þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Voting Common Stock
|
2,852,616 shares. |
Non-Voting Common Stock
|
12,423,992 shares. |
PART I | ||||||||
|
||||||||
Item 1. | 1 | |||||||
Item 1.A. | 4 | |||||||
Item 1.B. | 10 | |||||||
Item 2. | 11 | |||||||
Item 3. | 13 | |||||||
Item 4. | 13 | |||||||
|
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PART II | ||||||||
|
||||||||
Item 5. | 13 | |||||||
Item 6. | 15 | |||||||
Item 7. | 16 | |||||||
Item 7.A. | 26 | |||||||
Item 8. | 27 | |||||||
PHI, Inc. and Consolidated Subsidiaries:
|
||||||||
27 | ||||||||
28 | ||||||||
29 | ||||||||
30 | ||||||||
31 | ||||||||
32 | ||||||||
Item 9. | 54 | |||||||
Item 9.A. | 54 | |||||||
Report of Independent Registered Public Accounting Firm
|
||||||||
Item 9.B. | 56 | |||||||
|
||||||||
PART III | ||||||||
|
||||||||
Item 10. | 56 | |||||||
Item 11. | 56 | |||||||
Item 12. | 56 | |||||||
Item 13. | 56 | |||||||
Item 14. | 56 | |||||||
|
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PART IV | ||||||||
|
||||||||
Item 15. | 57 | |||||||
60 | ||||||||
Amended Articles of Incorporation | ||||||||
Amended 401(k) Retirement Plan | ||||||||
Amended 1995 Incentive Compensation Plan | ||||||||
Form of Non-Qualified Stock Option Agreement | ||||||||
Officer Deferred Compensation Plan II | ||||||||
Articles of Agreement | ||||||||
Subsidiaries | ||||||||
Consent of Deloitte & Touche LLP | ||||||||
Certification of CEO Pursuant to Section 302 | ||||||||
Certification of CFO Pursuant to Section 302 | ||||||||
Certification of CEO Pursuant to Section 906 | ||||||||
Certification of CFO Pursuant to Section 906 |
i
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
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Ø
the tropical storm and hurricane season in the Gulf of Mexico;
Ø
poor weather conditions that often prevail during winter and can develop in any season; and;
Ø
reduced daylight hours during the winter months.
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Ø
political, social and economic instability;
Ø
terrorism, kidnapping and extortion;
Ø
potential seizure or nationalization of assets;
Ø
import-export quotas; and
Ø
currency fluctuations or devaluation.
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Ø
the awarding of contracts to local contractors;
Ø
the employment of local citizens; and
Ø
the establishment of foreign subsidiaries with significant
ownership positions reserved by the foreign government for local
ownership.
Ø
the supply of, and demand for, oil and natural gas and market expectations regarding supply and demand;
Ø
weather-related or other natural causes;
Ø
actions of OPEC, and Middle Eastern and other oil producing countries, to control prices or change production levels;
Ø
general economic conditions in the United States and worldwide;
Ø
war, civil unrest or terrorist activities;
Ø
governmental regulation; and
Ø
the price and availability of alternative fuels.
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Ø
require us to dedicate a substantial portion of our cash flow from operations to pay principal of, and interest on, our
indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures or other
general corporate purposes, or to carry out other aspects of our business plan;
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Ø
increase our vulnerability to general adverse economic and industry conditions and limit our ability to withstand
competitive pressures;
Ø
limit our flexibility in planning for, or reacting to, changes in our business and future business opportunities;
Ø
place us at a competitive disadvantage compared to our competitors that have less debt; and limit our ability to obtain
additional financing to fund future working capital, capital expenditures and other aspects of our business plan.
Ø
limit our ability to obtain additional financing for working capital, capital expenditures and other aspects of our
business plan.
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Cruise
Appr.
Number
Speed
Range
Manufacturer
Type
in Fleet
Engine
Passengers
(mph)
(miles)
(2)
206 / 407
93
Turbine
4 6
130 150
300 420
BK-117 / BO-105
15
Twin Turbine
4 6
135
255 270
EC-135
(1)
20
Twin Turbine
7
143
382
AS350 B2 / B3
24
Turbine
5
140
337 385
212
(1)
/ 222
(1)
230
(1)
/ 412
(1)
25
Twin Turbine
8 13
115 160
300 370
S-76
(1)
A, A++, C+
28
Twin Turbine
12
150
400
214ST
(1)
4
Twin Turbine
18
155
429
S-92A
(1)
8
Twin Turbine
19
160
495
Total Helicopters
217
Aero Commander
2
Turboprop
6
300-340
1,200-1,600
31A
(1)
1
Turbojet
8
527
1,437
Conquest 441
(1)
3
Turboprop
6
330
1,200
King Air
(1)
1
Turboprop
8
300
1,380
Total Fixed Wing
7
Total Aircraft
224
(1)
Equipped to fly under instrument flight rules (IFR). All other types listed
can only fly under visual flight rules (VFR). See Item 1A. Business Risk Factors,
Risks Inherent In Our Business Our operations are affected by adverse weather
conditions and seasonal factors.
(2)
Based on maintaining a 30-minute fuel reserve.
(3)
Aircraft used for corporate purposes.
(4)
Aircraft used in the Air Medical segment.
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Facility
Lease Expiration
Area
Facilities
Comments
(Louisiana)
June 30, 2008
53 acres
Operational and
maintenance
facilities, landing
pads for 46
helicopters
Options to extend
to June 30, 2018
(Louisiana)
December 31, 2008
18 acres
Operational and
maintenance
facilities, landing
pads for 45
helicopters
Options to extend
to December 31,
2010
Airport (Louisiana)
August 31, 2008
14 acres
Operational and
maintenance
facilities, landing
pads for 30
helicopters
Three renewal
options to extend
for one year each
May 31, 2021
4 acres
Operational and
maintenance
facilities, landing
pads for 30
helicopters
Lease period to May
31, 2021 with
certain
cancellation
provisions
(Louisiana)
February 28, 2008
8 acres
Operational and
maintenance
facilities, landing
pads for 10
helicopters
Facility under
three separate
leases, of which
two contain options
to extend thru 2026
and 2028.
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ITEM 5.
MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Voting
Non-Voting
Period
High
Low
High
Low
$
41.00
$
29.00
$
39.48
$
30.00
38.00
29.99
38.54
29.00
34.24
29.01
34.39
26.69
34.10
27.29
33.06
27.56
$
30.25
$
23.42
$
30.11
$
20.75
30.95
24.10
30.50
23.12
35.48
23.90
32.48
23.02
34.59
27.25
32.40
26.35
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Index
2001
2002
2003
2004
2005
2006
100.00
148.20
122.50
128.90
155.00
165.00
100.00
94.64
100.71
135.61
147.59
187.73
100.00
99.50
107.82
142.23
209.02
229.40
100.00
79.30
115.60
135.25
139.75
163.50
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Year Ended
December 31,
2006
2005
2004
2003
2002
(Thousands)
$
413,118
$
363,610
$
291,308
$
269,392
$
283,751
(667
)
14,154
3,972
1,139
9,231
(0.05
)
1.76
0.74
0.21
1.73
(0.05
)
1.76
0.72
0.21
1.70
13,911
8,040
5,383
5,383
5,334
13,911
8,063
5,486
5,486
5,438
$
30,324
$
28,020
$
10,905
$
29,415
$
39,529
(178,928
)
(137,464
)
(18,594
)
(30,943
)
(169,760
)
146,388
108,947
8,275
2,026
127,245
$
307,689
$
224,265
$
128,405
$
110,135
$
103,851
254,099
162,527
88,716
70,300
72,751
369,465
311,678
253,241
258,526
252,577
700,970
549,209
394,173
377,454
366,707
205,500
204,300
210,275
202,000
200,000
400,125
239,051
109,975
105,993
104,854
(1)
See Restatement in Note 1 to the Consolidated Financial Statements.
(2)
As of the end of the period.
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ITEM 7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Year Ended
December 31,
2006
2005
2004
(Thousands of dollars)
$
248,035
$
219,644
$
180,102
133,397
112,123
77,476
25,588
28,192
24,342
6,098
3,651
9,388
413,118
363,610
291,308
213,279
173,177
151,107
130,412
104,465
67,664
18,456
19,099
18,668
4,125
2,522
7,935
366,272
299,263
245,374
1,010
1,003
1,499
7,384
6,503
6,525
96
214
49
82
7
12
8,572
7,727
8,085
374,844
306,990
253,459
33,746
45,464
27,496
(4,399
)
1,155
3,287
7,036
8,879
5,625
1,891
1,122
1,441
38,274
56,620
37,849
9,946
3,230
2,961
(19,267
)
(17,169
)
(12,949
)
(17,243
)
(20,448
)
(20,109
)
(12,790
)
$
(1,080
)
$
22,233
$
7,752
107,735
111,236
100,814
29,980
26,619
19,595
13,265
16,788
15,871
150,980
154,643
136,280
20,808
17,200
11,390
152
155
151
68
64
51
16
16
19
236
235
221
(1)
Including gains on disposition of property and equipment, and other income.
(2)
Includes 12, 12, and 14 aircraft as of December 31, 2006, 2005 and 2004, respectively
that are customer owned or leased by customers but operated by us.
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Payment Due by Year
Beyond
Total
2007
2008
2009
2010
2011
2011
(Thousands of dollars)
$
144,593
$
127,364
$
17,229
$
$
$
$
37,181
37,181
157,090
15,663
15,663
15,663
16,265
17,533
76,303
21,199
3,237
2,652
1,945
1,664
1,348
10,353
205,500
5,500
200,000
$
565,563
$
183,445
$
41,044
$
17,608
$
17,929
$
18,881
$
286,656
(1)
These commitments are for aircraft that we intend to finance with remaining cash from
the equity offering completed April 2006, and with cash from operations.
(2)
These commitments are for aircraft that we intend to finance with an operating lease.
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PHI, Inc.
Lafayette, Louisiana
March 16, 2007
Table of Contents
December 31,
December 31,
2006
2005
$
820
$
3,036
153,414
66,525
87,366
89,351
1,928
6,766
55,596
48,123
7,930
10,042
635
422
307,689
224,265
23,816
13,266
369,465
311,678
$
700,970
$
549,209
$
35,815
$
40,506
8,511
10,807
3,045
3,175
2,583
3,811
3,636
2,439
1,000
53,590
61,738
205,500
203,300
32,828
38,906
8,927
6,214
285
285
1,242
742
290,695
129,531
77
107,826
108,493
400,125
239,051
$
700,970
$
549,209
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Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2006
2005
2004
$
413,118
$
363,610
$
291,308
1,910
1,173
2,569
8,036
2,057
392
423,064
366,840
294,269
366,272
299,263
245,374
27,839
24,896
21,034
17,243
20,448
20,109
12,790
424,144
344,607
286,517
(1,080
)
22,233
7,752
(413
)
8,079
3,780
$
(667
)
$
14,154
$
3,972
$
(0.05
)
$
1.76
$
0.74
$
(0.05
)
$
1.76
$
0.72
13,911
8,040
5,383
13,911
8,063
5,486
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Accumulated
Voting
Non-Voting
Additional
Other Com-
Common Stock
Common Stock
Paid-in
prehensive
Retained
Shares
Amount
Shares
Amount
Capital
Income
Earnings
2,852
$
285
2,531
$
253
$
15,088
$
$
90,367
10
3,972
2,852
285
2,531
253
15,098
94,339
4,887
489
113,352
1,081
14,154
2,852
285
7,418
742
129,531
108,493
4,867
487
160,235
139
13
929
77
(667
)
2,852
$
285
12,424
$
1,242
$
290,695
$
77
$
107,826
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Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2006
2005
2004
$
(667
)
$
14,154
$
3,972
30,297
27,133
27,843
(1,631
)
6,415
3,845
(1,910
)
(1,173
)
(2,569
)
12,790
806
1,411
1,332
1,985
(31,109
)
(16,499
)
(7,473
)
(8,898
)
1,180
(213
)
(876
)
177
(2,313
)
(7,241
)
(6,679
)
23,049
(146
)
2,842
(649
)
64
30,324
28,020
10,905
(123,253
)
(96,165
)
(33,921
)
(1,518
)
36,809
10,751
14,395
(186,339
)
(97,950
)
(16,975
)
99,450
45,900
19,425
(5,595
)
(178,928
)
(137,464
)
(18,594
)
200,000
(10,208
)
(200,000
)
(4,857
)
(1,000
)
(1,000
)
181,900
114,875
37,008
(179,700
)
(119,850
)
(28,733
)
161,155
115,162
(433
)
(1,265
)
1,025
(469
)
146,388
108,947
8,275
(2,216
)
(497
)
586
3,036
3,533
2,947
$
820
$
3,036
$
3,533
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(1)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations, Basis of Consolidation, and Other General Principles
Since its inception, PHI, Inc.s primary business has been to transport personnel and, to a
lesser extent, parts and equipment, to, from and among offshore facilities for customers
engaged in the oil and gas exploration, development, and production industry. The Company
also provides air medical transportation services for hospitals, medical programs, and
aircraft maintenance services to third parties.
The consolidated financial statements include the accounts of PHI, Inc. and its subsidiaries
(PHI or the Company) after the elimination of all intercompany accounts and
transactions.
A principal stockholder has substantial control. Al A. Gonsoulin, Chairman of the Board and
Chief Executive Officer, beneficially owns stock representing approximately 52% of the total
voting power. As a result, he exercises control over the election of PHIs directors and
the outcome of matters requiring a stockholder vote.
Revenue Recognition
The Company recognizes revenue related to aviation transportation services after the
services are performed or the contractual obligations are met. Aircraft maintenance
services revenues are recognized at the time the repair or services work is completed.
Revenues related to emergency flights generated by the Companys Air Medical segment are
recorded net of contractual allowances under agreements with third party payors when the
services are provided.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements, as well as
reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Cash Equivalents
The Company considers cash equivalents to include demand deposits and investments with
original maturity dates of three months or less.
Short-term Investments
Short-term investments consist primarily of auction rate securities, which represent funds
available for current operations. In accordance with SFAS No. 115 Accounting for Certain
Investments in Debt and Equity Securities, these short-term investments are classified as
available for sale. The Companys auction rate securities generally have long-term stated
maturities, but have characteristics of short-term investments due to a rate-setting
mechanism and the ability to liquidate them through a Dutch auction process that occurs on
pre-determined intervals of less than 90 days. The Company has not recorded any unrealized
gains or losses associated with short-term investments as the carrying value approximates
fair value at December 31, 2006 and 2005.
Inventories of Spare Parts and Supplies
The Companys inventories are stated at the lower of average cost or market and consist
primarily of spare parts. Portions of the Companys inventories are used parts that are
often exchanged with parts removed from aircraft, reworked to a useable condition according
to manufacturers and FAA specifications, and returned to inventory. The Company uses
systematic procedures to estimate the valuation of the used parts, which includes
consideration of their condition and continuing utility. Reusable aircraft parts are
included
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in inventory at the average cost of comparable parts. The rework costs are expensed as
incurred. The Company also records an allowance for obsolescent and slow-moving parts,
relying principally on specific identification of such inventory. Valuation reserves
related to obsolescence and slow-moving inventory were $7.3 million and $6.3 million at
December 31, 2006 and 2005, respectively.
