrator notifies an individual that he is entitled to a
distribution and also notifies him of the provisions of this Section, and the
individual fails to claim his benefits under the Plan or make his address
known to the Plan Administrator within five calendar years after the
notification, the benefits under the Plan of such individual shall be
forfeited as of the end of the Plan Year coincident with or following the
five-year waiting period. Any amount forfeited pursuant to this Section shall
be allocated pursuant to Section 5.5. If the individual should later make a
claim for his forfeited benefit, the Company shall make a special contribution
to the Plan equal to the forfeiture, and such amount shall be distributed to
the individual.
14.12 Pronouns: Gender and Number.
Unless the context clearly indicates otherwise, words in either
gender shall include the other gender and the singular shall include the
plural and vice versa.
14.13 Applicable Law.
This Plan shall be construed and regulated by ERISA, the Code, and,
to the extent applicable, the laws of the State of Colorado.
FRONTIER
AIRLINES, INC.
DATE: __________________, 2002 By:____________________________________
