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EXHIBIT 10.15
HILTON HOTELS THRIFT SAVINGS PLAN
(1991 RESTATEMENT)
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.1 Requirements for Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.2 Notice of Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.3 Application to Participate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.4 Designation of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.5 Date of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III PARTICIPANT'S CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.1 Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.2 Change in Participant's Contributions . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.3 Cessation of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.4 Change in Investment Fund Designation . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.5 Section 401(m) Limitations on Participant Matched and Supplementary Contributions and
Matching Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV COMPANY CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.1 Matching Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.2 Investment of Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.3 Contribution Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.4 Limit of Deductible Contributions By The Company . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V PARTICIPANT'S ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.1 Account Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.2 Allocation of Earnings, Losses and Changes in Fair Market Value of the Net Assets
of the Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.3 Vesting of Participant's Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI DISTRIBUTION FROM TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.1 When Interests Become Distributable and Effect Thereof . . . . . . . . . . . . . . . . . 38
Section 6.2 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.3 Disposition of Forfeitable Interest - Effect of Rehiring . . . . . . . . . . . . . . . . 43
Section 6.4 Spendthrift Trust Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.5 Withdrawal of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.6 Missing Participant or Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.7 Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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TABLE OF CONTENTS (Continued)
Page
ARTICLE VII COMMITTEE, INVESTMENT AND ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.1 Appointment of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.2 General Duties and Powers of Committee . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.3 Investment Powers and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.4 Organization of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 7.5 Records and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.6 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.7 Manner of Administering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.8 Compensation, Bonding, Expenses and Indemnity . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VIII CONTINUANCE AND AMENDMENT OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.1 Continuance of Plan Not a Contractual Obligation of Company - Impossibility of Diversion 62
Section 8.2 Consolidation or Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 8.4 Termination of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE IX ADMINISTRATION OF THE TRUST FUND - THE TRUST AGREEMENT - EXPENSES . . . . . . . . . . . . . . . 66
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.1 Loans to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.2 Limits on Employees' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.3 Transfers of Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.4 Context to Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.5 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.6 Qualified Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.7 Action by Participant or Other Person . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.8 Receipt or Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.9 Persons Under Incapacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.10 Top-Heavy Plan Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE XI LAW GOVERNING AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
APPENDIX A ANNUAL ADDITION LIMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
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HILTON HOTELS THRIFT SAVINGS PLAN
(1991 Restatement)
HILTON HOTELS CORPORATION, pursuant to action of its Board of
Directors taken at a duly called meeting, has adopted and does institute the
following as an amendment and restatement in toto of the Hilton Hotels Thrift
Savings Plan:
ARTICLE I
DEFINITIONS
When used herein and in the Trust Agreement, the following
words have the following meanings unless the context clearly indicates
otherwise.
"Account" or "Accounts" shall mean the accounts established to
record a Participant's interest in the Trust Fund established in accordance
with this Plan.
"Affiliated Employer" shall mean, with respect to the Company
and each Participating Employer;
(a) Each corporation which is a member of a controlled group
of corporations (within the meaning of Section 1563(a) of the Code, determined
without regard to Section 1563(a)(4) and (e)(3)(C) thereof) of which the
Company or Participating Employer is a component member,
(b) each entity (whether or not incorporated) which is under
common control with the Company or Participating Employer, as such common
control is defined in
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Section 414(c) of the Code and Regulations issued thereunder,
(c) any organization which is a member of an affiliated
service group (within the meaning of Section 414(m) of the Code) of which the
Company or a Participating Employer is a member, and
(d) any organization which is required by regulations issued
under Section 414(o) of the Code to be treated as an Affiliated Employer. For
the purposes of Section 4.3 of this Plan the phrase "more than 50 percent"
shall be substituted for the phrase "at least 80 percent" each place it appears
in Section 1563(a)(1) of the Code. The term "Affiliated Employer" shall also
include each predecessor employer to the extent required by Section 414(a) of
the Code or to the extent designated by the Board of Directors.
Notwithstanding the foregoing, an organization shall not be considered an
Affiliated Employer for any purpose under the Plan prior to the date it is
considered affiliated under clauses (a) through (d) above.
"Beneficiary" or "Beneficiaries" shall mean the person or
persons, including a trustee, personal representative or other fiduciary, last
designated in writing by a Participant in accordance with the provisions of
Section 2.4 to receive the benefits specified hereunder in the event of the
Participant's death. If there is no valid Beneficiary designation in effect
that complies with the provisions of Section 2.4, or if there is no surviving
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designated Beneficiary, then the Participant's surviving spouse shall be the
Beneficiary. If there is no surviving spouse to receive any benefits payable
in accordance with the preceding sentence, the duly appointed and currently
acting personal representative of the Participant's estate (which shall include
either the Participant's probate estate or living trust) shall be the
Beneficiary. In any case where there is no such personal representative of the
Participant's estate duly appointed and acting in that capacity within 90 days
after the Participant's death (or such extended period as the Committee
determines is reasonably necessary to allow such personal representative to be
appointed, but not to exceed 180 days after the Participant's death), then
Beneficiary or Beneficiaries shall mean the person or persons who can verify by
affidavit or court order to the satisfaction of the Committee that they are
legally entitled to receive the benefits specified hereunder.
In the event any amount is payable under the Plan to a minor,
payment shall not be made to the minor, but instead shall be paid (i) to that
person's then living parent(s) to act as custodian, (ii) if that person's
parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (iii) if no parent of that person is then living, to a
custodian selected by the Committee to hold the funds for the minor under the
Uniform Transfers or Gifts to Minors Act in effect in the
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jurisdiction in which the minor resides. If no parent is living and the
Committee decides not to select another custodian to hold the funds for the
minor, then payment shall be made to the duly appointed and currently acting
guardian of the estate for the minor or, if no guardian of the estate for the
minor is duly appointed and currently acting within 60 days after the date the
amount becomes payable, payment shall be deposited with the court having
jurisdiction over the estate of the minor.
"Board of Directors" shall mean the Board of Directors of
HILTON HOTELS CORPORATION.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean the Administrative Committee appointed
in accordance with Article VII.
"Company" shall mean HILTON HOTELS CORPORATION, any
predecessor corporation, or any successor corporation resulting from merger,
consolidation, or transfer of assets substantially as a whole which shall
expressly agree in writing to continue this Plan and, where the context so
warrants, any Participating Employer.
"Company Contribution Account" shall mean the account
established to hold matching Company contributions contributed in accordance
with Article IV on behalf of each Participant, together with the allocations
thereto as required by the Plan.
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"Compensation" shall mean compensation paid or accrued, to or
on behalf of a Participant, subject to Employer FICA Taxes under the Code
provisions in effect on March 1, 1978 (without regard to the dollar
limitation). Such Compensation shall include overtime, bonuses, gratuities
subject to Employer FICA Taxes, vacation pay and holiday pay. Such
Compensation shall not include tips, tokens, gratuities or other forms of extra
Compensation not subject to Employer FICA Taxes, relocation, maintenance or
severance allowances, retirement plan contributions or benefits, fees, or
insurance premiums or benefits, and shall also exclude any amounts attributable
to a plan, program or other arrangement based on or involving Hilton Hotels
Corporation capital stock which otherwise would be treated as Compensation.
Compensation shall include amounts by which a Participant's Compensation is
reduced pursuant to a cafeteria plan, in accordance with Section 125 of the
Code. Effective January 1, 1994, Compensation shall include tips, tokens and
gratuities, but only to the extent that such tips, tokens and gratuities are
actually reported as income subject to income tax withholding on form W-2 for
the Employee.
Notwithstanding the foregoing, for purposes of Section 3.5 of
this Plan, Compensation shall mean the compensation of a Participant as defined
in Section 414(s) of the Code.
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For Plan years beginning on or after January 1, 1989, the
maximum amount of an Employee's Compensation which shall be taken into account
under the Plan for any Plan Year shall be $200,000 adjusted at the same time
and in the same manner as under Section 415(d) of the Code. For any Plan Year
of fewer than twelve months, the $200,000 limit shall be reduced to the amount
obtained by multiplying the $200,000 limit (as adjusted under Code Section
415(d)) by a fraction having a numerator equal to the number of full months in
the Plan Year and a denominator equal to twelve. For purposes of the $200,000
limitation referred to above, the Compensation of any Participant who is either
a 5% owner (as defined in Section 416(i)(1) of the Code), or one of the ten
most highly paid Highly Compensated Employees during the Plan Year ("First
Participant") shall be aggregated with the Compensation of any Participant who
has not attained age 19 and is a lineal descendant of the First Participant and
any Participant who is the spouse of the First Participant. In any case in
which such aggregation would produce Compensation in excess of the $200,000
limitation, the amount of the First Participant's Compensation that is
considered under the Plan shall be reduced until the $200,000 limitation is
met.
Notwithstanding the foregoing, for Plan Years beginning on or
after January 1, 1994, the $200,000 limit referred to above shall be reduced to
$150,000 adjusted in accordance with Section 401(a)(17)(B) of the Code. For
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purposes of applying the $150,000 limit, the rules set forth in the preceding
paragraph shall continue to apply, except that "$150,000" shall replace
"$200,000" each place it appears.
"Disability Retirement Date" shall mean the date of retirement
prior to the Normal Retirement Date fixed by the Company for a Participant who
is found by the Committee, in its sole discretion, after consideration of such
evidence as it may require, including reports of such physicians as it may
designate, to have become totally and permanently unable to discharge his
assigned duties as a result of mental or physical disease or condition.
"Effective Date" of this Plan is the 1st day of January, 1979.
"Eligible Employee" shall mean each Employee of the Company
and Participating Employers except that there shall be excluded all leased
employees described in Section 4.14(n) of the Code and those employees covered
by a collective bargaining agreement between the Company or Participating
Employers and any collective bargaining representative if retirement benefits
were the subject of good faith bargaining between such representative and the
Company or Affiliated Employer unless the Employee is a member of a group of
employees to whom this Plan has been extended by such a collective bargaining
agreement.
"Employee" shall mean every person employed by the Company or
an Affiliated Employer, including any leased
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employee described in Section 414(n) of the Code and any other individual
required to be treated as employed by the Company or an Affiliated Employer
under Section 414(o) of the Code.
"Equity Fund" shall mean a fund which the Trustee shall invest
in common or capital stocks, secured or unsecured bonds, debentures or notes,
or preferred stocks, whether or not convertible into common or capital stocks,
trust certificates, or real property or interests therein. Up to ten percent
(10%) of the fair market value of the Plan assets may be held in securities of
Hilton Hotels Corporation so long as overall investment diversification is
maintained, other investment provisions hereof are followed, and an amount in
excess of the Company's contribution to the Plan is not allocated to the
purchase of securities of Hilton Hotels Corporation or any other adopting
company.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Fiduciary" shall mean all persons defined in Section 3(21) of
ERISA associated in any manner with the control, management, operation, and
administration of the Plan or the assets of the Plan, and such term shall be
construed as including the term "Named Fiduciary" with respect to those
Fiduciaries named in the Plan or who are identified as Fiduciaries pursuant to
procedures specified in the Plan.
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"Fiscal Year" shall mean the fiscal year of the HILTON HOTELS
CORPORATION. At present, that Fiscal Year commences the first day of January
and ends the last day of December, and this shall be the Plan Year, limitation
year, and the taxable year of the Trust established pursuant to this Plan.
"Fixed Income Fund" shall mean a fund which the Trustee shall
invest in bonds, debentures, notes, commercial paper, savings bank deposits,
mortgages, preferred stocks, other fixed income securities or group annuity or
other contracts guaranteed by an insurance company. Up to ten percent (10%) of
the fair market value of the Plan assets may be held in securities of Hilton
Hotels Corporation so long as overall investment diversification is maintained,
other investment provisions hereof are followed, and an amount in excess of the
Company's contribution to the Plan is not allocated to the purchase of
securities of Hilton Hotels Corporation or any other adopting company.