Property and Equipment
The Company records its property and equipment at cost less accumulated depreciation. For
financial reporting purposes, the Company uses the straight-line method to compute
depreciation based upon estimated useful lives of five to fifteen years for flight equipment
and three to ten years for other equipment. The salvage value used in calculating
depreciation of aircraft ranges from 30% to 40%. The Company uses accelerated depreciation
methods for tax purposes. The cost of scheduled inspections and modifications for flight
equipment are charged to maintenance expense as incurred. Modifications that enhance the
operating performance or extend the useful lives of the aircraft are capitalized and
depreciated over the remaining life of the asset. Upon selling or otherwise disposing of
property and equipment, the Company removes the cost and accumulated depreciation from the
accounts and reflects any resulting gain or loss in earnings at the time of sale or other
disposition.
Effective January 1, 2005 and prospectively, the Company reassessed the salvage values
applicable to major modifications to aircraft based on updated estimates derived from recent
aircraft sales. The adjustment for the year 2005 resulted in a decrease in depreciation
expense ($1.6 million). In addition, the Company incurred approximately $1.1 million of
expense in 2005 for repairs to an aircraft that incurred substantial damage due to a weather
related incident.
The Company reviews its long-lived assets and certain identifiable intangibles for
impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The Company measures recoverability of assets to be held
and used by comparing the carrying amount of an asset to future undiscounted net cash flows
that it expects the asset to generate. When an asset is determined to be impaired, the
Company recognizes that impairment amount, which is measured by the amount that the carrying
value of the asset exceeds its fair value. Similarly, the Company reports assets that it
expects to sell at the lower of the carrying amount or fair value less costs to sell.
Self-Insurance
The Company maintains a self-insurance program for a portion of its health care costs.
Self-insurance costs are accrued based upon the aggregate of the liability for reported
claims and the estimated liability for claims incurred but not reported. As of December 31,
2006 and 2005, the Company had $1.3 million and $1.1 million, respectively, of accrued
liabilities related to health care claims.
During 2005, the Company established an offshore insurance captive to realize savings in
reinsurance costs on its insurance premiums. Amounts paid to the captive in 2006 and 2005
totaled $3.2 million and $1.9 million, respectively. The financial position and operations
of the insurance captive were not significant in 2006 nor 2005. The captive is fully
consolidated in the accompanying financial statements.
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk
consist primarily of short-term investments and trade accounts receivable. Short-term
investments include auction rate securities and money market securities. The Company does
not believe significant credit risk exists with respect to these securities at December 31,
2006.
PHI conducts a majority of its business with major and independent oil and gas exploration
and production companies with operations in the Gulf of Mexico. The Company also provides
services to major medical centers and US governmental agencies. The Company continually
evaluates the financial strength of its customers but generally does not require collateral
to support the customer receivables. The Company establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of specific customers, current
market conditions, and other information. Collection efforts are typically exhausted at
approximately nine months, at which time unpaid amounts are charged off as uncollectible.
The allowance for doubtful accounts was $0.1 million and $0.2 million at December 31, 2006
and December 31, 2005,
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Change
Before Adoption
due to
After Adoption of
of SFAS No. 158
SFAS No. 158
SFAS No. 158
$
1,192
$
(129
)
$
1,063
52
52
77
77
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(2)
PROPERTY AND EQUIPMENT
December 31,
December 31,
2006
2005
(Thousands of dollars)
$
480,934
$
416,076
74,638
67,645
555,572
483,721
(186,107
)
(172,043
)
$
369,465
$
311,678
(3)
LONG-TERM DEBT
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(4)
INCOME TAXES
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2006
2005
2004
(Thousands of dollars)
$
$
343
$
(50
)
(1,142
)
1,175
1,371
1,077
(1,588
)
6,415
3,845
$
(413
)
$
8,079
$
3,780
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Year Ended
Year Ended
Year Ended
December 31, 2006
December 31, 2005
December 31, 2004
(Thousands of dollars, except percentage amounts)
Amount
%
Amount
%
Amount
%
$
(367
)
(34
)
$
7,559
34
$
2,636
34
679
9
(537
)
(2
)
(35
)
(3
)
762
3
298
4
(11
)
(1
)
295
1
167
2
$
(413
)
(38
)
$
8,079
36
$
3,780
49
December 31,
December 31,
2006
2005
$
1,644
$
1,652
5,792
4,617
962
1,419
3,355
3,549
323
190
19
2,297
343
343
814
814
720
1,321
34,192
23,282
48,164
39,484
(2,142
)
(2,142
)
46,022
37,342
(74,326
)
(68,167
)
(74,326
)
(68,167
)
$
(28,304
)
$
(30,825
)
Table of Contents
(5)
EMPLOYEE BENEFIT PLANS
Years Ended December 31,
2006
2005
2004
(Thousands of dollars)
$
$
259
$
302
64
124
111
62
53
(30
)
126
436
383
December 31,
2006
2005
(Thousands of dollars)
$
3,413
$
3,148
259
64
124
(18
)
13
(384
)
(131
)
(2,012
)
1,063
3,413
Table of Contents
December 31,
2006
2005
(Thousands of dollars)
(1,063
)
(3,413
)
(123
)
$
(1,063
)
$
(3,536
)
5.8
%
4.0
%
Table of Contents
1995
Plan
Options
Weighted
Non-
Average
Voting
Exercise Price
217,703
11.63
(10,750
)
12.75
206,953
11.57
(150,000
)
11.06
(10,203
)
8.50
46,750
13.87
(8,500
)
12.75
(500
)
12.75
37,750
14.14
37,750
14.14
46,750
13.87
206,953
11.57
Options Outstanding and Exercisable
Remaining
Number
Contractual
Exercise
Outstanding
Life (Years)
Price
22,750
2.5
$
12.75
15,000
1.8
16.25
37,750
2.4
(1)
14.14
(1)
Weighted Average
Table of Contents
(6)
OTHER ASSETS
December 31,
December 31,
2006
2005
(Thousands of dollars)
$
2,747
$
2,747
10,170
4,576
5,231
3,520
3,298
910
2,370
1,513
$
23,816
$
13,266
(7)
FINANCIAL INSTRUMENTS
December 31, 2006
December 31, 2005
Carrying
Estimated
Carrying
Estimated
Amounts
Fair Value
Amounts
Fair Value
$
200,000
$
194,000
$
200,000
$
210,500
(8)
COMMITMENTS AND CONTINGENCIES
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2006
2005
2004
(Thousands of dollars)
$
15,663
$
5,817
$
748
5,174
5,167
3,906
$
20,837
$
10,984
$
4,654
Table of Contents
Aircraft
Other
Total
(Thousands of dollars)
$
15,663
$
3,237
$
18,900
15,663
2,652
18,315
15,663
1,945
17,608
16,265
1,664
17,929
17,533
1,348
18,881
76,303
10,353
86,656
$
157,090
$
21,199
$
178,289
Table of Contents
(9)
BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
Table of Contents
Year Ended
December 31,
2006
2005
2004
(Thousands of dollars)
$
248,035
$
219,644
$
180,102
133,397
112,123
77,476
25,588
28,192
24,342
6,098
3,651
9,388
413,118
363,610
291,308
213,279
173,177
151,107
130,412
104,465
67,664
18,456
19,099
18,668
4,125
2,522
7,935
366,272
299,263
245,374
1,010
1,003
1,499
7,384
6,503
6,525
96
214
49
82
7
12
8,572
7,727
8,085
374,844
306,990
253,459
33,746
45,464
27,496
(4,399
)
1,155
3,287
7,036
8,879
5,625
1,891
1,122
1,441
38,274
56,620
37,849
9,946
3,230
2,961
(19,267
)
(17,169
)
(12,949
)
(17,243
)
(20,448
)
(20,109
)
(12,790
)
$
(1,080
)
$
22,233
$
7,752
(1)
Including gains on disposition of property and equipment and other income.
Table of Contents
Year Ended
December 31,
2006
2005
2004
(Thousands of dollars)
$
107,896
$
55,876
$
7,614
14,446
39,361
18,071
136
284
198
775
644
8,038
$
123,253
$
96,165
$
33,921
Year Ended
December 31,
2006
2005
2004
(Thousands of dollars)
$
15,939
$
15,829
$
18,342
8,634
6,023
4,992
1,443
1,236
1,587
42
4,281
4,045
2,880
$
30,297
$
27,133
$
27,843
$
289,349
$
247,657
$
227,929
166,367
137,911
89,722
15,170
13,560
12,289
230,084
150,081
64,233
$
700,970
$
549,209
$
394,173
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2006
2005
2004
(Thousands of dollars)
$
387,530
$
335,418
$
266,966
25,588
28,192
24,342
$
413,118
$
363,610
$
291,308
$
362,527
$
303,924
$
246,819
6,938
7,754
6,422
$
369,465
$
311,678
$
253,241
(10)
EFFECTS OF HURRICANES
Table of Contents
(11)
QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarter Ended
March 31,
June 30,
September 30,
December 31,
2006
2006
2006
2006
(Thousands of dollars, except per share data)
$
101,372
$
107,157
$
109,315
$
95,274
14,317
17,946
16,091
(1,508
)
2,225
(2,755
)
5,122
(5,259
)
0.21
(0.19
)
0.34
(0.34
)
0.21
(0.19
)
0.33
(0.34
)
Quarter Ended
March 31,
June 30,
September 30,
December 31,
2005
2005
2005
2005
(Thousands of dollars, except per share data)
$
74,239
$
86,783
$
100,018
$
102,570
10,203
13,887
19,834
20,422
359
1,961
5,460
6,374
0.07
0.32
0.53
0.62
0.07
0.31
0.53
0.62
(12)
SHAREHOLDERS EQUITY
(13)
CONDENSED FINANCIAL INFORMATION GUARANTOR ENTITIES
Table of Contents
CONDENSED CONSOLIDATING BALANCE SHEETS
(Thousands of dollars)
December 31, 2006
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
385
$
435
$
$
820
153,414
153,414
75,642
13,652
89,294
55,596
55,596
7,922
8
7,930
44
591
635
293,003
14,686
307,689
46,226
(46,226
)
44,085
(44,085
)
23,759
57
23,816
361,570
7,895
369,465
$
724,558
$
66,723
$
(90,311
)
$
700,970
$
46,653
$
4,354
$
$
51,007
44,085
(44,085
)
2,295
288
2,583
93,033
4,642
(44,085
)
53,590
205,500
205,500
25,900
15,855
41,755
292,222
4,402
(4,402
)
292,222
77
77
107,826
41,824
(41,824
)
107,826
400,125
46,226
(46,226
)
400,125
$
724,558
$
66,723
$
(90,311
)
$
700,970
1)
Foreign subsidiaries represent minor subsidiaries and are included in the guarantors
subsidiaries amounts.
Table of Contents
CONDENSED CONSOLIDATING BALANCE SHEETS
(Thousands of dollars)
December 31, 2005
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
2,577
$
459
$
$
3,036
66,525
66,525
81,881
14,236
96,117
48,123
48,123
9,978
64
10,042
(61
)
483
422
209,023
15,242
224,265
38,700
(38,700
)
39,867
(39,867
)
13,253
13
13,266
303,421
8,257
311,678
$
564,397
$
63,379
$
(78,567
)
$
549,209
$
46,322
$
10,605
$
$
56,927
39,867
(39,867
)
3,522
289
3,811
1,000
1,000
90,711
10,894
(39,867
)
61,738
203,300
203,300
31,335
13,785
45,120
130,558
4,402
(4,402
)
130,558
108,493
34,298
(34,298
)
108,493
239,051
38,700
(38,700
)
239,051
$
564,397
$
63,379
$
(78,567
)
$
549,209
Table of Contents
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Thousands of dollars)
For the year ended December 31, 2006
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
357,355
$
55,763
$
$
413,118
2,231
(2,231
)
1,910
1,910
8,016
20
8,036
369,512
55,783
(2,231
)
423,064
325,115
41,157
366,272
2,231
(2,231
)
25,106
2,733
27,839
(7,592
)
7,592
17,243
17,243
12,790
12,790
372,662
46,121
5,361
424,144
(3,150
)
9,662
(7,592
)
(1,080
)
(2,483
)
2,070
(413
)
$
(667
)
$
7,592
$
(7,592
)
$
(667
)
For the year ended December 31, 2005
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
310,868
$
52,742
$
$
363,610
1,485
(1,485
)
1,173
1,173
1,988
69
2,057
315,514
52,811
(1,485
)
366,840
263,861
35,402
299,263
1,485
(1,485
)
22,110
2,786
24,896
(8,921
)
8,921
20,448
20,448
297,498
39,673
7,436
344,607
18,016
13,138
(8,921
)
22,233
3,862
4,217
8,079
$
14,154
$
8,921
$
(8,921
)
$
14,154
1)
Foreign subsidiaries represent minor subsidiaries and are included in the guarantors
subsidiaries amounts.
Table of Contents
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Thousands of dollars)
For the year ended December 31, 2004
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
244,230
$
47,078
$
$
291,308
4,943
(4,943
)
2,575
(6
)
2,569
373
19
392
252,121
47,091
(4,943
)
294,269
217,072
28,302
245,374
4,943
(4,943
)
17,354
3,680
21,034
(7,398
)
7,398
20,109
20,109
247,137
36,925
2,455
286,517
4,984
10,166
(7,398
)
7,752
1,012
2,768
3,780
$
3,972
$
7,398
$
(7,398
)
$
3,972
Table of Contents
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Thousands of dollars)
For the year ended December 31, 2006
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
30,142
$
182
$
$
30,324
(123,047
)
(206
)
(123,253
)
36,809
36,809
(86,889
)
(86,889
)
(5,595
)
(5,595
)
(178,722
)
(206
)
(178,928
)
200,000
200,000
(10,208
)
(10,208
)
(200,000
)
(200,000
)
(4,857
)
(4,857
)
(1,000
)
(1,000
)
2,200
2,200
160,722
160,722
(469
)
(469
)
146,388
146,388
(2,192
)
(24
)
(2,216
)
2,577
459
3,036
$
385
$
435
$
$
820
1)
Foreign subsidiaries represent minor subsidiaries and are included in the guarantors
subsidiaries amounts.
