Exhibit 10.78
QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
OF
GENERAL COMMUNICATION, INC.
(Amended and restated in compliance with GUST and EGTRRA)
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"This Document entitled Qualified Employee Stock
Purchase Plan of General Communication, Inc. constitutes
part of a Prospectus covering securities that have been
registered under the Securities Act of 1933."
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January 01, 2003
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TABLE OF CONTENTS
PAGE
ARTICLE I Name and Purpose of Plan and Trust 3
ARTICLE II Definitions 4
ARTICLE III Participation 12
ARTICLE IV Contributions 14
ARTICLE V Determination and Vesting of Participant Accounts 29
ARTICLE VI Retirement Date--Designation of Beneficiary 33
ARTICLE VII Distribution From Trust Fund 34
ARTICLE VIII Fiduciary Obligations 48
ARTICLE IX Plan Administrator and Plan Committee 51
ARTICLE X Powers and Duties of the Trustee 56
ARTICLE XI Continuance, Termination, and
Amendment of Plan and Trust 62
ARTICLE XII Miscellaneous 64
January 01, 2003 -2-
Article I
NAME AND PURPOSE OF PLAN AND TRUST
Section 1.1 Name and Purpose. The Company, by execution of this agreement,
amends and restates its qualified stock purchase plan, to be known as the
General Communication, Inc. Qualified Employee Stock Purchase Plan, to afford
its employees a convenient means for regular and systematic purchases of common
stock of the Company and to instill a proprietary interest in the Company. The
Plan and Trust Fund are created for the exclusive benefit of
Employee-Participants and their beneficiaries. The Plan is intended to qualify
under Sections 401(a) and 401(k) of the Code, and the trust created under the
Plan is intended to be exempt under Section 501(a) of the Code.
January 01, 2003 -3-
Article II
DEFINITIONS
Section 2.1 Definitions. When used in this agreement, the following words
shall have the following meanings, unless the context clearly indicates
otherwise:
(i) "Account", unless otherwise indicated, means a Participant's
entire interest in Company stock and any other assets in the
Trust Fund created by his Employer's contributions and his own
contributions, and the income, expenses, gains, and losses
attributable to such stock and assets.
(ii) "Anniversary Date" means the first day of each Plan Year.
(iii) "Associated Company" means any corporation which is deemed to
be a member of the group of corporations under common control
of the Company and which adopts this Plan and Trust with the
consent of the Company. Any such Company which subsequently is
no longer a member of the controlled group shall be deemed to
have terminated this Plan and Trust immediately upon such
failure to be a member of the controlled group.
(iv) "Beneficiary" means the person who, under this Plan, becomes
entitled to receive a Participant's Account upon his death.
(v) "Board of Directors" means the board of directors of the
Company.
(vi) "Break in Service" for purposes of eligibility to participate
means any 12-month period, measured from the Employee's
employment or Reemployment Commencement Date in which the
Employee has completed no more than 500 hours of service.
"One-Year Break in Service" for vesting and all other purposes
means any Plan Year in which the Employee has completed no
more than 500 hours of service. For purposes of this
definition, hours of service shall include service as an
Employee in any capacity including Union Employee and
commissioned salesman.
(vii) "Code" means the Internal Revenue Code of 1986, as it
presently is constituted, as it may be amended, or any
successor statute of similar purposes.
(viii) "Company" means General Communication, Inc., a corporation
with its principal place of business at Anchorage, Alaska, or
any successor in interest to it resulting from merger,
consolidation, or transfer of substantially all of its assets,
which expressly may agree in writing to continue this Plan.
(ix) "Compensation" means the total amount actually or
constructively paid by an Employer to a Participant for
services rendered to the Employer during the Plan Year
including overtime pay, commissions, and bonuses, but
excluding relinquished vacation pay, unused sick pay,
insurance premiums, pension and retirement benefits, living
expenses, other allowances, and all contributions by the
Employer to this Plan, to any other tax qualified Plan or to
any health accident or
January 01, 2003 -4-
welfare fund or Plan. Compensation shall be calculated to
include amounts that are not currently paid to a Participant
and not includible in a Participant's gross income by reason
of the application of Code Section 125 and 402(g). For
limitation years beginning on and after January 1, 2001, for
purposes of applying the limitations described in Section
4.8[b] of the Plan, compensation paid or made available during
such limitation years shall include elective amounts that are
not includible in the gross income of the employee by reason
of Code Section 132(f)(4) (qualified transportation benefits).
This amendment shall also apply to include elective deferrals
for qualified transportation expenses in the definition of
compensation for purposes of Section 2.1(ix) of the Plan for
plan years beginning on and after January 1, 2001.
Pursuant to Code Section 401(a)(17), Compensation taken into
account for all purposes under this Plan shall not exceed
$150,000, as adjusted by the Secretary of the Treasury for
cost of living increases each year, for any Plan Year.
(x) "Determination Date" means, with respect to any Plan Year, the
last day of the preceding Plan Year (or in the case of the
first Plan Year, the last day of such Plan Year). This Section
2.1(x) shall be interpreted to conform with Code Section 416.
(xi) "Effective Date" of this restated Plan means January 1, 1997,
unless otherwise provided in this Plan. For any Associated
Company which is not participating in this Plan on the
restated effective date, effective date means that date
designated by the Associated Company.
(xii) "Employee" means any person, whether male or female, now or
hereafter in the employ of an Employer, including officers of
the Employer, but excluding directors who are not in the
Employer's employ in any other capacity, excluding independent
contractors, and excluding Union Employees. Employee shall not
include any individual who is treated as an independent
contractor by the Employer, as reflected in the records of the
Company, even if such individual becomes classified as a
common-law employee of the Company by any administrative
agency or court of competent jurisdiction, or by the IRS, or
pursuant to an agreement between the Company and the IRS.
(xiii) "Employer" means the Company and any Associated Company which
has adopted the Plan and Trust.
(xiv) "Employment Commencement Date" means the date on which an
Employee first performs an Hour of Service for the Employer.
(xv) "Fiduciary" means a person who (A) exercises any discretionary
authority or discretionary control respecting management of
the Plan or exercises any authority or control respecting
management or disposition of its assets; (B) renders
investment advice for a fee or other Compensation, direct or
indirect, with respect to any moneys or other property of the
Plan, or has any authority or responsibility to do so; or (C)
has any discretionary authority or discretionary
responsibility in the administration of the Plan. If any money
or other property of
January 01, 2003 -5-
the Plan is invested in securities issued by an investment
company registered under the Investment Company Act of 1940,
such investment by itself shall not cause such investment
company or such investment company's investment adviser or
principal underwriter to be deemed to be a fiduciary or a
party in interest.
(xvi) "Highly Compensated Employee" means, for the Plan Year
beginning in 1997, and subsequent Plan Years, any Employee
who:
(A) was a five percent owner at any time during the
Determination Year or the Look-Back Year; or
(B) for the Look-Back Year, had Compensation in excess of
$80,000 (as adjusted by the Secretary of the Treasury for
cost of living increases), and
(C) was in the top-paid group of Employees for the Look-Back
Year. An Employee is in the top-paid group of Employees
for any Plan Year if such Employee is in the group
consisting of the top twenty percent (20%) of the
Employees when ranked on the basis of Compensation paid
during the Plan Year.
For purposes of this definition, the Determination Year shall
be the Plan Year. The Look-Back Year shall be the twelve-month
period immediately preceding the Determination Year.
In determining an individual's Compensation under this
section, Compensation from each Company required to be
aggregated under Code Sections 414(b), (c), (m), and (o) will
be taken into account. For purposes of this section, the
determination of Compensation will include deferrals made
pursuant to Code Sections 125, 402(e)(3), 402(h)(1)(B) and, in
the case of Company contributions made pursuant to a elective
deferral agreement, deferrals made pursuant to Code Section
403(b).
A former Employee will be treated as a Highly Compensated
Employee if such Employee separated from service (or was
deemed to have separated) prior to the Plan Year, performs no
service for the Company during the Plan Year, and was a Highly
Compensated Employee for either the separation year or any
Plan Year ending on or after the Employee's 55th birthday.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group and the Compensation that is
considered, will be made in accordance with Code Section
414(q).
(xvii) "Hour of Service" means (1) each hour for which an Employee is
paid or is entitled to payment, for the performance of duties
for his Employer during the applicable computation period; (2)
each hour for which an Employee is paid or is entitled to
payment by his Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship is terminated) due to vacation,
holiday, illness, incapacity (including disability),
January 01, 2003 -6-
layoff, jury duty, military duty, or leave of absence; and (3)
each hour for which back pay, irrespective of mitigation of
damages, either was awarded or agreed to by the Employer.
(A) For purposes of Section 2.1(xvii)(A)(2) the following
rules shall apply: (1) no more than 501 hours will be
credited to any Employee on account of a single
continuous period during which the Employee performs no
duties; (2) an hour shall not be credited on account of a
period during which no duties are performed if the
payment for such hour is made or due under a Plan
maintained solely for the purpose of complying with
applicable workmen's Compensation, or unemployment
Compensation or disability insurance laws; (3) hours
shall not be credited for payments which reimburse an
Employee solely for medical or medically related expenses
incurred by the Employee; and (4) a payment shall be
deemed to be made by or due from the Employer regardless
of whether such payment is made by or due from the
Employer directly, or indirectly through, among others, a
Trust Fund, or insurer, to which the Employer contributes
or pays premiums. These rules also shall apply to the
extent that any back pay is agreed to or awarded for a
period of time during which an Employee did not or would
not have performed duties.
(B) For purposes of this Section 2.1(xvii), the same hours of
service shall not be credited under both Sections
2.1(xvii)(A)(1) or (2) of this Plan and also under
Section 2.1(xvii)(A)(3) of this Plan. Each Hour of
Service shall be credited under this Section 2.1(xvii) in
accordance with 29 C.F.R. Section 2530.200b-2(b) and (c).
Employment with any affiliated companies (whether or not
incorporated) that are members of a controlled group as
defined in Code Section 414(b), that are under common
control as defined in Code Section 414(c), or that are
members of an affiliated service group within the meaning
of Code Section 414(m) or any other entity required to be
aggregated with the Company pursuant to Code Section
414(o) and the final regulations thereunder, will be
treated as employment with the Company for purposes of
participation and vesting under this Plan; provided,
however, that an employee must be employed by the
Employer to participate in this Plan. In addition, for
all purposes of the Plan, Hours of Service will be
credited for any individual considered a Leased Employee
under Code Section 414(n) and for any individual
considered an Employee under Code Section 414(o) and the
final regulations thereunder.
(C) For purposes of determining whether an Employee has
experienced a Break in Service, hours of service shall
include each hour for which an Employee is absent from
work for any period (1) by reason of the pregnancy of the
Employee; (2) by reason of the birth of a child of the
Employee; (3) by reason of the placement of a child with
the Employee in connection with the adoption of such
child by such Employee; or (4) for purposes of caring for
such child for a period beginning immediately following
such birth or placement.
(D) The hours described in the preceding sentence shall be
treated as hours
January 01, 2003 -7-
of service in the year in which the absence from work
begins if the Participant would be prevented from
incurring a one-year Break in Service as a result of such
treatment or, in any other case, the hours shall be
treated as hours of service in the immediately following
year. The hours described in the two preceding sentences
shall be the hours of service which otherwise would
normally have been credited to such Participant but for
such absence, or in any case in which the Plan is unable
to determine such hours, eight hours of service per work
day of such absence. No credit will be given pursuant to
this paragraph unless the Participant furnishes to the
Plan Committee such timely information as the Plan may
require to establish that the absence from work is for
reasons described above and to establish the number of
days for which there was such an absence.
(E) An Employee will be credited with service for
participation and vesting purposes for leaves of absence
qualifying under the Family and Medical Leave Act of
1993, but only to the extent required by the Family and
Medical Leave Act and the regulations thereunder.
(xviii) "Key Employee" means any Employee of an Employer who, at any
time during the Plan Year or any of the four preceding Plan
Years, is (1) an officer of an Employer having annual
Compensation greater than 50 percent of the dollar limitation
under Code Section 415(b)(1)(A), as adjusted for increases in
the cost of living for any Plan Year; (2) one of the ten
Employees having annual Compensation from an Employer of more
than the $30,000 annual addition limitation as adjusted for
increases in the cost of living and owning (or considered to
own under Code Section 318) the largest interests of the
Employer; (3) a five percent owner of the Employer; or (4) a
one percent owner of the Employer having annual Compensation
from the Employer of more than $150,000.
(A) For purposes of Section 2.1(xviii)(A)(1) of this Plan, no
more than 50 Employees (or, if lesser, the greater of 3
Employees or 10 percent of the Employees) shall be
treated as officers. For purposes of Section
2.1(xviii)(A)(2) of this Plan, if two Employees have the
same interest in an Employer, the Employee having greater
annual Compensation from the Employer shall be treated as
having a larger interest. This Section 2.1(xviii)(B)
shall be interpreted to conform with Code Section 416.
For purposes of this definition, "Employee" shall have
the same meaning as it does under Code Section 416(i)(1).
Any Beneficiary of a Key Employee shall be treated as a
Key Employee.
(xix) "Named Fiduciary" means any Fiduciary who is named in this
Plan, or who, pursuant to a procedure specified in the Plan,
is identified as a Fiduciary to the Plan by the Company. Such
Named Fiduciaries include, but are not limited to, the
Trustee, the Plan Committee, and the Plan Administrator.
(xx) "Normal Retirement Age" means the date a Participant attains
age 65.
(xxi) "Participant" means any Employee who has become a Participant
under Article III
January 01, 2003 -8-
of this Plan. Participation shall cease upon the later of (A)
distribution of a Participant's entire vested Account and
forfeiture of a Participant's entire nonvested Account or (B)
Termination of Employment.
(xxii) "Plan" and "Plan and Trust" means the Qualified Employee Stock
Purchase Plan of General Communication, Inc., and the Trust
set forth in and by this Agreement and all subsequent
amendments to it.
(xxiii) "Plan Administrator" means the person appointed by the Board
of Directors whose duties are provided in this Plan and Trust.
(xxiv) "Plan Committee" means the committee appointed by the Board of
Directors whose duties are provided in this Plan and Trust.
(xxv) "Plan Year" means the Company's fiscal (taxable) year, as
presently established, which ends on December 31 of each year,
and this shall be the fiscal (taxable) year of the Trust. If
there is a change in the Company's fiscal year, then "Plan
Year" shall mean the Company's new fiscal year, and any short
fiscal year resulting from such change shall be considered a
full year for all purposes of this Plan. The "Plan Year" shall
not change without approval of the Internal Revenue Service.
(xxvi) "Qualifying Employer Security" means the Class A and Class B
common stock of the Company.
(xxvii) "Quarterly Anniversary Date" means January 1, April 1, July 1,
or October 1 of each Plan Year.
(xxviii) "Reemployment Commencement Date" means the first date after a
Break in Service on which an Employee performs an Hour of
Service for the Employer.
(xxix) "Super Top Heavy Plan" means a plan in which the aggregate of
the Accounts of Key Employees under the plan as of the
Determination Date exceeds 90% of the aggregate of the
Accounts of all Participants under the plan (as of the
Determination Date for the Plan Year), excluding former Key
Employees.
(xxx) "Termination of Employment" means the termination of a
person's status as an Employee as defined in Section 2.1(xii),
as a Union Employee as defined in Section 2.1(xxxvi), or as a
commissioned salesman.
(xxxi) "Top Heavy Plan" means a plan in which the aggregate of the
Accounts of Key Employees under the plan as of the Valuation
Date exceeds 60 percent of the aggregate of the Accounts of
all Participants under the Plan (as of the Determination Date
for the Plan Year), excluding former Key Employees. The
Accounts of Participants shall be increased by the aggregate
distributions made with respect to such Participants during
the five-year period ending on the Determination Date. Section
2.1(xxxi) shall be interpreted to conform with Code Section
416. For purposes of determining whether this and any
aggregated plans are top heavy or super top heavy, all defined
benefit and defined contribution
January 01, 2003 -9-
plans (including any simplified Employee pension plan)
maintained or ever maintained by the Employer in which a Key
Employee participates or on which any plan in which a Key
Employee participates depends for qualification under Code
Sections 401(a)(4) or 410 must be aggregated. Other plans
maintained or ever maintained by the Employer may be
aggregated if, when considered as a group with the plans that
must be aggregated, they would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(xxxii) "Total Disability" means a disability that permanently renders
a Participant unable to perform satisfactorily the usual
duties of his employment with his Employer, as determined by a
physician selected by the Plan Committee, and which results in
his Termination of Employment with the Employer.
(xxxiii) "Trust Fund" means the assets of the trust established by this
Plan and Trust from which the benefits under this Plan shall
be paid and shall include all income of any nature earned by
the fund and all changes in fair market value.
(xxxiv) "Trustee" means the person or persons appointed as trustee of
the Trust Fund and any duly appointed and qualified successor
trustee.
(xxxv) "Trustee Responsibility" means any responsibility provided in
the Plan to manage or control the assets of this Plan.
(xxxvi) "Union Employee" means any Employee who is included in a unit
of Employees covered by a collective bargaining agreement
between Employee representatives and the Company or any
Associated Company, if retirement benefits were the subject of
good faith bargaining between such Employee representatives
and the Company or Associated Company.
(xxxvii) "Valuation Date" means the last day of each Plan Year.
(xxxviii) "Year of Service" for purposes of eligibility to participate
means any 12-month period, measured from the Employee's
Employment Commencement Date or Reemployment Commencement
Date, in which the Employee completes 1,000 or more Hours of
Service. For purposes of this definition, Hours of Service
shall include service as an Employee in any capacity including
Union Employee and commissioned salesman and shall include
service as an Employee of an Employer under common control
with the Company as defined in Code Sections 414(b), (c), (m),
and (o) and the final regulations thereunder, or any other
Company designated by the Plan Committee from time to time.
Year of Service also shall include service with any company
that is acquired directly or indirectly by any Employer
participating in this Plan whether by acquisition of stock or
assets if such company becomes part of the controlled group of
corporations as defined in Code Section 414(b) or (c) of which
the Company is a part. "Year of Service" for purposes of
vesting means any Plan Year in which the Participant completes
1,000 or more Hours of Service.