"Highly Compensated Employee" shall with respect to the
Company and each Participating Employer mean
(a) Any Employee who performs services for the Company or
any Affiliated Employer during the "determination year" and who, during the
"look-back year" (1) was a 5% owner of the Company or any Affiliated Employer;
(2) received compensation from the Company or any Affiliated Employer in excess
of $75,000 (as adjusted pursuant to Section 415(d) of the Code); (3) received
compensation from
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the Company or any Affiliated Employer in excess of $50,000 (as adjusted
pursuant to Section 415(d) of the Code) and was a member of the "top- paid
group" for such year; or (4) was an officer of the Company or any Affiliated
Employer and received compensation during such year that is greater than 50% of
the dollar limitation in effect under Section 415(b)(1)(A) of the Code;
(b) Any Employee who performs services for the Company or
any Affiliated Employer during the determination year and who, with respect to
the determination year, is either described in (a)(1) above or is both one of
the 100 Employees who received the most compensation from the Company or any
Affiliated Employer during the determination year and is described in (a)(2),
(a)(3) or (a)(4); or
(c) Any Employee who separated from service (or was
deemed to have separated) prior to the determination year, performs no services
for the Company or any Affiliated Employer during the determination year, and
met the description in (a) or (b) above for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
(d) If no officer of the Company or any Affiliated
Employer has compensation in excess of 50% of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code during a determination year or a
look-back year, the highest paid officer for such year shall be treated as a
Highly Compensated Employee.
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(e) If an Employee is, during a determination year or
look-back year, a "family member" of either a 5% owner who is an Employee or of
a Highly Compensated Employee in the group consisting of the 10 most highly
compensated Employees ranked on the basis of compensation paid by the Company
or any Affiliated Employer during the determination year or the look-back year,
then the family member and 5% owner or top-ten Highly Compensated Employee
shall be treated as a single Employee, and their compensation and contributions
or benefits under this Plan shall be aggregated. Except as otherwise provided
under Section 401(a)(17) of the Code, "family member' includes the spouse,
lineal ascendants and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
(f) The "determination year" shall be the Plan Year for
which compliance is being tested, and the "look-back year" shall be the
12-month period immediately preceding the determination year.
(g) The top-paid group for a determination year or a
look-back year shall consist of the top 20% of Employees ranked on the basis of
compensation received during the year excluding Employees described in Section
414(q)(8) of the Code and Treasury Regulations thereunder. The number of
Employees treated as officers shall be limited to 50 (or, if less, the greater
of 3 Employees or 10% of the Employees). For purposes of this definition of
"Highly
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Compensated Employee", "compensation" means compensation within the meaning of
Section 415(c)(3) of the Code, but including elective or salary reduction
contributions to a cafeteria plan, cash or deferred arrangement or
tax-sheltered annuity.
(h) If the Company or Participating Employer makes an
election for any year under this Paragraph (h), in determining whether an
Employee is a Highly Compensated Employee for such year, Paragraph (a)(2) shall
be applied by substituting "$50,000" for "$75,000," and Paragraph (a)(3) shall
not apply.
"Hour of Service" shall be defined as each hour
(a) for which an Employee is paid, or entitled to payment, for
the performance of duties for the Company or an Affiliated Employer;
(b) for which the Employee is paid or entitled to payment by
the Company or an Affiliated Employer on account of a period during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence; or
(c) for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Company or an Affiliated Employer.
The following additional rules shall apply in calculating
Hours of Service: (1) no more than 501 Hours of
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Service are required to be credited to an Employee on account of any single
period during which the Employee performs no duties; (2) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of
a period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, unemployment
compensation, or disability insurance laws; (3) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee; (4) a payment
shall be deemed to be made by or due from a Company or an Affiliated Employer
regardless of whether such payment is made by or due from the Company or an
Affiliated Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Company or an Affiliated Employer contributes or
pays premiums and regardless of whether contributions made or due to the trust
fund, insurer, or other entity are for the benefit of particular Employees or
on behalf of a group of Employees in the aggregate; (5) no more than one Hour
of Service shall be credited with respect to any hour of time; (6) an "Hour of
Service" shall include any hour for which an Employee is entitled to payment by
a "leasing organization" (as described in Section 414(n)(2) of the Code) for
the performance of duties for the Company or an Affiliated Employer.
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The definition of "Hour of Service" set forth herein shall
also be construed in accordance with, and shall include any additional periods
of service, that may be required by regulations promulgated by the United
States Department of Labor. The hour of service rules stated in the Department
of Labor Regulations Section 2530.200b-2(b) and -2(c) are herein incorporated
by reference.
"Investment Fund" shall mean one of the funds established by
the Committee for the investment of the assets of the Plan pursuant to Sections
2.3(b) and 3.4.
"Investment Manager" shall mean a Fiduciary designated by the
Committee under this Plan to whom has been delegated the responsibility and
authority to manage, acquire or dispose of Plan assets (a) who (1) is
registered as an investment adviser under the Investment Advisers Act of 1940;
(2) is a bank, as defined in that Act; or (3) is an insurance company qualified
to perform investment advisory services under the laws of more than one state;
and (b) who has acknowledged in writing that he is a Fiduciary with respect to
the management, acquisition, and control of Plan assets.
"Matching Company Contributions" shall mean the contributions
made by the Company or a Participating Employer pursuant to Section 4.1.
"Normal Retirement Age" shall mean a Participant's
sixty-fifth birthday. A Participant may retire at any time after attaining
Normal Retirement Age.
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Until actual retirement, a Participant shall continue to participate in this
Plan.
"One Year Break in Service" or "Break in Service" shall mean a
computation period during which an individual completes not more than 500 Hours
of Service. The computation period for purposes of Section 2.1 shall be the
twelve-month period commencing on the date the Employee first becomes an
Employee and anniversaries thereof and for all other purposes shall be the
Fiscal Year.
(a) Solely for purposes of determining whether an
Employee sustains a Break in Service, an Employee shall be eligible to receive
credit for absence (i) by reason of pregnancy of the Employee, (ii) by reason
of the birth of a child of the Employee, (iii) by reason of the placement of a
child with the Employee in connection with the adoption of the child by the
Employee, or (iv) for purposes of caring for the child for a period beginning
immediately following the birth or placement.
(b) The number of Hours of Service which shall credited
to an Employee for a period of absence described in subsection (a) above shall
be (i) the number which otherwise would normally have been credited to the
Employee but for the absence, or (ii) if the Committee determines that such
number can not be determined, eight (8) Hours of Service per day of such
absence; provided, however, that the total number of hours treated as Hours of
Service under this subsection (b) shall not exceed five hundred one (501) and
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that these Hours of Service shall be taken into account solely for purposes of
determining whether or not the Employee has incurred a Break in Service.
(c) The Hours of Service described in subsection (b)
above shall be credited to the computation period (i) in which the absence from
work begins, if the Employee would be prevented from incurring a Break in
Service in that computation period solely because of such crediting, or (ii) in
any other case, in the immediately following computation period.
(d) Subsections (a)-(c) above shall not apply unless the
Employee provides such timely information as the Committee may reasonably
require to establish (i) that the absence is for reasons described in
subsection (a), and (ii) the number of days for which there was such an
absence.
"Participant" shall mean any Eligible Employee included in the
Plan as provided in Article II.
"Participant Contribution Account" shall mean the account to
which Participant Matched Contributions and Participant Supplementary
Contributions are allocated pursuant to Section 5.1 on behalf of such
Participant, together with the allocations thereto as required by the Plan.
"Participant Matched Contributions" shall mean contributions
of 1% or 2% or 3% or 4% of Compensation made by a Participant which shall be
matched 50% by Matching Company Contributions.
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"Participant Supplementary Contributions" shall mean
contributions in excess of the Participant's Matched Contributions which shall
not be matched by Company contributions.
"Participating Employer" shall mean the Company and any
Affiliated Employer with respect to the Company which, by resolution of its
board of directors and with the approval of the Board of Directors, elects to
participate in this Plan. In addition, "Participating Employer" shall mean
other business entities in which the Company, directly or indirectly, has an
interest or with which it has a contractual relationship designated from time
to time by the Committee as being eligible to be included in the Plan, and
which adopts the Plan by appropriate action; but any such designation or
adoption may be terminated or withdrawn at any time by filing with the Company
a resolution, respectively of the Committee or of the adopting business entity,
and such termination or withdrawal the entity whose designation or adoption was
so terminated or withdrawn shall not thereafter be considered a Participating
Employer under this Plan. By electing to participate in this Plan, a
Participating Employer agrees to be bound by any Plan or Trust amendment
adopted by resolution of the Board of Directors or by the written instrument of
any person to whom the Board of Directors has delegated its authority to adopt
the amendment. Each Participating Employer shall also be bound by the
investment and administrative control of the
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Plan by delegates properly appointed by the Company and Committee. Appendix C
hereto sets forth the names of all Participating Employers as of November 1,
1991 and shall be revised from time to time by the Committee or its delegate.
"Plan" means the Hilton Hotels Thrift Savings Plan set forth
in this document and all subsequent amendments thereto.
"Short-Term Money Market Income Fund" shall mean a fund which
the Trustee shall invest in short term high quality commercial paper,
certificates of deposit, U.S. government and agency securities and other short
term instruments with average maturities of thirty to sixty days.
"Trust" shall mean that Trust established pursuant to the
Trust Agreement.
"Trust Agreement" shall mean that certain agreement between
the Company and the Trustee providing for the investment and administration of
the Trust Fund.
"Trust Fund" shall mean the fund established under the Trust
Agreement by contributions made by the Company and Participants and from which
any amounts payable under the Plan are to be paid.
"Trustee" shall mean the Trustee under the Trust Agreement.
"Valuation Date" shall mean the last day of each calendar
month as of which the Trust Fund shall be valued under this Plan.
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"Year of Service" shall mean a computation period during which
the Employee completes one thousand (1,000) or more Hours of Service for the
Company or an Affiliated Employer. The computation period referred to in the
preceding sentence shall be the Fiscal Year except for purposes of Section 2.1,
in which case the computation period shall be the twelve (12) month period
commencing on the date the Employee first becomes an Employee (or any
anniversary thereof). In no instance will an Employee be credited with more
than one (1) Year of Service with respect to service performed in a single
computation period. Notwithstanding any provision to the contrary in this
Plan, an Employee shall be credited with Years of Service only with respect to
periods of "covered service" and "contiguous noncovered service." For purposes
of determining an Employee's Years of Service, "covered service" shall mean an
Employee's service as an Eligible Employee and "contiguous noncovered service"
shall mean an Employee's noncovered service as a non-Eligible Employee which
immediately precedes or follows such Employee's covered service and no quit,
discharge or retirement occurs between such covered service and uncovered
service; provided, however, that any transfer of an Employee between (a) a
corporation or trade or business included within the definition of "Company"
and (b) an Affiliated Employer not included within the definition of "Company"
shall result in such Employee's period of noncovered service which immediately
precedes or
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follows such transfer being deemed "noncontiguous" for purposes of this
definition of Year of Service.
A Participant's employment is not considered terminated for
purposes of the Plan if the Employee has been on leave of absence with the
consent of the Company or an Affiliated Employer, provided that he returns to
the employ of the Company or an Affiliated Employer at the expiration of such
leave or such longer period as may be prescribed by law in the case of a
Participant who is a member of the armed forces of the United States. A leave
of absence shall mean leaves granted by the Company or an Affiliated Employer,
in accordance with rules uniformly applied to all Employees, for reasons of
health, military or public service or for reasons determined by the Company or
an Affiliated Employer to be in its best interests. Participants who do not
return to the employ of the Company or an Affiliated Employer within ten days
following the end of the leave of absence, or within the required time in case
of service with the armed forces, shall be deemed to have terminated their
employment as of the date when their leave began, unless such failure to return
was the result of their death, total disability or normal retirement.
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ARTICLE II
ELIGIBILITY
Section 2.1 Requirements for Participation. Participation in
the Plan on the part of each Employee is voluntary. An Eligible Employee who
on the Effective Date of this Plan, or the first day of any calendar month
thereafter, has completed at least one Year of Service shall be eligible to
participate as of the first day of the first calendar month coinciding with or
next following the date the Eligible Employee satisfies the aforesaid service
requirement.
Section 2.2 Notice of Eligibility. The Committee shall give
reasonable advance written notice to Employees of their prospective eligibility
to become Participants, and shall state therein the conditions of
participation.