Table of Contents
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Thousands of dollars)
For the year ended December 31, 2005
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
27,864
$
156
$
$
28,020
(96,161
)
(4
)
(96,165
)
10,751
10,751
(52,050
)
(52,050
)
(137,460
)
(4
)
(137,464
)
(5,975
)
(5,975
)
1,025
1,025
113,897
113,897
108,947
108,947
(649
)
152
(497
)
3,226
307
3,533
$
2,577
$
459
$
$
3,036
For the year ended December 31, 2004
Parent
Company
Guarantor
Only
Subsidiaries
(1)
Eliminations
Consolidated
$
10,644
$
261
$
$
10,905
(1,518
)
(1,518
)
(33,916
)
(5
)
(33,921
)
14,395
14,395
2,450
2,450
(18,589
)
(5
)
(18,594
)
8,275
8,275
8,275
8,275
330
256
586
2,896
51
2,947
$
3,226
$
307
$
$
3,533
Table of Contents
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
ITEM 9.A.
CONTROLS AND PROCEDURES
Table of Contents
PHI, Inc.
Lafayette, Louisiana
March 16, 2007
Table of Contents
Table of Contents
Page
1.
Financial Statements
Included in Part II of this report:
Report of Independent Registered Public Accounting Firm
27
Consolidated Balance Sheets December 31, 2006 and December 31, 2005.
28
29
30
31
Notes to Consolidated Financial Statements.
32
2.
Financial Statement Schedules
59
3
Articles of Incorporation and By-laws
(i)
Amended and Restated Articles of
Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1(i) to PHIs
Report on Form 10-Q for the quarterly period
ended June 30, 2006).
(ii)
Articles of Amendment to Articles of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to PHIs Report on Form 8-K
filed January 3, 2006).
(iii)
Amended and Restated By-laws of the Company (As amended
through May 1, 2002).
Instruments defining the rights of security holders, including indentures.
Loan Agreement dated as of April 23, 2002 by and among PHI, Inc., Acadian
Composites, LLC, Air Evac Services, Inc., Evangeline Airmotive Inc., and International
Helicopter Transport, Inc. and Whitney National Bank (incorporated by reference to
Exhibit 10.3 to PHIs Report on Form 10-Q for the quarterly period ended June 30,
2002).
1
st
Amendment to Loan Agreement dated as of April 23, 2002 by and
among PHI, Inc. Acadian Composites, LLC, Air Evac Services, Inc., Evangeline Airmotive
Inc., and International Helicopter Transport, Inc. and Whitney National Bank
(incorporated by reference to Exhibit 10.4 to PHIs Report on Form 10-Q for the
quarterly period ended June 30, 2004).
Form of Senior Debt Indenture (incorporated by reference to Exhibit 4.5 to
PHIs Registration Statement on Form S-3, filed on March 23, 2005, File No. 333-123528)
Form of Subordinated Debt Indenture (incorporated by reference to Exhibit 4.6
to PHIs Registration Statement on Form S-3, filed on March 23, 2005, File No.
333-123528)
First Supplemental Indenture dated April 12, 2006, among PHI, Inc., the
Subsidiary Guarantors named therein and The Bank of New York, as Trustee (incorporated
by reference to Exhibit 10.1 to PHIs Report on Form 8-K filed on April 13, 2006).
Table of Contents
Indenture dated April 12, 2006 among PHI, Inc., the Subsidiary Guarantors named
therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.2
to PHIs Report on Form 8-K filed on April 13, 2006).
Third Amendment to Loan Agreement dated April 12, 2006 by and among PHI, Inc.,
Air Evac Services, Inc., PHI Tech Services, Inc. (formerly Evangeline Airmotive, Inc.),
and International Helicopter Transport, Inc. and Whitney National Bank (incorporated by
reference to Exhibit 10.4 to PHIs Report on Form 8-K filed on April 13, 2006).
Material Contracts
The Amended and Restated PHI, Inc. 401 (k) Retirement Plan effective January 1,
2006.
Amended and Restated PHI, Inc. 1995 Incentive Compensation Plan adopted by
PHIs Board effective July 11, 1995 and approved by the shareholders of PHI on
September 22, 1995.
Form of Non-Qualified Stock Option Agreement under the PHI, Inc. 1995 Incentive
Compensation Plan between PHI and certain of its key employees.
Officer Deferred Compensation Plan II adopted by PHIs Board effective January
1, 2005.
Articles of Agreement Between PHI, Inc. & Office & Professional Employees
International Union and its Local 108 dated June 13, 2001.
Subsidiaries of the Registrant
Consent of Deloitte & Touche LLP
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chief Executive Officer.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chief Executive Officer.
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.
Table of Contents
Schedule II Valuation and Qualifying Accounts
(Thousands of dollars)
Additions
Balance at
Charged to
Balance at
Beginning
Costs and
End
Description
of Year
Expenses
Deductions
of Year
$
163
$
$
113
$
50
6,268
1,502
514
7,256
$
163
$
$
$
163
6,988
(70
)
650
6,268
$
120
$
43
$
$
163
5,536
2,400
948
6,988
Table of Contents
Michael J. McCann
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Signature
Title
Date
Chairman of the Board
March 16, 2007
Chief Executive Officer
and Director
(Principal Executive Officer)
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Director
March 16, 2007
Chief Financial Officer
March 16, 2007
(Principal Financial and
Accounting Officer)
Table of Contents
3
Articles of Incorporation and By-laws
(i)
Amended and Restated Articles of
Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1(i) to PHIs
Report on Form 10-Q for the quarterly period
ended June 30, 2006).
(ii)
Articles of Amendment to Articles of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 to PHIs Report on Form 8-K
filed January 3, 2006).
(iii)
Amended and Restated By-laws of the Company (As amended
through May 1, 2002).
Table of Contents
Amended and Restated PHI, Inc. 1995 Incentive Compensation Plan adopted by
PHIs Board effective July 11, 1995 and approved by the shareholders of PHI on
September 22, 1995.
Form of Non-Qualified Stock Option Agreement under the PHI, Inc. 1995 Incentive
Compensation Plan between PHI and certain of its key employees.
Officer Deferred Compensation Plan II adopted by PHIs Board effective January
1, 2005.
Articles of Agreement Between PHI, Inc. & Office & Professional Employees
International Union and its Local 108 dated June 13, 2001.
Subsidiaries of the Registrant
Consent of Deloitte & Touche LLP
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chief Executive Officer.
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Al
A. Gonsoulin, Chief Executive Officer.
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
Michael J. McCann, Chief Financial Officer.
INTRODUCTION | 1 | |||||||||
|
||||||||||
ARTICLE 1 DEFINITIONS | 2 | |||||||||
|
||||||||||
|
1.1 | Account Balance or Account | 2 | |||||||
|
1.2 | Act | 2 | |||||||
|
1.3 | Affiliate | 2 | |||||||
|
1.4 | Beneficiary | 2 | |||||||
|
1.5 | Board of Directors or Board | 2 | |||||||
|
1.6 | Code | 2 | |||||||
|
1.7 | Company | 2 | |||||||
|
1.8 | Compensation | 2 | |||||||
|
1.9 | Effective Date | 4 | |||||||
|
1.10 | Eligible Employee | 4 | |||||||
|
1.11 | Employee | 4 | |||||||
|
1.12 | Employee Benefits Committee or Committee | 5 | |||||||
|
1.13 | Employer | 5 | |||||||
|
1.14 | Employer Account | 5 | |||||||
|
1.15 | Employment Commencement Date | 5 | |||||||
|
1.16 | Entry Date | 5 | |||||||
|
1.17 | 401(k) Account | 5 | |||||||
|
1.18 | 401(k) Contributions | 5 | |||||||
|
1.19 | Highly Compensated Employee | 5 | |||||||
|
1.20 | Hour of Service | 6 | |||||||
|
1.21 | Investment Fund | 7 | |||||||
|
1.22 | Limitation Year | 7 | |||||||
|
1.23 | Matching Account | 7 | |||||||
|
1.24 | Matching Contributions | 7 | |||||||
|
1.25 | Nonelective Contribution Account | 7 | |||||||
|
1.26 | Nonhighly Compensated Employee | 7 | |||||||
|
1.27 | Normal Retirement Age | 7 | |||||||
|
1.28 | Normal Retirement Date | 7 | |||||||
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1.29 | One Year Period of Severance | 7 | |||||||
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1.30 | Participant | 8 | |||||||
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1.31 | Plan | 8 | |||||||
|
1.32 | Plan Year | 8 | |||||||
|
1.33 | Predecessor Company | 8 | |||||||
|
1.34 | Prior Plan | 8 | |||||||
|
1.35 | Qualified Domestic Relations Order | 8 | |||||||
|
1.36 | Qualified Nonelective Contributions | 8 | |||||||
|
1.37 | Qualified Matching Contributions | 8 | |||||||
|
1.38 | Rollover Account | 8 | |||||||
|
1.39 | Rollover Contribution | 8 | |||||||
|
1.40 | Service | 8 | |||||||
|
1.41 | Severance of Service | 9 | |||||||
|
1.42 | Spouse or Surviving Spouse | 10 | |||||||
|
1.43 | Totally and Permanently Disabled | 10 |
|
1.44 | Trust | 10 | |||||||
|
1.45 | Trustee | 10 | |||||||
|
1.46 | Valuation Date | 10 | |||||||
|
1.47 | Year of Service | 10 | |||||||
|
||||||||||
ARTICLE 2 ELIGIBILITY AND PARTICIPATION | 12 | |||||||||
|
||||||||||
|
2.1 | Initial Participation | 12 | |||||||
|
2.2 | Change in Status | 12 | |||||||
|
2.3 | Participation upon Reemployment | 12 | |||||||
|
2.4 | Ineligible Employees | 13 | |||||||
|
||||||||||
ARTICLE 3 CONTRIBUTIONS | 14 | |||||||||
|
||||||||||
|
3.1 | Employee Contributions | 14 | |||||||
|
3.2 | Company Contributions | 14 | |||||||
|
3.3 | Makeup Contributions | 15 | |||||||
|
3.4 | 401(k) Plan Nondiscrimination Testing | 15 | |||||||
|
3.5 | Rollover Contributions | 15 | |||||||
|
3.6 | Method and Time for Payment of Contributions | 16 | |||||||
|
3.7 | Contribution Due to Mistake of Fact | 16 | |||||||
|
3.8 | Nondeductible Overpayment | 16 | |||||||
|
3.9 | Individual Accounting | 16 | |||||||
|
||||||||||
ARTICLE 4 CONTRIBUTION ALLOCATIONS AND VESTING | 17 | |||||||||
|
||||||||||
|
4.1 | Allocation of Employee Contributions | 17 | |||||||
|
4.2 | Company Contributions | 17 | |||||||
|
4.3 | Limitation on Annual Addition | 18 | |||||||
|
4.4 | Vesting | 20 | |||||||
|
4.5 | Forfeitures | 20 | |||||||
|
||||||||||
ARTICLE 5 VALUATION OF FUND AND ALLOCATION OF GAINS AND LOSSES | 22 | |||||||||
|
||||||||||
|
5.1 | Valuation of Fund | 22 | |||||||
|
5.2 | Daily Valuation | 22 | |||||||
|
||||||||||
ARTICLE 6 PAYMENT OF BENEFITS | 23 | |||||||||
|
||||||||||
|
6.1 | Distribution of Benefits | 23 | |||||||
|
6.2 | Amount, Time and Method of Payment | 23 | |||||||
|
6.3 | Small Benefit Payments | 24 | |||||||
|
6.4 | Minimum Distribution Rules | 24 | |||||||
|
6.5 | Election of Direct Rollover | 25 | |||||||
|
6.6 | Definitions | 25 | |||||||
|
6.7 | Qualified Domestic Relations Order Payments | 26 | |||||||
|
6.8 | Reemployment | 26 | |||||||
|
||||||||||
ARTICLE 7 DEATH BENEFITS | 27 | |||||||||
|
||||||||||
|
7.1 | Death Benefits | 27 | |||||||
|
7.2 | Designation of Beneficiary | 27 | |||||||
|
7.3 | Time and Method of Payment | 27 |
(ii)
ARTICLE 8 IN-SERVICE WITHDRAWALS BY PARTICIPANTS | 29 | |||||||||
|
||||||||||
|
8.1 | Hardship Withdrawals from 401(k) Account | 29 | |||||||
|
8.2 | Withdrawal from Rollover Account | 30 | |||||||
|
8.3 | Withdrawals after Age 59 1 / 2 | 30 | |||||||
|
8.4 | Limitations on Withdrawals | 30 | |||||||
|
8.5 | Automated Withdrawals | 31 | |||||||
|
||||||||||
ARTICLE 9 INVESTMENT OF TRUST ASSETS PARTICIPANT DIRECTED INVESTMENTS | 32 | |||||||||
|
||||||||||
|
9.1 | Participant Directed Investments | 32 | |||||||
|
9.2 | Voting Rights | 32 | |||||||
|
||||||||||
ARTICLE 10 PLAN ADMINISTRATION | 33 | |||||||||
|
||||||||||
|
10.1 | Establishment of the Employee Benefits Committee | 33 | |||||||
|
10.2 | Powers of the Employee Benefits Committee | 33 | |||||||
|
10.3 | Duties and Authority of the Employee Benefits Committee | 34 | |||||||
|
10.4 | Actions by the Committee or a Subcommittee | 35 | |||||||
|
10.5 | Indemnification | 35 | |||||||
|
10.6 | Benefit Application and Claims Procedure | 35 | |||||||
|
10.7 | Responsibilities of Named Fiduciaries Other than the Committee | 36 | |||||||
|
10.8 | Allocation of Responsibilities | 36 | |||||||
|
10.9 | Designation of Persons to Carry Out Responsibilities of Named Fiduciaries | 36 | |||||||
|
10.10 | Payment of Expenses | 36 | |||||||
|
||||||||||
ARTICLE 11 PLAN ADOPTION, AMENDMENT OR TERMINATION | 37 | |||||||||
|
||||||||||
|
11.1 | Amendment of Plan | 37 | |||||||
|
11.2 | Merger | 37 | |||||||
|
11.3 | Form of Amendments | 37 | |||||||
|
11.4 | Acceptance of Transferred Assets | 37 | |||||||
|
11.5 | Plan to Plan Transfers | 37 | |||||||
|
11.6 | Plan Termination or Partial Termination | 38 | |||||||
|
||||||||||
ARTICLE 12 TRUST FUND AND THE TRUSTEE | 39 | |||||||||
|
||||||||||
|
12.1 | Trust and Trustee | 39 | |||||||
|
12.2 | Assets of the Trust | 39 | |||||||
|
||||||||||
ARTICLE 13 MISCELLANEOUS | 40 | |||||||||
|
||||||||||
|
13.1 | Limitation of Assignment | 40 | |||||||
|
13.2 | Legally Incompetent Distributee | 40 | |||||||
|
13.3 | Unclaimed Payments | 40 | |||||||
|
13.4 | Notification of Addresses | 40 | |||||||
|
13.5 | Notice of Proceedings and Effect of Judgment | 40 | |||||||
|
13.6 | Severability | 40 | |||||||
|
13.7 | Prohibition Against Reversion | 41 | |||||||
|
13.8 | Limitation of Rights | 41 | |||||||
|
13.9 | Controlling Law | 41 |
(iii)
|
13.10 | Errors in Payment | 41 | |||||||
|
13.11 | USERRA and Code Section 414(u) Compliance | 41 | |||||||
|
13.12 | Loans | 41 | |||||||
|
13.13 | Headings and Use of Words | 42 | |||||||
|
||||||||||
ARTICLE 14 TOP-HEAVY PROVISIONS | 43 | |||||||||
|
||||||||||
|
14.1 | Applicability of this Article | 43 | |||||||
|
14.2 | Top-Heavy and Super Top-Heavy Determination | 43 | |||||||
|
14.3 | Computation of the Aggregate of the Account Balances | 43 | |||||||
|
14.4 | Required Aggregation of Plans | 44 | |||||||
|
14.5 | Permissive Aggregation of Plans | 45 | |||||||
|
14.6 | Special Rules of Top-Heavy Plans and Super Top-Heavy Plans | 45 | |||||||
|
14.7 | Special Definitions | 46 | |||||||
|
||||||||||
ARTICLE 15 GOOD FAITH EGTRRA PROVISIONS | 48 | |||||||||
|
||||||||||
|
15.1 | Limitations on Contributions | 48 | |||||||
|
15.2 | Increase in Compensation Limit | 48 | |||||||
|
15.3 | Modification of Top-Heavy Rules | 48 | |||||||
|
15.4 | Direct Rollovers of Plan Distributions | 49 | |||||||
|
15.5 | Rollovers from Other Plans | 50 | |||||||
|
15.6 | Rollovers Disregarded in Involuntary Cash-Outs | 50 | |||||||
|
15.7 | Repeal of Multiple Use Test | 50 | |||||||
|
15.8 | Elective Deferrals Contribution Limitation | 50 | |||||||
|
15.9 | Maximum Salary Reduction Contributions | 51 | |||||||
|
15.10 | Catch-Up Contributions | 51 | |||||||
|
15.11 | Suspension Period Following Hardship Distribution | 51 | |||||||
|
15.12 | Distribution upon Severance from Employment | 51 | |||||||
|
||||||||||
ARTICLE 16 MINIMUM DISTRIBUTION REQUIREMENTS | 52 | |||||||||
|
||||||||||
|
16.1 | General Rules | 52 | |||||||
|
16.2 | Time and Manner of Distribution | 52 | |||||||
|
16.3 | Required Minimum Distributions During Participants Lifetime | 53 | |||||||
|
16.4 | Required Minimum Distributions After Participants Death | 54 | |||||||
|
16.5 | Definitions | 55 | |||||||
|
||||||||||
SCHEDULE A 401(k) PLAN NONDISCRIMINATION TESTING | A - 1 | |||||||||
|
||||||||||
SCHEDULE B ELIGIBLE UNION EMPLOYEES | B - 1 | |||||||||
|
||||||||||
SCHEDULE C PARTICIPATING AFFILIATES | C - 1 |
(iv)
(a) | General Definition . Compensation generally means wages, salaries and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the employer maintaining the plan to the extent that the amounts are includable in gross income (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in IRS regulations section 1.62-2(c)). Compensation shall include any amount contributed by a Company on behalf of a Participant pursuant to |
2
a salary reduction agreement which is not includible in the gross income of the Participant under Code Section 125, 132(f)(4), 401(k), 402(e)(3) or 402(h). Effective March 1, 2003, Compensation shall also include payments made to an Employee while on leave pursuant to the Uniformed Services Employment and Reemployment Rights Act (USERRA). Compensation shall exclude the following: |
(i) | Employer contributions to a plan of deferred compensation which are not includible in the Employees gross income for the taxable year in which contributed, or employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation; | ||
(ii) | 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; | ||
(iii) | Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and | ||
(iv) | 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 contract described in section 403(b) of the Internal Revenue Code (whether or not the contributions are actually excludable from the gross income of the employee). |
(b) | For Plan Years beginning in 1997 and thereafter, Compensation shall be limited to $160,000 annually and shall be adjusted for changes in the cost of living in accordance with Code Section 401(a)(17)(B). For Plan Years of less than 12 months, this limit shall be prorated based on the number of calendar months in the short Plan Year. | ||
(c) | Definition for Purposes of 401(k) Contributions . Notwithstanding (a) above, for purposes of determining an Employees 401(k) Contributions, Compensation shall exclude commissions, vacation purchases and other extra or special compensation, such as, but not limited to, safety awards, one-time relocation bonuses, incentive bonuses, and severance pay (including cashout of vacation pay, both banked and current). Effective January 1, 2002, Compensation shall include cash payments of banked vacation pay paid while actively employed and incentive bonuses paid for the 2002 fiscal year and years thereafter. | ||
(d) | Definition for Purposes of Matching Contributions . Notwithstanding (a) above, for purposes of determining Matching Contributions, Compensation shall exclude bonuses, commissions, overtime pay, vacation purchases, and other extra or special compensation such as, but |
3
not limited to, safety awards, one time relocation bonuses, incentive bonuses, and severance pay (including cashout of vacation pay, both banked and current). Effective January 1, 2002 Compensation shall include banked vacation pay paid while actively employed and incentive bonuses paid on account of the 2002 fiscal year and years thereafter. |