Effective for acquisitions occurring on or after January 1,
1996, Year of Service also shall include Years of Service with
any company that is acquired directly or
January 01, 2003 -10-
indirectly by any Employer participating in this Plan whether
by acquisition of stock or assets if such company becomes part
of the controlled group of corporations as defined in Code
Section 1563(a) of which the Company is a part and provided
that such individual for whom such service is credited becomes
an Employee of General Communication, Inc. as a result of the
acquisition. Effective for Employees first employed by the
Company on or after January 1, 1996, an Employee will be
credited with Years of Service under this Plan for Years of
Service with any company which has received services provided
by the Company under a management or outsourcing contract
between such company and General Communication, Inc. as a
service provider (as determined by the Company) provided that
such individual for whom such service is to be credited
becomes an Employee of the Company directly from the company
for which the Company serves as service provider (as
determined by the Company).
Section 2.2 Gender. The masculine gender shall include the feminine and
neuter, and the singular shall include the plural.
January 01, 2003 -11-
ARTICLE III
PARTICIPATION
Section 3.1 Who May Become a Participant. Any Employee of an Employer on
the Effective Date who has completed one Year of Service may become a
Participant on the Effective Date of the Plan. Any other or new Employee of an
Employer may become a Participant on any Quarterly Anniversary Date of the Plan
following his having completed one Year of Service, provided such Employee must
be an Employee of the Employer when he becomes a Participant.
Section 3.2 Participation Form.
(a) Completion Requested. The participation form shall be
available from the Plan Administrator. To become a
Participant, each Employee must complete and return the form
to the Plan Administrator on which he shall evidence the
following: (i) his acceptance of participation in the Plan;
and (ii) his consent to be bound by the terms and conditions
of the Plan and all its amendments.
(b) Failure To Complete, Revocation. The failure to complete and
return the form will be deemed to be an election not to become
a Participant. An Employee may revoke this election and become
a Participant by requesting, completing, and returning an
application form before a subsequent Quarterly Anniversary
Date of the Plan, if he otherwise is eligible.
Section 3.3 Effect of Break in Service on Becoming a Participant.
(a) Year in Which the Employee Completes More Than 500 but Fewer
Than 1,000 Hours of Service. An Employee who completes more
than 500 but fewer than 1,000 hours of service during any
12-month period, measured from the Employee's employment or
Reemployment Commencement Date, shall not be deemed to have
completed a Year of Service nor to have suffered a Break in
Service. For the purposes of Section 3.3(c) of this Plan, any
breaks in service which are interrupted by a year in which the
Employee has more than 500 but fewer than 1,000 hours of
service shall be treated as inconsecutive breaks in service.
(b) Inclusion of Pre-Break Years of Service in General. All years
of service prior to any period of up to five consecutive one
year breaks in service, not excluded by reason of this
section, shall be counted in determining who may become a
Participant.
(c) Exclusion of Years of Service for Employees Without Vested
Rights. Years of service completed prior to any Break in
Service by an Employee who has no vested interest in any
Employer contributions at the time of his reemployment shall
not be counted in determining whether the Employee
January 01, 2003 -12-
may become a Participant if the number of consecutive one-year
breaks in service equals or exceeds the greater of five years
or the aggregate number of years of service before such break.
The aggregate number of years of service before such break
shall not include any years of service which have been
excluded by reason of a prior application of this Section
3.3(c).
Section 3.4 Participation Upon Reemployment. An Employee who has satisfied
the service requirement under Section 3.1 of this Plan by reason of years of
service prior to a Break in Service of one year or longer (which service has not
been excluded under Section 3.3 of this Plan) may become a Participant
immediately upon his reemployment. However, an Employee who becomes a
Participant under this section may not commence contributions until the first
Quarterly Anniversary Date occurring after reemployment pursuant to Section 4.1
of this Plan.
Section 3.5 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).
January 01, 2003 -13-
Article IV
CONTRIBUTIONS
Section 4.1 Contributions and Salary Reductions by Participants.
(a) General Rules. Each Participant shall make contributions to
the Trust Fund only by means of regular payroll deductions, by
elective deferrals, or in such other manner as the Plan
Committee shall determine, which contributions shall be paid
to the Trustee at least quarterly. Participant after-tax
contributions by payroll deduction or by any other manner as
the Plan Committee shall determine shall be referred to as
voluntary contributions, and Participant pre-tax contributions
shall be known as elective deferrals. Each Participant shall
designate up to 50% (but 12% for Highly Compensated Employees,
as defined in Code Section 414(q)) of his Compensation in each
payroll period, until changed by the Participant, as a
elective deferral, plus any contributions under Section 4.1(c)
of this Plan. A Participant may change his designation
prospectively but not retroactively effective for any payroll
period by filing a new election with the Plan Administrator
prior to the last two weeks of the calendar quarter
immediately preceding the quarter for which it is to be
effective. A Participant may suspend his contributions to the
Plan for any quarter by filing a written notice of suspension
with the Plan Administrator at any time prior to the last two
weeks of the calendar quarter immediately preceding the
calendar quarter in which it is to be effective. Such notice
shall remain effective until the Participant elects to make
further Participant contributions, and no Employer
contributions shall be made on behalf of the Participant
during such suspension period. A Participant may authorize
resumption of Participant contributions by filing a new
contribution designation with the Plan Administrator at any
time prior to the last two weeks of the calendar quarter
immediately preceding the calendar quarter in which it is to
be effective.
(b) Salary Reductions. To become or remain a Participant in this
Plan, an eligible Employee must elect to reduce his
Compensation in such manner as the Plan Committee shall
determine not to exceed 50% (but 12% for Highly Compensated
Employees, as defined in Code Section 414(q)) of his
Compensation per payroll period. Such election shall be made
and may be changed at any time in accordance with Section
4.1(a) of this Plan. Contributions under this section shall be
made in accordance with an agreement with the Company under
which the Participant elects to reduce his Compensation by the
amount determined at his discretion, and for purposes of Code
Section 401(k) shall be deemed to be Company contributions.
Agreements to reduce Compensation shall be subject to Sections
4.11 and 4.12 of this Plan.
(c) Nonqualified Voluntary Contributions. Each Plan Participant
may contribute to the Plan for each Plan Year during which he
is a Participant such amount of nonqualified voluntary
contributions as he shall elect in his
January 01, 2003 -14-
sole discretion, provided that such amount shall not exceed
10% of his Compensation for each payroll period. Nonqualified
voluntary contributions shall be so designated in writing when
made or when the Participant agrees to payroll deductions. All
non-qualified voluntary contributions for the Plan Year shall
be made during the Plan Year or within 30 days after the end
of the Plan Year.
Section 4.2 Determination of Contribution by the Employer. The Plan
Committee on behalf of each Employer shall pay into the Trust Fund at least
annually an amount up to 100% of each Participant's elective deferral and
voluntary contributions to the Plan which are invested in Qualifying Employer
Securities pursuant to Section 10.1(d), as the Board of Directors shall
determine by resolution; provided, however, that the Employer contribution on
behalf of Participants who have elected to direct the investment of any portion
of their elective deferrals and voluntary contributions into investments other
than Qualifying Employer Securities will receive an Employer matching
contribution of up to 50% of the Participant's elective deferral and voluntary
contributions to the Plan. The Employer's contribution on behalf of any
Participant who elects to direct the investment of any portion of his elective
deferrals and voluntary contributions into investments other than Qualifying
Employer Securities under Section 10.1(d) shall be equal to a stated percentage
of each such Participant's contributions (both voluntary contributions and
elective deferrals) under Section 4.1 of this Plan during any payroll period,
and the Employer's contribution on behalf of any Participant who elects to
direct the investment of all of his elective deferrals and voluntary
contributions into Qualifying Employer Securities under Section 10.1(d) shall be
equal to a stated percentage of each such Participant's contributions (both
voluntary contributions and elective deferrals) under Section 4.1 of this Plan
during any payroll period. No Participant's elective deferral or voluntary
contributions shall be matched in an amount exceeding 10% of such Participant's
Compensation during any payroll period the Participant participates in the Plan.
Except as provided in Section 7.3 of this Plan, the amount of the Employer's
contribution shall not exceed either 10% of the aggregate Compensation of all
Participants under this Plan in the year for which the contribution is being
determined or the annual addition limitations of the Code as provided in
Sections 4.8 or 4.9 of this Plan.
Section 4.3 Time and Method of Payment of Contribution by the Employer. The
Plan Committee on behalf of the Employer may make payment of its contribution
for any Plan Year in installments on any date or dates it elects, provided that
the amount of its contribution for any year shall be paid in full within the
time prescribed in order to qualify such payment as an income tax deduction for
such year under the Code or any other provisions of law and provided further
that the final allocation of such Employer contribution shall not be made to an
Account until the last day of the Plan Year. Such contribution may be made in
cash, in Qualifying Employer Securities (as determined by the Company), or in
property of the character in which the Trustee is authorized to invest the Trust
Fund. Contributions of property other than cash or Qualifying Employer
Securities shall be subject to the approval of the Trustee and the Plan
Committee.
Section 4.4 To Whom Contributions Are To Be Paid. The Employer's
contributions for any Plan Year shall be paid to the Trustee and shall become a
part of the Trust Fund.
January 01, 2003 -15-
Section 4.5 Return of Employer Contributions.
(a) Circumstances Under Which Return Will Be Made. A contribution
by the Employer to the Plan shall be returned to the Company,
at the Employer's discretion, under any of the following
circumstances: (i) if a contribution is made by the Employer
by a mistake of fact, including a mistaken excess
contribution, within one year of its payment to the Plan; (ii)
if initial qualification of the Plan is denied, within one
year after the date of denial of initial qualification of the
Plan; or (iii) if all or any part of the deduction of the
contribution is disallowed, to the extent of the disallowance,
within one year after the disallowance of the deduction.
(b) Amount of Return. The Employer shall state by written request
to the Trustee the amount of the contribution to be returned
and the reason for such return. Such amount shall not include
any earnings attributable to the contribution and shall be
reduced by any losses attributable to the contribution. Upon
sending such request to the Trustee, the Employer
simultaneously shall send to the Plan Committee a copy of the
request. The Trustee shall return such contributions to the
Employer immediately upon receipt of the written request by
the Employer. All contributions by the Employer to the Plan
are declared to be conditioned upon both the qualification of
the Plan under Section 401 of the Code and the deductibility
of such contributions Under Section 404 of the Code.
Section 4.6 Employer's Obligations. The adoption and continuance of the
Plan shall not be deemed to constitute a contract between the Employer and any
Employee or Participant, nor to be a consideration for, or an inducement or
condition of, the employment of any person. Nothing in this Plan shall be deemed
to give any Employee or Participant the right to be retained in the employ of
the Employer, or to interfere with the right of the Employer to discharge any
Employee or Participant at any time, nor shall it be deemed to give the Employer
the right to require the Employee or Participant to remain in its employ, nor
shall it interfere with the right of any Employee or Participant to terminate
his employment at any time.
Section 4.7 Rollover Contributions and Transfers. Notwithstanding the
limits imposed upon Participant contributions, a Participant may contribute any
amount of funds or property to the Plan in any year if such contribution
satisfies the requirements under law for rollover contributions and if the Plan
Committee agrees in writing to accept such contribution on behalf of the Plan
and the Employer. Subject to the direction of the Plan Committee, the Trustee is
authorized to receive and add to the Trust Fund those assets attributable to
employees who were participants in the Western Tele-Communications, Inc.
Employee Stock Purchase Plan. A direct transfer from a qualified Plan subject to
Code Section 417 shall not be permitted. The Employer shall not be required
under Section 4.2 of this Plan to make any matching contributions for such
rollover contributions or transfers. Rollover contributions and transfers shall
be added to a separate Account for such Participant, shall be nonforfeitable,
and shall be distributable under Article VII of this Plan. Transfers from the
Western Tele-Communications, Inc. Employee Stock Purchase Plan shall be subject
to Section 10.1(d) of this Plan.
January 01, 2003 -16-
Section 4.8 Annual Addition.
(a) Limitations. For the purpose of this Section 4.8, the term
"Annual Addition" includes Employer contributions and
forfeitures and any Participant's voluntary contributions.
Annual Addition shall not include any direct transfer or any
contribution made by a Participant which qualified under law
as a rollover contribution. The annual limitation year shall
be the Plan Year. If the Annual Addition to the Account of any
Participant, attributable to all defined contribution plans
(including money purchase pension plans or profit-sharing
plans of the Employer), would exceed either $30,000 or 25% of
such Participant's Compensation, the excess amount shall be
disposed of as follows:
(i) any Participant contributions, to the extent that the
return would reduce the excess amount, shall be
returned to the Participant;
(ii) The amount of such excess attributable to Employer
contributions and any forfeitures shall be allocated
and reallocated to other Participants' Accounts in
accordance with Article V of this Plan to the extent
that such allocations do not cause the additions to
any such Participant's Account to exceed the lesser
of the maximum permissible amount or any other
limitation provided in the Plan;
(iii) To the extent that the excess amounts described in
Section 4.8(a)(ii) of this Plan cannot be allocated
to other Participant Accounts, such excess amounts
shall be allocated to the suspense Account in
accordance with Article V of this Plan and allocated
to Participants under the provisions of that article.
(b) Compensation Defined. For purposes of limiting Annual
Additions under this section and combined benefits and
contributions under Section 4.9 of this Plan, compensation
means a Participant's wages, salaries, fees for professional
services, and other amounts received for personal services
actually rendered for the Employer (including but not limited
to, commissions paid salesmen, compensations for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips, and bonuses).
(i) For Plan Years beginning prior to December 31, 1997,
compensation for Annual Additions purposes shall not
include the following: (A) Employer contributions to
a deferred compensation plan that are not includable
in the Employee's gross income for the year in which
contributed, Employer contributions to a simplified
Employee pension plan described under Code Section
408(k) to the extent such contributions are
deductible by the Employee, or any distributions from
a deferred compensation plan other than amounts
received from an unfunded nonqualified plan; (B)
amounts realized from the exercise of a nonqualified
stock
January 01, 2003 -17-
option or when restricted stock (or property) held by
the Employee either becomes freely transferable or is
no longer subject to substantial risk of forfeiture;
(C) amounts realized from the sale, exchange, or
other disposition of stock acquired under a qualified
stock option; or (D) other amounts which received
special tax benefits, or Employer contributions to
purchase an annuity contract described in Code
Section 403(b), whether or not under a elective
deferral agreement or whether or not the amounts
actually are excludable from the gross income of the
Employee.
(ii) For Plan Years beginning after December 31, 1997,
"Compensation" shall include elective deferrals (as
defined in Code Section 402(g)) and any amounts which
are not included in the Participant's gross income by
reason of Code Sections 125 (cafeteria plans) and 457
(deferrals to governmental plans). All determinations
of Compensation will be made in accordance with Code
Section 415(c)(3), as it may be amended from time to
time.
Section 4.9 Limitation on Combined Benefits and Contributions of All
Defined Benefit and Defined Contribution Plans of the Employer.
(a) Employer Contributions. In any year if the Employer makes
contributions to a defined benefit plan on behalf of an
Employee who also is a Participant in this Plan, then the sum
of the defined benefit plan fraction and the defined
contribution plan fraction (both as prescribed by law and as
defined below) for such Employee for such year shall not
exceed 1.0. In any year if the sum of the defined benefit plan
fraction and the defined contribution plan fraction on behalf
of an Employee does exceed 1.0, then the Employer's
contribution on behalf of such Participant to this defined
contribution plan of the Employer shall be reduced to the
extent necessary to prevent the sum of the defined
contribution plan fraction and the defined benefit plan
fraction from exceeding 1.0. The Employer's contribution on
behalf of such Participant to this Plan may be reallocated to
other Participants under Article V of this Plan to the extent
necessary to prevent the sum of the defined contribution plan
fraction and the defined benefit Plan fraction from exceeding
1.0. If any amount cannot be allocated or reallocated without
exceeding the limits provided in this Article, such amount may
be allocated to the suspense Account established under Article
V of this Plan and allocated to the Participants in accordance
with the provisions of Article V of this Plan. For purposes of
this section the limitation year shall be the Plan Year.
(b) Defined Benefit Plan Fraction. The defined benefit plan
fraction is a fraction the numerator of which is the projected
annual benefit of the Participant under the Plan (determined
as of the close of the year) and the denominator of which is
the lesser of the following amounts determined for such year
and for each prior Year of Service with the Employer: (i) the
product of 1.25 times the maximum benefit dollar limitation in
effect for the limitation year; or
January 01, 2003 -18-
(ii) the product of 1.4 times 100% of the Participant's
average Compensation for his high three consecutive calendar
years.
(c) Defined Contribution Plan Fraction. The defined contribution
plan fraction is a fraction the numerator of which is the sum
of the annual additions to the Participant's Account under all
defined contribution Plans of the Employer as of the close of
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 Year of Service with the Employer: (i) the
product is 1.25 times the dollar limitations in effect under
Code Section 415(c)(1)(A) for the limitation year (without
regard to Code Section 415(c)(6)); or (ii) the product of 1.4
times an amount equal to 25% of the Participant's Compensation
for the limitation year.
(d) Transition Rules. The Plan Committee, in its discretion, may
elect to use the transition rules for calculating the defined
contribution plan fraction as provided in Code Sections
415(e)(4) and 415(e)(6).
(e) Limitation Years Beginning After December 31, 1999. This
Section 4.9 shall not apply to any limitation year beginning
after December 31, 1999.
Section 4.10 Top Heavy Plan Provisions.
(a) Plan Years after December 31, 1983. The provisions of this
section shall have effect for any Plan Years beginning after
December 31, 1983 in which the Plan is top heavy.