Section 2.3 Application to Participate. An Eligible Employee
eligible to become a Participant may become a Participant by filing, at least
thirty (30) days before the first day of the month as of which participation is
to commence, in such form and with such persons as the Committee shall
designate, an application which shall:
(a) Specify the amount of contribution to be deducted
from his Compensation by the Company and paid to the Trustee on his behalf;
(b) Specify the manner in which such contribution shall
be invested, provided that such investment must be in accordance with one of
the following investment options:
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(1) 100% in the Equity Fund,
(2) 100% in the Fixed Income Fund,
(3) 50% in each of the two above Funds,
(4) 25% in the Equity Fund and 75% in the Fixed
Income Fund, or
(5) 75% in the Equity Fund and 25% in the Fixed
Income Fund;
(c) Designate a Beneficiary or Beneficiaries to receive
any payment which may be due under the Plan upon his death;
(d) Contain such other or additional information as in
the opinion of the Committee is desirable or necessary in the operation of the
Plan.
(e) Notwithstanding anything herein to the contrary, an
Employee shall not be entitled to make contributions for any calendar month
which commenced prior to the Employee's specification of the amount of
contribution to be deducted from his Compensation, nor shall he be entitled to
retroactively increase his specified contributions.
Section 2.4 Designation of Beneficiary. Upon forms provided
by the Committee, each Employee who becomes a Participant shall designate in
writing the Beneficiary or Beneficiaries whom such Employee desires to receive
any benefits payable under this Plan in the event of such Employee's death. A
Participant may from time to time change his designated Beneficiary or
Beneficiaries without
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the consent of such Beneficiary or Beneficiaries by filing a new designation in
writing with the Committee. However, if a married Participant wishes to
designate a person other than his spouse as Beneficiary, such designation shall
be consented to in writing by the spouse, which consent shall acknowledge the
effect of the designation and be witnessed by a Plan representative or a notary
public. The Participant may change any election designating a Beneficiary or
Beneficiaries without any requirement of further spousal consent if the
spouse's consent so provides. Notwithstanding the foregoing, spousal consent
shall be unnecessary if it is established (to the satisfaction of a Plan
representative) that there is no spouse or that the required consent cannot be
obtained because the spouse cannot be located, or because of other
circumstances prescribed by Treasury Regulations. The Company, the Committee
and the Trustee may rely upon his designation of Beneficiary or Beneficiaries
last filed in accordance with the terms of this Plan. Upon the dissolution of
marriage of a Participant, any designation of the Participant's former spouse
as a Beneficiary shall be treated as though the Participant's former spouse had
predeceased the Participant, unless (i) the Participant executes another
Beneficiary designation that complies with this Section 2.4 and that clearly
names such former spouse as a Beneficiary, or (ii) a court order presented to
the Committee prior to distribution on behalf of the Participant explicitly
requires the
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Participant to continue to maintain the former spouse as the Beneficiary. In
any case in which the Participant's former spouse is treated under the
Participant's Beneficiary designation as having predeceased the Participant, no
heirs or other beneficiaries of the former spouse shall receive benefits from
the Plan as a Beneficiary of the Participant except as provided otherwise in
the Participant's Beneficiary designation.
Section 2.5 Date of Participation. Once the application for
participation is completed, participation shall become effective on the date of
eligibility specified in Section 2.1 and shall continue during the
Participant's employment with the Company or Participating Employer.
ARTICLE III
PARTICIPANT'S CONTRIBUTIONS
Section 3.1 Participant Contributions.
(a) A Participant shall make contributions which shall be
made solely by payroll deductions from his Compensation and the amounts so
deducted shall be paid to the Trustee on or before ninety days following the
time when the deduction is made. The amount, which shall be specified under
Section 2.3(a) and deducted under this Section, shall be either one percent
(1%) or two percent (2%) or three percent (3%) or four percent (4%) or five
percent (5%) or six percent (6%) or seven percent (7%) or eight percent (8%) or
nine percent (9%) or ten percent (10%) or eleven percent
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(11%) or twelve percent (12%) or thirteen percent (13%) or fourteen percent
(14%) of his Compensation as specified by the Participant.
(b) Contributions of 1% or 2% or 3% or 4% of Compensation
shall be considered the Participant Matched Contributions.
(c) The amount of contributions made in excess of the
maximum Participant's Matched Contributions (i.e., in excess of 4% of
Compensation) which may total to a maximum of an additional 10% of Compensation
shall be considered the Participant Supplementary Contributions.
(d) Notwithstanding any provision in this Plan to the
contrary, if, due to federal or state tax withholding requirements the net
amount of after-tax Compensation payable to a Participant by the Company for a
pay period is less than the Compensation percentage specified by the
Participant in accordance with Section 2.3(a), the Participant may make a cash
contribution to the Plan equal to the difference between the Participant's
contribution for the payroll period by payroll deduction, if any, and the
Compensation percentage specified by the Participant. Any direct cash
contribution by a Participant with respect to a payroll period in accordance
with this Section 3.1(d) shall be made within thirty (30) days following the
last day of such payroll period.
Section 3.2 Change in Participant's Contributions. A
Participant may as of the first day of any
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calendar month change the specifications with respect to payroll deductions
made under Section 2.3(a) and 3.1(a) to another specification permitted under
such Sections by filing an application to change such specification in such
form and with such person as the Committee shall designate. Such change in
specification shall not become effective until the first day of the calendar
month which is at least thirty days after the filing of such application.
Section 3.3 Cessation of Participation. A Participant who
changes his specification to direct that no contributions shall be deducted
from his Compensation shall have such change effective as of the next regular
payroll period and need not wait until the beginning of the next calendar
month; provided, however, that such Participant may not again change such
specification to begin further contributions sooner than the beginning of the
payroll period in the calendar month coinciding with or next following three
(3) months after the first payroll date for which no contribution is made by
that Participant.
Section 3.4 Change in Investment Fund Designation. The
specification required in Section 2.3(b) by a Participant shall be deemed to be
a continuing direction to the Trustee unless and until changed under the
following provisions of this Section 3.4.
(a) A Participant may change such specification as to
future contributions by application in such form and with such person as the
Committee shall designate, effective
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as of the first day of any calendar month if such application is filed within
the same time period provided in Section 3.2.
(b) A Participant may change his investment specification
as to his entire Account balances as follows:
(i) As of the first day of any Plan Year, a
Participant may make such change in investment specification to another
specification permitted under Section 2.3(b), pursuant to application approved
by the Committee and submitted on or prior to November 30 preceding such date.
Such investment specification shall also govern future contributions as of the
first day of the payroll period following the beginning of such Plan Year.
(ii) As of any July 1, by application approved by
the Committee submitted on or prior to the preceding May 31, a Participant may
direct that the Participant's entire Account balance then invested in the
Equity Fund be transferred to the Short-Term Money Market Income Fund. If no
further investment specification is directed by the Participant, the balance so
transferred into the Short-Term Money Market Income Fund will be transferred to
the Fixed Income Fund on the first day of the Plan Year following such July 1
transfer. Such direction by the Participant will not affect investment of
future contributions unless and until separate specification is made with
respect to such future contributions under this Section 3.4.
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(c) Notwithstanding the preceding provisions of this
Section 3.4, if distribution of a Participant's interest in the Trust Fund is
to be deferred following such Participant's termination of employment, pursuant
to Section 6.2(a) or (c), the Participant's interest in the Trust Fund shall be
transferred to the account described in Section 6.2(d), and the Participant
shall have no further right to specify the manner in which such interest shall
be invested. A transfer required under this paragraph shall be effective as of
the first Valuation Date that occurs at least ninety (90) days after the
Participant's employment terminates. The foregoing provisions of this
paragraph requiring a transfer of a Participant's interest in the Trust Fund to
such separate account shall also apply to any portion of such interest that the
Committee determines must be segregated pursuant to a qualified domestic
relations order, within the meaning of Section 414(p) of the Internal Revenue
Code. Such transfer shall be effective as of the first Valuation Date that
occurs at least 120 days after the Committee makes the determination to
segregate.
Section 3.5 Section 401(m) Limitations on Participant Matched
and Supplementary Contributions and Matching Company Contributions.
(a) The Committee will estimate, as soon as practicable,
before the close of the Plan Year and at such other times as the Committee in
its discretion determines, the extent to which Participant Matched and
Supplementary
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Contributions ("Participant Contributions") and/or Matching Company
Contributions may not be available to any Participant or class of Participants
under Code Section 401(m). In accordance with any such estimate, the Committee
may modify the limits in Section 3.1 or set initial or interim limits, for
Participant Contributions and/or Matching Company Contributions relating to any
Participant or class of Participants. The tests of this Section 3.5 shall be
performed separately with respect to the Company and Participating Employers
together with their respective Affiliated Employers.
(b) For each Plan Year, a contribution percentage will be
determined for each Eligible Employee equal to the ratio of the total amount of
the Participant Contributions and Matching Company Contributions allocated
under Sections 3.1 and 4.1 for the Plan Year divided by the Eligible Employee's
Compensation in the Plan Year during which the Eligible Employee was eligible
to participate in the Plan. In the case of family members treated as a single
Highly Compensated Employee under Paragraph (e) of the definition of "Highly
Compensated Employee," in accordance with the family aggregation rules of
Section 414(q)(6) of the Code, the contribution percentage shall be determined
by combining the Participant Contributions, Matching Company Contributions and
Compensation of all eligible family members. Except to the extent taken into
account in the preceding sentence, the Participant Contributions, Matching
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Company Contributions, and Compensation of such family members shall be
disregarded for purposes of determining the average of the contribution
percentages for the group of non-Highly Compensated Employees under this
Section 3.5(b). Except as otherwise provided in this Section 3.5(b), with
respect to Eligible Employees who have made no Participant Contributions and
for whom there were no Company Matching Contributions under this Plan, such
contribution percentage will be zero.
(c) The average of the contribution percentages for
Highly Compensated Employees ("High Average") when compared with the average of
the contribution percentages for non-Highly Compensated Employees ("Low
Average") must meet one of the following requirements:
(1) The High Average is no greater than 1.25 times the
Low Average; or
(2) The High Average is no greater than two times the Low
Average, and the High Average is no greater than the Low Average plus
two percentage points.
(d) If, at the end of a Plan Year, a Participant or class
of Participants has excess contributions, then the Committee may elect, at its
discretion, to pursue any of the following courses of action or any combination
thereof:
(i) Matching Company Contributions (and any
earnings attributable thereto through the end of the Plan Year) that are not
vested may be forfeited.
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(ii) Excess Participant Contributions and excess
Matching Company Contributions (and any earnings attributable to such excess
amounts through the end of the Plan Year) may be distributed to the Participant
within the 2-1/2 month period following the close of the Plan Year to the
extent feasible, and in all events no later than 12 months after the close of
the Plan Year. The Company may distribute the Participant Supplementary
Contributions before distributing any Participant Matched Contributions or may
distribute (or forfeit pursuant to clause i above) Matching Company
Contributions prior to distributing any Participant Matched Contributions.
(e) The amount of excess Participant Contributions and
Matching Company Contributions shall be determined by the Committee by reducing
the contribution percentage of the Highly Compensated Employees with the
highest contribution percentage to the extent required to enable the Plan to
meet the limits in (c) above or to cause the contribution percentage of such
Participants to equal the contribution percentage of the Highly Compensated
Employees with the next-highest contribution percentage. The process in the
preceding sentence shall be repeated until the Plan satisfies the limits in (c)
above. The earnings attributable to excess contributions will be determined in
accordance with Treasury Regulations. The Company and Committee will not be
liable to any Participant (or to his Beneficiary, if applicable) for any losses
caused
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by inaccurately estimating or calculating the amount of any Participant's
excess contributions and earnings attributable to such contributions.