(a) | covered by a collective bargaining agreement between a union and a Company, provided that retirement benefits were the subject of good faith bargaining, unless (1) the bargaining agreement specifically provides for participation in this Plan, or (2) the bargaining agreement specifically provides for participation in a tax-qualified plan of a company acquired by the Employer or an Affiliate and the Employee Benefits Committee has consented to participation in this Plan, which consent is evidenced by specifying the bargaining agreement in Schedule B, | ||
(b) | a leased employee, or | ||
(c) | a non-resident alien. |
4
(a) | such employee is covered by a money purchase pension plan providing: |
(i) | a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined in section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employees gross income under section 125, 132(f)(4), section 402(e)(3), section 402(h)(1)(B) or section 403(b) of the Code, | ||
(ii) | immediate participation, and | ||
(iii) | full and immediate vesting; and |
(b) | leased employees do not constitute more than 20 percent of the recipients nonhighly compensated work force. |
(a) | is a 5-percent owner at any time during the year or the preceding year; or | ||
(b) | received compensation during the preceding year from the Company in excess of $80,000 (as adjusted pursuant to Code Section 415(d)), and, if |
5
the Employer so elects, was a member of the top-paid group for such year. | |||
An employee is in the top-paid group of employees for any year if such employee is in the group consisting of the top 20 percent of employees when ranked on the basis of compensation paid during such year. For purposes of determining the number of employees in the top-paid group, the Company shall exclude employees who: |
(i) | have not completed 6 months of service; | ||
(ii) | normally work less than 17 1 / 2 hours per week; | ||
(iii) | normally work during not more than 6 months in any year; | ||
(iv) | have not attained age 21; and | ||
(v) | except to the extent provided in regulations, are included in a unit of employees covered by a collective bargaining agreement between employee representatives and the Company. |
A former Employee shall be treated as a Highly Compensated Employee if such employee was a Highly Compensated Employee when such employee separated from service, or such employee was a Highly Compensated Employee at any time after attaining age 55. | |||
The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of employees in the top-paid group, and the compensation that is considered, will be made in accordance with Code Section 414(q) and the regulations thereunder. | |||
For the 1997 Plan Year, the above rules apply as if they were in effect during the Plan Year beginning in 1996. |
(a) | Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a Company. These hours shall be credited to the Employee for the computation period or periods in which the duties are performed; | ||
(b) | Each hour for which an Employee is paid, or entitled to payment, by a Company on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, or leave of absence. Such person shall not be considered to have terminated employment under this Section 1.22(b) unless the person fails to return to the employ of the Company at or prior to the expiration date of the persons absence hereunder, in which case |
6
the person shall be deemed to have terminated employment as of the date of commencement of such absence; | |||
(c) | Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by a Company. These hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made. |
7
(a) | If an Employee has a Severance of Service because of a quit, discharge or retirement and then performs an Hour of Service within twelve (12) months of the Severance of Service date, he or she shall receive Service credit for the period of time commencing on the date a Severance of Service occurs and ending on the date on which the Employee again performs an Hour of Service for the Employer or an Affiliate. (hereafter referred to as Period of Severance). | ||
(b) | An Employee who has a Severance of Service because of a quit, discharge or retirement during or immediately following an authorized leave of absence, and who performs an Hour of Service within (12) |
8
months from the date the leave of absence began, shall receive service credit for the Period of Severance. If an Employee is absent for 12 full months, no service credit is given for the Period of Severance, except as required by Section 13.11. |
(a) | the date on which the Employee quits, retires, is discharged or dies; | ||
(b) | the date on which the Employee fails to return to the service of the Company at the expiration of an authorized leave of absence in excess of twelve (12) months or recovery from being Totally and Permanently Disabled in excess of six (6) months; or | ||
(c) | the first anniversary of the first date of a period in which the Employee remains absent from service with the Company (with or without pay) for any reason other than quit, retirement, discharge, death, authorized leave of absence or Total and Permanent Disability (such as vacation, holiday, sickness, unauthorized leave of absence or layoff). |
(d) | a period of service with the Armed Forces of the United States of America, if an Employee who left active service with the Company to enter and did directly enter such Armed Forces, returned to active employment within the time and under the conditions which entitle him/her to reemployment rights under the laws of the United States of America; | ||
(e) | transfer directly from the employment of one Company to another Company. Transfer of an Employee in this Plan to service with an Affiliate which has not adopted this Plan will not be considered a Severance of Service and will cause such service to be included as Service in this Plan. However, such aforesaid service will only be |
9
credited for vesting purposes and not for benefit purposes under this Plan; or | |||
(f) | the period ending on the second anniversary of any absence from work by reason of the pregnancy of the Employee, by reason of the birth of a child of the Employee, by reason of the placement of a child with the Employee in connection with the adoption of such child by the Employee, or for purposes of caring for such child for a period immediately following such birth or placement; provided, however, that the period between the first and second anniversaries of the first day of any such absence shall not count as Service and no credit will be given for such period for vesting purposes. |
10
(a) | A number of years equal to the number of years of service credited to the Employee under the terms of the Prior Plan before the Plan Year in which the Prior Plan was amended and restated; and | ||
(b) | The greater of: |
(i) | the period of Service that would be credited to the Employee under the Service provisions of the this Plan beginning on the first day of the Plan Year in which the Plan is amended and restated; or | ||
(ii) | the service taken into account under the Prior Plan for the year of the amendment as of the date the Prior Plan is amended and restated. |
11
(a) | If a Participant no longer meets the definition of an Eligible Employee, such Participant may no longer contribute to the Plan and is no longer eligible for Company contributions effective as of the time of such change in status. If any such Employee again becomes an Eligible Employee, active participation in the Plan commences effective as of the time of the change in status. A change in status includes, but is not limited to, transfer to or from an Affiliate which is not participating in this Plan or becoming a member of a collective bargaining unit whose members do not participate in the Plan. | ||
(b) | If an Employee is employed by a Company after working for an Affiliate not covered by the Plan, his Service with the Affiliate shall count for purposes of meeting the eligibility requirement of Section 2.1, except that if his employment with the Affiliate terminated and he is reemployed by a Company after more than five consecutive One Year Periods of Severance, prior Service is disregarded. |
(a) | If an Employee incurs a One Year Period of Severance prior to completing the eligibility requirement of Section 2.1 and is later reemployed by a Company, his prior Service shall be disregarded for purposes of meeting the eligibility requirement of Section 2.1. | ||
(b) | If a Participant has no vested interest in his Matching Account and Employer Account and incurs more than five consecutive One Year Periods of Severance, prior Service shall be disregarded for purposes of meeting the eligibility requirement of Section 2.1. |
12
13
(a) | 401(k) Contributions |
(i) | Participant Election. A Participant may elect to make 401(k) Contributions in whole percentages of Compensation on a form provided by the Committee or by any other method authorized by the Committee, which may not be less than 1% of Compensation and which may not exceed the lesser of: (A) 90% of Compensation, or (B) $15,000 (the Code Section 402(g) limit in effect for the 2006 taxable year), adjusted from time to time for increases in the cost-of-living pursuant to Code Section 402(g)(5). | ||
(ii) | Separate Election for Bonuses and Accrued Vacation. Notwithstanding the preceding, a Participant may make a separate deferral election with respect to bonuses and accrued vacation payments made in lieu of time off, in a percentage from 1% to 100%, subject to the Code Section 402(g) limit in effect for the applicable Plan Year. | ||
(iii) | Automatic Enrollment. An Employee hired or rehired on or after April 1, 2006, will be automatically enrolled in the Plan with an election equal to 3% of Compensation on the first date he is otherwise eligible to participate in the Plan if he does not make an affirmative election under paragraph (i) above. Such deemed deferral election shall remain in effect until changed by the Participant in accordance with the terms of Section 3.1(b) of the Plan. Each Employee will be given a reasonable amount of time before the first applicable payroll period, to elect to cancel his/her automatic enrollment instead of having the automatic 401(k) deferral election applied to his/her pay. |
(b) | Participants Election . A Participant may make or change the contribution election made pursuant to this Section 3.1 at any time in accordance with the Plans administrative procedures. |
(a) | Matching Contributions . The Company shall make Matching Contributions on behalf of each Participant who is an Eligible Employee in an amount equal to 200% of the amount contributed for said Participant under Section 3.1(a); however, no more than 3% of the Participants Compensation shall be taken into account. The Matching Contribution shall be made taking into account Compensation on a payroll period basis. The annual Matching Contribution under this Section shall equal |
14
two times the Participants 401(k) Contribution, not to exceed 6% of the Participants Compensation. The Matching Contribution shall be made taking into account Compensation on a payroll period basis with respect to regular payroll checks and on the basis of each payment made with respect to incentive bonuses and cash payment of banked vacation pay paid while actively employed. | |||
(b) | Discretionary Matching Contributions . The Company, in its sole discretion, may make discretionary matching contributions to the Plan to match Participants 401(k) Contributions. | ||
(c) | Discretionary Contributions . The Company, in its sole discretion, may make a profit sharing contribution to the Plan for a Plan Year, without regard to whether the Company has profits. | ||
(d) | Qualified Nonelective Contributions and Qualified Matching Contributions . The Company may make Qualified Nonelective Contributions and/or Qualified Matching Contributions to satisfy the nondiscrimination tests described in Schedule A of the Plan. The Employer shall not be required to make a Qualified Nonelective Contribution or a Qualified Matching Contribution for any Plan Year, and the Employer shall have sole discretion to determine whether any such contribution shall be made for a Plan Year and the amount of such contribution. |
15
(a) | It is the intent of the Company to pay 401(k) Contributions to the Trust in accordance with Department of Labor regulations. | ||
(b) | All other contributions shall be paid to the Trust no later than the time prescribed by law (including extensions thereof) for filing the Companys federal income tax return for the fiscal year ending with or within the Plan Year for which the contribution is made. |
16
(a) | Allocation of Matching Contributions . Matching Contributions will be allocated to the Matching Account of the Participant on whose behalf they were made under the terms of the Plan. | ||
(b) | Allocation of Discretionary Matching Contributions . Discretionary matching contributions made pursuant to Section 3.2(b) will be allocated to the Matching Accounts of Participants pro rata on the basis of all 401(k) Contributions made during the Plan Year. | ||
(c) | Allocation of Profit Sharing Contributions . Profit sharing contributions made pursuant to Section 3.2(c) will be allocated to a Participants Employer Account on the basis that the Participants Compensation bears to the total of all Participants Compensation. | ||
(d) | Allocation of Qualified Nonelective Contributions . If the Company elects to make a Qualified Nonelective Contribution for a Plan Year, such contribution will be allocated either to all Participants or only to Participants who are Nonhighly Compensated Employees, (i) in the ratio that the Compensation of each such Participant for the Plan Year bears to the total Compensation of all such Participants for the Plan Year, or (ii) using another method of allocation permitted under Treasury Regulation Section 1.401(k)-2(a)(6). Qualified Nonelective Contributions shall be treated as 401(k) Contributions for all purposes under the Plan to the extent used to satisfy the ADP test described in Schedule A. | ||
(e) | Allocation of Qualified Matching Contributions . If the Company elects to make a Qualified Matching Contribution for a Plan Year, such contribution will be allocated either to all Participants or only to Participants who are Nonhighly Compensated Employees, (i) in the ratio that each Participants 401(k) Contributions under Section 3.1(a) for the Plan Year bears to the total 401(k) Contributions under Section 3.1(a) of all Participants for the Plan Year, or (ii) using another method of allocation permitted under Treasury Regulation Section 1.401(m)-2(a)(6). Qualified Nonelective Contributions shall be treated as 401(k) Contributions for all purposes under the Plan to the extent used to satisfy the ADP test described in Schedule A. | ||
(f) | Allocation of Makeup Contribution . A contribution made pursuant to Section 3.3 will be allocated in accordance with the Committees direction |
17
to reinstate a former Participants Account or, as necessary, to correct a mistake or omission. | |||
(g) | Allocation of Rollover Contribution . A Rollover Contribution made by a Participant will be allocated to the Participants Rollover Account. |
(a) | Definitions . The following terms used in this section shall have the following meanings: |
(i) | The term Annual Additions means the sum of (1) the Employer contributions under the Plan (including elective deferrals to a 401(k) plan) credited to a Participant for any Limitation Year, (2) forfeitures credited to a Participant for any Limitation Year, and (3) amounts described in §415(l)(1) and §419A(d)(2) of the Code. | ||
(ii) | The term Dollar Limitation means $30,000, as adjusted pursuant to Code Section 415(d). |
(b) | Limitation on Maximum Annual Additions . |
(i) | Notwithstanding any provision of the Plan to the contrary, the Annual Additions credited to a Participants Account in any Limitation Year shall not exceed the lesser of the Dollar Limitation in effect for the Limitation Year or twenty-five percent (25%) of the Participants compensation as defined in Code Section 415(c)(3) for such Limitation Year. | ||
Effective for Plan Years beginning on or after December 31, 1997, for purposes of calculating the maximum annual addition to a Participants account under Code Section 415, Compensation shall include elective deferrals as defined in Code Section 402(g)(3) and any amount which is not includible in gross income of a Participant by reason of Code Sections 125 or 457. Effective for Plan Years beginning on and after January 1, 2001, Compensation shall include elective amounts that are not includible in gross income of a Participant by reason of Code Section 132(f)(4). | |||
(ii) | If as a result of a reasonable error in estimating a Participants compensation, or under other circumstances approved by the Commissioner of Internal Revenue, this limitation is exceeded, the Administrator shall eliminate the excess amount in the following order: (1) apply the provisions of any other plans to the extent that such provisions would reduce the excess amount in the Participants Account; or (2) distribute 401(k) Contributions and forfeit any Matching Contributions or Discretionary Matching |
18
Contributions attributable thereto made for the year to the extent that the distribution would reduce the excess amount in the Participants Account. | |||
(iii) | If unallocated portions are held in a suspense account at the time of the complete termination of the Plan and such unallocated portions may not be allocated as a result of the limitations of this subsection, then such unallocated portions shall be returned to the Employer. | ||
(iv) | If 401(k) Contributions are returned to the Participant under this subsection, then such returned amounts shall not be included for purposes of the limitations of Code §402(g), the ADP test and the ACP test. | ||
(v) | The limitations of this subsection are intended solely to satisfy the requirements of Code §415 and shall at no time prevent the payment of any benefits not prohibited by the Code or Treasury regulations issued thereunder. | ||
(vi) | For purposes of this section, all defined contribution plans maintained by Affiliates shall be treated as a single plan whether or not such plans have been terminated. |