(b) Minimum Contribution. If no other qualified plan maintained by
the Employer provides the minimum benefit or contribution for
Participants as required under Code Section 416(c) for a year
that the plan is top heavy, this Plan shall provide a minimum
allocation (which may include forfeitures otherwise allocable)
for such Plan Year for each Participant who is a non-Key
Employee in an amount equal to at least three percent of such
Participant's Compensation for such Plan Year. Notwithstanding
the preceding sentence, the minimum allocation required under
this Section 4.10 shall in no event exceed the percentage of
contributions made under the Plan for such year for the Key
Employee for whom such percentage is the highest for such
year. If Employees who are Participants in this Plan also
participate in a defined benefit plan maintained by the
Employer and both plans are top heavy in any year, the
Employer may elect to satisfy the minimum contribution
requirements of Code Section 416(c) and the regulations
thereunder by providing a minimum allocation (which may
include forfeitures otherwise allocable) for such Plan Year
for each Participant (for purposes of Code Section 416(c) and
the regulations thereunder) who is a non-Key Employee in an
amount equal to at least 5% of such Participant's Compensation
for such Plan Year. For purposes of this Section 4.10,
Participants who must be considered Participants to satisfy
the coverage requirements of Code Section 410(b) in accordance
with Code Section 401(a)(5) and who have not separated from
service at the end of the Plan Year shall be eligible to
January 01, 2003 -19-
share this minimum contribution including Participants who
have failed to complete 1,000 or more hours of service, who
have declined to make mandatory contributions to the Plan or
who have been excluded because such Participant's Compensation
is less than a stated amount. Compensation for purposes of
this Section 4.10 shall mean Compensation as defined in
Section 4.8 of this Plan. Elective deferral contributions may
not be used to satisfy the minimum contribution required under
this Section 4.10. If, in any top-heavy year, the highest
percentage of Employer contributions and forfeitures allocated
to any Key Employee is less than three percent, amounts
allocated as a result of any Key Employee's elective deferrals
must be included in determining the Employer contribution made
on behalf of such Key Employees.
(c) Modification of Plan Fractions. The 1.25 factor in the defined
benefit plan fraction and defined contribution Plan fraction
(as such fractions are defined in the preceding section) shall
be reduced to 1.0 for any year that the Plan is top heavy. If
the Plan is super top heavy, the 1.25 factor also shall be
reduced to 1.0 for the Plan Year.
(d) Maximum Compensation Limitation. The annual Compensation
considered for each Participant for purposes of the Plan for
any year that the Plan is top heavy shall not exceed such
Participant's Compensation (as limited by Code Section
401(a)(17)).
Section 4.11 Salary Reduction Rules.
(a) Election to Reduce Salary. As a condition of participation, an
Employee eligible to participate in this Plan must elect to
reduce his or her Compensation by an amount determined at his
or her discretion (annually not to exceed the lesser of the
amount specified for a given calendar year by the Internal
Revenue Service or 10% of Compensation). A Participant must
make this election according to the procedure prescribed by
and on the form provided by the Plan Committee.
(b) Nondiscriminatory Benefits. All Participants are eligible to
defer identical percentages of their Compensation, regardless
of the amount of such Compensation; provided such percentage
does not result in a deferral of more than the limitation
imposed under Code Section 402(g) in any calendar year. A
Participant may assign to this Plan any excess elective
deferrals made during a taxable year of the Participant by
notifying the Plan Administrator on or before the following
March 15 of the amount of the excess elective deferrals to be
assigned to the Plan. A Participant is deemed to have notified
the Plan Administrator of any excess elective deferrals that
arise taking into account only those elective deferrals made
to this Plan and any other plans of the Employer. An excess
elective deferral is any elective deferral during a calendar
year in excess of the dollar limitation in effect under Code
Section 402(g) for such year. On or before the April 15th
following the end of each calendar year, the Company will
distribute excess elective deferrals (plus any allocable
January 01, 2003 -20-
income and minus any allocable loss) to any Participant to
whose Account excess elective deferrals were made or assigned
for the preceding year and who claims excess elective
deferrals for such taxable year or who is deemed to have
notified the Plan Administrator of such excess. The income or
loss attributable to excess elective deferrals is the income
or loss for the year allocable to the Participant's elective
deferrals multiplied by a fraction, the numerator of which is
the Participant's excess elective deferrals for such year and
the denominator of which is the total Account balance of the
Participant attributable to elective deferrals, without regard
to any income or losses allocable to such elective deferrals
for the calendar year. Alternatively, in the discretion of the
Committee, income allocable to the Participant's excess
elective deferrals may be determined under any reasonable
method used by the Plan for allocating income on Plan assets.
(c) Limit on Actual Deferral Percentage. The Actual Deferral
Percentage for Participants who are Highly Compensated
Employees for each Plan Year and the Actual Deferral
Percentage for Participants who are Non-Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
(i) The Actual Deferral Percentage for the Plan Year for
Participants who are Highly Compensated Employees may
not exceed the Actual Deferral Percentage for the
preceding Plan Year for Participants who are
Non-Highly Compensated Employees multiplied by 1.25
times; or
(ii) The Actual Deferral Percentage for the Plan Year for
Participants who are Highly Compensated Employees may
not exceed the Actual Deferral Percentage for the
preceding Plan Year for Participants who are
Non-Highly Compensated Employees multiplied by 2.0,
provided that the Actual Deferral Percentage for the
Plan Year for Participants who are Highly Compensated
Employees does not exceed the Actual Deferral
Percentage for the preceding Plan Year for
Participants who are Non-Highly Compensated Employees
by more than two percentage points.
The following rules regarding the Actual Deferral Percentage
will apply:
(i) The Actual Deferral Percentage for the Plan Year for
any Highly Compensated Employee who is eligible to
have elective deferrals (and qualified non-elective
contributions or qualified matching contributions, or
both, if such contributions are treated as elective
deferrals for purposes of the Actual Deferral
Percentage test) allocated to his or her Account
under two or more arrangements described in Code
Section 401(k) that are maintained by the Company
will be determined as if such elective deferrals
(and, if applicable, such qualified non-elective
contributions or qualified matching contributions, or
both) were made under a single arrangement. If a
Highly Compensated Employee participates in
January 01, 2003 -21-
two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred
arrangements ending with or within the same calendar
year will be treated as a single arrangement;
(ii) In the event that this Plan satisfies the
requirements of Code Sections 401(k), 401(a)(4), or
410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated
with this Plan, then this section will be applied by
determining the Actual Deferral Percentage of
Participants as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year;
(iii) For purposes of determining the Actual Deferral
Percentage, elective deferrals, qualified
non-elective contributions, and qualified matching
contributions must be made before the last day of the
twelve-month period immediately following the Plan
Year to which such contributions relate; and
(iv) The Company will maintain records sufficient to
demonstrate satisfaction of the Actual Deferral
Percentage test and the amount of qualified
non-elective contributions or qualified matching
contributions, or both, used in such test.
(d) Nonforfeitability of Elective Contributions. All elective
deferral contributions made on behalf of Participants to this
Plan are vested immediately. Such elective deferrals are
nonforfeitable at all times.
(e) Distributions Restriction. Elective deferrals shall be subject
to the restrictions on withdrawals under Section 7.6 of this
Plan.
(f) Definitions.
(i) The "Actual Deferral Percentage" for a specified
group of Participants for a Plan Year is the average
of the ratios (calculated separately for each
Participant in such group) of the amount of deferrals
made under the Plan on behalf of each such
Participant for the Plan Year to the Participant's
Compensation for the entire Plan Year (whether or not
the Participant was a Participant for the entire Plan
Year) or for the portion of such Plan Year during
which the Employee was a Participant, as determined
by the Company for such Plan Year so long as such
determination is applied uniformly to Participants
under the Plan for such Plan Year. Deferrals on
behalf of any Participant include [A] any elective
deferrals made pursuant to the Participant's deferral
election, including excess elective deferrals, but
excluding elective deferrals that are taken into
account in the Average Contribution Percentage test
(provided the Actual Deferral Percentage test is
satisfied both with and without exclusion of these
elective deferrals); and [B] in
January 01, 2003 -22-
the discretion of the Company, all qualified
non-elective contributions or such qualified
non-elective contributions as are necessary to meet
the Actual Deferral Percentage test and all qualified
matching contributions or such qualified matching
contributions as are necessary to meet the Actual
Deferral Percentage test. For purposes of computing
Actual Deferral Percentages, an Employee who would be
a Participant but for the failure to make elective
deferrals will be treated as a Participant on whose
behalf no elective deferrals are made.
(ii) "Elective Deferrals" means any Company contributions
made to the Plan at the election of the Participant
in lieu of cash compensation, including contributions
made pursuant to a elective deferral agreement or
other deferral arrangement. A Participant's elective
deferrals in any calendar year are the sum of all
Company contributions made on behalf of such
Participant pursuant to an election to defer under
any arrangement described in Code Section 401(k), any
simplified employee pension cash or deferred
arrangement described in Code Section 402(h)(1)(B),
any eligible deferred compensation plan under Code
Section 457, any plan as described in Code Section
501(c)(18), and any Company contributions made on
behalf of a Participant pursuant to a elective
deferral agreement for the purchase of an annuity
contract under Code Section 403(b).
(iii) "Participant" for purposes of this Section 4.11 only
includes all Employees eligible to participate in
this Plan even if not electing to do so.
(iv) "Compensation" for purposes of this Section 4.11
means only Compensation as defined in Section 2.1(ix)
of this Plan prior to any elective deferrals under
Section 4.1 of this Plan.
(g) Distribution of Excess Contributions. An excess contribution
is the excess, in any Plan Year, of the aggregate amount of
contributions actually taken into account in determining the
Actual Deferral Percentage for Highly Compensated Employees
over the maximum amount of such contributions permitted by the
Actual Deferral Percentage test, determined by reducing
contributions made on behalf of Highly Compensated Employees
beginning with the Highly Compensated Employee with the
highest amount of elective deferrals for such Plan Year. In
the event that excess contributions are made for any Plan
Year, the Committee will distribute the excess contributions
in accordance with this paragraph. On or before the 15th day
of the third month following the end of each Plan Year, but in
no event later than the close of the following Plan Year, each
Highly Compensated Employee will have his or her portion of
the excess contribution, adjusted for any income or loss
allocable to such portion, distributed to him. The income or
loss attributable to excess contributions is the income or
loss for the Plan Year allocable to the Participant's elective
deferral Account (and, if applicable, the qualified
non-elective
January 01, 2003 -23-
contribution Account or the qualified matching contribution
Account, or both) multiplied by a fraction, the numerator of
which is the Participant's excess contributions for the Plan
Year and the denominator of which is the Participant's Account
balance attributable to elective deferrals (and qualified
non-elective contributions or qualified matching
contributions, or both, if any such contributions are taken
into account in determining the actual deferral percentage),
without regard to any income or losses allocable to such
contributions for the Plan Year. Alternatively, in the
discretion of the Committee, income allocable to the
Participant's excess contributions may be determined under any
reasonable method used by the Plan for allocating income on
Plan assets. Excess contributions will be distributed from the
Participant's elective deferral Account and qualified matching
contributions Account, if applicable, in proportion to the
Participant's elective deferrals and qualified matching
contributions (to the extent used in the actual deferral
percentage test) for the Plan Year. Excess contributions will
be distributed from the Participant's qualified non-elective
contribution Account only to the extent that such excess
contributions exceed the balance in the Participant's elective
deferral Account and qualified matching contributions account.
If excess contributions are not distributed by the 15th day of
the third month following the end of the Plan Year in which
such excess contributions arose, a ten percent excise tax will
be imposed on the Company with respect to such excess
contributions. Matching contributions attributable to excess
contributions that are distributed to a Participant shall be
forfeited as of the distribution date of the excess
contribution.
Section 4.12 Nondiscrimination Rules for Voluntary Contributions and
Employer Contributions. (a) Limit on Average Contribution Percentage. The
Average Contribution Percentage for Participants who are Highly Compensated
Employees for each Plan Year and the Average Contribution Percentage for
Participants who are Non-Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(i) The Average Contribution Percentage for the Plan Year
for Participants who are Highly Compensated Employees
may not exceed the Average Contribution Percentage
for the preceding Plan Year for Participants who are
Non-Highly Compensated Employees multiplied by 1.25
times; or
(ii) The Average Contribution Percentage for the Plan Year
for Participants who are Highly Compensated Employees
may not exceed the Average Contribution Percentage
for the preceding Plan Year for Participants who are
Non-Highly Compensated Employees multiplied by 2.0,
provided that the Average Contribution Percentage for
the Plan Year for Participants who are Highly
Compensated Employees does not exceed the Average
Contribution Percentage for the preceding Plan Year
for Participants who are Non-Highly Compensated
Employees by more than two percentage points.
January 01, 2003 -24-
(iii) Multiple Use: If one or more Highly Compensated
Employees participate in both a cash or deferred
arrangement and a plan subject to the Average
Contribution Percentage test maintained by the
Company and the sum of the Actual Deferral Percentage
and Average Contribution Percentage of those Highly
Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the Average
Contribution Percentage of those Highly Compensated
Employees who also participate in a cash or deferred
arrangement will be reduced (beginning with such
Highly Compensated Employee with the highest amount
of such contributions for such Plan Years) so that
the Aggregate Limit is not exceeded. The amount by
which each Highly Compensated Employee's contribution
amount is reduced will be treated as an excess
aggregate contribution. The Actual Deferral
Percentage and Average Contribution Percentage of the
Highly Compensated Employees are determined after any
corrections required to meet the Actual Deferral
Percentage and Average Contribution Percentage tests.
Multiple use does not occur if both the Actual
Deferral Percentage and the Average Contribution
Percentage of the Highly Compensated Employees do not
exceed 1.25 times the Actual Deferral Percentage and
Average Contribution Percentage of the Non-Highly
Compensated Employees;
(iv) The Average Contribution Percentage for the Plan Year
for any Highly Compensated Employee who is eligible
to have contribution percentage amounts allocated to
his or her Account under two or more arrangements
described in Code Section 401(k) that are maintained
by the Company will be determined as if such
contribution percentage amounts were made under a
single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
or deferred arrangements ending with or within the
same calendar year will be treated as a single
arrangement;
(v) In the event that this Plan satisfies the
requirements of Code Sections 401(m), 401(a)(4), or
410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated
with this Plan, then this section will be applied by
determining the contribution percentage of
Participants as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code
Section 401(m) only if they have the same Plan Year;
(vi) For purposes of determining the Average Contribution
Percentage test, Participant contributions are
considered to have been made in the Plan Year in
which contributed to the Trust. Matching
contributions and qualified non-elective
contributions will be considered made for a Plan Year
if made no later than the end of the twelve-month
period beginning on the day after the close of the
January 01, 2003 -25-
Plan Year. A matching contribution (including a
qualified matching contribution) that is forfeited to
correct excess contributions, or because it is
attributable to an excess contribution or excess
deferral will not be taken into account for purposes
of determining the contribution percentage test; and
(vii) The Company will maintain records sufficient to
demonstrate satisfaction of the Average Contribution
Percentage test and the amount of qualified
non-elective contributions or qualified matching
contributions, or both, used in such test.
(viii) An excess aggregate contribution is the excess, in
any Plan Year, of the aggregate contribution
percentage amounts taken into account in determining
the numerator of the average contribution percentage
actually made on behalf of Highly Compensated
Employees over the maximum contribution percentage
amounts permitted by the average contribution
percentage test, determined by reducing contributions
made on behalf of Highly Compensated Employees
beginning with the Highly Compensated Employee with
the highest contribution percentage. In the event
that excess aggregate contributions are made for any
Plan Year, the Committee will distribute the excess
aggregate contributions in the same manner as excess
contributions are distributed, as provided above.
Income and losses attributable to excess aggregate
contributions will be determined and distributed
along with the excess aggregate contributions in the
manner provided above.
(ix) In lieu of distributing excess contributions as
provided above or excess aggregate contributions as
provided above, the Company, in its discretion, may
make qualified non-elective contributions on behalf
of all Participants or all Participants who are
non-Highly Compensated Employees, in the Company's
discretion, that are sufficient to satisfy either the
actual deferral percentage test or the average
contribution percentage test, or both, pursuant to
regulations under the Code. "Qualified non-elective
contributions" means contributions (other than
matching contributions or qualified matching
contributions) made by the Company and allocated to
Participants' Accounts that the Participants may not
elect to receive in cash until distributed from the
Plan, that are nonforfeitable when made, and that are
distributable only in accordance with the
distribution provisions that are applicable to
elective deferrals and qualified matching
contributions.
(b) Definitions.
(i) The "Average Contribution Percentage" for a specified
group of Participants for a Plan Year is the average
of the ratios (calculated separately for each
Participant in such group) of the sum of the
Participant contributions, matching contributions,
and qualified matching contributions (to the extent
such contributions are not
January 01, 2003 -26-
taken into account for purposes of the actual
deferral percentage test) made on behalf of the
Participant for the Plan Year to the Participant's
Compensation for the entire Plan Year (whether or not
the Participant was a Participant for the entire Plan
Year) or for the portion of the Plan Year during
which the Employee was a Participant in the Plan, as
determined by the Company for such Plan Year so long
as such determination is applied uniformly to all
Participants under the Plan for such Plan Year.
Matching and qualified matching contributions on
behalf of any Participant in any Plan Year include
[A] in the discretion of the Company, all qualified
non-elective contributions or such qualified
non-elective contributions, as are necessary to meet
the average contribution percentage test; and [B] in
the discretion of the Company, all elective deferrals
made pursuant to the Participant's deferral election
or such elective deferrals as are necessary to meet
the average contribution percentage test (provided
that the actual deferral percentage test is satisfied
both with and without the exclusion of these elective
deferrals). Such contribution percentage amounts
shall not include matching contributions that are
forfeited either to correct excess aggregate
contributions or because the contributions to which
they relate are excess deferrals, excess
contributions or excess aggregate contributions.
(ii) "Aggregate Limit" means the greater of:
(A) the sum of [i] 1.25 times the greater of the
Actual Deferral Percentage of Non-Highly
Compensated Employees for the Plan Year or
the Average Contribution Percentage of
Non-Highly Compensated Employees for the
Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement;
and [ii] the lesser of two times or two plus
the lesser of such Actual Deferral
Percentage or Average Contribution
Percentage; or
(B) the sum of [i] 1.25 times the lesser of the
Actual Deferral Percentage of Non-Highly
Compensated Employees for the Plan Year or
the Average Contribution Percentage of
Non-Highly Compensated Employees for the
Plan Year beginning with or within the Plan
Year of the cash or deferred arrangement;
and [ii] the lesser of two times or two plus
the greater of such Actual Deferral
Percentage or Average Contribution
Percentage.
(iii) "Compensation" for purposes of this Section 4.12
only, will mean compensation as defined in Code
Section 2.1(ix) of this Plan prior to any elective
deferrals under Section 4.1 of this Plan.
(iv) "Participant Contribution" means any contribution
made to the Plan by or on behalf of a Participant
that is included in the Participant's gross income in
the year in which made and that is maintained
January 01, 2003 -27-
under a separate Account to which earnings and losses
are allocated.
(v) "Matching Contribution" means a Company contribution
made to this or any other defined contribution plan
on behalf of a Participant on account of a
Participant contribution made by such Participant, or
on account of a Participant's elective deferral,
under a Plan maintained by the Company.