ARTICLE IV
COMPANY CONTRIBUTIONS
Section 4.1 Matching Company Contributions. At the time each
Participant's contributions are paid to the Trustee, the Company will pay to
the Trustee a corresponding contribution equal to fifty percent (50%) of the
Participant's Matched Contribution amount as defined in Section 3.1(b) and then
being paid to the Trustee. The Company will not pay a corresponding
contribution based on the Participant's Supplementary Contributions as defined
in Section 3.1(c) that are paid to the Trustee. Notwithstanding the foregoing,
to the extent determined by the Company, the Company may at its sole discretion
make an additional Matching Contribution for any Plan Year on behalf of
Participants whose Compensation does not exceed a specified dollar amount
("Eligible Participants"). Such additional Matching Company Contribution for a
Plan Year shall be allocated among Eligible Participants who are Employees as
of the last day of such Plan Year in the proportion that each such Eligible
Participant's Matched Contributions for the Plan Year bears to the total of
Matched Contributions by all such Eligible Participants for such Plan Year.
Any additional Matching Company
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Contribution shall be made within the time prescribed under Section 404 of the
Code.
Contributions by the Company shall be made without regard to
current and accumulated profits for the year; provided, however, that the Plan
shall continue to be designed to qualify as a profit sharing plan for purposes
of Sections 401(a) et seq. of the Code.
Section 4.2 Investment of Company Contributions. Contributions
made by the Company shall be invested by the Trustee in the Equity Fund and the
Fixed Income Fund in the same proportion as the contributions made by
Participants to which such contributions by the Company correspond. No part of
the contributions paid by the Company to the Trustee shall be recoverable by
the Company, and it is intended that the contributions not be used for or
diverted to purposes other than for the exclusive benefit of the Participants.
Section 4.3 Contribution Limits. Notwithstanding anything
else contained herein, the Annual Additions, to all the Accounts of a
Participant shall not exceed the lesser of $30,000 (or, if greater, 1/4 of the
defined benefit dollar limitation in effect under Section 415(b)(1) of the Code
for the limitation year) or 25% of the Participant's Section 415 Compensation
from the Company or Affiliated Employers during the Plan Year, in accordance
with the provisions of Appendix A attached hereto.
Section 4.4 Limit of Deductible Contributions By The Company.
The amount of the contribution made by the
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Company or a Participating Employer for any fiscal year shall not exceed the
amount deductible by such Company or Participating Employer for federal income
tax purposes, including any amounts which may be carried forward.
ARTICLE V
PARTICIPANT'S ACCOUNTS
Section 5.1 Account Balances. There shall be maintained for
each Participant a Participant Contribution Account and a Company Contribution
Account which shall show the dollar value of his current interest in the Trust
Fund as of the most recent Valuation Date, including the Participant Matched
Contributions made during the calendar month ending on such Valuation Date, the
Matching Company Contributions made during such calendar month on behalf of
each such Participant, the Participant Supplementary Contributions made during
such calendar month, all forfeitures allocated to such Participant under this
Plan and an allocation of earnings, losses and changes in fair market value of
the assets of the Investment Fund for such calendar month. For purposes of
determining a Participant's basis in his Account under Section 72(e) of the
Code, his interest in the Participant Contribution Account attributable to any
pre-1987 Supplementary Contributions and pre-1987 Matched Contributions shall
be separately accounted for.
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Section 5.2 Allocation of Earnings, Losses and Changes in
Fair Market Value of the Net Assets of the Funds. Earnings, losses and changes
in fair market value of the net assets of each fund comprising the Investment
Fund shall be allocated each as of the last day of each calendar month to the
Participant's Accounts in the ratio which the dollar value of the interest of
each such Participant in the respective fund bears to the dollar value of the
interests in such fund of all such Participants as of the current Valuation
Date.
Section 5.3 Vesting of Participant's Interests.
(a) Participant Contribution Account. The interest of a
Participant in his Participant Contribution Account shall be fully vested and
non-forfeitable when allocated.
(b) Company Contribution Account. A Participant's
interest allocated to his Company Contribution Account shall become vested to
the extent of twenty-five percent (25%) upon completion of two Years of Service
and twenty-five percent (25%) for each additional Year of Service. Therefore,
a Participant shall be fully vested in his Company Contribution Account balance
after five Years of Service. Any portion of the interest of a Participant
which shall not have become vested as herein provided shall be a forfeitable
interest.
(i) With respect to an Employee who has a
One-Year Break in Service, such Employee's pre-break and
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post-break service will be aggregated for vesting purposes only after the
Employee's post-break service is at least one year.
(ii) If any Employee has five (5) or more
consecutive One Year Breaks in Service and the number of such consecutive
Breaks in Service is greater than the number of Years of Service he had prior
to such break, and if such Employee has no vested benefits under this Plan
derived from contributions by the Company at the time of said break, then Years
of Service prior to such break shall not be added to the Years of Service after
such break for vesting purposes.
(c) Discontinuance of Contributions. If the Company
shall, for any reason, completely discontinue its contributions to the Trust
Fund, the entire interest of each Participant in his Company Contribution
Account shall be one hundred percent (100%) vested.
(d) Valuation of Amounts Distributable. The value of
Participant Account balances shall be determined as of the Valuation Date
immediately preceding the date of distribution.
(e) Vesting on Death or Normal Retirement. When any
Participant shall reach his Normal Retirement Age or shall die, or shall suffer
total disability while an Employee, his entire interest in the Trust Fund shall
become one hundred percent (100%) vested without regard to his period of
employment.
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(f) Plan Provisions Govern Distribution. Any interest in
the Trust Fund, whether forfeitable or vested, shall be and become payable to
such Participant or his Beneficiaries only as and to the extent provided in
this Plan, and a Participant or a former Participant who dies having designated
a Beneficiary shall cease to have any interest hereunder or in his separate
Account, and his Beneficiary shall become entitled to payment thereof solely as
provided by the terms of this Plan.
(g) Amendment of Vesting Schedule. If the vesting
schedule under the Plan is amended or if the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's vested
interest in the Trust Fund, each Participant who has completed at least three
(3) Years of Service may elect, within a reasonable time after the adoption of
the amendment, to continue to have such vested interest computed under the Plan
without regard to such amendment. The period during which the election may be
made shall commence with the date the amendment is adopted and shall end on the
latest of: (i) 60 days after the amendment is adopted; (ii) 60 days after the
amendment is effective; or (iii) 60 days after the Participant is issued
written notice of the amendment.
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ARTICLE VI
DISTRIBUTION FROM TRUST FUND
Section 6.1 When Interests Become Distributable and Effect
Thereof.
(a) Upon Death, Disability or Retirement. When a
Participant dies, suffers total disability or retires, his entire interest in
the Trust Fund as defined in this Plan, which shall have become one hundred
percent (100%) vested as provided in Article V hereof, shall thereupon become
distributable as hereinafter provided.
(b) Upon Termination of Employment. When a Participant's
employment is terminated for any reason other than death, total disability or
retirement, such portion of his interest in the Trust Fund as shall have become
vested as provided in Article V hereof shall thereupon become distributable as
hereinafter provided.
(c) Effect of Interest Becoming Distributable. When a
Participant's vested interest shall become distributable upon termination of
employment for any reason, as provided in this Section 6.1, such Participant,
or his designated Beneficiary, shall cease to have any further interest or
participation in the Trust Fund, or any subsequent accrual or contributions
thereto, except the right to receive, in accordance with this Plan, payment of
the value of his vested Account balance.
Section 6.2 Payment.
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(a) Distribution Upon Retirement or Disability. A
Participant whose termination of employment occurs on or after attaining Normal
Retirement Age or Disability Retirement Date shall, prior to the commencement
of benefits, make an election with respect to the method of payment of his
interest in the Trust Fund. The Committee shall then institute one of the
following methods of payment, as elected by the Participant, normally within
ninety (90) days of said election to the extent administratively feasible:
(i) Payment of the entire interest in cash in a
lump sum.
(ii) Transfer of the entire interest to a separate
account for the Participant as described in Section 6.2(d), and payment
thereof, including earnings to the Participant or Beneficiary, in substantially
equal monthly installments not to exceed 120.
Notwithstanding the preceding provisions of this Section
6.2(a), no payment period shall extend beyond the maximum period prescribed
under Section 401(a)(9)(A) of the Internal Revenue Code. In the event a
Participant or Beneficiary shall fail to make a timely election with respect to
the method of payment, payment shall be made in a cash lump sum and shall be
made as soon as practicable following attainment of Normal Retirement Age or
Disability Retirement Date.
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(b) Distribution Upon Death.
If such Participant's interest is to be distributed because of
his death, his Beneficiary or Beneficiaries shall be paid the entire amount of
his interest in a lump sum within ninety (90) days after the Valuation Date
coinciding with or immediately following receipt of notice of death and any
other documents deemed appropriate by the Committee to the extent
administratively feasible; provided, however, if an election for payment other
than lump sum is in effect under Section 6.2(a), the selected mode of payment
shall continue, and the method of distribution shall be at least as rapid as in
effect on the date of the Participant's death. However, a Beneficiary may make
an election to have the Participant's interest payable in installments, as
provided in Section 6.2(a). Neither the Trustee nor the Company shall in any
way be responsible for payment of death taxes attributable to payment of
benefits hereunder. Notwithstanding the preceding provisions of this Section
6.2(b), no payment period shall extend beyond the maximum period described by
Code Section 401(a)(9), and, if payment is to be made in a lump sum, the
Participant's interest shall be distributed within five (5) years of the
Participant's death.
(c) Distribution Upon Termination of Employment. If a
Participant's employment terminates prior to his Normal Retirement Age for any
reason other than death or total disability, his vested interest in the Trust
Fund shall be
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distributable in cash in a lump sum after receipt by the Committee of all
required documentation, as follows:
(i) In the case of a Participant whose vested
interest does not exceed $3,500, distribution shall be made within ninety (90)
days after the Valuation Date coinciding with or next following the
Participant's termination of employment to the extent administratively
feasible, whether or not the Participant consents to such distribution.
(ii) In the case of a Participant whose vested
interest exceeds $3,500 distribution shall be made, to the extent
administratively feasible, within ninety (90) days after the Valuation Date
coinciding with or next following the Participant's termination of employment,
but only after the receipt by the Committee of the properly completed
application of the Participant and any other required documentation to request
distribution, including the Participant's consent to the distribution.
(iii) If a Participant described in (ii) above
fails to consent to distribution of his vested interest prior to the first
Valuation Date that occurs at least ninety (90) days following the
Participant's termination of employment, the provisions of Section 6.2(d) shall
apply. Such a Participant shall be deemed to have made an election to defer
distribution to his Normal Retirement Age, unless prior to Normal Retirement
Age and in accordance with (ii)
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above the Participant submits a request for an earlier distribution.
(d) Transfer for Deferred Payments. A terminated
Participant's forfeitable interest in the Trust Fund, if any, and any vested
interest of the Participant that is not distributed prior to the first
Valuation Date that occurs at least ninety (90) days following the
Participant's termination of employment, pursuant to (i) an election of an
installment distribution under Section 6.2(a) or (ii) the deferral of the
distribution under Section 6.2(c), shall be transferred to and held in the
Short-Term Money Market Income Fund or equivalent fund as designated by the
Committee.
(e) Required Distribution Date.
(i) Unless a Participant elects otherwise in
writing, payment of benefits hereunder shall commence, notwithstanding anything
to the contrary contained herein, no later than sixty days following the close
of the later of the Plan Year in which (1) the Participant reaches Normal
Retirement Age, (2) the Participant terminates employment, or (3) in which
occurs the tenth anniversary of the year in which the Participant commenced
participation in the Plan (unless the amount of the Participant's benefit has
not been calculated by that date or the Participant cannot be located, in which
case distribution shall begin no later than sixty days after the payment can be
calculated or the Participant located).
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(ii) Notwithstanding anything to the contrary
contained herein, the distribution options under the Plan shall comply with
Section 401(a)(9) of the Code and regulations promulgated thereunder, which are
hereby incorporated by this reference as a part of the Plan. Accordingly,
unless otherwise permitted by law, the entire interest of each Participant
shall be distributed, by April 1 of the calendar year following the calendar
year in which the Participant reaches age 70-1/2. Except as provided by law, a
Participant who reached age 70-1/2 before January 1, 1988 and who was not a
five percent owner of the Company at any time during the Plan Year ending with
or within the calendar year in which the Participant attains age 66-1/2 or
thereafter, is not required to receive distribution of his interest until he
separates from service.