(c) | Limitation Where Participant Also Participates in Defined Benefit Plan . |
(i) | Effective for Plan Years beginning before January 1, 2000, if a Participant is a participant in one or more defined benefit plans maintained by the Company, then for each Limitation Year the sum of the defined benefit plan fraction and the defined contribution plan fraction shall not exceed 1.0 for any Plan Year. | ||
(ii) | The defined benefit plan fraction for any Limitation Year shall mean a fraction (i) the numerator of which is the projected annual benefit of the Participant (the annual benefit to which the Participant would be entitled on the assumption that he continues employment until his Normal Retirement Date at his current rate of compensation and other relevant factors used to determine the annual benefit remain constant) under the defined benefit plan determined as of the end of each Limitation Year, and (ii) the denominator of which is the lesser of (a) 1.25 times the dollar limitation in effect under Code §415(b)(1)(A) for such year, or (b) 1.4 times 100% of the Participants average Compensation for the high 3 years. | ||
(iii) | The defined contribution plan fraction for any Limitation Year shall mean a fraction (i) the numerator of which is the sum of the Annual Additions to the Participants Account at the close of the |
19
Limitation Year, and (ii) the denominator of which is the sum of the lesser of the following amounts determined for such year and for each prior year of service with the Employer, Affiliate or Predecessor Company (regardless of whether a plan was in existence during those years): (a) 1.25 times the dollar limitation in effect under Code §415(c)(1)(A) for such year (determined without regard to Code §415(c)(6), or (b) 1.4 times 25% of the Participants Compensation for each year. | |||
(iv) | If the sum of the defined benefit plan fraction and defined contribution plan fraction exceeds 1.0, the benefits under the defined benefit plan shall be reduced to the extent necessary for the sum to equal 1.0. |
(a) | A Participant shall be vested in his Account under the Plan as follows: |
(i) | 401(k) Account 100% | ||
(ii) | Matching Account and Employer Account: |
Years of Service | Vested Percentage | |||
1
|
0 | |||
2
|
25 | |||
3
|
50 | |||
4
|
75 | |||
5
|
100 |
(iii) | Rollover Account 100% | ||
(iv) | Nonelective Contribution Account 100% |
(b) | Notwithstanding the foregoing, if a Participant dies, becomes Totally and Permanently Disabled or attains age 65 while employed by a Company he or she shall become 100% vested in his or her Account. | ||
(c) | All Service with the Company counts for purposes of vesting under the Plan, except that any Employee who terminates employment with fewer than two Years of Service and is later reemployed shall lose those Years of Service for vesting purposes if the reemployment occurs after such Employee incurs five consecutive One Year Periods of Severance. |
20
21
(a) | Value at current fair market value the assets of the Trust. | ||
(b) | Adjust the Participants Account Balances (including any suspense accounts) for any gain or loss since the last Valuation Date. | ||
(c) | Subtract all payments or distributions made from the Participants Accounts since the preceding Valuation Date, including any adjustments for fees and expenses of the trust charged to the Participants Account Balances. | ||
(d) | Add the 401(k) Contributions, Matching Contribution, Qualified Non-Matching and/or Nonelective Contributions or any other contributions made to the Trust since the last Valuation Date to the appropriate accounts. | ||
(e) | Debit or credit, as applicable, the Investment Funds in accordance with a Participants change in investment election pursuant to Article 9. |
22
(a) | If a Participant separates from service or becomes Totally and Permanently Disabled, the Participants vested Account Balance shall be payable in accordance with this Article. | ||
(b) | A Participant will be treated as having incurred a separation from service and a distribution will be available under this Article in the event of: |
(i) | the disposition of a corporation to an unrelated corporation of substantially all of the assets (within the meaning of Code Section 409(d)(2)) used in a trade or business if the Participant continues employment with the corporation acquiring the assets and the selling corporation continues to maintain the Plan after the disposition; or | ||
(ii) | the disposition by a corporation to an unrelated entity or individual of such corporations interest in a subsidiary (within the meaning of Code Section 409(d)(3)) if the Participant continues employment with the subsidiary and the selling corporation continues to maintain the Plan. | ||
(iii) | A distribution is not available under this subparagraph if the purchaser maintains the sellers plan at any time after the disposition. A distribution made under this paragraph may not be made later than the end of the second year following the calendar year in which the disposition occurred except in unusual circumstances or in accordance with applicable regulations. |
(a) | When a Participants vested Account Balance becomes payable, a distribution of the vested Account Balance, valued as of the Valuation Date preceding distribution, will be made to the Participant with the Participants consent as soon as administratively practicable in accordance with this Article. | ||
(b) | If consent is required and the Participant does not consent to a distribution, the Account Balance will remain invested under the Plan, subject to the Participants right to direct the investment of the Account. | ||
(c) | If a Participant receives a distribution, any contributions credited to the Participants Account subsequent to such distribution shall become distributable as of their allocation to the extent vested. |
23
(d) | Distribution of a Participants vested Account Balance shall begin no later than sixty (60) days after the end of the Plan Year in which occurs the later of: |
(i) | the Participants attainment of age 65, | ||
(ii) | the tenth anniversary of the Participants participation in the Plan, or | ||
(iii) | the Participants termination of employment with the Company. |
(e) | Method of Payment . When a Participants vested Account is distributable, a Participant has the right to elect in writing, on a form approved by and filed with the Committee, to have his or her vested Account Balance distributed in a single lump sum payment. |
(a) | General Rule . Effective January 1, 1997, a Participant must begin receiving minimum required distributions from the Plan in accordance with Code Section 401(a)(9) by April 1 of the calendar year following the later of the calendar year in which such Participant attains age 70 1 / 2 or the calendar year in which the Participant retires. | ||
(b) | Special Rule Applicable to 5-Percent Owner . A 5-percent owner of a Company, as that term is defined in Code Section 416, is required to begin receiving minimum required distributions under Code Section 401(a)(9) by April 1 of the calendar year following attainment of age 70 1 / 2 without regard to whether he or she has retired. | ||
(c) | Special Rule for Participants Who Are Receiving Minimum Required Distributions . If a Participant (other than a 5-percent owner) is employed by a Company and began receiving a distribution required under Code Section 401(a)(9) before it was amended by the Small Business Job Protection Act of 1996, such Participant may elect to suspend |
24
distributions from the Plan by written notice to the Committee until the time distributions are required under the Plan. | |||
(d) | Application of Code §401(a)(9) and the Incidental Death Benefit Requirement . Distributions under this Section will be made in accordance with the regulations under Code §401(a)(9), including §1.401(a)(9)-2, notwithstanding any other provision of the Plan to the contrary. Any distribution required under the incidental death benefit requirements shall be treated as a distribution required under this Section 6.4. | ||
(e) | Transition Rule . Notwithstanding Section 6.4(a), a Participant who attains age 70 1 / 2 on or after January 1, 1996, but before December 31, 1999, may elect to commence receiving the equivalent of his minimum required distributions by April 1 of the calendar year following the calendar year in which such Participant attains age 70 1 / 2 , or to defer receipt of all distributions under the Plan until he or she retires. |
(a) | Eligible Rollover Distribution . An Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributees designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities) and any hardship withdrawal distributed in accordance with Section 8.1. | ||
(b) | Eligible Retirement Plan . An Eligible Retirement Plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a) that accepts the Distributees 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. |
25
(c) | Distributee . A Distributee includes an Employee or former Employee. In addition, the Employees or former Employees Surviving Spouse and the Employees or former Employees Spouse or former Spouse who is the alternate payee under a Qualified Domestic Relations Order are Distributees with regard to the interest of the Spouse or former Spouse. | ||
(d) | Direct Rollover . A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee. |
26
(a) | Distributions that began before death . If the Participant dies after distribution of his or her Account Balance has begun, the remaining portion will continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participants death. | ||
(b) | Distribution beginning after death . If the Participant dies before distribution of his or her Account Balance has begun, distribution of the Participants entire interest shall be completed by December 31 of the calendar year containing the fifth anniversary of the Participants death, except to the extent that an election is made to receive distributions in accordance with (i) or (ii) below: |
(i) | if any portion of the Participants interest is payable to a designated Beneficiary, distributions may be made over a period certain not greater than the life expectancy of the designated Beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died; | ||
(ii) | if the designated Beneficiary is the Participants Surviving Spouse, the date distributions are required to begin in accordance with (i) above shall not be earlier than the later of (1) December 31 of the |
27
calendar year immediately following the calendar year in which the Participant died, or (2) December 31 of the calendar year in which the Participant would have attained age 70 1 / 2 . |
If the Participant has not made an election pursuant to this Section 7.3(b) by the time of his or her death, the Participants designated Beneficiary must elect the method of distribution no later than the earlier of (1) December 31 of the calendar year in which distributions would be required to begin under this section, or (2) December 31 of the calendar year which contains the fifth anniversary of the date of death of the Participant. If the designated Beneficiary does not elect a method of distribution, distribution of the Participants entire interest will be paid in a lump sum by December 31 of the calendar year containing the fifth anniversary of the Participants death. | |||
(c) | For purposes of Section 7.3(b) above, if the Surviving Spouse dies after the Participant, but before payments to such Spouse begin, the provisions of Section 7.3(b), with the exception of paragraph (ii) therein, shall be applied as if the Surviving Spouse were the Participant. | ||
(d) | Death benefit distributions shall be made in accordance with Code Section 401(a)(9) and applicable IRS guidance, rulings and regulations. | ||
(e) | Distributions shall be made in accordance with Section 6.3 if the Participants Account Balance is $5,000 ($3,500 for distributions prior to August 5, 1997) or less. |
28
(a) | The following are the only financial needs considered immediate and heavy: |
(i) | Expenses for medical care (described in Code Section 213(d), determined without regard to whether the expenses exceed 7.5% of adjusted gross income) previously incurred by the Participant, the Participants Spouse, or any dependent of the Participant (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2), and (d)(1)(B)) or amounts necessary for these persons to obtain such medical care; | ||
(ii) | Costs directly related to the purchase of a principal residence for the Participant (excluding mortgage payments); | ||
(iii) | Payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant, the Participants Spouse, children or dependents (as defined in Code Section 152, without regard to paragraphs (b)(1), (b)(2) and (d)(1)(B)); | ||
(iv) | Payments necessary to prevent the eviction of the Participant from, or a foreclosure on the mortgage of, the Participants principal residence; | ||
(v) | Payments for funeral or burial expenses for the Participants deceased parent, Spouse, child or dependent (as defined in Code Section 152, without regard to paragraph (d)(1)(B)); | ||
(vi) | Expenses to repair damage to the Participants principal residence that would qualify for a casualty loss deduction under Code Section 165 (determined without regard to whether the loss exceeds 10 percent of adjusted gross income); or | ||
(vii) | Any other financial need considered immediate and heavy under IRS regulations, rulings, notices or other documents of general applicability. |
29
(b) | When a Participant takes a hardship distribution: |
(i) | He or she will be suspended from making elective deferrals to any 401(k) plan maintained by the Company or an Affiliate for twelve months following receipt of the hardship distribution (for withdrawals made on or after January 1, 2002, the suspension period shall be six months) ; and | ||
(ii) | For the taxable year of the Participant following the taxable year of the hardship distribution, the Participants elective deferrals are limited to the applicable limit under Code Section 402(g) reduced by the Participants elective deferrals to any 401(k) plan maintained by the Company or an Affiliate for the year the hardship distribution was taken. |
(c) | A distribution will be considered as necessary to satisfy an immediate and heavy financial need of the Participant only if: |
(i) | The Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans maintained by the Company; and | ||
(ii) | The distribution is not in excess of the amount of the immediate and heavy financial need (including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution). |
(a) | No distribution will be made under this Article which will result in a distribution amount of less than $500 or the total amount available for withdrawals, if less. This limitation is applicable to each type of account and is not an aggregate limitation. | ||
(b) | In the case of a partial withdrawal made by a Participant having an interest in more than one Investment Fund, the amount withdrawn from each Investment Fund shall be in the same proportion as the value of his interest in each such Investment Fund immediately preceding such withdrawal bears to the total value of the account from which the withdrawal is made. |
30
31
32
(a) | establishing its own rules for governance and determining the times and places for holding meetings of the Committee and the notice to be given of such meetings; | ||
(b) | employing such agents and assistants, such counsel (who may be counsel to the Company), and such clerical, medical, accounting, actuarial and investment services or advisers as the Committee may require in carrying out the provisions of the Plan; | ||
(c) | authorizing one or more of their number or any agent to make any payment, or to execute or deliver any instrument, on behalf of the Committee, except that all requisitions for funds from, and requests, directions, notifications and instructions to the trustee of the Plan shall be signed by at least two members of the Committee; | ||
(d) | in its discretion, establishing one or more subcommittees as it deems appropriate, and delegating any power or duty granted to the Committee to any such subcommittee; |
33
(e) | appointing and removing the Trustee of the Plan pursuant to the terms of the trust agreement; | ||
(f) | receiving and reviewing reports from the Trustee of the Plan as to the financial condition of the Trust, including its receipts and disbursements; | ||
(g) | executing and filing with the appropriate governmental agencies such registration and other statements, forms, applications, notifications, and other documents or information as the Committee may from time to time deem necessary or appropriate in connection with the Plan; | ||
(h) | amending the Plan to the extent it is authorized to do so by the Board or the terms of the Plan; and | ||
(i) | directing the Trustee, or appointing one or more investment managers to direct the Trustee, subject to the conditions set forth in the trust agreement and in this article, in all matters concerning the investment of the Trust; |
(a) | The Committee shall have the general responsibility for administering the Plan and carrying out its provisions. Subject to the limitations of the Plan, the Committee from time to time shall establish rules for the administration of the Plan and the transaction of its business and shall promulgate such rules as may be necessary to effectuate the Plans funding and investment policy. The Committee, in its sole discretion, shall determine all matters of administration and Plan interpretation and the amounts of and rights to benefits payable under the Plan. Provided however, to the extent the Committee delegates its discretion to determine matters of administration, interpretation and amounts of and rights to benefits payable under the Plan to a subcommittee such subcommittee shall have the sole discretion to make such determinations. | ||
(b) | It shall be the duty of the Committee to notify the Trustee in writing of the amount of any benefit which shall be due to any Participant and in what form and when such benefit is to be paid. | ||