January 01, 2003 -28-
Article V
DETERMINATION AND VESTING OF PARTICIPANT ACCOUNTS
Section 5.1 Determination of Participants' Accounts.
(a) Allocation of Contributions. As of the last day of each
calendar quarter the Plan Committee shall allocate to the
Account of each Participant (including a Participant who
terminates employment during the quarter) any amounts
contributed by the Employer to the Trust on behalf of such
Participant under Section 4.2 of this Plan for the calendar
quarter then ended. Forfeitures under Section 7.3 of this Plan
shall be allocated along with Employer contributions during
the first calendar quarter after the end of the year in which
the forfeitures occur. The maximum allocation under this
Section 5.1(a) to any Participant for any Plan Year shall not
exceed 10% of such Participant's Compensation. Voluntary
contributions and elective deferrals under Section 4.1 of this
Plan shall be allocated to the Account of the Participant
making such contribution.
(b) Allocation of Earnings, Losses and Changes in Fair Market
Value of the Net Assets of the Trust Fund; Allocation of
Qualifying Employer Securities. Each class (whether Class A or
Class B) of Qualifying Employer Securities shall be allocated
to the Accounts of Participants as of the end of each biweekly
payroll period or as of the end of each calendar quarter after
acquired by the Trust Fund in the ratio that contributions
under Section 4.1 of this Plan made to each Account in the
calendar quarter bear to the total contributions under that
Section 4.1 made to all Accounts for the calendar quarter. Any
dividends, cash or stock, paid on Qualifying Employer
Securities shall be allocated along with the Qualifying
Employer Securities on which they are paid. Once Qualifying
Employer Securities are allocated to a Participant's Accounts,
any dividends, cash or stock, paid on such allocated
securities shall be allocated directly to such Accounts.
Earnings and losses of the Trust Fund (other than on
Qualifying Employer Securities) shall be computed and
allocated to the Participants in the ratio which the total
dollar value of the Account (whether or not vested and
excluding Qualifying Employer Securities) of each Participant
in the Trust Fund bears to the aggregate dollar value of the
Accounts (excluding Qualifying Employer Securities) of all
Participants as of the annual computation date. Only
Participants in the Plan on the last day of the Plan Year
shall share in the allocation of earnings, losses and changes
in fair market value of the net assets of the Trust Fund
(other than Qualifying Employer Securities) for that year.
Losses and declines in value of Participants' Accounts will
not be considered to be a forfeiture.
(c) Participant Accounts. The Plan Committee shall maintain an
Account for each Participant showing the number of shares
allocated to his Account in the Trust Fund as of the last
previous annual computation date attributable to any
contributions made by the Employer, including any
January 01, 2003 -29-
Employer contributions for the year ending on such date. This
Account shall be known as the Employer contributions Account.
Separate Accounts also shall be kept, showing the voluntary
and elective deferral contributions of each Participant,
shares allocated, and the earnings, losses and changes in fair
market value thereof. The Plan Committee shall distribute, or
cause to be distributed, to each Participant at least annually
a written statement setting forth the value of such
Participant's Accounts as of the last day of the Plan Year,
and such other information as the Plan Committee shall
determine. Qualifying Employer Securities shall be valued at
the mean between dealer "bid" and "ask" closing prices of the
stock in the over-the-counter market as reported by the
National Association of Securities Dealers, Inc., or in the
"pink sheets" published by the National Quotation Bureau, Inc.
Valuations of Qualifying Employer Securities that are not
readily tradable on an established securities market shall be
made by an independent appraiser.
(d) Valuation Dates. The Valuation Date of the Trust Fund shall be
the last day of each Plan Year, and such other dates as
determined by the Committee, at which time the Plan Committee
shall determine the value of the net assets of the Trust Fund
(i.e., the value of all the assets of the Trust Fund at their
then current fair market value, less all liabilities) and the
value of contributions by each Employer and all Participants
for such year.
(e) Computation Dates. The Plan Committee shall compute the value
of each Participant's Account annually on the last day of each
Plan Year and shall base such computations on the valuation of
the assets in the Trust Fund on the Valuation Date coincident
with such date. Upon direct distribution under Section 7.2(a)
of this Plan, the Plan Committee shall make a special
computation by which it shall adjust the value of such
Participant's Account to reflect the values determined as of
the most recent Quarterly Anniversary Date prior to the
occurrence of such direct distribution. The value of his
Account as so adjusted shall be the amount which the Plan
Committee shall use in determining the amount which shall be
distributable to such Participants. The Plan Committee shall
be under no obligation to compute the value of any
Participant's Account more than once annually, unless an event
occurs which requires the direct distribution of any part of a
Participant's Account, in which case the Plan Committee shall
compute the Account of such Participant as provided above and,
in its discretion, may compute the Account of each
Participant. To the extent Qualifying Employer Securities have
been allocated to the Account of any Participant, the Plan
Committee may distribute such Qualifying Employer Securities
in kind without a special computation of value.
(f) Suspense Account for Unallocated Amounts. If the amount to be
allocated to any Participant's Account would exceed the
contribution limitations of Sections 4.8 or 4.9 of this Plan,
a separate suspense Account shall be established to hold such
unallocated amounts for any
January 01, 2003 -30-
year or years provided that: (i) no Employer contributions may
be made at any time when their allocations would be precluded
by Section 415 of the Code; (ii) investment gains and losses
and other income are not allocated to the suspense Account;
and (iii) the amounts in the suspense Account are allocated
under Section 5.1(a) of this Plan as of each allocation date
on which such amounts may be allocated until the suspense
Account is exhausted. In the event of Plan termination, the
balance of such suspense Account may revert to the Company,
subject to regulations governing such reversion.
Section 5.2 Vesting of Participants' Accounts.
(a) General Rules. If any Participant reaches his Normal
Retirement Age, dies, or suffers Total Disability while a
Participant, his entire Account shall become fully vested
without regard to the number of years of service such
Participant has had with the Employer. Any Account whether
vested or forfeitable shall become payable to a Participant or
his beneficiaries only to the extent provided in this Plan. A
Participant or former Participant who has designated a
Beneficiary and who dies shall cease to have any interest in
this Plan or in his Account, and his Beneficiary shall become
entitled to distribution of the Participant's Account under
this Plan and not as a result of any transfer of the interest
or Account. A Participant's Account attributable to his own
contributions or attributable to a rollover contribution shall
be fully vested at all times.
(b) Vesting Schedule. A Participant shall have a vested interest
in the portion of his Account attributable to Employer
contributions, in accordance with the following schedule:
Percentage of Account
Years of Service Which is Vested
---------------- ---------------
Fewer than 1 0
1 or more but fewer than 2 20
2 or more but fewer than 3 30
3 or more but fewer than 4 45
4 or more but fewer than 5 60
5 or more but fewer than 6 80
6 or more 100
Section 5.3 Full Vesting Upon Termination or Partial Termination of Plan or
Upon Complete Discontinuance of Employer Contributions. Upon the termination or
partial termination of this Plan or upon complete discontinuance of Employer
contributions, the Accounts of all Participants affected, as of the date such
termination, partial termination, or complete discontinuance of Employer
contributions occurred, shall be fully vested.
Section 5.4 Service Included in Determination of Vested Accounts. All years
of service with the Company and any Associated Company shall be included for the
purpose of determining a Participant's vested Account under Section 5.2 of this
Plan, except years of service excluded by reason of a Break in Service under
Section 5.5 of this Plan.
January 01, 2003 -31-
Section 5.5 Effect of Break in Service on Vesting. With respect to a
Participant who has five or more consecutive one-year breaks in service, years
of service after such Break in Service shall not be taken into account for
purposes of computing the Participant's vested Account balance attributable to
Employer contributions made before such five or more year period.
Section 5.6 Effect of Certain Distributions.
(a) Participant Contributions. The provisions of this
Section 5.6 shall not apply to any Participant
contributions (including elective deferrals) or
rollover contributions.
(b) Repayment of Distribution. A Participant who
terminates participation for any reason other than
retirement, disability, or death while any portion of
his Account in the Trust Fund is forfeitable and who
receives a distribution of his vested Account
attributable to Employer contributions shall have the
right to pay back such distribution to the Plan. Such
repayment may be made (i) only if the Participant has
returned to the employ of the Company or any
Associated Company, and (ii) before the earlier of
the date which is five years after the date the
Participant is re-employed by the Employer, or the
date on which the Participant experiences any five
consecutive one-year breaks in service commencing
after the distribution. Repayment of a Participant's
Account attributable to his elective deferral
contributions, if any, shall not be permitted under
this Section 5.6. A Participant who desires to make
repayment of a distribution under this Section 5.6(b)
shall make repayment directly to the Plan Committee.
If a Participant repays a distribution under this
section, the value of his Account shall be the amount
of his Account prior to distribution, unadjusted for
any subsequent gains or losses. The amount of the
Participant's Account that was forfeited previously
shall be restored from one or more of the following
sources, at the discretion of the Plan Committee:
income or gain to the Plan, forfeitures or Employer
contributions.
(c) Forfeiture of Account When Repayment of Distribution
Is Not Made. If distribution is made to a Participant
and he does not repay such distribution under the
terms of Section 5.6(b) of this Plan when the time
limit for repayment expires under Section 5.6(b)
above, the Participant shall forfeit the entire
portion of his nonvested Account (as adjusted for
gains and losses) which was not distributed to him.
The Account shall be unadjusted for any increase in
vesting for service completed during the repayment
period.
January 01, 2003 -32-
Article VI
RETIREMENT DATE, DESIGNATION OF BENEFICIARY
Section 6.1 Normal Retirement Date. On the last date of the quarter in
which a Participant attains his Normal Retirement Age, for purposes of this Plan
he shall be entitled to retire voluntarily. The Employer may continue to employ
a Participant after he has attained his Normal Retirement Age with the consent
of such Participant. At any time thereafter such Participant may retire. Until
retirement, a Participant shall continue to participate in the Plan unless he
elects otherwise. A Participant who has completed 10 years of service with any
Employer or combination of Employers may elect to retire for purposes of this
Plan on the last day of any quarter during the 5-1/2 years prior to his Normal
Retirement Age upon application to and approval by the Plan Committee. In no
event may a Participant receive a distribution attributable to Employer
contributions prior to termination of the Participant's employment except upon
retirement for purposes of this Plan.
Section 6.2 Designation of Beneficiary. A Participant's full vested Account
balance shall be payable upon the death of the Participant, to the Participant's
surviving spouse or to his designated Beneficiary if there is no surviving
spouse or if the spouse consents to such Beneficiary designation in writing.
This spousal consent shall acknowledge the effect of such consent and shall be
witnessed by a Plan Committee member or a notary public. If there is no
surviving spouse or in the case of a spousal election not to receive the
Account, a Participant shall designate a Beneficiary to receive his Account in
the Trust Fund upon his death on the form prescribed by and delivered to the
Plan Committee. The Participant shall have the right to change or revoke a
designation at any time by filing a new designation or notice of revocation with
the Plan Administrator. No notice to any Beneficiary other than the spouse nor
consent by any Beneficiary other than the spouse shall be required to effect any
change of designation or revocation. If a Participant fails to designate a
Beneficiary before his death, or if no designated Beneficiary survives the
Participant, the Plan Committee shall direct the Trustee to pay his Account in
the Trust Fund to his surviving spouse, or if none, to his personal
representative. If no personal representative has been appointed actual notice
of such is given to the Plan Committee within 60 days after the Participant's
death, and if his Account does not exceed $5,000, the Plan Committee may direct
the Trustee to pay his Account to such person as may be entitled to it under the
laws of the state where such Participant resided at the date of his death. In
such case, the Plan Committee may require such proof of right or identity from
such person as the Plan Committee may deem necessary.
Section 6.3 Participant or Beneficiary Whose Whereabouts Are Unknown. In
the case of any Participant or Beneficiary whose whereabouts are unknown, the
Plan Committee shall notify such Participant or Beneficiary at his last known
address by certified mail with return receipt requested advising him of his
right to a pending distribution. If the Participant or Beneficiary cannot be
located in this manner, the Plan Committee shall direct the Trustee to establish
a custodial Account for such Participant or Beneficiary for the purpose of
holding the Participant's Account until it is claimed by the Participant or
Beneficiary or until proof of death satisfactory to the Plan Committee is
received by the Plan Committee. If such proof of death is received, the Plan
Committee shall direct the Trustee to distribute the Participant's Account in
accordance with the provisions of Section 6.2 of this Plan. Any Trustee fees or
other administrative expenses attributable to a custodial Account established
and maintained under this section shall be charged against such Account.
January 01, 2003 -33-
Article VII
DISTRIBUTION FROM TRUST FUND
Section 7.1 When Accounts Become Distributable and Effect of Distribution.
If a Participant dies, suffers Total Disability, retires, or terminates his
employment for any other reason, the portion of this vested Account attributable
to Employer contributions, to Participant contributions, and to any rollover
contributions shall be distributable under Section 7.2 of this Plan. When the
Participant's Account becomes distributable, such Participant shall cease to
have any further interest or participation in the Trust Fund or any subsequent
accruals or contributions to the Trust Fund except as provided below: (i) a
Participant shall retain the right to receive distribution of his Account as
determined at the last prior regular computation or upon the special computation
as determined under Section 5.1 of this Plan; and (ii) except as provided in
Section 5.1 of this Plan, a Participant who makes contributions during any
quarter shall retain the right to receive his share in the Employer's
contribution allocated to his Account for such quarter.
Section 7.2 Distribution of Account.
(a) Notification of Trustee and Nature of Distribution. As soon as
administratively feasible after a Participant's vested Account
is distributable, the Plan Committee shall notify the Trustee
in writing of the Participant's name and address, the amount
of his vested Account which is distributable, the reason for
its being distributable and the permissible manner of
distribution. A Participant's Account shall be distributed in
cash or Qualifying Employer Securities at the election of the
Participant, provided that Qualifying Employer Securities
shall be distributed to a Participant who makes a written
demand for such to the Plan Committee. Cash always may be
distributed in lieu of fractional shares.
(b) Distribution Upon Retirement and Upon Total Disability. Except
as provided in Section 7.5, if a Participant's Account becomes
distributable upon his Termination of Employment with the
Employer because such Participant has attained retirement age
or because of his Total Disability, the Trustee shall pay such
Participant's Account as soon as administratively feasible
following the Participant's Termination of Employment in (i)
one lump sum distribution, or (ii) substantially equal annual
installments over a period not to exceed five years. If he
dies before receiving all of his vested Account, the remaining
installments shall be paid to his Beneficiary under this
Section 7.2. Any payments received as disability benefits
under this Plan are intended to qualify as distribution from
an accident and health Plan as described in the Code.
(c) Distribution Upon Death. Except as provided in Section 7.5, if
a Participant's Account becomes distributable because of his
death, his Beneficiary may elect to receive such Participant's
Account, commencing as soon as administratively feasible
following the Participant's death in (i) one lump sum
distribution, or (ii) substantially equal annual installments
over a period not to exceed five years. If the Beneficiary
dies before
January 01, 2003 -34-
receiving all of the Participant's vested Account, the
remaining payments shall be made to the contingent
Beneficiary, if any. If the Participant has not designated a
Beneficiary, or if he has designated a Beneficiary who dies
and the Participant has not designated a contingent
Beneficiary, the Participant's vested Account, or the
undistributed portion of it, shall be paid in a lump sum under
Section 6.2 of this Plan.
(d) Distribution Upon Other Termination of Employment. Except as
provided in Section 7.5, if a Participant's Account becomes
distributable upon his Termination of Employment for any
reason other than attainment of retirement age, disability, or
death, the Trustee shall pay such Participant's Account to the
Participant, in one lump sum distribution as soon as
administratively feasible following Participant's Termination
of Employment and election to receive a distribution in
accordance with Section 7.2(f). The vested Account of a
Participant who has satisfied the years of service requirement
for early retirement under Section 6.1 of this Plan, but who
terminates employment prior to the early retirement age may be
distributed, at the option of the Participant, as soon as
administratively feasible following the date on which the
Participant attains early retirement age, if such date is
earlier than the date on which this Account otherwise would be
distributable. If the Participant dies prior to receiving all
of his vested Account, the remainder shall be distributed to
his Beneficiary under this Section 7.2.
(e) Distribution for Rollover Transactions and Eligible Rollover
Distributions.
(i) Notwithstanding any other provision of this Section
7.2, a Participant whose Account becomes
distributable may request that the Plan Committee
direct the Trustee to distribute the entirety of the
Participant's vested Account in a single payment to
the Participant for the purpose of transferring such
Account upon Termination of Employment to another
plan in a rollover transaction. A Participant may not
rollover the portion of his Account considered
contributed by the Participant, which includes all
Participant contributions other than elective
deferrals. A rollover contribution may include all or
any portion of any prior rollover contributions, any
earnings, losses, and changes in the fair market
value of the portion of a Participant's Account
attributable to his own contributions and the portion
of a Participant's vested Account attributable to
elective deferrals and Employer contributions. The
Participant shall make such rollover request in
writing and shall provide such information to the
Plan Committee as the Plan Committee requests,
including the name of the plan to which his interest
is to be transferred and the name and address of the
sponsor and the Trustee of the new plan, when
applicable.
(ii) Notwithstanding any provision of the Plan to the
contrary that otherwise would limit a Participant's
distribution election under this Article, a
Participant may elect, at the time and in the manner
prescribed by the Plan Committee, to have any portion
of an
January 01, 2003 -35-
eligible rollover distribution paid directly to an
eligible retirement plan specified by the Participant
in a direct rollover. An eligible rollover
distribution is any distribution of all or any
portion of the balance to the credit of the
Participant, except that an eligible rollover
distribution does not include (A) any distribution
that is one of a series of substantially equal
periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; (B) any
distribution to the extent such distribution is
required under Code Section 401(a)(9); and (C) the
portion of any distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities). An eligible
retirement plan is an individual retirement account
described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b),
an annuity plan described in Code Section 403(a), or
a qualified trust described in Code Section 401(a),
that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to a surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity. A
distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are
distributees with regard to the interest of the
spouse or former spouse. A direct rollover is a
payment by the Plan to the eligible retirement plan
specified by the distributee. The Committee may
establish procedures for the distribution of eligible
rollover distributions, including any limitations on
the amount eligible for a rollover distribution, to
the extent permitted by law.
(f) Distribution of a Participant's Contributions.