Section 6.3 Disposition of Forfeitable Interest - Effect of
Rehiring.
(a) Subject to the provisions of (c) below, any
forfeitable portion of a Participant's interest in the Trust Fund shall be
forfeited as of the earlier of the date the Participant's vested interest is
distributed to him, as provided in Section 6.2(c), or the date the Participant
incurs five (5) consecutive Breaks in Service.
(b) Effective as of January 1, 1989, as of the last day
of each Plan year, any and all amounts forfeited by Participants under the
provisions of (a) above or Section 6.6 shall be reallocated among the Accounts
of the Par-
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ticipants remaining in the ratio which the Matching Company Contributions made
on behalf of each Participant for that Plan Year bears to the aggregate
Matching Company Contributions made on behalf of all Participants for that Plan
Year. Any Matching Company Contributions and earnings allocable thereto which
are forfeited under the provisions of Section 3.5 shall not be reallocated as
provided above, but shall be applied to reduce future Matching Company
Contributions by the Company or Participating Employer that made such
contribution on behalf of the Participant, as provided in Section 3.5.
(c) In accordance with such rules as the Committee may
prescribe, there shall be restored to the Participant's credit in his Account
the dollar value of any portion of a Participant's interest in the Trust Fund
which was forfeited upon distribution of the Participant's vested interest in
accordance with Section 6.2(c); provided, however, that such restoration shall
be made only in the case of the Participant's reemployment as an Eligible
Employee prior to sustaining five (5) consecutive one year Breaks in Service,
and only if the Participant repays to the Plan in cash no later than the fifth
anniversary of his reemployment as an Eligible Employee, the amount of the
distribution attributable to Company Matching Contributions and earnings
thereon received at termination. The determination of the amount the
Participant is required to repay in cash under this Subsection (c), and the
determination of the dollar
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value of the forfeited amount required to be restored shall be made as of the
Valuation Date the Participant's Account was valued for purposes of determining
the amount of his distribution from the Trust Fund. No adjustment in the
dollar value of the forfeited amount shall be made for any gains or losses of
the Trust Fund between the applicable Valuation Date and the restoration of the
dollar value of the forfeited portion of Participant's interest in the Trust
Fund. The repaid amount and the Participant's restored interest in the Trust
Fund shall upon repayment become a part of the Participant's new Account
balance. Said forfeited interest shall be restored from forfeitures in the
Plan Year of repayment, or as soon as available.
Section 6.4 Spendthrift Trust Provisions. Except as
otherwise provided hereunder, all amounts payable hereunder by the Trustee
shall be paid only to the person or persons entitled thereto, and all such
payments shall be made directly into the hands of such person or persons and
not into the hands of any other person or corporation whatsoever. The
interests of any Participant or Beneficiary in the Trust Fund and/or any of the
benefits, payments, proceeds or avails therefrom and under this Plan shall not
be subject to claims of his creditors, or others, or subject to attachment,
garnishment, execution or other process of law, and no Participant or
Beneficiary shall have any right to alienate, assign, anticipate, commute,
pledge or encumber his interest in the Trust Fund and/or any of the benefits,
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payments, proceeds or avails therefrom or under this Plan in any manner.
Section 6.5 Withdrawal of Contributions. Effective on the
last day of any given calendar month, a Participant may, upon giving prior
written notice to the Committee, withdraw a part of the dollar value of his
Account subject to the following conditions and limitations:
(a) Such withdrawal must first be made from the
Participant's pre-1987 Supplementary Contributions, if any, but exclusive of
earnings thereon. A Participant who elects to make a withdrawal of his
pre-1987 Supplementary Contributions under the provisions of this subsection
(a) shall not be permitted to make further Matched or Supplementary
Contributions until the beginning of the calendar month following a period of
three months from the last day of the calendar month in which such withdrawal
request is made.
(b) Upon exhaustion of the Participant's pre-1987
Supplementary Contributions, any further withdrawal must then be made from the
Participant's pre-1987 Matched Contributions, if any, also exclusive of
earnings thereon; provided, however, that any Participant withdrawing pre-1987
Matched Contributions shall not be permitted to make further Supplementary or
Matched Contributions until the beginning of the calendar month following a
period of three months from the last day of the calendar month in which such
withdrawal request is made.
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(c) Upon exhaustion of the Participant's pre-1987 Matched
Contributions, if any, exclusive of earnings thereof, any further withdrawal
must be then made from the Participant's post-1986 Supplementary Contributions
and Matched Contributions and earnings allocable to his aggregate Participant
contributions under the Plan. Any such withdrawal shall be treated as an
allocable withdrawal of his Supplementary and Matched Contributions and of the
earnings thereon in accordance with Section 72(e); provided, however, any
withdrawal treated under Section 72(e) of the Code as a withdrawal of amounts
contributed by the Participant shall be first allocable to the Participant's
Supplementary Contributions and then to his Matched Contributions. A
Participant who elects to make a withdrawal of any or all of his post- 1986
Supplementary and Matched Contributions and earnings on his aggregate
contributions under the provisions of this subsection (c) shall not be
permitted to make further Matched or Supplementary Contributions until the
beginning of the calendar month following a period of three months from the
last day of the calendar month in which such withdrawal request is made.
(d) Notwithstanding subparagraphs (a), (b) and (c)
hereof, in the case of a Participant who has withdrawn the total dollar value
of his Supplementary Contributions and his Matched Contributions, and earnings
allocable to such contributions, withdrawals may be made from the Company's
Matching Contributions made on behalf of said
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Participant, and any earnings thereon, up to the full amount thereof; provided,
however, that such Participant must be fully vested (100%) in Company
contributions at the date of such a withdrawal, and must be determined, by the
Committee, to have a hardship need. A Participant who makes a hardship
withdrawal shall make no further Supplementary or Matched Contributions until
the beginning of the calendar month following a period of three months from the
last day of the calendar month in which such withdrawal is made.
Hardship determinations shall be made in a uniform and
non-discriminatory manner. By way of example, and not limitation, hardship
would be a financial hardship occurring in the personal affairs of a
Participant because of:
(i) A financial need of long-range proportion,
such as a need for Participant's purchase of a primary home or residence or for
the post-secondary education of Participant's children; or
(ii) A financial need of large proportion, such as
a need due to major destruction of Participant's residence when not covered by
insurance; major loss of income caused by accident, sickness, or temporary
disability of Participant; major loss of income caused by extended layoff of at
least 90 days of Participant; major financial burden caused by death occurring
in the immediate family of Participant; foreclosure on the mortgage of
Participant's residence; and medical expenses of Participants who are eligible
to participate in the Hilton Hotels Group Health
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Plans to the extent such expenses are not otherwise covered under those plans.
Such election shall be effective as of the first day of the calendar month
which is at least 30 days following the date the election is filed.
(e) If a Participant's Supplementary and Matched
Contributions are suspended in the event of a withdrawal under this Section,
such contributions shall not be resumed unless the Participant files a written
election with the Committee to that effect.
(f) Withdrawals under this Section may not be in an
amount less than the lesser of the amount contributed to the Plan by the
Participant, or $500.00, and a period of 12 months must have elapsed since the
last withdrawal, except for hardship withdrawals under subparagraph (d) hereof.
Section 6.6 Missing Participant or Beneficiary. If a
Participant's vested interest cannot be distributed because such Participant or
his Beneficiary or Beneficiaries cannot be located, the Trustee shall transfer
the value of the Participant's interest in the Trust Fund to the fund described
in Section 6.2(d) for the benefit of such Participant or Beneficiary.
Thereafter, if the Committee fails to locate the Participant or Beneficiary
entitled to a distribution, the entire amount set aside with respect to such
payee, plus earnings, shall be forfeited as of the beginning of the calendar
month coinciding with or next following the fifth anniversary of the date
distribution of said vested interest was first attempted. Said forfeited
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amount shall be disposed of as provided in Section 6.3 hereof.
Should a Participant or Beneficiary to whom payment is due
make a claim for his vested interest in the Trust Fund, the vested interest so
forfeited will be reinstated on behalf of such claimant. Said reinstated
vested interest shall be paid from forfeitures arising in the Plan Year during
which the claim is settled, or as soon as available from forfeitures.
Section 6.7 Direct Rollovers.
(a) This Section 6.7 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this Section
6.7, a Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover.
(b) Eligible Rollover Distributions: For purposes of
this Section 6.7, an "Eligible Rollover Distribution" is any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include:
(1) any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and
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(2) the portion of any distribution that
is not includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
(c) Eligible Retirement Plan: For purposes of this
Section 6.7, an "Eligible Retirement Plan" is an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
(d) Distributee: For purposes of this Section 6.7, 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 Section 414(p) of the Code, are
Distributees with regard to the interest of the spouse or former spouse.
(e) Direct Rollover: For purposes of this Section 6.7, a
"Direct Rollover" is a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee."
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ARTICLE VII
COMMITTEE, INVESTMENT AND ADMINISTRATION
Section 7.1 Appointment of Committee. The Committee shall
consist of three or more members appointed by the Board of Directors of the
Company. The Board of Directors shall by resolution appoint the original
members of such Committee, and such members shall hold office until
resignation, death or removal by the Board of Directors. The Committee may
then select a Plan Administrator under the Plan.
Section 7.2 General Duties and Powers of Committee. The
Committee shall be charged with the administration of this Plan and shall
decide, subject to the terms of the Trust Agreement, all questions arising in
the administration, interpretation and application of this Plan, including all
questions of eligibility.
The Committee shall, from time to time, direct the Trustee
concerning the payments to be made out of the Trust Fund pursuant to this Plan
and shall have such other powers respecting the administration of the Trust
Fund as may be conferred upon it hereunder or under the Trust Agreement.
Within a reasonable time after the last day of a calendar
month, the Company shall certify to the Committee in writing the total amount
of the Company's contribution to the Trust Fund for such month and such
information from the Company's records with respect to Employees as the
Committee may require in order to determine the identity and interests
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of the Participants and otherwise to perform its duties hereunder.
Any certification by the Company of information to the
Committee pursuant to this Plan shall, for all purposes of this Plan, be
binding on all parties, provided that whenever any Employee proves to the
satisfaction of the Company that his period of employment or his Compensation
as so certified is incorrect, the Company shall correct such certification, all
in accordance with the claims procedure provided herein.
The determination of the Committee as to the identity of the
respective Participants and as to their respective interests shall be binding
upon the Company, the Trustee, the Employees, the Participants and all the
Beneficiaries.
In any matter affecting any member of the Committee in his
individual capacity as a Participant hereunder, separate and apart from his
status as a member of the group of Participants, such interested member shall
have no authority or vote in the determination of such matter as a member of
the Committee, but said Committee shall determine such matter as if said
interested member were not a member of the Committee; provided, however, that
this shall not be deemed to take from said interested member any of his rights
hereunder as a Participant. In the event that the remaining members of the
Committee should be unable to agree on any matter so affecting an interested
member
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because of an equal division of voting, the Board of Directors shall appoint a
temporary member of the Committee in order to create an odd number of voting
members.
Section 7.3 Investment Powers and Duties. The Committee may
direct the Trustee with respect to the investment and reinvestment of the Trust
Fund, and to the extent it exercises its power to direct the Trustee, shall be
the Fiduciary with respect to investment, management and control of Trust
assets.
The Committee may transfer to the Trustee or an Investment
Manager the authority and duty to direct the investment and management of all
or a portion of the Trust assets. Upon such transfer the Trustee or the
Investment Manager, as the case may be, shall be the Fiduciary with respect to
the investment and management of such Trust assets and the Committee shall have
no responsibility therefor. Any transfer of investment and management to the
Trustee or to an Investment Manager may be revoked upon receipt by the Trustee
and the Investment Manager, if applicable, of a notice to that effect by the
Committee. The appointment, selection and retention of a qualified Investment
Manager shall be solely the responsibility of the Committee. The Trustee is
authorized and entitled to rely upon the fact that said Investment Manager is
at all times a qualified Investment Manager until such time as the Trustee has
received a written notice from the Committee to the contrary, as well as to
rely upon the fact that said
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Investment Manager is authorized to direct the investment and management of the
assets of the aforesaid Trust until such time as the Committee shall notify the
Trustee in writing that another Investment Manager has been named or, in the
alternative, that the Investment Manager named has been removed and the
responsibility for the investment and management of the Trust assets has been
assumed by the Committee or has been transferred back to the Trustee, as the
case may be.