(c) | The Committee may at any time or from time to time with respect to the Plan require the Trustee, by a written direction to purchase one or more annuities, in specific amounts, in the names of Participants, their Spouses, their contingent annuitants, and/or their beneficiaries from an insurance company designated by the Committee. | ||
(d) | The responsibility for the formulation of the general investment practices and policies of the Plan and its related Trust and for effectuating such practices and policies is placed with the Committee. |
34
(a) | A Participant or Beneficiary shall apply for benefits by filing with the Committee a signed, written request specifically identifying the benefits requested and describing all facts and circumstances entitling him or her to payment. A written request is not required if distribution is processed through an automated voice response unit or similar automated method provided by the Plans recordkeeper in accordance with the recordkeepers procedures. | ||
(b) | Within ninety days after receipt of such an application, the Committee shall notify the applicant of its decision. If special circumstances require an extension of time, the Committee shall notify the applicant of such circumstances within ninety days after receipt of the application, and the Committee shall thereafter notify the applicant of its decision within 180 days after receipt of the application. If the application is denied in whole or in part, the Committees notice of denial shall be in writing and shall state: |
(i) | the specific reasons for denial with specific reference to pertinent Plan provisions upon which the denial is based; | ||
(ii) | ( a description of any additional materials or information necessary for the applicant to perfect his or her claim and an explanation of why the materials or information are necessary; and | ||
(iii) | an explanation of the Plans claim review procedure. |
(c) | During the sixty-day period following an applicants receipt of a notice of denial of his or her application for benefits, the applicant or his or her duly authorized representative may review pertinent documents and within sixty (60) days submit a written request to the Committee for an appeal of the denial. An applicant requesting an appeal, or his or her duly authorized representative, may submit issues and comments in writing to |
35
the Committee. The Committee shall consider the merits of the applicants presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Committee shall deem relevant; and shall render a decision as to the merit of the appeal and the claim. Within sixty (60) days after receipt of the request for appeal, the Committee shall issue a written decision to the applicant. If special circumstances require an extension of time, the Committee shall issue a written decision no later than 120 days after receipt of the request for appeal. The Committees decision shall include specific reasons for the decision, written in a manner calculated to be understood by the applicant, and contain specific references to the pertinent Plan provisions upon which the decision is based. | |||
(d) | If the Committee fails to respond to the claim or appeal within the times described above, the claim or appeal, whichever is applicable, is deemed denied. |
36
(a) | The Employer reserves the right to terminate the Plan or to modify, alter or amend the Plan from time to time as it may, in its sole and complete discretion, deem advisable, including, but without limiting the generality of the foregoing, any amendment deemed necessary to qualify or to ensure the continued qualification of the Plan under the Code. The foregoing right shall be exercised only by action of the Employers Board of Directors or other entity authorized to act for the Employer or by action of an officer of the Employer with later ratification by the Employers Board. | ||
(b) | Notwithstanding Section 11.1(a), the Committee, by a written instrument, duly executed by a majority of its members, may make, on behalf of the Employers Board of Directors, |
(i) | any amendment that may be necessary or desirable to ensure the continued qualification of the Plan and its related Trust under the Code or which may be necessary to comply with the requirements of the Act, or any regulations or interpretations issued by the Department of Labor or the Internal Revenue Service with respect to the requirements of the Act or the Code, and | ||
(ii) | any amendment that is required by the provisions of a collective bargaining agreement between a Company and its employees. |
37
38
39
40
(a) | Loans shall be made available to all Participants who are current Employees on an equal basis upon completion of application forms provided by the Committee and available from the applicable Human Resources representative of the Company in accordance with the written procedure established by the Committee and communicated to the Participants. Loans shall be available on a nondiscriminatory basis upon completion of the application form and are based on the Participants vested balances in his or her Account. Loans shall not be made available to Participants who are Highly Compensated Employees, officers, or shareholders in percentage amounts greater than the percentage amounts of the values described in paragraph (b) below made available to other Participants; | ||
(b) | The principal amount of a loan to a Participant pursuant to this Section may not exceed the lesser of (i) $50,000 (reduced by the highest outstanding balance of loans during the twelve (12) month period ending |
41
on the day before the date on which the loan was made), or (ii) fifty (50) percent of the Participants vested Accounts Balance. | |||
(c) | Loans shall be made at an interest rate equal to the prevailing interest rate charged by institutions in the business of lending money. | ||
(d) | Principal and interest on loans shall be repaid in equal installments over a period not to exceed five (5) years according to nondiscriminatory rules established by the Committee, provided, however, that the principal and interest on a loan which is to be used to acquire a principal residence of the Participant may be repaid in equal installments over a period not to exceed ten (10) years. | ||
(e) | The loan obligation of the Participant shall be evidenced by a promissory note which shall contain the terms of repayment and such other terms and provisions as may be necessary or advisable; | ||
(f) | The obligation of the Participant shall be adequately secured, as determined by the Committee and such security may include up to fifty (50) percent of the vested balance of the Account maintained for the Participant in the Plan. |
42
(a) | The Plan shall be a Top-Heavy Plan for a Plan Year if, as of the Determination Date, the aggregate of the Account Balances under the Plan for Key Employees exceeds 60 percent of the aggregate of the Account Balances under the Plan for all Employees. | ||
(b) | The Plan shall be a Super Top-Heavy Plan if, as of the Determination Date, the aggregate of the Account Balances under the Plan for Key Employees exceeds 90 percent of the aggregate of the Account Balances under the Plan for all Employees. |
(a) | The Account Balance of an Employee shall be the sum of (i) the Account Balance as of the most recent Valuation Date occurring within a twelve (12) month period ending on the Determination Date and (ii) the amount of any contributions that would be allocated as of a date not later than the Determination Date without regard to whether such amount is subject to a waiver of the minimum funding standards or is in violation of such standards or actually contributed or, in the case of a Plan not subject to the minimum funding standards, the amount of any contributions actually made after the Valuation Date, but before the Determination Date. | ||
(b) | If an Employee is a Key Employee on a Determination Date, the total amount of the Employees Account Balance is taken into account in determining the aggregate of Account Balances (including amounts attributable to service as a Non-Key Employee). If any individual is a Non-Key Employee with respect to the Plan for a Plan Year, but such individual was a Key Employee for any prior Plan Year, the Account Balance of such individual shall not be taken into account. | ||
(c) | If an Employee has not performed any service for the Company or an Affiliate at any time during the five-year period ending on the Determination Date, any accrued benefit and Account Balance of such Employee shall not be taken into account. | ||
(d) | Additional rules: |
(i) | In the case of an unrelated rollover, the plan making the distribution counts it in determining top-heaviness, and the plan receiving the distribution does not count it in determining top- |
43
heaviness. An unrelated rollover is a rollover or plan-to-plan transfer both initiated by the Employee and made from a plan maintained by one company to a plan maintained by another company. | |||
(ii) | In the case of a related rollover, the plan making the distribution does not count the distribution in determining top-heaviness and the plan receiving the distribution counts the rollover in determining top-heaviness. A related rollover is a rollover or a plan-to-plan transfer either not initiated by the Employee or made to a plan maintained by the same company. | ||
(iii) | For purposes of determining whether the company is the same company, all companies aggregated under Code Section 414(b), (c) or (m) are treated as the same company. |
(e) | Distributions (other than those described in (d) above) made within the Plan Year that includes the Determination Date or within the four preceding Plan Years are added to the aggregate of Account Balances. |
(a) | Each plan of a company required to be included in an aggregation group shall be treated as a Top-Heavy Plan if the required aggregation group is a top-heavy group. The required aggregation group includes: |
(i) | each plan of the company (within the meaning of Code Section 414(b), (c) and (m)) in which a Key Employee participates in the Plan Year containing the Determination Date or any of the four preceding Plan Years, and | ||
(ii) | each other plan of the company which enables any plan described in (i) above to meet the requirements of Code Section 401(a)(4) or Code Section 410. |
(b) | A required aggregation group is a top-heavy group if, as of each Plans Determination Date, the sum of (i) the present value of the cumulative accrued benefits for Key Employees under all defined benefit plans included in the group and (ii) the aggregate of the Account Balances of Key Employees under all defined contribution plans included in the group exceeds 60 percent of a similar sum determined for all Employees. When aggregating plans, the value of accrued benefits and Account Balances shall be calculated by adding together the results of each plan as of the Determination Dates that fall within the same calendar year. In performing this computation the principles of Section 14.3 shall be applied. |
44
(c) | Each plan in the required aggregation group will be a Top-Heavy Plan if the group is top-heavy. No plan in the required aggregation group will be a Top-Heavy Plan if the group is not top-heavy. |
(a) | If the Plan is a Top-Heavy Plan, then the following changes shall be made to the Plan as otherwise written: |
(i) | The allocation of Company contributions and forfeitures to the account of a Non-Key Employee for a Plan Year shall equal at least three (3%) percent of Compensation. Notwithstanding the foregoing, if the largest percentage of compensation provided for any Key Employee is less than three (3%) percent, then the minimum percentage of compensation that must be provided for a Non-Key Employee for a Plan Year is the largest percentage of compensation provided for any Key Employee. The preceding sentence does not apply if this Plan is included in any required aggregation group and enables a defined benefit plan included in such group to meet the requirements of Code Section 401(a)(4) or Section 410. For purposes of determining the largest percentage of compensation provided for any Key Employee, amounts contributed as a result of a salary reduction agreement must be included. All defined contribution plans of the Company and Affiliates shall be treated as a single plan for purposes of determining the defined contribution minimum. Neither amounts the Employee elects to defer under any 401(k) plan maintained by the Company nor any Matching Contributions made by the Company and Affiliates shall be treated as Company contributions for purposes of determining minimum required contributions. | ||
The following Non-Key Employees shall receive the minimum allocation provided under this subparagraph (i) for a particular Plan Year: |
(A) | Participants who are otherwise eligible for an allocation under the Plan; |
45
(B) | Employees who are Participants but who have not completed 1,000 Hours of Service during the Plan Year; | ||
(C) | Employees who would be Participants but for the failure to make mandatory contributions to the Plan; or | ||
(D) | Employees who are Participants but whose compensation is less than the amount necessary to receive an allocation under the Plan: however, | ||
(E) | Employees who are also Participants in a defined benefit plan sponsored by the Company shall receive the minimum benefit under the defined benefit plan. |
(ii) | The compensation of a Participant taken into account under the Plan shall not exceed the dollar amount specified in Code Section 401(a)(17), subject to applicable cost of living increases. |
(b) | For Plan Years beginning prior to January 1, 2000, if the Plan is a Top-Heavy Plan then, in applying the limitations of Code Section 415, the denominators of the defined benefit fraction and the defined contribution fraction shall be determined by substituting 1.0 for 1.25 as the multiplier for the Code Section 415 dollar limitation. If the Plan is not a Super Top-Heavy Plan, this Section 14.6(b) shall not apply so long as the minimum benefits required under Code Section 416 are satisfied. |
(a) | Determination Date . With respect to any Plan Year, the last day of the preceding Plan Year. In the case of the first Plan Year of the Plan, the Determination Date shall be the last day or such Plan Year. | ||
(b) | Key Employee . Any Employee or former Employee who at any time during the Plan Year containing the Determination Date or any of the four preceding Plan Years, is or was |
(i) | An officer of the Company having an annual compensation from the Company greater than 50% of the dollar limitation in effect under Code Section 415(b)(1)(A) for any such Plan Year, | ||
(ii) | One of the ten Employees having annual compensation from the Company of more than the limitation in effect under Code Section 415(c)(1)(A) and owning (or considered as owning under Code Section 318) the largest interests in the Company, | ||
(iii) | The owner of a five percent or more interest in the Company, or |
46
(iv) | The owner of a one percent or more interest in the Company who has annual compensation (as defined in Code Section 415(c)(3) but including amounts contributed by the Company pursuant to a salary reduction agreement which are excludable from the Employees gross income under Code 125, 132(f)(4), 402(a)(8), 402(h) or 403(b)) from the Company for a Plan Year of more than the dollar limit specified in Code Section 401(a)(17). | ||
For purposes of clause (i) the number of officers of the Company considered to be Key Employees cannot exceed fifty and is further limited to the greater of three or ten percent of all Employees (including leased employees within the meaning of Code Section 414(n)). If a Company has more officers than the number required to be counted as Key Employees, the officers to be taken into account are the Employees who had the largest annual compensation for the prior five Plan Year period. For purposes of clause (ii), if two employees have the same interest in the Company, the Employee having the greater annual compensation from the Company shall be treated as having a larger interest. The Beneficiary of a Key Employee shall be treated as a Key Employee for the applicable portion of the five-year period, and the Beneficiary of a Non-Key Employee shall be treated as a Non-Key Employee for the applicable portion of the five-year period. For purposes of applying the foregoing limitations, the aggregation rules of Code Section 414(b), (c) and (m) apply except with respect to determining ownership. For purposes of determining ownership under clauses (iii) and (iv), an Employee shall be considered as owning an interest in the Company within the meaning of Code Section 318. |
(c) | Non-Key Employee . Any Employee who is not a Key Employee. |
47
(a) | Maximum annual addition . Except to the extent permitted under Section 15.10 and section 414(v) of the Code, if applicable, the annual addition that may be contributed or allocated to a Participants account under the Plan for any limitation year shall not exceed the lesser of: |
(i) | $40,000, as adjusted for increases in the cost-of-living under section 415(d) of the Code, or | ||
(ii) | 100 percent of the Participants compensation, within the meaning of section 415(c)(3) of the Code, for the limitation year. |
(a) | Determination of top-heavy status . |
(i) | Key Employee . Key Employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of the Employer having annual Compensation greater than $130,000 (as adjusted under section 416(i)(1) of the Code for Plan |
48
Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the employer having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of section 415(c)(3) of the Code. The determination of who is a key Employee will be made in accordance with section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder. | |||
(ii) | Determination of present values and amounts . This Section 15.3(a) shall apply for purposes of determining the present values of accrued benefits and the amounts of Account balances of Employees as of the determination date. | ||