Notwithstanding any other provision of Section 7.2 of
this Plan, but subject to the rules of Section 7.5 of
this Plan; if a Participant terminates employment for
any reason, he shall receive distribution in one lump
sum of his Account in the Trust Fund attributable to
Participant contributions and the earnings, losses,
and changes in fair market value of such
contributions if he makes written demand for them
upon the Plan Committee. If a Participant so
requests, distribution of his Account attributable to
Participant contributions shall be made as soon as
administratively feasible following his election. Any
amount attributable to Participant contributions not
distributed under this Section 7.2(f) shall be
distributed along with Employer contributions.
(g) Optional Forms of Benefits for Transferred Assets.
Notwithstanding any provision of this Plan to the
contrary, to the extent that any optional form of
benefit under this Plan permits a distribution prior
to the employee's retirement, death, disability, or
severance from employment, and prior to
January 01, 2003 -36-
Plan termination, the optional form of benefit is not
available with respect to benefits attributable to
assets (including the post-transfer earnings thereon)
and liabilities that are transferred, within the
meaning of section 414(1) of the Internal Revenue
Code, to this Plan from a money purchase pension plan
qualified under section 401(a) of the Internal
Revenue Code (other than any portion of those assets
and liabilities attributable to voluntary employee
contributions).
Section 7.3 Disposition of Forfeitable Account on Termination of
Employment. If a Participant's employment is terminated for any reason other
than retirement, death, or Total Disability, while any part of his Account in
the Trust Fund is forfeitable, then that portion of his Account which is
forfeitable shall be forfeited by him on the earlier of the date the Participant
receives distribution or the date which he experiences five consecutive one-year
breaks in service. If the value of a Participant's vested Account balance is
zero upon the Participant's termination of employment, the Participant will be
deemed to have received a distribution of the vested Account balance immediately
upon such termination of employment. If a Participant who has received a
distribution of less than his or her entire Account upon termination of
employment is reemployed prior to five consecutive one-year breaks in service,
the forfeited Account will be restored from income or gains to the Plan,
forfeitures, or Company contributions, at the discretion of the Plan Committee,
if the Participant repays the distributed amount to the Plan pursuant to section
5.6(b). Any amount forfeited will remain in the Trust Fund and will be allocated
as provided in Section 5.1 of this Plan.
Section 7.4 Assignment of Benefits.
(a) General Rules. Except as provided in this Section 7.4, all
amounts payable by the Trustee shall be paid only to the
person entitled to them, and all such payments shall be paid
directly to such person and not to any other person or
corporation. Such payments shall not be subject to the claim
of any creditor of a Participant, nor shall such payments be
taken in execution by attachment or garnishment or by any
other legal or equitable proceedings. No person shall have any
right to alienate, anticipate, commute, pledge, encumber, or
assign any payments or benefits which he may expect to receive
contingently or otherwise, under this Plan, except the right
to designate a Beneficiary or beneficiaries; provided, that
this Section 7.4 shall not affect, restrict, or abridge any
right of setoff or lien which the Trust may have by law.
(b) Qualified Domestic Relations Orders.
(i) Section 7.4(a) of this Plan shall not apply with
respect to payments in accordance with the
requirements of a qualified domestic relations order.
A qualified domestic relations order creates or
recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right
to, receive all or a portion of the benefits
otherwise payable to a Participant under the Plan. A
domestic relations order means any judgment, decree,
or order (including approval of a property settlement
agreement) that relates to the provision of child
support, alimony payments, or
January 01, 2003 -37-
marital property rights to a spouse, former spouse,
child, or other dependent of a Participant, and is
made pursuant to a state domestic relations law
(including a community property law). To qualify, the
domestic relations order must:
(A) Clearly state the name and last known
mailing address of the Participant and the
name and mailing address of each alternate
payee covered by the order;
(B) Clearly state the amount or percentage of
the Participant's benefits to be paid by the
Plan to each alternate payee, or the manner
in which the amount or percentage is to be
determined;
(C) Clearly state the number of payments or
period to which the order applies;
(D) Identify each Plan to which the order
applies;
(E) Not require the Plan to provide any type or
form of benefits, or any option, not
otherwise provided under the Plan;
(F) Not require the Plan to provide increased
benefits (determined on the basis of
actuarial value); and
(G) Not require the payment of benefits to an
alternate payee that are required to be paid
to another alternate payee under another
order previously determined to be a
qualified domestic relations order.
(ii) In the case of any distribution before a Participant
has separated from service, a qualified domestic
relations order shall not fail to meet the
requirements of Section 7.4(b)(i)(E) of this Plan
solely because such order requires that payment of
benefits be made to an alternate payee (A) on or
after the date the Participant attains the earliest
retirement age, (B) as if the Participant had retired
on the date on which such payment is to begin under
such order, and (C) in any form in which benefits may
be paid under the Plan to the Participant (other than
in the form of a qualified joint and survivor annuity
with respect to the alternate payee and his
subsequent spouse). Payment of benefits before
Termination of Employment solely by reason of
payments to an alternate payee under a qualified
domestic relations order shall not be deemed to be a
violation of Code Section 401(a) or (k).
January 01, 2003 -38-
(b) Definitions.
(i) "Alternate payee" means any spouse, former spouse,
child, or other dependent of a Participant who is
recognized by a qualified domestic relations order as
having a right to receive all, or a portion of, the
benefits payable under a Plan with respect to such
Participant.
(ii) "Earliest retirement age" means the earlier of:
(A) The date on which the Participant is
entitled to a distribution under the Plan;
or
(B) The later of the date the Participant
attains age 50, or the earliest date on
which the Participant could begin receiving
benefits under the Plan if the Participant
had separated from service.
Section 7.5 Other Rules for Distribution of Fund.
(a) Vested Accounts and Consent to Distribution. No life annuity
may be purchased or distributed under this Plan and no amount
(taking into consideration both Employer and Employee
contributions) may be distributed to a Participant prior to
age 65 unless the amount is distributed in a lump sum of
$5,000 or less or the Participant consents in writing to the
distribution. Unless the Participant elects otherwise,
distribution must commence not later than 60 days after the
end of the Plan Year in which a Participant attains Normal
Retirement Age or actually retires, whichever is later. Unless
otherwise elected by the Participant, distributions must
commence no later than one year after the close of the Plan
Year in which occurs the later of the Participant's
Termination of Employment because of death, disability or
Normal Retirement Age, or the fifth Plan Year following the
Participants' separation from service; provided, however, that
if securities held in a Participant's Account were purchased
with the proceeds of a loan that has not been repaid in full,
distributions may be delayed until the end of the Plan Year
during which the loan is repaid in full. The Participant's
Account must be distributed over a period not longer than five
years or, five years plus one additional year (but not more
than five additional years) for each $100,000 of Account
balance in excess of $500,000.
(b) Distribution Rules. Notwithstanding any other provisions of
this section, the following distribution rules shall apply
(unless a different method of distribution applies under
Section 242(b) of the Tax Equity and Fiscal Responsibility Act
of 1982):
(i) Before Death. The entire Account of each Participant
(A) will be distributed to him not later than the
required beginning date; or (B) shall be distributed
commencing not later than the required beginning date
over (1) the life of the Participant (or the lives of
the
January 01, 2003 -39-
Participant and his designated Beneficiary), or (2) a
period not extending beyond the life expectancy of
the Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(ii) After Death. If a Participant dies and distribution
of his Account has begun in accordance with Section
7.5(i)(B) of this Plan, the remaining portion of his
Account will be distributed at least as rapidly as
under the method of distribution being used under
that Section 7.5(i)(B) as of the date of the
Participant's death. If a Participant dies before
distribution of the Participant's Account has
commenced, the entire interest of the Participant
will be distributed within five years after the death
of the Participant. The preceding sentence shall not
apply if any portion of the Participant's Account is
payable to or for the benefit of a designated
Beneficiary, if such portion will be distributed over
the life of the designated Beneficiary, and if such
distributions will begin not later than one year
after the date of the Participant's death or such
later date as the Secretary of the Treasury may
prescribe by regulations. If the designated
Beneficiary is the surviving spouse of the
Participant, the date on which the distributions are
required to begin shall not be earlier than the date
on which the Participant would have attained age
70-1/2, and if the surviving spouse dies before the
distribution to such spouse begins, distributions
shall be made as if the surviving spouse were the
Participant.
(iii) Life Expectancy. For purposes of this Section 7.5,
the life expectancy of an Employee and the Employee's
spouse (other than in the case of a life annuity) may
be redetermined but not more frequently than annually
as determined by the Plan Committee. With respect to
distributions under the Plan made in calendar years
beginning on or 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 amendment shall continue in effect
until the end of the last calendar beginning before
the effective date of final regulations under Section
401(a)(9) or such other date specified in guidance
published by the Internal Revenue Service
(iv) Required Beginning Date. Required Beginning Date
means April 1 of the calendar year following the
calendar year in which occurs the later of [1] the
date the Participant attains age 70 1/2, or [2] the
date the Participant retires from employment with the
Company. Notwithstanding the above, in the case of a
5% owner of the Company, Required Beginning Date
means April 1 of the calendar year following the
calendar year in which the Participant attains age 70
1/2.
January 01, 2003 -40-
Any Participant (who is not a 5% owner of the
Company) attaining age 70 1/2 in years after 1995 may
elect by April 1 of the calendar year following the
year in which the Participant attained age 70 1/2 (or
by December 31, 1997 in the case of a Participant
attaining age 70 1/2 in 1996) to defer distributions
until the calendar year following the calendar year
in which the Participant retires. If no such election
is made the Participant will begin receiving
distributions by the April 1 of the calendar year
following the year in which the Participant attained
age 70 1/2 (or by December 31, 1997 in the case of a
Participant attaining age 70 1/2 in 1996).
Any Participant attaining age 70 1/2 in years prior
to 1997 may elect to stop distributions and
recommence by the April 1 of the calendar year
following the year in which the Participant retires.
(v) Designated Beneficiary. Designated Beneficiary means
any individual designated as a Beneficiary by the
Participant.
(vi) Treatment of Payments to Children. Under regulations
prescribed by the Secretary of the Treasury, any
amount paid to a child shall be treated as if it had
been paid to the surviving spouse if such amount will
become payable to the surviving spouse upon such
child reaching majority (or such other designated
event permitted under regulations).
(vii) Spouse, Trust for Benefit of Spouse, or Estate As
Beneficiary. If distribution prior to a Participant's
death has not commenced or has commenced as
installment payments from the Trust Fund and if the
Participant designates his spouse, a trust for the
benefit of his spouse, or his estate as his
Beneficiary, the provisions of this subsection shall
apply, subject to the limitations in this Section
7.5:
(A) Spouse As Beneficiary. If a Participant
designates his spouse as his Beneficiary,
upon the death of the Participant the spouse
shall elect (1) to receive the entire
Account of the Participant in a lump sum
distribution, or (2) to receive payment of
the Account in installments as provided in
Section 7.5(vii)(E) of this Plan. In the
absence of an election by the spouse, the
Participant's Account shall be distributed
to the spouse in a lump sum within a period
of time that satisfies the requirements of
this section. Notwithstanding any other
provisions of this Plan, the spouse at any
time may direct the Trustee to distribute
all or any part of the Account to the
spouse, or may request that the Trustee
segregate the Account from the remainder of
the Trust Fund and invest it in the manner
that the spouse specifies. The Trustee, in
its sole discretion, shall determine on a
nondiscriminatory basis whether to permit
such segregation.
January 01, 2003 -41-
(B) QTIP Trust As Beneficiary. If a Participant
designates as his Beneficiary a qualified
terminable interest property "QTIP" trust
for the benefit of his spouse, upon the
death of the Participant the Trustee of the
QTIP trust shall elect for the QTIP trust
(1) to receive the entire Account of the
Participant in a lump sum distribution, or
(2) to receive payment of the Account in
installments as provided in Section
7.5(vii)(E) of this Plan. In the absence of
an election by the QTIP Trustee, the
Participant's Account shall be distributed
to the QTIP trust in a lump sum within a
period of time that satisfies the
requirements of this Section 7.5.
Notwithstanding any other provisions of this
Plan, the spouse at any time may direct the
Trustee to distribute all or any part of the
Account to the QTIP trust, or may request
that the Trustee segregate the Account from
the remainder of the Trust Fund and invest
it in the manner that the QTIP Trustee
specifies. The Trustee, in its sole
discretion, shall determine on a
nondiscriminatory basis whether to permit
such segregation.
(C) General Power of Appointment Trust As
Beneficiary. If the Participant designates
as his Beneficiary a trust over which his
spouse has a general power of appointment,
upon the death of the Participant the spouse
shall elect (1) for such trust to receive
the entire Account of the Participant in a
lump sum distribution, or (2) for such trust
to receive payment of the Account in
installments as provided in Section
7.5(vii)(E) of this Plan. In the absence of
an election by the spouse, the Participant's
Account shall be distributed to such trust
in a lump sum within a period of time that
satisfies the requirements of this section.
Notwithstanding any other provisions of this
Plan, the spouse at any time may direct the
Trustee to distribute all or any part of the
Account to the general power of appointment
trust, or may request that the Trustee
segregate the Account from the remainder of
the Trust Fund and invest it in the manner
that the spouse specifies. The Trustee, in
its sole discretion, shall determine on a
nondiscriminatory basis whether to permit
such segregation.
(D) Estate As Beneficiary. If the Participant
designates his estate as his Beneficiary
with a specific bequest of his income in
respect of decedent to his spouse, upon the
death of the Participant the personal
representative of the Participant (or the
successor of the personal representative)
shall elect (1) to receive the entire
Account of the Participant in a lump sum
distribution, or (2) for the spouse to
receive payment of the Account in
installments as provided in Section
7.5(vii)(E) of this Plan. In the
January 01, 2003 -42-
absence of an election by the personal
representative (or his successor), the
Participant's Account shall be distributed
to the personal representative (or his
successor) in a lump sum within a time
period that satisfies the requirements of
this section. Notwithstanding any other
provisions of this Plan, the personal
representative (or his successor) at any
time may direct the Trustee to distribute
all or any part of the Account, or may
request that the Trustee segregate the
Account from the remainder of the Trust Fund
and invest it in the manner that the
personal representative (or his successor)
specifies. The Trustee, in its sole
discretion, shall determine on a
nondiscriminatory basis whether to permit
such segregation.
(E) Installment Distributions. If installment
payments of the Participant's Account are
elected under this section, the person
making the election shall specify the amount
of the payments and when they shall be made,
provided that payment must be made no less
frequently than annually. The total
installment payments each year shall equal
the greater of (1) all income from the
Account, or (2) the minimum permissible
annual payment under this Section 7.5, and
shall be limited as provided under Section
7.2(c) of this Plan. If a spouse elects
installment payments, such spouse shall
determine who shall receive the amounts, if
any, payable under such installment election
after such spouse's death.
Section 7.6 Withdrawals.
(a) Employer Contributions. Upon completing the requirements for
early retirement provided in Section 6.1 of this Plan, a
Participant may elect to retire for purposes of this Plan and
may request withdrawal from the Trust Fund of all or any
portion of his Account attributable to Employer contributions
valued as of the most recent preceding Valuation Date. If a
Participant does make such a withdrawal, he shall not be
eligible to participate in the Plan again and he shall forfeit
all income which otherwise would have been credited to his
Account on the last day of the year in which he makes a
withdrawal of Employer contributions. His Account shall be
credited or charged with any realized or unrealized gains or
losses on such date as though no such withdrawal had occurred.
(b) Voluntary Contributions. At any time a Participant may request
withdrawal of all or any part of his Account attributable to
voluntary contributions. A Participant desiring such a
withdrawal shall file a written request with the Plan
Committee at least two weeks before the date on which
withdrawal is to be made. The Participant shall specify the
date of withdrawal in his request which date shall be the end
of a calendar quarter and that date shall be the withdrawal
date for all purposes of this Plan whether or not he actually
receives his distribution on that date. The Plan Committee
then
January 01, 2003 -43-
shall direct the Trustee to distribute the amount requested to
the Participant. The Trustee shall distribute the withdrawn
contributions as soon as reasonably possible after the
withdrawal date. A Participant who makes withdrawal of any
portion of his Account under this Section 7.6(b) may not
contribute to the Trust Fund under Section 4.1 of this Plan
until the first calendar quarter commencing six months after
withdrawal is made. Any expenses attributable to any
withdrawal under this Section 7.6(b) shall be charged to the
Account of the Participant requesting the withdrawal. Vested
benefits under the Plan may not be forfeited because a
Participant withdraws his voluntary contributions.
(c) Salary Reductions and Rollover Contributions. A Participant
may withdraw his elective deferral contributions to this Plan
(but excluding any earnings, losses, and changes in fair
market value of such contributions in the case of a hardship
withdrawal), as reflected in his Account attributable to
elective deferrals, upon either completing the requirements
for early retirement under Section 6.1 of this Plan or upon
serious financial hardship, as defined below. A Participant
may withdraw any Rollover contributions made under Section 4.7
(including any earnings, losses, and changes in fair market
value of such rollover contributions) upon serious financial
hardship, as defined below. A Participant desiring such a
withdrawal shall make his request in such form and manner as
the Plan Committee shall prescribe from time to time. If a
Participant makes a withdrawal upon eligibility for early
retirement, he shall not be eligible to participate in the
Plan again and shall forfeit all income which otherwise would
have been credited to his Account on the last day of the year
in which he makes withdrawal. A hardship distribution cannot
exceed the amount required to meet the immediate financial
need and cannot be reasonably available to the Participant
from other resources. If the Plan Committee determines in
accordance with a uniform and nondiscriminatory policy that
serious financial hardship exists, it may direct the Trustee
to distribute the amount requested to the Participant. Any
expenses attributable to the hardship withdrawal shall be
charged to the Account of the Participant requesting the
withdrawal. For the purposes of this Section, a serious
financial hardship is defined as an immediate and heavy
financial need of the Participant when such Participant lacks
other available resources. The following are the only
financial needs considered immediate and heavy:
(i) Deductible medical expenses (within the meaning of
Code Section 213(d)) of the Participant, the
Participant's spouse, children, or dependents;
(ii) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii) Payment of tuition, and related expenses, for the
next twelve months of post-secondary education for
the Participant, the Participant's spouse, children,
or dependents;
January 01, 2003 -44-
(iv) The need to prevent the eviction of the Participant
from, or a foreclosure on the mortgage of, the
Participant's principal residence;
(v) Funeral expenses of a family member of the
Participant; or
(vi) Any other reason deemed to be an immediate and heavy
financial need by the Secretary of Treasury.