To the extent the Committee exercises its power to direct the
Trustee with respect to the investment and management of all or a portion of
the assets of the Trust Fund, the Trustee shall not be liable nor responsible
for losses or unfavorable results arising from the Trustee's compliance with
proper directions of the Committee which are made in accordance with the terms
of the Plan and Trust and which are not contrary to the provisions of any
applicable Federal or State statute regulating such investment and management
of the assets of an employee benefit trust. To the extent authority and
responsibility with respect to the investment and management of all or a
portion of the Trust assets are transferred to an Investment Manager, the
Trustee shall not be liable nor responsible in any way for any losses or other
unfavorable results arising from the Trustee's compliance with investment or
management directions received by the Trustee from the Investment Manager. Any
directions by the Committee shall be in accordance with the Trust Agreement.
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Any directions by an Investment Manager shall be in accordance with an
agreement between said Manager, the Committee and the Trustee; provided,
however, the Trustee shall be under no duty to question any directions of the
Investment Manager nor to review any securities or other property of the Trust
constituting assets thereof with respect to which an Investment Manager has
investment responsibility, nor to make any suggestions to such Investment
Manager in connection therewith. The Trustee shall, as promptly as possible,
comply with any written directions given by the Committee or an Investment
Management hereunder.
The Trustee shall not be liable, in any manner nor for any
reason, for the making or retention of any investment pursuant to such
directions of the Investment Manager, nor shall the Trustee be liable for its
failure to invest any or all of the Trust Funds in the absence of such written
directions. In any event, neither the Committee nor any Investment Manager
referred to above shall direct the purchase, sale or retention of any assets of
the Trust Fund if such directions are not in compliance with the applicable
provisions of the Act and any Regulations or Rulings issued thereunder. No
Fiduciary shall permit the indicia of ownership of any of the Trust assets to
be maintained at a location outside the jurisdiction of the District Courts of
the United States, except as authorized by the Secretary of Labor.
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During such period or periods of time, if any, as the
Committee or an Investment Manager is authorized to direct the investment and
management of the Trust assets, the Trustee shall have no obligation to
determine the existence of any conversion, redemption, exchange, subscription
or other right relating to any of said securities purchased of which notice was
given prior to the purchase of such securities, and shall have no obligation to
exercise any such right unless the Trustee is informed of the existence of the
right and is instructed to exercise such right, in writing, by the Committee or
the Investment Manager, as the case may be, within a reasonable time prior to
the expiration of such right.
In the event the Committee or Investment Manager has the power
to direct the Trustee in the investment of the Trust Fund, they shall have the
power to direct the Trustee 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 in accordance with the investment powers enumerated in the Trust
Agreement; providing investments are prudently made, with diversity to minimize
risk of loss, and are not in conflict with other fiduciary rules hereunder and
under the Trust Agreement.
Section 7.4 Organization of Committee. The Committee may
adopt such by-laws and regulations as it deems desirable for the conduct of its
affairs and appoint one of its own members chairman and appoint a secretary and
one or
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assistant secretaries and one or more other agents, none of whom need be a
member of the Committee, but any of whom may, but need not be, an officer or
employee of the Company. It may delegate to any agent such duties and powers,
both ministerial and discretionary, as it deems appropriate, excepting only
that all matters involving investment of funds, if applicable, interpretation
of this Plan and settlement of disputes shall be determined by the Committee.
Any member of the Committee may resign at any time by giving
written notice to the other members and to the Secretary of the Company,
effective as therein stated, otherwise upon receipt. Any member who leaves the
employ of the Company shall be deemed to have resigned as a member on the date
of his termination of employment. Any member of the Committee may, at any
time, be removed by the Board of Directors.
Upon the death, resignation or removal of any member, the
Board of Directors shall at its next regular meeting, or at a special meeting
if so desired, appoint by resolution a successor. Notice of appointment of a
successor member shall be made by the Secretary of the Company in writing to
the Trustee and to the Committee.
Section 7.5 Records and Reports. The Committee shall keep
accurate records of all of its proceedings, as well as such books of account,
records and other data as may be necessary for the proper administration of the
Plan. The Plan Administrator, unless the Plan is otherwise exempted by
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law, shall, within the time prescribed by law, prepare and submit to the
Internal Revenue Service and the Company an Annual Report conforming with the
requirements of the Employee Retirement Income Security Act of 1974, as
amended, and any Regulations or Rulings thereunder. Notwithstanding anything
herein to the contrary, the Plan Administrator shall fully comply with all
reporting and disclosure requirements provided by law.
Section 7.6 Claims Procedure. Claims for benefits or
hardship withdrawal shall be filed with the Plan Administrator, who shall be
required to give written notice to any Participant or Beneficiary who makes a
claim under the Plan which claim is denied by the Committee. Unless additional
time is required, such notice shall be given within ninety (90) days of receipt
of the claim, and shall be sent to the Participant's or Beneficiary's last
known address and shall set forth the specific reasons for denial of the
benefit claimed, specify the pertinent Plan provisions on which the denial is
based, describe any additional material or information necessary for the
claimant to perfect the claim and explain why such material is necessary. The
notice must also explain the Plan's claim review procedure. The Participant,
Beneficiary or a duly authorized representative, shall have sixty (60) days
from the date such notice was given to submit a written request for review of
his claims denial. He shall be entitled to review pertinent documents and
submit issues and comments in
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writing, whereupon the entire Committee shall, unless additional time is
required, within thirty (30) days of receipt of the request, hear such appeal
and shall render a written decision within sixty (60) days thereafter.
Section 7.7 Manner of Administering. The Committee shall
have full discretion to construe and interpret the terms and provisions of this
Plan, which interpretation or construction shall be final and binding on all
parties, including but not limited to the Company and any Participant or
Beneficiary, except as otherwise provided by law. The Committee shall
administer such terms and provisions in a uniform and nondiscriminatory manner
and in full accordance with any and all laws applicable to the Plan.
Section 7.8 Compensation, Bonding, Expenses and Indemnity.
(a) The members of the Committee shall serve without
compensation for their services hereunder.
(b) Members of the Committee and any delegates shall be
bonded to the extent required by Section 412(a) of ERISA and the regulations
thereunder. Bond premiums and all expenses of the Committee or of any delegate
who is an employee of the Company shall be paid by the Company and the Company
shall furnish the Committee and any such delegate with such clerical and other
assistance as is necessary in the performance of their duties.
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(c) The Committee is authorized at the expense of the
Company to employ such legal counsel as it may deem advisable to assist in the
performance of its duties hereunder. Expenses and fees in connection with the
administration of the Plan and the Trust shall be paid from the Trust assets as
provided in Article IX to the fullest extent permitted by law, unless the
Company determines otherwise.
(d) To the extent permitted by applicable state law, the
Company shall indemnify and save harmless the Committee and each member
thereof, the Board of Directors and any delegate of the Committee who is an
employee of the Company against any and all expenses, liabilities and claims,
including legal fees to defend against such liabilities and claims arising out
of their discharge in good faith of responsibilities under or incident to the
Plan, other than expenses and liabilities arising out of willful misconduct.
This indemnity shall not preclude such further indemnities as may be available
under insurance purchased by the Company or provided by the Company under any
by-law, agreement or otherwise, as such indemnities are permitted under state
law. Payments with respect to any indemnity and payment of any expenses and
fees under this Section shall be made only from assets of the Company and shall
not be made directly or indirectly from Trust assets.
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ARTICLE VIII
CONTINUANCE AND AMENDMENT OF PLAN
Section 8.1 Continuance of Plan Not a Contractual Obligation
of Company - Impossibility of Diversion. It is the expectation of the Company
that it will continue this Plan indefinitely, but the continuance of this Plan
is not assumed as a contractual obligation by the Company, and the right is
reserved to the Company by action of its Board of Directors at any time to
discontinue this Plan. The discontinuance of this Plan by the Company shall
not have the effect of revesting in the Company any part of the Trust Fund,
except as specifically provided hereinafter. Upon the complete discontinuance
of contributions by any Company, affected Participants shall be one hundred
percent (100%) vested in their Account balances, and the Committee shall direct
the Trustee to distribute the net amount available, after payment of any fees
and expenses, in cash to the Participants entitled thereto according to their
Account balances, in accordance with Section 6.2.
In the event that the initial determination of the
Commissioner of Internal Revenue as to the qualification of this Plan and the
Trust hereunder under Sections 401 and 501(a) of the Federal Internal Revenue
Code of 1954 or any amendments thereto effective prior to said initial
determination, or the corresponding provisions of any later statute effective
prior to said determination, shall be that this Plan and the Trust hereunder do
not initially qualify
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under said sections, then the Company, by action of its Board of Directors,
shall have the right to discontinue this Plan and the Trust hereunder and to
cause all contributions made to the Trust hereunder by the Company to be
returned to the Company, and Participants shall have their contributions
returned as well.
Under no circumstances, other than those of the preceding
paragraph, shall any contributions by the Company to the Trust or any part of
the Trust Fund be recoverable by the Company from the Trustee or from any
Participant or former Participant, his Beneficiaries or other persons, or be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries and defraying the reasonable expenses of
the Plan.
Section 8.2 Consolidation or Merger. In the event of the
consolidation or merger of the Company with or into any other business
enterprise, or the sale by the Company of its assets or stock, the resulting
successor enterprise may continue the Plan by formally adopting the same and by
executing a proper supplemental agreement to the Trust Agreement with the
Trustee; provided, however, that such continuation shall be allowed only with
the express written authorization of the Board of Directors of the Company; and
provided, further, that in the case of any merger or consolidation with or
transfer of assets or liabilities to any other plan, each Participant in the
Plan must, if the Plan is then terminated, receive a benefit
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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, within ninety (90) days from
the effective date of such consolidation, merger or sale of assets, the Board
of Directors of the Company does not authorize continuation or such successor
does not adopt the Plan, the Plan shall be terminated in accordance with
Section 8.4.
Section 8.3 Amendments. The Company, by action of the Board
of Directors, may at any time and from time to time amend this Plan; provided,
however, that no amendment shall be made at any time pursuant to which the
Trust Fund may be diverted to purposes other than for the exclusive benefit of
the Participants and their Beneficiaries, and provided further that no
amendment shall decrease the percentage of the interest of any Participant
which shall theretofore have become vested, nor shall any amendment
discriminate in favor of employees who are officers, shareholders, or highly
compensated employees, and further that no amendment shall be made which
affects the rights, duties or responsibilities of the Trustee without the
Trustees approval, and further if any amendment changes the vesting schedule,
any Participant with three or more Years of Service may, by filing a written
request thereto with the Company within sixty (60) days after he has received
notice of such amendment, elect to have his vested percentage
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computed under the vesting schedule in effect prior to the amendment. Notice
and disclosure of amendments shall be given by the Plan Administrator in
accordance with law.
Notwithstanding anything herein to the contrary, however, this
Plan may be amended at any time if necessary to conform to the provisions and
requirements of the Federal Internal Revenue Code, the provisions and
requirements of the Revenue and Taxation Code of the State of California with
respect to employee benefit trusts or any amendments thereto, or regulations
issued pursuant thereto, or any similar act, and the Employee Retirement Income
Security Act of 1974 or any amendments thereto, or regulations, orders or
rulings issued pursuant thereto; and no such amendment shall be considered
prejudicial to any interest of any Participant or Beneficiary.
Amendments made by the Board of Directors as above shall bind
all adopting corporations without further action on their part, unless the
Board of Directors is otherwise notified within thirty (30) days of such
amendment.