(iii) | Distributions during year ending on the determination date. The present values of accrued benefits and the amounts of Account balances of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting 5-year period for 1-year period. | ||
(iv) | Employees not performing services during year ending on the determination date . The accrued benefits and Accounts of any individual who has not performed services for the Employer during the 1-year period ending on the determination date shall not be taken into account. |
(b) | Minimum benefits . Employer Matching Contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of section 416(c)(2) of the Code and the Plan. The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other Plan. Employer Matching Contributions that are used to satisfy the minimum contribution requirements shall be treated as Matching Contributions for purposes of the actual contribution percentage test and other requirements of section 401(m) of the Code. |
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(a) | Modification of definition of eligible retirement plan . For purposes of the direct rollover provisions in Section 6.5, an eligible retirement plan shall also mean an annuity contract described in section 403(b) of the Code and an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Code. | ||
(b) | Modification of definition of eligible rollover distribution to exclude hardship distributions . For purposes of the direct rollover provisions in Section 6.5, any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distribute may not elect to have any portion of such a distribution paid directly to an eligible retirement plan. |
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(a) | This Section 15.12 shall apply for distributions and severances from employment occurring after December 31, 2001. | ||
(b) | New distributable event . A Participants elective deferrals, qualified nonelective contributions, qualified matching contributions, and earnings attributable to these contributions shall be distributed on account of the Participants severance from employment. However, such a distribution shall be subject to the other provisions of the Plan regarding distributions, other than provisions that require a separation from service before such amounts may be distributed. |
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(a) | Precedence. The requirements of this article will take precedence over any inconsistent provisions of the Plan. | ||
(b) | Requirements of Treasury Regulations Incorporated . All distributions required under this article will be determined and made in accordance with the Treasury regulations under section 401(a)(9) of the Internal Revenue Code. | ||
(c) | TEFRA Section 242(b)(2) Elections . Notwithstanding the other provisions of this Article 16, distributions may be made under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to section 242(b)(2) of TEFRA. |
(a) | Required Beginning Date . The Participants entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participants required beginning date. | ||
(b) | Death of Participant Before Distributions Begin . If the Participant dies before distributions begin, the Participants entire interest will be distributed, or begin to be distributed, no later than as follows: |
(i) | If the Participants surviving spouse is the Participants sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1 / 2 , if later. | ||
(ii) | If the Participants surviving spouse is not the Participants sole designated beneficiary, then distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. |
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(iii) | If there is no designated beneficiary as of September 30 of the year following the year of the Participants death, the Participants entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participants death. | ||
(iv) | If the Participants surviving spouse is the Participants sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 16.2(b), other than section 16.2(b)(i), will apply as if the surviving spouse were the Participant. |
For purposes of this Section 16.2(b) and Section 16.4, unless Section 16.2(b)(iv) applies, distributions are considered to begin on the Participants required beginning date. If Section 16.2(b)(iv) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 16.2(b)(i). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participants required beginning date (or to the Participants surviving spouse before the date distributions are required to begin to the surviving spouse under Section 16.2(b)(i)), the date distributions are considered to begin is the date distributions actually commence. | |||
(c) | Forms of Distribution . Unless the Participants interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 16.3 and 16.4. If the Participants interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of section 401(a)(9) of the Code and the Treasury regulations. |
(a) | Amount of Required Minimum Distribution For Each Distribution Calendar Yea r. During the Participants lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: |
(i) | the quotient obtained by dividing the Participants account balance by the distribution period in the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the Participants age as of the Participants birthday in the distribution calendar year; or | ||
(ii) | if the Participants sole designated beneficiary for the distribution calendar year is the Participants spouse, the quotient obtained by dividing the Participants account balance by the number in the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of |
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(b) | Lifetime Required Minimum Distributions Continue Through Year of Participants Death . Required minimum distributions will be determined under this Section 16.3 beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participants date of death. |
(a) | Death On or After Date Distributions Begin |
(i) | Participant Survived by Designated Beneficiary . If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participants designated beneficiary, determined as follows: |
(A) | The Participants remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. | ||
(B) | If the Participants surviving spouse is the Participants sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participants death using the surviving spouses age as of the spouses birthday in that year. For distribution calendar years after the year of the surviving spouses death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouses birthday in the calendar year of the spouses death, reduced by one for each subsequent calendar year. | ||
(C) | If the Participants surviving spouse is not the Participants sole designated beneficiary, the designated beneficiarys remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participants death, reduced by one for each subsequent year. |
(ii) | No Designated Beneficiary . If the Participant dies on or after the date distributions begin and there is no designated beneficiary as |
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of September 30 of the year after the year of the Participants death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance by the Participants remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
(b) | Death Before Date Distributions Begin |
(i) | Participant Survived by Designated Beneficiary . If the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participants death is the quotient obtained by dividing the Participants account balance by the remaining life expectancy of the Participants designated beneficiary, determined as provided in section 16.4(a). | ||
(ii) | No Designated Beneficiary . If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participants death, distribution of the Participants entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participants death. | ||
(iii) | Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin . If the Participant dies before the date distributions begin, the Participants surviving spouse is the Participants sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under section 16.2(b)(i), this section 16.5 will apply as if the surviving spouse were the Participant. |
(a) | Designated beneficiary . The individual who is designated as the beneficiary under Section 7.2 of the Plan and is the designated beneficiary under section 401(a)(9) of the Internal Revenue Code and section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations. | ||
(b) | Distribution calendar year . A calendar year for which a minimum distribution is required. For distributions beginning before the Participants death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participants required beginning date. For distributions beginning after the Participants death, the first distribution calendar year is the calendar year in which distributions are required to begin under section 16.2(b). The required minimum distribution for the Participants first distribution |
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calendar year will be made on or before the Participants required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participants required beginning date occurs, will be made on or before December 31 of that distribution calendar year. | |||
(c) | Life expectancy . Life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations. | ||
(d) | Participants account balance . The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. | ||
(e) | Required beginning date . The date specified in Section 6.5(a). | ||
(f) | Election to Apply 5-Year Rule to Distributions to Designated Beneficiaries . If the Participant dies before distributions begin and there is a designated Beneficiary, distribution to the designated Beneficiary is not required to begin by the date specified in Section 16.2(b), but the Participants entire interest will be distributed to the designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participants death. If the Participants surviving spouse is the Participants sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to either the Participant or the surviving spouse begin, this election will apply as if the surviving spouse were the Participant. This Section 16.7 will apply to all distributions. |
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(i) | At least as frequently as annually, the Committee shall determine the Actual Deferral Percentage (ADP) of 401(k) Contributions made to the Plan during the Plan Year. 401(k) Contributions must meet the ADP test of Code Section 401(k)(3). For Plan Years beginning on or after January 1, 2000, the ADP for the current Plan Year for Participants who are Highly Compensated Employees must satisfy one of the following tests: |
(A) | The Plan Years ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior Plan Years ADP for Participants who were Nonhighly Compensated Employees for the prior Plan Year multiplied by 1.25; or | ||
(B) | The Plan Years ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior Plan Years ADP for Participants who were Nonhighly Compensated Employees for the prior Plan Year multiplied by two (2.0), provided the ADP for Participants who are Highly Compensated Employees for the Plan Year does not exceed the ADP for Participants who were Nonhighly Compensated Employees for the prior Plan Year by more than two (2) percentage points. |
(ii) | Current Year Testing | ||
If elected by the Committee, the ADP tests in (A) and (B) above will be applied by comparing the current Plan Years ADP for Participants who are Highly Compensated Employees for each Plan Year with the current Plan Years ADP for Participants who are Nonhighly Compensated Employees. Once made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding 5 Plan Years or if, as a result of a merger or acquisition described in Code Section 410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using current year testing and the change is made within the transition period described in Code Section 410(b)(6)(C)(ii). | |||
(iii) | Actual Deferral Percentage (ADP) means, for a specified group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of (1) the amount of 401(k) Contributions (other than Catch-Up Contributions) actually paid to the |
(b) | Additional Rules. |
(i) | The ADP for any Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to have 401(k) Contributions (and Qualified Non-Elective Contributions or Qualified Matching Contributions, or both, if treated as 401(k) Contributions for purposes of the ADP test) allocated to his or her accounts under two or more arrangements described in Code Section 401(k) that are maintained by the Company or an Affiliate, shall be determined as if such 401(k) Contributions were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan Years, all 401(k) Contributions made during the Plan Year under all such arrangements shall be aggregated. | ||
(ii) | In the event that this Plan satisfies the requirements of Code Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the ADP of Employees as if all such plans were a single plan. If more than 10 percent of the Employers Nonhighly Compensated Employees are involved in a plan coverage change as defined in Regulations 1.401(k)-2(c)(4), then any adjustments to the Nonhighly Compensated Employees ADP for the prior Plan Year will be made in accordance with such Regulations unless the Employer has elected to use the current year testing method. Plans may be aggregated in order to satisfy Code Section 401(k) only if they have the same Plan Year and use the same ADP testing method. | ||
(iii) | For purposes of the ADP test, 401(k) Contributions, Qualified Matching and/or Qualified Nonelective Contributions (to the extent included in the |
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ADP test) and any other elective deferrals must be made before the last day of the twelve month period immediately following the Plan Year to which contributions relate. | |||
(iv) | For purposes of this section, compensation means compensation as defined in Code Section 415(c)(3). The preceding notwithstanding, compensation shall include any amount contributed by a Company on behalf of a Participant pursuant to a salary reduction agreement which is not includible in the gross income of the Participant under Code Sections 125, 132(f)(4), 401(k), 402(e)(3) or 402(h). | ||
(v) | Notwithstanding any other provision contained in Schedule A, testing shall be performed consistently with the regulations, rulings and guidance under Code Section 401(k), and the Plan hereby incorporates by reference all options relating to testing not specifically described in this document with the intent to have flexibility in satisfying the ADP test. | ||
(vi) | The Committee shall maintain records sufficient to demonstrate satisfaction of the ADP test. | ||
(vii) | The determination and treatment of the ADP amounts of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. | ||
(viii) | A Participant is a Highly Compensated Employee for a particular Plan Year if he or she meets the definition of a Highly Compensated Employee in effect for that Plan Year. Similarly, a Participant is a Nonhighly Compensated Employee for a particular Plan Year if he or she does not meet the definition of a Highly Compensated Employee in effect for that Plan Year. |
(c) | Excess Contributions. With respect to any Plan Year, Excess Contributions are the excess of: |
(i) | The aggregate amount of contributions actually taken into account in computing the ADP of Highly Compensated Employees for such Plan Year, over | ||
(ii) | The maximum amount of such contributions permitted by the ADP test for the Highly Compensated Employees, calculated in the following manner: |
(1) | The 401(k) Contributions are hypothetically reduced for the HCEs with the highest actual deferral ratio (ADR) determined in accordance with applicable regulations to permit such HCEs percentages to equal the greater of the highest ADR allowed by the ADP test or the ADR of the HCE (or HCEs) with the next highest ADR. If a lesser reduction is required to satisfy the ADP test, only the lesser reduction is considered. |
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(2) | Step (1) is repeated until the ADP test is satisfied. | ||
(3) | The total amount of Excess Contribution is the sum of the hypothetical contribution reduction for each HCE. |
Excess Contributions shall be treated as Annual Additions under the Plan. | ||
(d) | Allocation of Excess Contributions. The dollar amount of the Excess Contribution determined in subsection (c) is distributed to the HCEs using the dollar leveling method, as follows: |
(i) | The elective contribution of the HCE with the highest dollar amount of elective contributions is reduced by the amount that will cause that HCEs elective contributions to equal the dollar amount of the elective contributions of the HCE with the next highest dollar amount of elective contributions. | ||
(ii) | The amount determined in Step (i) is then distributable to the HCE with the highest dollar amount of elective contributions. | ||
(iii) | If a lesser reduction, when added to the total dollar amount already distributable under these steps, would equal the total Excess Contribution, the lesser reduction amount is distributable. | ||
(iv) | If the total amount distributable is less than the total amount of Excess Contributions, the preceding steps are repeated until the total amount of excess contributions has been apportioned. | ||
(v) | If the distributions equal to the total amount distributable to HCEs under the dollar leveling method, adjusted in accordance with subsection (e), are made, the ADP is treated as meeting the nondiscrimination test of Code Section 401(k)(3), regardless of whether the ADP, if recalculated after distributions, would satisfy Code Section 401(k)(3). |