In the case of hardship withdrawal of elective deferrals, a
distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if
(A) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans available
under all Plans maintained by the Company; (B) in the case of
hardship withdrawal of elective deferrals, all Plans
maintained by the Company provide that the Participant's
elective deferrals and Participant contributions will be
suspended for twelve months after the receipt of the hardship
distribution; (C) the distribution is not in excess of the
amount necessary to satisfy the immediate and heavy financial
need; and (D) all plans maintained by the Company provide that
the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable
limit under Code Section 402(g) for such taxable year less the
amount of such Participant's elective deferrals for the
taxable year of the hardship distribution.
Any hardship withdrawal under this section may be made only in
a cash lump sum.
Section 7.7 Put Option. If Qualifying Employer Securities distributed, as
part of the balance to the credit of the Participant distributed within one
taxable year, are not readily tradable on an established market, the Participant
receiving such Qualifying Employer Securities has a right to require the
Employer to repurchase such Qualifying Employer Securities at fair market value.
The put option period shall extend for 60 days after the date of distribution
and, if not exercised during that time period shall extend for an additional 60
day period in the following Plan Year (to the extent provided in Treasury
regulations). Payments for the Qualifying Employer Securities must be made in
substantially equal period payments over a period not exceeding five years and
must commence within 30 days after the exercise of the "put option". Adequate
security shall be provided and reasonable interest shall be paid on unpaid
amounts. Qualifying Employer Securities shall be readily tradable on an
established market if they are (i) listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, (ii) quoted
on a system sponsored by a national securities association registered under
Section 15A(b) of the Securities Exchange Act, including the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ"),
or (iii) traded on any over the counter market by brokers or dealers who make
the market using "pink sheets" published by the National Quotation Bureau, Inc.
January 01, 2003 -45-
Section 7.8 Loans to Participants.
(a) Uniform Non-Discriminatory Policy. The Committee may establish
a uniform and nondiscriminatory policy under which it may
direct the Trustee to make a loan to a Participant who makes a
written request for such a loan. In no event may all loans
from all qualified plans of the Company to an individual
Participant exceed the lesser of (i) the greater of $10,000 or
one-half the present value of the Participant's nonforfeitable
accrued benefit under all such plans; or (ii) $50,000 reduced
by the excess (if any) of the highest outstanding balance of
loans from all such plans during the one year period ending on
the day before the date on which such loan was made over the
outstanding balance of loans from all such plans on the date
on which such loan was made.
(b) Collateral Terms. All loans shall be secured adequately by
collateral which collateral may (in the Plan Committee's
discretion) include up to 50% of the Participant's vested
Account, shall be considered investments of the Plan and
Trust, and shall bear a rate of interest considered reasonable
on the date on which the loan was made. Except to the extent
it is used to acquire any dwelling unit that within a
reasonable time is to be used (determined at the time the loan
is made) as a principal residence of the Participant, any such
loan shall be repaid within or upon the earlier of the date
prescribed by the Plan Committee, or five years after the loan
is made. To the extent that any loan is used to acquire the
principal residence of the Participant, such loan shall be
repaid within a reasonable period of time as determined by the
Committee. Substantially level amortization of the loan (with
payments at least quarterly) shall be made over the term of
the loan. If a Participant does not repay such loan within the
time prescribed, then in addition to enforcing payment through
any legal remedy, the Plan Committee may instruct the Trustee
to deduct the total amount of the loan and any unpaid interest
due on it from such Participant's Account, but no foreclosure
of the Participant's Account may occur prior to the Account
being distributable under this Article. In its discretion the
Plan Committee may require the Participant to repay the loan
by payroll deduction. Loans may not be made to
shareholder-Employees or to owner-Employees. For purposes of
this requirement, a shareholder-Employee means an Employee or
officer of an electing small business (Subchapter S)
corporation who owns (or is considered as owning within the
meaning of Code Section 319(a)(1)) on any day during the
taxable year of such corporation, more than five percent of
the outstanding stock of the corporation. An owner-Employee
means an Employee who owns the entire interest of an
unincorporated trade or business or is a partner owning more
than 10 percent of the capital interest or profits in such
partnership.
Section 7.9 Other Restrictions on Withdrawals. Notwithstanding other
provisions of this Plan and in particular Article VII of this Plan, the
following will apply to all transactions involving Qualifying Employer
Securities or Accounts which are the subject of this Plan:
January 01, 2003 -46-
(a) Six Month Limitation on Further Purchases. An officer or
director Participant making a withdrawal under this Plan must
cease further purchases of Qualifying Employer Securities in
the Plan for six months, or the Qualifying Employer Securities
so distributed must be held by that Participant six months
prior to disposition; provided that extraordinary
distributions of all of the Qualifying Employer Securities
held by the Plan and distributions in connection with death,
retirement, disability, Termination of Employment, or a
qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the
rules under those acts, are not subject to this requirement;
and
(b) Six Month Limitation on Further Participation. An officer or
director Participant who ceases participation in the Plan may
not participate in the Plan again for at least six months.
January 01, 2003 -47-
Article VIII
FIDUCIARY OBLIGATIONS
Section 8.1 General Fiduciary Duties. A Fiduciary shall discharge his
duties under the Plan solely in the interest of the Participants and the
beneficiaries and for the exclusive purpose of providing benefits to
Participants and to their beneficiaries and defraying reasonable expenses of
administering the Plan. All fiduciaries shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. Except as
authorized by regulations of the Secretary of Labor, no Fiduciary may maintain
the indicia of ownership of any assets of the Plan outside the jurisdiction of
the district courts of the United States. A Fiduciary shall act in accordance
with the documents and instruments governing the Plan to the extent such
documents and instruments are consistent with the requirements of law.
Section 8.2 Allocation of Fiduciary Responsibility. A Named Fiduciary may
designate persons other than named fiduciaries to carry out Fiduciary
responsibilities (other than Trustee responsibilities) under the Plan.
Section 8.3 Liability of Fiduciaries.
(a) Extent of Liability. A Fiduciary who breaches any of the
responsibilities, obligations, or duties imposed upon him by
this Plan or by the requirements of law shall be personally
liable only (i) to make good to the Plan any losses resulting
from his breach, (ii) to restore to the Plan any profits the
Fiduciary has made through the use of Plan assets for his
personal Account, and (iii) to pay those penalties prescribed
by law arising from his breach. A Fiduciary shall be subject
to such other equitable or remedial relief as a court of law
may deem appropriate, including removal of the Fiduciary. A
Fiduciary also may be removed for a violation of Section 8.8
of this Plan (prohibition against certain persons holding
certain positions). No Fiduciary shall be liable with respect
to the breach of a Fiduciary duty if such breach was committed
before he became a Fiduciary or after he ceased to be a
Fiduciary.
(b) Liability of Fiduciary for Breach by Co-Fiduciary. A Fiduciary
shall be liable for a breach of Fiduciary responsibility of
another Fiduciary of this Plan, only if he (i) participates
knowingly in, or knowingly undertakes to conceal, an act or
omission of the other Fiduciary, and knows such act or
omission by the other Fiduciary is a breach of the other
Fiduciary's duties, (ii) enables another Fiduciary to commit a
breach, by his failure to comply with Section 8.1 of this Plan
in the administration of the specific responsibilities which
give rise to his status as a Fiduciary, or (iii) has knowledge
of a breach of another Fiduciary and does not make reasonable
efforts under the circumstances to remedy the breach.
(c) Liability for Improper Delegation of Fiduciary Responsibility.
A Named Fiduciary who allocates any of his Fiduciary
responsibilities to any person
January 01, 2003 -48-
or designates any person to carry out any of his Fiduciary
responsibilities shall be liable for the act or omission of
such person in carrying out the responsibility only to the
extent that the Named Fiduciary fails to satisfy his general
Fiduciary duties of Section 8.1 of this Plan with respect to
the allocation or designation, with respect to the
establishment or implementation of the procedure by which he
allocates the responsibilities, or in continuing the
allocation or designation. Nothing in this Section 8.3(c)
shall prevent a Named Fiduciary from being liable if he
otherwise would be liable for an act or omission under Section
8.3 of this Plan.
(d) Fiduciary to whom Responsibilities are Allocated. Any person
who has been designated to carry out Fiduciary
responsibilities under Section 8.2 of this Plan shall be
liable for such responsibilities under this section to the
same extent as any Named Fiduciary.
(e) Liability Insurance and Indemnification. Nothing in this Plan
shall preclude a Fiduciary from purchasing insurance to cover
liability from and for his own account. The Company may
purchase insurance to cover potential liability of those
persons who serve in a Fiduciary capacity with regard to the
Plan or may indemnify a Fiduciary against liability and
expenses reasonably incurred by him in connection with any
action to which such Fiduciary may be made a party by reason
of his being or having been a Fiduciary.
Section 8.4 Prohibited Transactions. No Fiduciary shall cause the Plan to
engage in a transaction if the Fiduciary knows or should know that the
transaction constitutes a prohibited transaction under law. No disqualified
person under law (other than a Fiduciary acting only as such) shall engage in a
prohibited transaction as prescribed by law.
Section 8.5 Receipts of Benefits by Fiduciaries. Nothing shall prohibit any
Fiduciary from receiving any benefit to which he may be entitled as a
Participant or Beneficiary in the Plan, if such benefit is computed and paid on
a basis which is consistent with the terms of the Plan applied to all other
Participants and beneficiaries. The determination of any matters affecting the
payment of benefits to any Fiduciary other than the Plan Committee shall be
determined by the Plan Committee. If the Plan Committee is an individual, the
determination of any matters affecting the payment of benefits to the Plan
Committee shall be made by a temporary Plan Committee who shall be appointed by
the Board of Directors for such purpose. If the Plan Committee is a group of
individuals, the determination of any matters affecting the payment of benefits
to any individual Plan Committee member shall be made by the remaining Plan
Committee members without the vote of such individual Plan Committee member. If
the remaining Plan Committee members are unable to agree on any matter affecting
the payment of such benefits, the Board of Directors shall appoint a temporary
Plan Committee to decide the matter.
Section 8.6 Compensation and Expenses of Fiduciaries.
(a) General Rules. A Fiduciary shall be entitled to receive any
reasonable Compensation for services rendered or for the
reimbursement of
January 01, 2003 -49-
expenses properly and actually incurred in the performance of
his duties under the Plan. However, no Fiduciary who already
receives full-time pay from an Employer shall receive
Compensation from the Plan, except for reimbursement of
expenses properly and actually incurred. All Compensation and
expenses shall be paid by the Plan, unless the Company, in its
discretion, elects to pay all or any part of such Compensation
and expenses.
(b) Compensation of Plan Committee and Plan Administration. A Plan
Administrator who is not a full-time Employee of an Employer
shall be entitled to such reasonable Compensation as the Plan
Committee and Plan Administrator mutually shall determine. A
Plan Committee member who is not a full-time Employee of an
Employer shall be entitled to such reasonable Compensation as
the Company and the Plan Committee mutually shall determine.
Any expenses properly and actually incurred by the Plan
Committee or the Plan Administrator due to a request by a
Participant shall be charged to the Account of the Participant
on whose behalf such expenses are incurred.
(c) Compensation of Trustee. A Trustee who is not a full-time
Employee of an Employer shall be entitled to such reasonable
Compensation for its services as the Plan Committee and the
Trustee mutually shall determine.
(d) Compensation of Persons Retained or Employed by Named
Fiduciary. The Compensation of all agents, counsel, or other
persons retained or employed by a Named Fiduciary shall be
determined by the Named Fiduciary employing such person, with
the Plan Committee's approval, provided that a person who is a
full-time Employee of an Employer shall receive no
Compensation from the Plan.
Section 8.7 Service by Fiduciaries and Disqualified Persons. Nothing in
this Plan shall prohibit anyone from serving as a Fiduciary in addition to being
an officer, Employee, agent, or other representative of a disqualified person as
defined in the Code.
Section 8.8 Prohibition Against Certain Persons Holding Certain Positions.
No person who has been convicted of a felony shall be permitted to serve as an
administrator, Fiduciary, officer, Trustee, custodian, counsel, agent, or
Employee of this Plan, or as a consultant to this Plan, unless permitted under
law. The Plan Committee shall ascertain to the extent practical that no
violation of this section occurs. In any event, no person knowingly shall permit
any other person to serve in any capacity which would violate this section.
January 01, 2003 -50-
Article IX
PLAN ADMINISTRATOR AND PLAN COMMITTEE
Section 9.1 Appointment of Plan Administrator and Plan Committee. The Board
of Directors by resolution shall appoint a Plan Administrator and Plan
Committee, both of whom shall hold office until resignation, death, or removal
by the Board of Directors. If the Board of Directors fails to appoint the Plan
Committee or Plan Administrator, or both, the Board of Directors shall be the
Plan Committee, the Plan Administrator, or both. Any person may serve in more
than one Fiduciary capacity, including service as Plan Administrator and Plan
Committee member. Any group of persons appointed by the Board of Directors may
serve in the capacity of Plan Committee, Plan Administrator, or both.
Section 9.2 Organization and Operation of Offices of Plan Administrator and
Plan Committee. The Plan Administrator and Plan Committee may adopt such
procedures as each deems desirable for the conduct of their respective affairs
and may appoint or employ a secretary or other agents, any of whom may be, but
need not be, an officer or Employee of the Company or an Associated Company. Any
agent may be removed at any time by the person appointing or employing him.
Section 9.3 Information To Be Made Available to Plan Committee and Plan
Administrator. To enable the Plan Committee and the Plan Administrator to
perform all of their respective duties under the Plan, each Employer shall
provide the Plan Committee and the Plan Administrator with access to the
following information for each Employee: (i) name and address; (ii) social
security number; (iii) birthdate; (iv) dates of commencement and Termination of
Employment; (v) reason for termination of employment; (vi) hours worked during
each year; (vii) annual Compensation; (viii) Employer contributions; and (ix)
such other information as the Plan Committee or the Plan Administrator may
require. To the extent the information is available in Employer records, an
Employer shall provide the Plan Committee and Plan Administrator with access to
information relating to each Employee's contributions, benefits received under
the Plan, and marital status. If such information is not available from the
Employer records, the Plan Committee shall obtain such information from the
Participants. The Plan Committee, the Plan Administrator and the Employer may
rely on and shall not be liable because of any information which an Employee
provides, either directly or indirectly. As soon as possible following any
Participant's death, Total Disability, retirement, or other Termination of
Employment, his Employer shall certify in writing to the Plan Committee and Plan
Administrator such Participant's name and the date and reason for his
Termination of Employment.
Section 9.4 Resignation and Removal of Plan Administrator or Plan Committee
Member; Appointment of Successors. Any Plan Administrator or Plan Committee
member may resign at any time by giving written notice to the Board of
Directors, effective as stated in such notice, otherwise upon receipt of such
notice. At any time the Plan Administrator or any Plan Committee member may be
removed by the Board of Directors without cause. As soon as practical, following
the death, resignation, or removal of any Plan Administrator or Plan Committee
member, the Board of Directors shall appoint a successor by resolution. Written
notice of the appointment of a successor Plan Administrator or successor Plan
Committee member shall be given by the Company to the Trustee. Until receipt by
the Trustee of such written notice, the Trustee shall not be charged with
knowledge or notice of such change.
January 01, 2003 -51-
Section 9.5 Duties and Powers of Plan Administrator, Reporting and
Disclosure.
(a) General Requirements. The Plan Administrator shall be
responsible for all applicable reporting and disclosure
requirements of law. The Plan Administrator shall prepare,
file with the Secretary of Labor, the Secretary of the
Treasury, or the Pension Benefit Guaranty Corporation, when
applicable, and furnish to Participants and beneficiaries,
when applicable, the following: (i) summary plan description;
(ii) description of modifications and changes; (iii) annual
report; (iv) terminal and supplementary reports; (v)
registration statement; and (vi) any other return, report, or
document required by law.
(b) Statement of Benefits Accrued and Vested. The Plan
Administrator is to furnish any Plan Participant or
Beneficiary who so requests in writing, a statement
indicating, on the basis of the latest available information,
the total benefits accrued and the vested benefits, if any,
which have accrued, or the earliest date on which benefits
will become vested. The Plan Administrator shall furnish a
written statement to any Participant who terminates employment
during the Plan Year and is entitled to a deferred vested
benefit under the Plan as of the end of the Plan Year, if no
retirement benefits have been paid with respect to such
Participant during the Plan Year. The statement shall be an
individual statement and shall contain the information
required in the annual registration statement which the Plan
Administrator is required to file with the Secretary of the
Treasury. The Plan Administrator shall furnish the individual
statement to the Participant before the expiration of the time
prescribed for filing the annual registration statement with
the Secretary of the Treasury.
(c) Inspection of Documents. The Plan Administrator is to make
available for inspection copies of the Plan description and
the latest annual report and the agreements under which the
Plan was established or is operated. Such documents shall be
available for examination by any Participant or Beneficiary in
the principal office of the Plan Administrator and in such
other places as may be necessary to make available all
pertinent information to all Participants. Upon written
request by any Participant or Beneficiary, the Plan
Administrator is to furnish a copy of the last updated summary
Plan description, Plan description, and the latest annual
report, any terminal report, and any agreements under which
the Plan is established or operated. In addition, the Plan
Administrator is to comply with every other requirement
imposed on him by law.
(d) Employment of Advisers and Persons To Carry Out
Responsibilities. The Plan Administrator may appoint one or
more persons to render advice with regard to any
responsibility the Plan Administrator has under the Plan and
may employ one or more persons (other than a Named Fiduciary)
to carry out any of his responsibilities under the Plan.
(e) Notice of Eligibility for Direct Rollover Distribution. The
Plan Administrator shall provide a written explanation to the
recipient of any eligible rollover distribution that income
taxes will not be withheld on the distribution to the
January 01, 2003 -52-
extent such distribution is transferred in an eligible
rollover distribution to an eligible retirement plan.