Section 8.4 Termination of Plan. While the Plan is intended
as a permanent program, the Board of Directors reserves the right to terminate
the Plan at any time. In the event of such termination or a partial
termination, all affected Participants shall be one hundred percent (100%)
vested, to the extent required by applicable law. To the extent permissible
under Code Section 411(a)(11), the Committee shall direct the Trustee to
distribute the net amount
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available, after payment of any fees and expenses, in cash to the Participants
entitled thereto according to their Account Balances. Any payments shall be
made within a reasonable time following the effective date of the termination
or a determination of the occurrence of a partial termination.
ARTICLE IX
ADMINISTRATION OF THE TRUST FUND -
THE TRUST AGREEMENT - EXPENSES
Concurrently with the adoption of this Plan, the Company has
executed a Trust Agreement providing for the administration of the Trust Fund
by the Trustee hereunder and containing such provisions as the Company has
deemed appropriate with respect to the following: (a) powers and authority of
the Trustee as to the investment and reinvestment of the Trust Fund, the income
therefrom, and the general administration thereof, subject to an election by
the Company regarding the right of the Committee or an Investment Manager to
direct the Trustee with respect to investment of the Trust Fund; (b) the
limitations on the liability of the Trustee; (c) authority of the Committee to
settle the Accounts of the Trustee on behalf of all persons having any interest
in the Trust Fund and from time to time to appoint a new Trustee in place of
any then acting Trustee of the Trust Fund.
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ARTICLE X
MISCELLANEOUS
Section 10.1 Loans to Participants. Notwithstanding any
other provision of this Plan, the Committee shall have no right or authority to
authorize or direct the Trustee to make any loan or advance to any Participant
under this Plan or to make any distributions except as provided in this Plan.
Section 10.2 Limits on Employees' Rights. Neither the action
of the Company in establishing this Plan, nor any action taken by it or the
Committee under the provisions hereof, nor any provision of this Plan shall be
construed as giving to any Employee of the Company the right to be retained in
its employ or any right to any payment whatsoever, except to the extent of the
benefits provided for by this Plan to be paid from the Trust Fund. The Company
expressly reserves its rights at any time to dismiss any Employee without any
liability for any claim against the Trust Fund for any payment whatsoever
except to the extent provided for in this Plan, or against the Company. This
Plan is strictly a voluntary undertaking on the part of the Company and shall
not be deemed to constitute a contract between the Company and any Employee, or
to be a consideration for, or an inducement or condition of, the employment of
any Employee.
Section 10.3 Transfers of Participants. A Participant who
leaves the employment of a Company or entity
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71
participating in the Plan and forthwith is employed by transfer to another
Company or entity participating in the Plan, shall continue to be a
Participant, and his vesting and benefit accumulation shall continue without
interruption.
A Participant who leaves the employment of a Company or entity
participating in the Plan, and forthwith is employed by transfer (not an
authorized leave of absence) to an Affiliated Employer or entity or property
not participating in the Plan, may continue to be a Participant, and, subject
to the provisions of the definition of Year of Service contained in Article I,
his vesting shall continue without interruption, but he may no longer continue
to contribute to the Plan.
Section 10.4 Context to Control. The headings of articles
and sections are included solely for convenience of reference, and if there be
any conflict between such headings and the text of this Plan, the text shall
control.
Section 10.5 Construction. The masculine gender shall be
deemed to include the feminine, and the singular the plural, unless the context
clearly indicates to the contrary.
Section 10.6 Qualified Domestic Relations Orders.
Notwithstanding any other provision of this Plan to the contrary, the Committee
may comply with the terms of a qualified domestic relations order (within the
meaning of such term under Section 414(p) of the Internal Revenue
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72
Code). Consistent with the preceding sentence, payments to an alternate payee
pursuant to a qualified domestic relations order may be made prior to the time
the Participant attains "earliest retirement age" (as defined in Section
414(p)(4)(B) of the Internal Revenue Code).
Section 10.7 Action by Participant or Other Person. Whenever
an election or consent or similar action is authorized by a Participant or
other person, such election, consent or action shall be taken in such form and
manner as is satisfactory to the Committee, in addition to satisfying
applicable requirements of the Plan.
Section 10.8 Receipt or Release. Any payment to any
Participant or Beneficiary in accordance with the provisions of the Plan shall,
to the extent thereof, be in full satisfaction of all claims against the
Trustee, the Committee, and the Company. The Trustee may require such
Participant or Beneficiary, as a condition precedent to such payment, to
execute a receipt and release to such effect.
Section 10.9 Persons Under Incapacity. In the event any
amount is payable under the Plan to a person for whom a conservator has been
legally appointed, the payment shall be distributed to the duly appointed and
currently acting conservator, without any duty on the part of the Committee to
supervise or inquire into the application of any funds so paid.
Section 10.10 Top-Heavy Plan Requirements. For any Plan Year
for which this Plan is a top-heavy plan as
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73
defined in Section B.3 of Appendix B, attached hereto, and despite any other
provisions of this Plan to the contrary, this Plan will be subject to the
provisions of Appendix B.
ARTICLE XI
LAW GOVERNING AND SEVERABILITY
This Plan shall be construed, regulated and administered under
ERISA, and to the extent federal law is inapplicable, under the laws of the
State of California, and the Committee and the Trustee shall be liable to
account only in the courts of that State. All contributions received by the
Trustee hereunder shall be deemed to have been received in that State.
In the event any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions of this Plan, which shall be fully severable, and this
Plan shall be construed and enforced as if said illegal or invalid provisions
had never been inserted.
DATE: _____________, 1993
HILTON HOTELS CORPORATION
By _______________________
By _______________________
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APPENDIX A
ANNUAL ADDITION LIMITS
Section 4.3 of the Plan shall be construed in accordance with
this Appendix A. Unless the context clearly requires otherwise, words and
phrases used in this Appendix A shall have the same meanings that are assigned
to them under the Plan.
A.1 - Definitions.
As used in this Appendix A, the following terms shall have the
meanings specified below.
"Annual Additions" shall mean the sum credited to a
Participant's Accounts for any Plan Year of (a) Company contributions, (b)
voluntary contributions, (c) forfeitures, (d) amounts credited after March 31,
1984 to an individual medical account, as defined in Section 415(l)(2) of the
Code which is part of a Defined Benefit Plan maintained by the Company, and (e)
amounts derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account required with respect to a
key employee (as defined in Section B.2(e) of Appendix B to the Plan) under a
welfare benefit plan (as defined in Section 419(e) of the Code) maintained by
the Company.
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75
"Defined Benefit Plan" means a plan described in Section
414(j) of the Code.
"Defined Contribution Plan" means a plan described in Section
414(i) of the Code.
"Defined Benefit Plan Fraction" shall mean a fraction, the
numerator of which is the projected annual benefit (determined as of the close
of the relevant Plan Year) of the Participant under all Defined Benefit Plans
maintained by one or more Related Companies, and the denominator of which is
the lesser of (a) the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for the Plan Year, or (b) the
product of 1.4 multiplied by the amount which may be taken into account under
Section 415(b)(1)(B) of the Code with respect to the Participant for the Plan
Year.
"Defined Contribution Plan Fraction" shall mean a fraction,
the numerator of which is the sum of the annual additions to a Participant's
accounts under all Defined Contribution Plans maintained by one or more Related
Companies, and the denominator of which is the sum of the lesser of (a) or (b)
for such Plan Year and for each prior Plan Year of service with one or more
Related Companies, where (a) is the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of the Code for the Plan Year
(determined without regard to Section 415(c)(6) of the Code), and (b) is the
product of 1.4 multiplied by the amount which may be taken into account under
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76
Section 415(c)(1)(B) of the Code (or Section 415(c)(7) of the Code, if
applicable) with respect to the Participant for the Plan Year. Solely for
purposes of this definition, contributions made directly by an Employee to a
Defined Benefit Plan which maintains a qualified cost-of- living arrangement as
such term is defined in Section 415(k)(2) shall be treated as Annual Additions.
Notwithstanding the foregoing, the numerator of the Defined Contribution Plan
Fraction shall be adjusted pursuant to Treasury Regulations 1.415-7(d)(1),
Questions T-6 and T-7 of Internal Revenue Service Notice 83-10, and Questions
Q-3 and Q-14 of Internal Revenue Service Notice 87-21.
"Section 415 Compensation" shall mean a Participant's earned
income, wages, salaries, and fees for professional services, and other amounts
received for personal services actually rendered in the course of employment
with an employer maintaining a plan (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses), and excluding
the following:
(a) Employer contributions to a plan of deferred
compensation which are not included in the Employee's gross income for
the taxable year in which contributed or employer contributions under
a simplified employee pension plan to the extent such contributions
are
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deductible by the Employee, or any distributions from a plan of
deferred compensation;
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
section 403(b) of the Code (whether or not the amounts are actually
excludable from the gross income of the Employee).
Compensation for any limitation year is the compensation actually paid or
includable in gross income during such year.
A.2 - Annual Addition Limitations.
(a) The compensation limitation of Section 4.3 of the Plan
shall not apply to any contribution for medical benefits (within the meaning of
Section 419A(f)(2)) after separation from service which is treated as an Annual
Addition. In the event that Annual Additions to all the
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78
accounts of a Participant would exceed the limitations of Section 4.3 of the
Plan, they shall be reduced in the following priority: (1) return of voluntary
contributions to the Participant; (2) reduction of Company contributions.
(b) If any Company or any Affiliated Employer contributes
amounts, on behalf of Participants covered by the Plan, to other Defined
Contribution Plans, the limitation on Annual Additions provided in Article IV
of the Plan shall be applied to Annual Additions in the aggregate to the Plan
and such other plans. Reduction of Annual Additions, where required, shall be
accomplished by first refunding any voluntary contributions to Participants,
then by reducing contributions under such other plans pursuant to the
directions of the fiduciary for administration of such other plans or under
priorities, if any, established by the terms of such other plans, and then, if
necessary, by reducing contributions under the Plan.
(c) In any case where a Participant under the Plan is also a
participant under a Defined Benefit Plan or a Defined Benefit Plan and other
Defined Contribution Plans maintained by the Company or an Affiliated Employer,
the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall not exceed 1.0. Reduction of contributions to or benefits from
all plans, where required, shall be accomplished by first reducing benefits
under such other Defined Benefit Plan or plans, then by allocating any excess
in the manner set out above with
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79
respect to the Plan, and finally by reducing contributions or allocating any
excess contributions with respect to other Defined Contribution Plans, if any;
provided, however, that adjustments necessary under this or the next preceding
paragraph may be made in a different manner and priority pursuant to the
agreement of the Committee and the administrators of all other plans covering
such Participant, provided such adjustments are consistent with procedures and
priorities prescribed by Treasury Regulations under Section 415 of the Code.
(d) In the event the limitations of Section 4.3 of the
Plan or this Appendix A are exceeded and the conditions specified in Treasury
Regulations Section 1.415-6(b)(6) are met, the Committee may elect to apply the
procedures set forth in Treasury Regulations Section 1.415-6(b)(6).
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APPENDIX B
TOP-HEAVY PROVISIONS
Section 10.10 of the Plan shall be construed in accordance
with this Appendix B. Definitions in this Appendix B shall govern for the
purposes of this Appendix B. Any other words and phrases used in this Appendix
B, however, shall have the same meanings that are assigned to them under the
Plan, unless the context clearly requires otherwise.
B.1 - General.
This Appendix B shall be effective for Plan Years beginning on
or after January 1, 1984. This Appendix B shall be interpreted in accordance
with Section 416 of the Code and the regulations thereunder.
B.2 - Definitions.
(a) The "Benefit Amount" for any Employee means (1) in
the case of any defined benefit plan, the present value of his normal
retirement benefit, determined on the Valuation Date as if the Employee
terminated on such Valuation Date, plus the aggregate amount of distributions
made to such Employee within the five-year period ending on the Determination
Date (except to the extent already included on the Valuation Date) and (2) in
the case of any defined contribution plan, the sum of the amounts credited,
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81
on the Determination Date, to each of the accounts maintained on behalf of such
Employee (including accounts reflecting any nondeductible employee
contributions) under such plan plus the aggregate amount of distributions made
to such Employee within the five-year period ending on the Determination Date.