Section 9.6 Duties and Powers of Plan Committee - In General. The Plan
Committee shall decide, in its sole and absolute discretion, all questions
arising in the administration, interpretation, and application of the Plan and
Trust, including all questions relating to eligibility, vesting, and
distribution, except as may be reserved under this Plan to the Company, its
Board of Directors or any Associated Company. The Plan Committee may designate
any person (other than the Plan Administrator or Trustee) to carry out any of
the Plan Committee's Fiduciary responsibilities under the Plan (other than a
Trustee Responsibility) and may appoint one or more persons to render advice
with regard to any responsibility the Plan Committee has under the Plan. The
Plan Committee from time to time shall direct the Trustee concerning the
payments to be made out of the Trust Fund pursuant to this Plan. All notices,
directions, information, and other communications from the Plan Committee shall
be in writing.
Section 9.7 Duties and Powers of Plan Committee - Keeping of Records. The
Plan Committee shall keep a record of all the Plan Committee's proceedings and
shall keep all such books of Account, records, and other data as may be
necessary or advisable in its judgment for the administration of this Plan and
Trust, including records to reflect the affairs of this Plan, to determine the
amount of vested and/or forfeitable interests of the respective Participants in
the Trust Fund, and to determine the amount of all benefits payable under this
Plan. The Plan Committee shall maintain separate Accounts for each Participant
as provided under Section 5.1 of this Plan. Subject to the requirements of law,
any person dealing with the Plan Committee may rely on, and shall incur no
liability in relying on, a certificate or memorandum in writing signed by the
Plan Committee as evidence of any action taken or resolution adopted by the Plan
Committee.
Section 9.8 Duties and Powers of Plan Committee - Claims Procedure.
(a) Filing and Initial Determination of Claim. Any Participant,
Beneficiary or his duly authorized representative may file a
claim for a Plan benefit to which the claimant believes that
he is entitled. Such a claim must be in writing and delivered
to the Plan Committee in person or by certified mail, postage
prepaid. Within 90 days after receipt of such claim, the Plan
Committee shall send to the claimant by certified mail,
postage prepaid, notice of the granting or denying, in whole
or in part, of such claim unless special circumstances require
an extension of time for processing the claim. In no event may
the extension exceed 90 days from the end of the initial
period. If such extension is necessary the claimant will
receive a written notice to this effect prior to the
expiration of the initial 90-day period. The Plan Committee
shall have full discretion pursuant to the Plan to deny or
grant a claim in whole or in part. If notice of the denial of
a claim is not furnished in accordance with this Section
9.8(a), the claim shall be deemed denied and the claimant
shall be permitted to exercise his right of review pursuant to
Section 9.8(c) and (d) of this Plan.
(b) Duty of Plan Committee Upon Denial of Claim. The Plan
Committee shall provide to every claimant who is denied a
claim for benefits written notice setting forth in a manner
calculated to be understood by the claimant: (i)
January 01, 2003 -53-
the specific reason or reasons for the denial; (ii) specific
reference to pertinent Plan provisions on which the denial is
based; (iii) a description of any additional material or
information necessary for the claimant to perfect the claim
and an explanation of why such material is necessary; and (iv)
an explanation of the Plan's claim review procedure.
(c) Request for Review of Claim Denial. Within 60 days after
receipt by the claimant of written notification of the denial
in whole or in part of his claim, the claimant or his duly
authorized representative, upon written application to the
Plan Committee in person or by certified mail, postage
prepaid, may request a review of such denial, may review
pertinent documents and may submit issues and comments in
writing. Upon its receipt of the request for review, the Plan
Committee shall notify the Board of Directors of the request.
(d) Claims Reviewer. Upon its receipt of notice of a request for
review, the Board of Directors shall appoint a person other
than a Plan Committee member to be the claims reviewer. The
Plan Committee shall deliver to the claims reviewer all
documents submitted by the claimant and all other documents
pertinent to the review. The claims reviewer shall make a
prompt decision on the review. The decision on review shall be
written in a manner calculated to be understood by the
claimant, and shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on
which the decision is based. The decision on review shall be
made not later than 60 days after the Plan Committee's receipt
of a request for a review, unless special circumstances
require an extension of time for processing, in which case a
decision shall be rendered not later than 120 days after
receipt of a request for review. If such extension is
necessary the claimant shall be given written notice of the
extension prior to the expiration of the initial 60-day
period. If notice of the decision on review is not furnished
in accordance with this Section 9.8(d), the claim shall be
deemed denied and the claimant shall be permitted to exercise
his right to legal remedy pursuant to Section 9.8(e) of this
Plan.
(e) Legal Remedy. After exhaustion of the claims procedure as
provided under this Plan, nothing shall prevent any person
from pursuing any other legal remedy.
Section 9.9 Duties and Powers of Plan Committee - Funding Policy. The
policy of each Employer is that this Plan shall be funded with Employer
contributions and Participant contributions. The Plan Committee shall determine
the Plan's short-run and long-run financial needs and regularly communicate
these requirements to the appropriate persons. The Plan Committee will determine
whether the Plan has a short-run need for liquidity, (e.g., to pay benefits) or
whether the liquidity is a long-run goal and investment growth is a more current
need. The Plan Committee shall communicate such information to the Trustee so
that investment policy can be coordinated appropriately with Plan needs.
Section 9.10 Duties and Powers of Plan Committee - Bonding of Fiduciaries
and Plan Officials. The Plan Committee shall procure bonds for every Fiduciary
of the Plan and every
January 01, 2003 -54-
Plan official, if he handles funds of the Plan, in an amount not less than 10%
of the amount of funds handled and in no event less than $1,000, except the Plan
Committee shall not be required to procure such bonds if: (i) the person is
excepted from the bonding requirement by law; or (ii) the Secretary of Labor
exempts the Plan from the bonding requirements. The bonds shall conform to the
requirements of law.
Section 9.11 Duties and Powers of Plan Committee - Qualified Domestic
Relations Orders.
(a) Establish Procedures. Effective as of January 1, 1985, the
Plan Committee shall establish reasonable procedures for
determining the qualification status of a domestic relations
order. Such procedures: (i) shall be in writing; (ii) shall
provide to each person specified in a domestic relations order
as entitled to payment of Plan benefits notification of such
procedures promptly upon receipt by the Plan of the order; and
(iii) shall permit an alternate payee to designate a
representative for receipt of copies of notices that are sent
to the alternate payee.
(b) Determination of Plan Committee. Within a reasonable period of
time after receipt of such order, the Plan Committee shall
determine whether such order is a qualified domestic relations
order and notify the Participant and each alternate payee of
such determination. During any period in which the issue of
whether a qualified domestic relations order is a qualified
domestic relations order is being determined, the Plan
Committee shall segregate in a separate Account the amounts
which would have been payable to the alternate payee during
such period if the order had been determined to be a qualified
domestic relations order. If, within 18 months the order is
determined not to be a qualified domestic relations order or
the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Plan Committee shall
pay under the terms of the Plan the segregated amounts to the
person or persons who would have been entitled to such amounts
if there had been no order. If a Fiduciary acts in accordance
with the fiduciary responsibility provisions of ERISA, then
the Plan's obligation to the Participant and each alternate
payee shall be discharge to the extent of any payment made.
Section 9.12 Advice to Designated Fiduciaries. Any Fiduciary designated by
the Plan Committee or Plan Administrator may appoint with the consent of the
Plan Committee or Plan Administrator, respectively, one or more persons to
render advice with regard to any responsibility such designated Fiduciary has
under the Plan.
January 01, 2003 -55-
Article X
POWERS AND DUTIES OF THE TRUSTEE
Section 10.1 Investment of Trust Fund.
(a) Duties of Trustee. The duty of the Trustee is to hold in trust
the funds it receives. Subject to the direction of the Plan
Committee, the Trustee shall have exclusively authority and
discretion to manage and control the assets of the Plan and to
manage, invest, and reinvest the Trust Fund and the income
from it under this article, without distinction between
principal and income, and shall be responsible only for such
sums that it actually receives as Trustee. The Trustee shall
have no duty to collect any sums from the Plan Committee. The
Plan Committee will have the duty to direct the Trustee with
respect to the investment of the Trust Fund, subject to the
Participants' direction of investment under Section 10.1(d).
Notwithstanding any other provision of the Plan, the Trustee
shall have no responsibility to select the investment options
offered to Participants under Section 10.1(d) nor shall the
Trustee have any discretion with respect to the investment of
Trust Fund assets.
(b) Powers of Trustee. The Trustee shall have the power to apply
the funds it receives to purchase shares of Qualifying
Employer Securities, and the Trustee may invest in Qualifying
Employer Securities, up to 100% of the value of Plan assets,
without regard to the diversification requirement or the
prudence requirement to the extent it requires
diversification. Purchases of stock may be made by the Trustee
in the open market or by private purchase, or, if available,
from the Company, or as the Trustee may determine in its sole
discretion, provided only that no private purchase or purchase
from the Company may be made at a price greater than the
current market price for Qualifying Employer Securities on the
day of such purchase. The Trustee also may purchase stock from
Participants who receive distributions from this Trust,
provided that all such purchases shall be made at the current
market price on the day of such purchase. The Trustee also
shall have the power to invest and/or reinvest any and all
money or property of any description at any time held by it
and constituting a part of the Trust Fund, without previous
application to, or subsequent ratification of, any court,
tribunal, or commission, or any federal or state governmental
agency and may invest in real property and all interest in
real property, in bonds, notes, debentures, mortgages,
commercial paper, preferred stocks, common stocks, or other
securities, rights, obligations, or property, real or
personal, including shares or certificates of participation
issued by regulated investment companies or regulated
investment trusts, shares or units of participation in
qualified common trust funds, in qualified pooled funds, or in
pooled investment funds of an insurance Company qualified to
do business in the state. If the Trustee is a bank or similar
financial institution supervised by the United States or a
state, it may invest Plan assets in its own deposits
January 01, 2003 -56-
(savings Accounts and certificates of deposit) if such
deposits bear a reasonable rate of interest.
(c) Diversification and Prudence Requirements. Except to the
extent the Trustee invests in the Qualifying Employer
Securities, the Trustee shall diversify the investments of the
Plan to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so. The Trustee
shall act with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in
a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like
aims.
(d) Participant's Right to Designate Investments.
(i) General Rules. Each Participant shall have the right
to designate the investment of his Account
attributable to elective deferral contributions,
voluntary contributions, and rollover contributions
and transfers made to the Plan, as provided below.
(ii) Investments as of December 31, 1994, to be Invested
by Trustee, at the direction of the Plan Committee.
All Accounts as of December 31, 1994, or such later
date as determined by the Plan Committee, will remain
subject to investment by the Trustee as directed by
the Plan Committee, including investment of up to
100% of such Accounts in Qualifying Employer
Securities.
(iii) Procedure for Designation. Any designation or changes
in designation of the investment of a Participant's
Account attributable to elective deferrals or
voluntary contributions shall be made in writing on
forms provided by the Plan Committee and submitted to
the Plan Committee or the Trustee, as determined by
the Plan Committee, at such times as the Plan
Committee shall provide.
(iv) Investment Categories. The Plan Committee shall offer
a broad range of investment categories, as selected
by the Plan Committee from time to time, which
categories shall include fixed income obligations of
a secure nature, such as savings accounts,
certificates of deposit, and fixed income government
and corporate obligations. The investment categories
also may include Qualifying Employer Securities,
other common stocks, real property, notes, mortgages,
commercial paper, preferred stocks, mutual funds, or
other securities, rights, obligations, or property,
real or personal, including shares or certificates of
participation issued by regulated investment trusts
and shares or units of participation in qualified
common Trust Funds or pooled funds.
(v) Absence of Investment Designation. In the absence of
any written designation of investment for the
Participant's elective deferrals or voluntary
contributions, the Trustee shall invest all funds
received
January 01, 2003 -57-
on Account of any Participant in such category or
categories as the Plan Committee may designate from
time to time.
(vi) Irrevocability of Investment Designation. Once a
Participant has designated the investment of his
Account attributable to elective deferrals or
voluntary contributions into Qualifying Employer
Securities, such Accounts will thereafter remain
invested in Qualifying Employer Securities. A
Participant's rollover contributions and transfer
contributions, if any, may be invested in Qualifying
Employer Securities and such investments may be
changed quarterly in the same manner as investments
other than Qualifying Employer Securities are changed
under the Plan.
(vii) Sole and Exclusive Power of Participants. The right
to designate investment categories under this Section
10.1 shall be the sole and exclusive investment power
granted to Participants. Neither the Trustee nor the
Plan Committee shall be liable for any loss which
results from the Participant exercising such control
under this Section 10.1.
(viii) Expenses. Any expense incurred by the Trustee or the
Plan Committee will be charged directly against the
value of the Account of the Participant on whose
behalf such expense is incurred. The Trustee or the
Plan Committee may allocate expenses to individual
Accounts or commingled Accounts on a
nondiscriminatory basis.
(ix) Special 1997 Participant Election Regarding
Qualifying Employer Securities: Effective from
January 27, 1997, until August 31, 1997, and only in
connection with the public offering of common stock
of General Communication, Inc. that occurs during
1997 (the "1997 Public Offering"), each Participant
will be permitted to make a one-time election to sell
up to 50% of the Qualifying Employer Securities held
in such Participant's Account (including but not
limited to the Participant's elective deferral
account and Company contributions account). The
election to sell such Qualifying Employer Securities
shall be made pursuant to procedures promulgated by
the Committee, which will be applied in a uniform and
nondiscriminatory manner. The sale price for such
Qualifying Employer Securities will be that price at
which such common stock is offered to the general
public during the 1997 Public Offering. The proceeds
from the sale of such Qualifying Employer Securities
thereafter may be invested as directed by the
Participant pursuant to the provisions of this
Section 10.1, disregarding Section 10.1(ii) to the
extent applicable to the Participant's special
one-time election. Participant Accounts (including
proceeds from the 1997 Public Offering) invested in
Qualifying Employer Securities after the 1997 Public
Offering will remain subject to the prohibition
against later sales provided in Section 10.1(vi).
January 01, 2003 -58-
(x) Qualifying Employer Securities Diversification Right:
Notwithstanding any other provision of this Plan,
effective January 1, 2003, each Participant will be
permitted to diversify (direct and change the
investment of) that portion of the Participant's
Account balance that is invested in Qualifying
Employer Securities, as follows: Effective December
31, 2002, an accounting of the historical cumulative
portions of the Participant's Account balance which
were invested in Qualifying Employer Securities as of
December 31, 2002 (the "Qualifying Balances"), will
be completed. As soon as practicable after December
31, 2002, 100% of the Qualifying Balances will be
available for complete investment discretion by the
Participant under the terms of this Plan. The intent
of this subsection (x) it to permit Participants
complete investment direction over their Qualifying
Balances. Amounts contributed and invested in
Qualifying Employer Securities after December 31,
2002, will remain subject to the terms of this Plan,
excluding this subsection (x).
Section 10.2 Administrative Powers of the Trustee. Subject to the
requirements imposed by law, the Trustee shall have all powers necessary or
advisable to carry out the provisions of this Plan and Trust and all inherent,
implied, and statutory powers not or subsequently provided by law, including
specifically the power to do any of the following:
(a) To cause any securities or other property to be registered and
held in its name as Trustee, or in the name of one or more of
its nominees, without disclosing the Fiduciary capacity, or to
keep the same in unregistered form payable to bearer;
(b) To sell, grant options to sell, exchange, pledge, encumber,
mortgage, deed in trust, or use any other form of
hypothecation, or otherwise dispose of the whole or any part
of the Trust Fund on such terms and for such property or cash,
in part cash and credit, as it may deem best; to retain, hold,
maintain, or continue any securities or investments which it
may hold as part of the Trust Fund for such length of time as
it may deem advisable; and generally, in all respects, to do
all things and exercise each and every right, power, and
privilege in connection with and in relation to the Trust Fund
as could be done, exercised, or executed by an individual
holding and owning such property in absolute and unconditional
ownership;
(c) To abandon, compromise, contest, and arbitrate claims and
demands; to institute, compromise, and defend actions at law
(but without obligation to do so); in connection with such
powers, to employ counsel as the Trustee shall deem advisable
and as approved by the Plan Committee; and to exercise such
powers all at the risk and expense of the Trust Fund;
(d) To borrow money for this trust upon such terms and conditions
as the Trustee shall deem advisable, and to secure the
repayment of such by the mortgage or pledge of any assets of
the Trust Fund, provided that the
January 01, 2003 -59-
Trustee may not borrow money to purchase Qualifying Employer
Securities;
(e) To vote in person or by proxy any shares of stock or rights
held in the Trust Fund as directed by the Plan Committee; to
participate in and to exchange securities or other property in
reorganization, liquidation, or dissolutions of any
corporation, the securities of which are held in the Trust
Fund; and
(f) To any amount due on any loan or advance made to the Trust
Fund, to charge against and pay from the Trust Fund all taxes
of any nature levied, assessed, or imposed upon the Trust
Fund, and to pay all reasonable expenses and attorney fees
necessarily incurred by the Trustee and approved by the Plan
Committee with respect to any of the foregoing matters.
Section 10.3 Advice of Counsel. The Trustee may consult with legal counsel,
who may be counsel for the Company or any Associated Company, or Trustee's own
counsel, with respect to the meaning or construction of the Plan and Trust or
Trustee's obligations or duties. The Trustee shall be protected from any
responsibility with respect to any action taken or omitted by it in good faith
pursuant to the advice of such counsel, to the extent permitted by law.
Section 10.4 Records and Accounts of the Trustee. The Trustee shall keep
all such records and Accounts which may be necessary in the administration and
conduct of this trust. The Trustee's records and Accounts shall be open to
inspection by the Company, any Associated Company, the Plan Committee, and the
Plan Administrator, at all reasonable times during business hours. All income,
profits, recoveries, contributions, forfeitures, and any and all moneys,
securities, and properties of any kind at any time received or held by the
Trustee shall be held for investment purposes as a commingled Trust Fund.
Separate Accounts or records may be maintained for operational and accounting
purposes, but no such Account or record shall be considered as segregating any
funds or property from any other funds or property contained in the commingled
fund, except as otherwise provided. After the close of each year of the trust,
the Trustee shall render to the Company and the Plan Committee a statement of
assets and liabilities of the Trust Fund for such year.
Section 10.5 Appointment, Resignation, Removal, and Substitution of
Trustee. The Board of Directors by resolution shall appoint a Trustee or
Trustees, each of which shall hold office until resignation or removal by the
Board of Directors. The Trustee may resign at any time upon 30 days' written
notice to the Company. The Trustee may be removed at any time by the Company
upon written notice to the Trustee with or without cause. Upon resignation or
removal of the Trustee, the Company, by action of its Board of Directors, shall
appoint a successor Trustee which shall have the same powers and duties as are
conferred upon the Trustee appointed under this Plan. The resigning or removed
Trustee shall deliver to its successor Trustee all property of the Trust Fund,
less a reasonable amount necessary to provide for its Compensation, expenses,
and any taxes or advances chargeable or payable out of the Trust Fund. If the
Trustee is an individual, death shall be treated as a resignation, effective
immediately. If any corporate Trustee at any time shall be merged, or
consolidated with, or shall sell or transfer substantially all of its assets and
business to another corporation, whether state or federal, or shall be
reorganized or reincorporated in any manner, then the resulting or
January 01, 2003 -60-
acquiring corporation shall be substituted for such corporate Trustee without
the execution of any instrument and without any action upon the part of the
Company, any Participant or Beneficiary, or any other person having or claiming
to have an interest in the Trust Fund or under the Plan.
Section 10.6 Appointment of Trustee, Acceptance in Writing. The Trustee
shall accept its appointment as soon as practical by executing this Plan or by
delivering a signed document to the Company, a copy of which shall be sent to
the Plan Committee by the Trustee. The Board of Directors shall appoint a new
Trustee if the Trustee fails to accept its appointment in writing.
Section 10.7 Vote of Qualifying Employer Securities Held in Trust. If the
Employer securities of the Company are not publicly traded and if more than 10%
of the total Plan assets are securities of the Company, then for voting
purposes, each Participant shall be credited with his pro rata portion
(including fractional shares) of the Qualifying Employer Securities allocated to
his Account which are not encumbered. Each Participant shall be entitled to vote
the pro rata portion of Qualifying Employer Securities allocable to him under
this Section 10.7. Unreleased Qualifying Employer Securities shall be voted by
the Trustee. The Plan Committee shall certify to the Employer the number of
shares to be voted by each Participant if an event occurs which requires a vote
of such shares. To the extent the Participants do not vote Qualifying Employer
Securities under this Section 10.7, the Plan Committee shall vote such
Qualifying Employer Securities. For voting purposes, each Participant shall be
credited with his pro rata portion (including fractional shares) of the
Qualifying Employer Securities allocated to his account which are not
encumbered. Each Participant shall be entitled to vote the pro rata portion of
Qualifying Employer Securities allocable to him under the preceding sentence.
January 01, 2003 -61-
Article XI
CONTINUANCE, TERMINATION, AND AMENDMENT OF PLAN AND TRUST
Section 11.1 Termination of Plan. The expectation of each Employer is to
continue this Plan indefinitely, but the continuance of the Plan is not assumed
as a contractual obligation by the Employer and the right is reserved to each
Employer, by action of its Board of Directors, to terminate this Plan in whole
or in part at any time. The termination of the Plan by an Employer in no event
shall have the effect of revesting any part of the Trust Fund in the Employer.
The Plan created by execution of this Plan with respect to any Employer shall be
terminated automatically in the event of the dissolution, consolidation or
merger of such Employer or the sale by such Employer of substantially all of its
assets, if the resulting successor corporation or business entity shall fail to
adopt the Plan and Trust under Section 11.3 of this Plan. If this Plan is
disqualified, the Board of Directors of the Company, in its discretion, may
terminate this Plan.
Section 11.2 Termination of Trust. The Trust created by execution of this
Plan shall continue in full force and effect for such time as may be necessary
to accomplish the purposes for which it is created, unless sooner terminated and
discontinued by the Board of Directors. Notice of such termination shall be
given to the Trustee by the Plan Committee in the form of an instrument in
writing executed by the Company pursuant to the action of its Board of
Directors, together with a certified copy of the resolution of the Board of
Directors to that effect. In its discretion the Plan Committee may receive a
favorable determination letter from the Internal Revenue Service stating that
the prior qualified status of the Plan has not been affected by such
termination. Such termination shall take effect as of the date of the delivery
of the notice of termination and favorable determination letter, if obtained, to
the Trustee. The Plan Administrator shall file such terminal reports as are
required in Article IX of this Plan.
Section 11.3 Continuance of Plan and Trust by Successor Business. With the
approval of the Company, a successor business may continue this Plan and Trust
by proper action of the proprietor or partners, if not a corporation, and, if a
corporation, by resolution of its Board of Directors, and by executing a proper
supplemental agreement to this Plan and Trust with the Trustee. Within 90 days
from the Effective Date of such dissolution, consolidation, merger, or sale of
assets of an Employer, if such successor business does not adopt and continue
this Plan and Trust, this Plan shall be terminated automatically as of the end
of such 90-day period.
Section 11.4 Merger, Consolidation, or Transfer of Assets or Liabilities of
the Plan. The Board of Directors may merge or consolidate this Plan with any
other plan or may transfer the assets or liabilities of the Plan to any other
plan if each Participant in the Plan (if the Plan then terminated) would receive
a benefit immediately after the merger, consolidation, or transfer which is
equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan then had
terminated). If any merger, consolidation, or transfer of assets or liabilities
occurs, the Plan Administrator shall file such reports as required in Article IX
of this Plan.
Section 11.5 Distribution of Trust Fund on Termination of Trust. If the
trust is terminated under this Article XI, the Trustee shall determine the value
of the Trust Fund and of the respective interest of the Participants and
beneficiaries under Article V of this Plan as of the business day next following
the date of such termination. The value of the Account of each respective
Participant or Beneficiary in the Trust Fund shall be vested in its entirety as
of the
January 01, 2003 -62-
date of the termination of the Plan. The Trustee then shall transfer to each
Participant or Beneficiary the net balance of the Participant's Account unless
the Plan Committee directs the Trustee to retain the assets and pay them under
the terms of this Plan as if no termination had occurred.
Section 11.6 Amendments to Plan and Trust. At any time the Company may
amend this Plan and Trust by action of its Board of Directors, provided that no
amendment shall cause the Trust Fund to be diverted to purposes other than for
the exclusive benefit of the Participants and their beneficiaries. No amendment
shall decrease the vested interest of any Participant nor shall any amendment
increase the contribution of any Employer or Participant in the Plan. If an
amended vesting schedule is adopted, any Participant who has five or more years
of service at the later of the date the amendment is adopted or becomes
effective and who is disadvantaged by the amendment, may elect to remain under
the Plan's prior vesting schedule. Such election must be made within a period
established by the Plan Committee, in accordance with applicable regulations,
and on a form provided by and delivered to the Plan Committee. No amendment to
the Plan (including a change in the actuarial basis for determining optional
benefits) shall be effective to the extent that it has the effect of decreasing
a Participant's accrued benefit. For purposes of this Section 11.6, a Plan
amendment that has the effect of (i) eliminating or reducing an early retirement
benefit or a retirement-type subsidy, or (ii) eliminating an optional form of
benefit, with respect to benefits attributable to service before the amendment,
will be treated as reducing accrued benefits. No amendment shall discriminate in
favor of Employees who are officer, shareholders, or Highly Compensated
Employees. Notwithstanding anything in this Plan and Trust to the contrary, the
Plan and Trust may be amended at any time to conform to the provisions and
requirements of federal and state law with respect to employees' trusts or any
amendments to such laws or regulations or rulings issued pursuant to them. No
such amendment shall be considered prejudicial to the interest of any
Participant or Beneficiary under this Plan.
January 01, 2003 -63-
Article XII
MISCELLANEOUS
Section 12.1 Benefits To Be Provided Solely from the Trust Fund. All
benefits payable under this Plan shall be paid or provided solely from the Trust
Fund, and no Employer assumes liability or responsibility for payment of
benefits.
Section 12.2 Notices from Participants To Be Filed with Plan Committee.
Whenever provision is made in the Plan that a Participant may exercise any
option or election or designate any Beneficiary, the action of each Participant
shall be evidenced by a written notice signed by the Participant and delivered
to the Plan Committee in person or by certified mail. If a form is furnished by
the Plan Committee for such purpose, a Participant shall give written notice of
his exercise of any option or election or of his designation of any Beneficiary
on the form provided for such purpose. Written notice shall not be effective
until received by the Plan Committee.
Section 12.3 Text To Control. The headings of articles and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Plan and Trust exists, the text shall control.
Section 12.4 Severability. If any provision of this Plan and Trust is
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions. On the contrary, such remaining provisions
shall be fully severable, and this Plan and Trust shall be construed and
enforced as if such illegal or invalid provisions never had been inserted in
this Plan.
Section 12.5 Jurisdiction. This Plan shall be construed and administered
under the laws of the State of Alaska when the laws of that jurisdiction are not
in conflict with federal substantive law.
Section 12.6 Plan for Exclusive Benefit of Participants; Reversion
Prohibited. This Plan and Trust has been established for the exclusive benefit
of the Participants and their beneficiaries. Under no circumstances shall any
funds contributed to or held by the Trustee at any time revert to or be used by
or enjoyed by an Employer except to the extent permitted by Article IV of this
Plan.
Section 12.7 Transferability Restriction. A derivative security issued
under the Plan, including but not limited to Class B common stock of the
Company, is not transferable by the Participant other than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security Act
or the rules under those acts. The designation of a beneficiary by an officer,
director, or other Participant in the Plan does not constitute a transfer under
the Plan.
January 01, 2003 -64-
QUALIFIED EMPLOYEE STOCK PURCHASE PLAN OF
GENERAL COMMUNICATION, INC.
AMENDMENT NUMBER THREE
MODEL AMENDMENTS UNDER EGTRRA
WHEREAS, Section 11.6 of the Qualified Employee Stock Purchase
Plan of General Communication, Inc. (the "Plan") provides that the Company has
the power and right to amend the Plan:
NOW THEREFORE, the Company hereby amends the Plan by the
adoption of the following model amendments issued by the Internal Revenue
Service:
SECTION 1. LIMITATIONS ON CONTRIBUTIONS
1.1 Effective date. This section shall be effective for limitation years
beginning after December 31, 2001.
1.2 Maximum annual addition. Except to the extent permitted under Section 9
of this amendment and Code Section 414(v), if applied, relating to
catch-up contributions under a 401(k) Plan. The annual addition that
may be contributed or allocated to a Participant's Account under the
Plan for any limitation year shall not exceed the lesser of:
1.2.1 $40,000, as adjusted for increases in the cost-of-living under
Code Section 415(d), or
1.2.2 100 percent of the Participant's compensation, within the
meaning of Code Section 415(c)(3), for the limitation year.
The compensation limit referred to in 1.2.2 shall not apply to any
contribution for medical benefits after separation from service (within
the meaning of Code Section 401(h) or Section 419A(f)(2)) which
otherwise is treated as an annual addition.
SECTION 2. INCREASE IN COMPENSATION LIMIT
The annual compensation of each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001, shall not
exceed $200,000, as adjusted for cost-of-living increases in accordance with
Code Section 401(a)(17)(B). Annual Compensation means Compensation during the
Plan Year or such other consecutive 12-month period over which Compensation is
otherwise determined under the Plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to annual
Compensation for the determination period that begins with or within such
calendar year.
SECTION 3. MODIFICATION OF TOP-HEAVY RULES
3.1 Effective date. This section shall apply for purposes of determining
whether the Plan is a top-heavy plan under Code Section 416(g) for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies
the minimum benefits requirements of Code Section 416(c) for such
years. This section amends Section 4.10 of the Plan.
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3.2 Determination of top-heavy status.
3.2.1 Key Employee. Key Employee means any Employee or former
Employee (including any deceased Employee) who at any time
during the Plan Year that includes the determination date was:
(a) an officer of the Company having annual compensation
greater than $130,000 (as adjusted under Code Section
416(i)(1) for Plan Years beginning after December 31, 2002),
(b) a 5-percent owner of the Company, or (c) a 1-percent owner
of the Company having annual compensation of more than
$150,000. For this purpose, annual compensation means
compensation within the meaning of Code Section 415(c)(3). The
determination of who is a Key Employee will be made in
accordance with Code Section 416(i)(1) and the applicable
regulations and other guidance of general applicability issued
thereunder.
3.2.2 Determination of present values and amounts. This section
3.2.2 shall apply for purposes of determining the present
values of accrued benefits and the amounts of Account balances
of Participants as of the determination date.
(1) Distributions during year ending on the determination
date. The present values of accrued benefits and the
amounts of Account balances of an Employee as of the
determination date shall be increased by the
distributions made with respect to the Employee under
the Plan and any plan aggregated with the Plan under
Code Section 416(g)(2) during the 1-year period
ending on the determination date. The preceding
sentence shall also apply to distributions under a
terminated plan which, had it not been terminated,
would have been aggregated with the Plan under Code
Section 416(g)(2)(A)(i). In the case of a
distribution made for a reason other than separation
from service, death, or disability, this provision
shall be applied by substituting "5-year period" for
"1-year period."
(b) Employees not performing services during year ending
on the determination date. The accrued benefits and
accounts of any individual who has not performed
services for the Company during the 1-year period
ending on the determination date shall not be taken
into account.
3.3 Minimum benefits.
3.3.1 Matching contributions. Company matching contributions shall
be taken into account for purposes of satisfying the minimum
contribution requirements of Code Section 416(c)(2) and the
Plan. The preceding sentence shall apply with respect to
matching contributions under the Plan or, if the Plan provides
that the minimum contribution requirement shall be met in
another plan, such other plan. Company matching contributions
that are used to satisfy the minimum contribution requirements
shall be treated as matching contributions for purposes of the
actual contribution percentage test and other requirements of
Code Section 401(m).
3.3.2 Contributions under other plans. The Company may provide that
the minimum benefit requirement shall be met in another plan
(including another plan that consists solely of a cash or
deferred arrangement which meets the requirements of Code
Section 401(k)(12) and matching contributions with respect to
which the requirements of Code Section 401(m)(11) are met).
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SECTION 4. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
4.1 Effective date. This section shall apply to distributions made after
December 31, 2001.
4.2 Modification of definition of eligible retirement plan. For purposes of
the direct rollover provisions in section 7.2(e)(ii) of the Plan, an
eligible retirement plan shall also mean an annuity contract described
in Code Section 403(b) and an eligible plan under Code Section 457(b)
which is maintained by a state, political subdivision of a state, or
any agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred
into such plan from this Plan. The definition of eligible retirement
plan shall also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relation order, as defined in Code Section
414(p).
4.3 Modification of definition of eligible rollover distribution to exclude
hardship distributions. For purposes of the direct rollover provisions
in section 7.2(e)(ii) of the Plan, any amount that is distributed on
account of hardship shall not be an eligible rollover distribution and
the distributee may not elect to have any portion of such a
distribution paid directly to an eligible retirement plan.
4.4 Modification of definition of eligible rollover distribution to include
nondeductible voluntary employee contributions. For purposes of the
direct rollover provisions in section 7.2(e)(ii) of the Plan, a portion
of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of nondeductible
voluntary employee contributions which are not includible in gross
income. However, such portion may be transferred only to an individual
retirement account or annuity described in Code Section 408(a) or (b),
or to a qualified defined contribution plan described in Code Sections
401(a) or 403(a) that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of
such distribution which is not so includible.
SECTION 5. ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
5.1 Applicability and effective date. This section shall be effective for
distributions made after December 31, 2001.
5.2 Rollovers disregarded in determining value of vested Account balance
for involuntary distributions. For purposes of section 7.5 of the Plan
[relating to involuntary cash-out distributions], the value of a
participant's vested Account balance shall be determined without regard
to that portion of the Account balance that is attributable to rollover
contributions (and earnings allocable thereto) within the meaning of
Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and
457(e)(16). If the value of the Participant's vested Account balance as
so determined is $5,000 or less, the Plan shall distribute the
Participant's entire vested Account balance as provided in Section 7.5.
SECTION 6. REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation section 1.401(m)-2 and
section 4.12[a][iii] of the Plan shall not apply for Plan Years beginning after
December 31, 2001.
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THE FOLLOWING MODEL AMENDMENTS APPLY ONLY TO SECTION 401(K) PLANS
SECTION 7. ELECTIVE DEFERRALS -- CONTRIBUTION LIMITATION
No Participant shall be permitted to have Elective Deferrals made under this
Plan, or any other qualified plan maintained by the Company during any taxable
year, in excess of the dollar limitation contained in Code Section 402(g) in
effect for such taxable year, except to the extent permitted under section 9 of
this amendment and Code Section 414(v), if applicable [relating to catch-up
contributions].
SECTION 8. MODIFICATION OF TOP-HEAVY RULES
The top-heavy requirements of Code Section 416 and Article VII of the Plan shall
not apply in any year beginning after December 31, 2001, in which the Plan
consists solely of a cash or deferred arrangement which meets the requirements
of Code Section 401(k)(12) and Company matching contributions with respect to
which the requirements of Code Section 401(m)(11) are met.
SECTION 9. CATCH-UP CONTRIBUTIONS
Effective for years beginning on or after January 1, 2002, all Employees who are
eligible to make Elective Deferrals under this Plan and who have attained age 50
before the close of the Plan Year shall be eligible to make catch-up
contributions in accordance with, and subject to the limitations of, Code
Section 414(v). Such catch-up contributions shall not be taken into account for
purposes of the provisions of the Plan implementing the required limitations of
Code Sections 402(g) and 415. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of Code
Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by
reason of the making of such catch-up contributions.
SECTION 10. SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION
A Participant who receives a distribution of Elective Deferrals after December
31, 2001, on account of hardship shall be prohibited from making Elective
Deferrals and Employee contributions under this and all other plans of the
Company for 6 months after receipt of the distribution. A Participant who
receives a distribution of Elective Deferrals in calendar year 2001 on account
of hardship shall be prohibited from making Elective Deferrals and Employee
contributions under this and all other plans of the Company for 6 months after
receipt of the distribution or until January 1, 2002, if later.
SECTION 11. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT
11.1 Effective date. This section shall apply for distributions occurring
after December 31, 2001, regardless of when the severance from
employment occurred.
11.2 New distributable event. A Participant's Elective Deferrals, qualified
nonelective contributions, qualified matching contributions, and
earnings attributable to these contributions shall be distributed on
account of the Participant's severance from employment. However, such a
distribution shall be subject to the other provisions of the Plan
regarding distributions, other than provisions that require a
separation from service before such amounts may be distributed.
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IN WITNESS WHEREOF, the this Amendment is approved and adopted as of
the date set forth below.
General Communication, Inc.
By: /s/ John M. Lowber
Title: Sr. VP, Secretary, Treasurer
Date: December 23, 2002
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