For purposes of this Section, the present value shall be computed using a 5%
interest assumption and the mortality assumptions contained in the defined
benefit plan for benefit equivalence purposes, provided that, if more than one
defined benefit plan is being aggregated for top-heavy purposes, the actuarial
assumptions which shall be used for testing top-heaviness are those of the plan
with the lowest interest assumption, provided further that if the lowest
interest assumption is the same for two or more plans, the actuarial
assumptions used shall be that of the plan with the greatest value of assets on
the applicable date.
(b) "Company" means any company (including unincorporated
organizations) participating in the Plan or plans included in the "aggregation
group" as defined in this Appendix B.
(c) "Determination Date" means the last day of the
preceding Plan Year or, in the case of the first Plan Year of the Plan, the
last day of the Plan Year.
(d) "Employees" means employees, former employees,
beneficiaries, and former beneficiaries who have
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82
a Benefit Amount greater than zero on the Determination Date.
(e) "Key Employee" means any Employee who, during the
Plan Year containing the Determination Date or during the four preceding Plan
Years, is:
(1) one of the ten Employees of a Company having annual
compensation from such Company of more than the limitation in effect
under Section 415(c)(1)(A) of the Code and owning (or considered as
owning within the meaning of Section 318 of the Code) both more than a
1/2% interest and the largest interest in such Company (if two
Employees have the same interest the Employee having the greater
annual compensation from the Company shall be treated as having a
larger interest);
(2) a 5% owner of a Company;
(3) a 1% owner of a Company who has an annual compensation
above $150,000; or
(4) an officer of a Company having an annual compensation
greater than 50% of the amount in effect under Section 415(b)(1)(A) of
the Code for any such Plan Year (however, no more than the lesser of
(A) 50 employees or (B) the greater of 3 employees or 10% of the
Company's employees shall be treated as officers). For purposes of
determining the number of employees taken into account under this
Section B.2(e)(4), employees described in Section 414(q)(8) of the
Code shall be excluded.
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83
(f) A "Non-Key Employee" means an Employee who is not a
Key Employee.
(g) "Valuation Date" means the first day (or such other date
which is used for computing plan costs for minimum funding purposes) of the
12-month period ending on the Determination Date.
(h) A "Year of Service" shall be calculated using the Plan
rules that normally apply for determining vesting service.
These definitions shall be interpreted in accordance with
Section 416(i) of the Code and the regulations thereunder and such rules are
hereby incorporated by reference. The term "Key Employee" shall not include
any officer or employee of an entity referred to in Section 414(d) of the Code.
For the purpose of this subsection, "compensation" shall mean compensation as
defined in Section 414(q)(7) of the Code and shall be determined without regard
to Sections 125, 402(a)(8), 402(h)(1)(B) or, in the case of employer
contributions made pursuant to a salary reduction agreement, Section 403(b).
B.3 - Top-Heavy Definition.
The Plan shall be top-heavy for any Plan Year if, as of the
Determination Date, the "top-heavy ratio" exceeds 60%. The top- heavy ratio is
the sum of the Benefit Amounts for all employees who are Key Employees divided
by the sum
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84
of the Benefit Amounts for all Employees. For purposes of this calculation
only, the following rules shall apply:
(a) The Benefit Amounts of all Non-Key Employees who were
Key Employees during any prior Plan Year shall be disregarded.
(b) The Benefit Amounts of all employees who have not
performed any services for any Company at any time during the five-
year period ending on the Determination Date shall be disregarded;
provided, however, if an Employee performs no services for five years
and then again performs services, such Employee's Benefit Amount shall
be taken into account.
(c)(1) Required Aggregation. This calculation shall be made
by aggregating any plans, of the Company or an Affiliated
Employer, qualified under Section 401(a) of the Code in which
a Key Employee participates or which enables this Plan to meet
the requirements of Section 401(a)(4) or 410 of the Code; all
plans so aggregated constitute the "aggregation group."
(2) Permissive Aggregation. The Company may also
aggregate any such plan to the extent that such plan, when
aggregated with this aggregation group, continues to meet the
requirements of Section 401(a)(4) and Section 410 of the Code.
If an aggregation group includes two or more defined benefit plans,
the actuarial assumptions used in
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85
determining an Employee's Benefit Amount shall be the same under each
defined benefit plan and shall be specified in such plans. The
aggregation group shall also include any terminated plan which covered
a Key-Employee and which was maintained within the five-year period
ending on the Determination Date.
(d) This calculation shall be made in accordance with Section
416 of the Code (including 416(g)(3)(B) and (g)(4)(A)) and the
regulations thereunder and such rules are hereby incorporated by
reference. For purposes of determining the accrued benefit of a Non-
Key Employee who is a Participant in a defined benefit plan, this
calculation shall be made using the method which is used for accrual
purposes for all defined benefit plans of the Company, or if there is
no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Section 411(b)(1)(C) of the Code.
B.4 - Vesting.
Notwithstanding the vesting provisions of the Plan, if the
Plan is top-heavy for any Plan Year, any Participant who completes one Hour of
Service during any day of such Plan Year or any subsequent Plan Year and who
terminates during any day of such Plan Year or any subsequent Plan Year shall
be entitled to a vested benefit which is the greater of his vested interest
pursuant to
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86
Section 5.2 of the Plan, or a vested interest at least equal to the product of
(x) the benefit such Participant would receive under the Plan if he was 100%
vested on the date of such termination times (y) the percentage shown below:
Number of Completed
Years of Service Percentage
------------------- ----------
2 20%
3 40%
4 60%
5 80%
6 100%
Notwithstanding the foregoing, the nonforfeitable percentage of a Participant's
benefit under the Plan shall not be less than that determined under the Plan
without regard to the preceding vesting schedule. Such benefit shall be
payable in accordance with the provisions of the Plan regarding payments to
terminated Participants.
Notwithstanding the preceding paragraph, if the Plan is no
longer top-heavy in a Plan Year following a Plan Year in which it was
top-heavy, a Participant's vesting percentage shall be computed under the
vesting schedule that otherwise exists under the Plan. However, in no event
shall a Participant's vested percentage in his accrued benefit be reduced. In
addition, a Participant shall have the option of remaining under the vesting
schedule set forth in this
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87
Section if he has completed three years of Vesting Service. The period for
exercising such option shall begin on the first day of the Plan Year for which
the Plan is no longer top-heavy and shall end 60 days after the later of such
first day or the day the Participant is issued written notice of such option by
the Company or the Committee.
B.5 - Minimum Benefits or Contributions, Compensation Limitations and Section
415 Limitations.
If the Plan is top-heavy for any Plan Year, the following
provisions shall apply to such Plan Year:
(a)(1) Except to the extent not required by Section 416 of
the Code or any other provision of law, notwithstanding any other
provision of this Plan, if the Plan and all other plans which are part
of the aggregation group are defined contribution plans, each
Participant (and any other Employee required by Section 416 of the
Code) other than Key employees shall receive an allocation of employer
contributions and forfeitures from a plan which is part of the
aggregation group at least equal to 3% (or, if lesser, the largest
percentage allocated to any Key Employee for the Plan Year) of such
Participant's compensation for such Plan Year (the "defined
contribution minimum"). For purposes of this subsection, salary
reduction contributions on behalf of a Key Employee must be taken into
account. For purposes of this subsection, a non-
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88
Key Employee shall be entitled to a contribution if he is employed on
the last day of the Plan Year (1) regardless of his level of
compensation, (2) without regard to whether he has made any mandatory
contributions required under the Plan, and (3) regardless of whether
he has less than 1,000 Hours of Service (or the equivalent) for the
accrual computation period.
(2) Except to the extent not required by Section 416 of the
Code or any other provision of law, notwithstanding any other
provisions of the Plan, if the Plan or any other plan which is part of
the aggregation group is a defined benefit plan each Participant who
is a participant in any such defined benefit plan (who is not a Key
Employee) who accrues a full Year of Service during such Plan Year
shall be entitled to an annual normal retirement benefit from a
defined benefit plan which is part of the aggregation group which
shall not be less than the product of (1) the employee's average
compensation for the five consecutive years when the employee had the
highest aggregate compensation and (2) the lesser of 2% per Year of
Service or 20% (the "defined benefit minimum"). A Non-Key Employee
shall not fail to accrue a benefit merely because he is not employed
on a specified date or is excluded from participation because (1) his
compensation is less than a stated minimum or (2) he
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89
fails to make mandatory employee contributions. For purposes of
calculating the defined benefit minimum, (1) compensation shall not
include compensation in Plan Years after the last Plan Year in which
the Plan is top-heavy and (2) a Participant shall not receive a Year
of Service in any Plan Year before January 1, 1984 or in any Plan Year
in which the Plan is not top-heavy. This defined benefit minimum
shall be expressed as a life annuity (with no ancillary benefits)
commencing at normal retirement age. Benefits paid in any other form
or time shall be the actuarial equivalent (as provided in the plan for
retirement benefit equivalence purposes) of such life annuity. Except
to the extent not required by Section 416 of the Code or any other
provisions of law, each Participant (other than Key Employees) who is
not a participant in any such defined benefit plan shall receive the
defined contribution minimum (as defined in paragraph (a)(1) above).
(3) If a non-Key Employee is covered by plans described in
both paragraphs (1) and (2) above, he shall be entitled only to the
minimum described in paragraph (1), except that for the purpose of
paragraph (1) "3% (or, if lesser, the largest percentage allocated to
any key employee for the Plan Year)" shall be replaced by "5%".
Notwithstanding the preceding sentence, if the accrual rate under the
plan described in (2) would comply with this Section B.5 absent the
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90
modifications required by this Section, the minimum described in
paragraph (1) above shall not be applicable.
(b) For purposes of this Section, "compensation" shall mean
all earnings included in the Employee's Form W-2 for the calendar year
that ends within the Plan Year, not in excess of $200,000, adjusted at
the same time and in the same manner as under Section 415(d) of the
Code.
(c)(1) Unless the Plan qualifies for an exception under
Section B.5(c)(2), "1.0" shall be substituted for "1.25" in the
definitions of Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction used in Appendix A to the Plan.
(2) A Plan qualifies for an exception from the rule of
Section B.5(c)(1) if the Benefit Amount of all Employees who are Key
Employees does not exceed 90% of the sum of the Benefit Amounts for
all Employees and one of the following requirements is met:
(A) A defined benefit minimum of 3% per Year of
Service (up to 30%) is provided;
(B) For Participants covered only by a defined
contribution plan, a defined contribution minimum of 4% is
provided;
(C) For Participants covered by both types
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91
of plans, benefits from the defined contribution minimum are
comparable to the 3% defined benefit minimum;
(D) The plan provides a floor offset where the
floor is a 3% defined benefit minimum; or
(E) A defined contribution minimum of 7-1/2% of
compensation is provided for any non-Key Employee who is
covered under both a defined benefit plan and a defined
contribution plan (each of which is top-heavy) of a Company.
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APPENDIX C
Special Employee
Classification
Name of Employer Limitation
---------------- ----------
Plan Sponsor:
Hilton Hotels Corporation None
Controlled Group Members:
Palmer House Company None
Hotel Waldorf Astoria Corp. None
Hilton Washington Corporation None
Hotel Equipment Corporation None
Hilton Casinos, Inc. None
Hilton San Diego Corporation None
Hilton Inns, Inc. None
Hilton New Jersey Corp. None
Benco, Inc. None
Conrad International Investment Corp. None
Conrad International Hotel Corp. None
Non-Controlled Group Subsidiaries:
Hilton Hawaiian Village Joint Venture None
Hilton Service Corporation None
Managed Properties:
Palacio Del Rio, Inc. (Hilton Palacio Del Rio) None
S.A. Hotel, Inc. None
Bristol Corporation (Anchorage Westward Hilton) None
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Special Employee
Classification
Name of Employer Limitation
---------------- ----------
International Rivercenter (New Orleans Hilton) None
Koar-Pasadena Investment Partnership, G.P.
(Pasadena Hilton) None
Hotelerama Associates Limited (Fontainebleu Hilton) None
Fortuna Ent. LP (Los Angeles Airport Hilton) None
Kuilima Resort Company (Turtle Bay Hilton) None
Anaheim Hotel Partnership None
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