(e) | Distribution of Excess Contributions. Notwithstanding any other provision of this Plan, Excess Contributions apportioned to a Highly Compensated Employee, plus any income and minus any loss allocable thereto, must be distributed from such Participants 401(k) Account no later than the last day of the Plan Year next following the Plan Year in which the Excess Contribution arose, in accordance with IRS guidance, rulings and regulations. To the extent a Highly Compensated Employee has not reached his or her Catch-Up Contribution limit under the Plan, Excess Contributions allocated to such Highly Compensated Employee are treated as Catch-Up Contributions and will not be treated as Excess Contributions. If such Excess Contributions (other than Catch-Up Contributions) are distributed more than 2 1/2 months after the last day of the Plan Year in which such Excess Contributions arose, a ten (10%) percent excise tax will be imposed on the Company with respect to such amounts. |
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(i) | Determination of Income or Loss Allocable to Excess Contributions. Excess Contributions shall be adjusted for any income or loss allocable to such Excess Contributions up to the date of distribution. The income or loss allocable to a Participants Excess Contributions shall be determined using any of the methods set forth below: |
(A) | Reasonable Method of Allocating Income . The Committee may use any reasonable method for computing the income allocable to Excess Contributions, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants Accounts. A Plan will not fail to use a reasonable method for computing the income allocable to Excess Contributions merely because the income allocable to Excess Contributions is determined on a date that is no more than seven (7) days before the distribution. | ||
(B) | Alternative Method of Allocating Income . The Committee may allocate income to Excess Contributions for the Plan Year by multiplying the income for the Plan Year allocable to the 401(k) Contributions and other amounts taken into account under the ADP test (including contributions made for the Plan Year), by a fraction, the numerator of which is the Excess Contributions for the Participant for the Plan Year, and the denominator of which is the sum of (1) the Account Balance attributable to 401(k) Contributions and other amounts taken into account under the ADP test as of the beginning of the Plan Year; and (2) any additional amount of such contributions made for the Plan Year. | ||
(C) | Safe Harbor Method of Allocating Gap Period Income . The Committee may use the safe harbor method in this paragraph to determine income on Excess Contributions for the gap period. Under this safe harbor method, income on Excess Contributions for the gap period is equal to ten percent (10%) of the income allocable to Excess Contributions for the Plan Year that would be determined under paragraph (B) above, multiplied by the number of calendar months that have elapsed since the end of the Plan Year. For purposes of calculating the number of calendar months that have elapsed under the safe harbor method, a corrective distribution that is made on or before the fifteenth day of a month is treated as made on the last day of the preceding month and a distribution made after the fifteenth day of a month is treated as made on the last day of the month. | ||
(D) | Alternative method for Allocating Plan Year and Gap Period Income . The Committee may determine the income for the aggregate of the Plan Year and the gap period, by applying the |
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(ii) | Suspension or Reduction of Contributions. If, prior to the end of a Plan Year, the Committee determines that a Highly Compensated Employee is likely to have Excess Contributions for the Plan Year because of the election made under Section 3.1, the Committee may authorize a suspension or reduction of 401(k) Contributions for such affected Participant as the Committee may determine. Provided further, if prior to the end of a Plan Year, the Committee determines that under the provisions of this Section, a Participant is likely to have Excess Contributions for the next Plan Year because of the election made under Section 3.1, the Committee shall communicate in writing to affected Participants, a prospective limitation on the percentage of Compensation which such Participant may elect to contribute, which limitation may be prospectively changed at any time by resolution. |
(iii) | Testing. The ADP test shall be performed in accordance with the Code and applicable IRS guidance, rulings and regulations. | ||
(iv) | Attributable Matching Contributions. If Excess Contributions are distributed to a Participant, no Matching Contributions will be made with respect to the Excess Contributions. If Matching Contributions have already been allocated based on such Excess Contributions, the Matching Contributions attributable to the Excess Contributions shall be forfeited upon distribution of the Excess Contributions. |
(a) | Limitations on Matching Contributions. |
(i) | Actual Contribution Percentage (ACP) Test . Matching Contributions made under the Plan must meet the Actual Contribution Percentage (ACP) test of Code Section 401(m). For Plan Years beginning on or after January 1, 2000, the ACP for the current Plan Year for eligible Participants who are Highly Compensated Employees for the Plan Year must satisfy one of the following tests: |
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(A) | The ACP for eligible Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior Plan Years ACP for Participants who were Nonhighly Compensated Employees for the prior Plan Year multiplied by 1.25; or | ||
(B) | The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior Plan Years ACP for Participants who were Nonhighly Compensated Employees for the prior Plan Year multiplied by two (2), provided that the ACP for Participants who are Highly Compensated Employees for the Plan Year does not exceed the prior Plan Years ACP for Participants who were Nonhighly Compensated Employees for the prior Plan Year by more than two (2) percentage points. |
(ii) | Current Year Testing | |
If elected by the Committee, the ACP tests in (A) and (B) above will be applied by comparing the current Plan Years ACP for Participants who are Highly Compensated Employees for each Plan Year with the current Plan Years ACP for Participants who are Nonhighly Compensated Employees. The Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding 5 Plan Years or if, as a result of a merger or acquisition described in Code Section 410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using current year testing and the change is made within the transition period described in Code Section 410(b)(6)(C)(ii). | ||
(iii) | Actual Contribution Percentage (ACP) means, for a specified group of eligible Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of (1) the sum of the Participants Matching Contributions and any Qualified Matching or Qualified Nonelective Contributions to be used in the ACP test made on behalf of such Participant for the applicable Plan Year (and disregarding any contributions returned as an excess annual addition pursuant to Regulation Section 1.415-6(b)(6)(iv)), to (2) the Participants compensation for such Plan Year (whether or not the Employee was a Participant for the entire Plan Year). | |
For purposes of this section, an eligible Participant shall mean any Employee of the Company who is otherwise authorized under the terms of the Plan to have 401(k) Contributions or Matching Contributions allocated to his or her Account for the Plan Year (or prior Plan Year, as applicable). If 401(k) Contributions are required to receive a Matching Contribution, any Employee who would be an eligible Participant if such Employee had made a 401(k) Contribution shall be treated as an eligible Participant. |
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(b) | Additional Rules |
(i) | The ACP for any Participant who is a Highly Compensated Employee and who is eligible to have Matching Contributions and 401(k) Contributions, if applicable, allocated to his or her account under two or more plans described in Code Section 401(a) or arrangements described in Code Section 401(k) that are maintained by the Company, shall be determined as if the total of such matching contributions and before-tax contributions, if applicable, was made under each plan. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan years, all Matching Contributions made during the Plan Year under all such arrangement shall be aggregated. | ||
(ii) | In the event that this Plan satisfies the requirements of Code Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the ACP of Employees as if all such plans were a single plan. If more than 10 percent of the Employers Nonhighly Compensated Employees are involved in a plan coverage change as defined in Regulations 1.401(m)-2(c)(4), then any adjustments to the Nonhighly Compensated Employees ADP for the prior Plan Year will be made in accordance with such Regulations unless the Employer has elected to use the current year testing method. Plans may be aggregated in order to satisfy Code Section 401(m) only if they have the same Plan Year and use the same ACP testing method. | ||
(iii) | For purposes of the ACP test, Matching Contributions, Qualified Matching Contributions and Qualified Nonelective Contributions will be considered made for a Plan Year if made no later than the end of the twelve month period beginning on the day after the close of the applicable Plan Year. | ||
(iv) | For purposes of this Section, compensation means compensation as defined in Section A.1(b)(iv). | ||
(v) | Notwithstanding any other provision contained in Schedule A, testing shall be performed consistently with regulations, rulings and guidance under Code Section 401(m), and the Plan hereby incorporates by reference all options relating to testing not specifically described in this document with the intent to have flexibility in satisfying the ACP test. | ||
(vi) | The Committee shall maintain records sufficient to demonstrate satisfaction of the ACP test. |
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(vii) | A Participant is a Highly Compensated Employee for a particular Plan Year if he or she meets the definition of a Highly Compensated Employee in effect for that Plan Year. Similarly, a Participant is a Nonhighly Compensated Employee for a particular Plan Year if he or she does not meet the definition of a Highly Compensated Employee in effect for that Plan Year. |
(c) | Excess Aggregate Contributions. With respect to any Plan Year, Excess Aggregate Contributions are the excess of: |
(i) | The aggregate amount of Matching Contributions, 401(k) Contributions, and if treated as matching contributions for purposes of the ACP test, Qualified Matching and/or Qualified Nonelective Contributions, taken into account in computing the ACP of Highly Compensated Employees for such Plan Year, over |
(ii) | The maximum amount of such contributions permitted by the ACP test for the Highly Compensated Employees, calculated in the following manner: |
(1) | The Matching Contributions are hypothetically reduced for the HCEs with the highest actual contribution ratio (ACR) determined in accordance with applicable regulations so that such HCEs ACR equals the greater of the highest percentage allowed by the ACP test or the ACR of the HCE (or HCEs) with the next highest ACR. If a lesser reduction is required to satisfy the ACP test, only the lesser reduction is considered. | ||
(2) | Step (1) is repeated until the ACP test is satisfied. | ||
(3) | The total amount of Excess Aggregate Contributions is the sum of the hypothetical contribution reductions for each HCE. |
Such determination shall be made after first determining Excess Contributions pursuant to Section A.1 and then determining Excess Aggregate Contributions pursuant to this Section A.2. | ||
(d) | Allocation of Excess Aggregate Contributions . The total dollar amount of the Excess Aggregate Contributions determined in subsection (c) is distributed to the HCEs using the dollar leveling method, as follows: |
(i) | The Excess Aggregate Contribution of the HCE with the highest dollar amount of Excess Aggregate Contributions is reduced by the amount that will cause that HCEs Excess Aggregate Contributions to equal the dollar amount of the HCE with the next highest dollar amount of Excess Aggregate Contributions. | ||
(ii) | The amount determined in Step (i) is then distributable to the HCE with the highest dollar amount of Excess Aggregate Contributions. |
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(iii) | If a lesser reduction, when added to the total dollar amount already distributable under these steps would equal the total Excess Aggregate Contribution, the lesser reduction amount is distributable. | ||
(iv) | If the total amount distributable is less than the total amount of Excess Aggregate Contributions, the preceding steps are repeated until the total amount of Excess Aggregate Contributions has been apportioned. | ||
(v) | If distributions equal to the total amount distributable to HCEs under the dollar leveling method, adjusted in accordance with subsection (e), are made, the ACP is treated as meeting the nondiscrimination test of Code Section 401(m)(2), regardless of whether the ACP, if recalculated after distributions, would satisfy Code Section 401(m)(2). |
(e) | Distribution of Excess Aggregate Contributions. Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, to the extent not vested, or if not forfeitable, shall be distributed, in accordance with IRS guidance, rulings and regulations to the Highly Compensated Employees to whose Accounts Excess Aggregate Contributions were allocated, from such Participants Matching Accounts (and, if applicable, the Participants Qualified Nonelective Contributions Accounts and 401(k) Accounts) no later than the last day of the Plan Year next following the Plan Year to which such Excess Aggregate Contributions relate . If such Excess Aggregate Contributions are distributed more than 2 1/2 months after the last day of the Plan Year to which such Excess Aggregate Contributions relate, a ten percent (10%) excise tax will be imposed on the Company maintaining the Plan with respect to such amounts. | |
Excess Aggregate Contributions shall be treated as Annual Additions under the Plan for Code Section 415 purposes. | ||
(f) | Determination of Income or Loss Allocable to Excess Aggregate Contributions. Excess Aggregate Contributions shall be adjusted for any income or loss allocable to such Excess Aggregate Contributions up to the date of distribution. The income or loss allocable to a Participants Excess Aggregate Contributions shall be determined using any of the methods set forth below: |
(A) | Reasonable Method of Allocating Income . The Committee may use any reasonable method for computing the income allocable to Excess Aggregate Contributions, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants Accounts. A Plan will not fail to use a reasonable method for computing the income allocable to Excess Aggregate Contributions merely because the income allocable to Excess Aggregate Contributions is determined on a date that is no more than seven (7) days before the distribution. |
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(B) | Alternative Method of Allocating Income . The Committee may allocate income to Excess Aggregate Contributions for the Plan Year by multiplying the income for the Plan Year allocable to the Matching Contributions and other amounts taken into account under the ACP test (including contributions made for the Plan Year), by a fraction, the numerator of which is the Excess Aggregate Contributions for the Participant for the Plan Year, and the denominator of which is the sum of (1) the Account Balance attributable to Matching Contributions and other amounts taken into account under the ACP test as of the beginning of the Plan Year; and (2) any additional amount of such contributions made for the Plan Year. | ||
(C) | Safe Harbor Method of Allocating Gap Period Income . The Committee may use the safe harbor method in this paragraph to determine income on Excess Aggregate Contributions for the gap period. Under this safe harbor method, income on Excess Aggregate Contributions for the gap period is equal to ten percent (10%) of the income allocable to Excess Aggregate Contributions for the Plan Year that would be determined under paragraph (B) above, multiplied by the number of calendar months that have elapsed since the end of the Plan Year. For purposes of calculating the number of calendar months that have elapsed under the safe harbor method, a corrective distribution that is made on or before the fifteenth day of a month is treated as made on the last day of the preceding month and a distribution made after the fifteenth day of a month is treated as made on the last day of the month. | ||
(D) | Alternative method for Allocating Plan Year and Gap Period Income . The Committee may determine the income for the aggregate of the Plan Year and the gap period, by applying the alternative method provided by paragraph (B) above to the aggregate period. This is accomplished by (1) substituting the income for the Plan Year and the gap period, for the income for the Plan Year, and (2) substituting the amounts taken into account under the ACP test for the Plan Year and the gap period, for the amounts taken into account under the ACP test for the Plan Year in determining the fraction that is multiplied by that income. |
(g) | Testing. The ACP test shall be performed in accordance with the Code and applicable IRS guidance, rulings and regulations. |
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A.3. Excess 401(k) Deferrals . 401(k) Contributions that are includible in a Participants gross income under Code Section 402(g) to the extent such Participants 401(k) Contributions for a taxable year exceed the dollar limitation under such Code Section are Excess 401(k) Deferrals. Excess 401(k) Deferrals are treated as annual additions under the Plan for Code Section 415 purposes, unless such amounts are distributed on or before April 15th of the calendar year following the close of the Participants taxable year in which such Excess 401(k) Deferrals arose. The Participant must notify the Committee by April 1st of each year of the amount of the Excess 401(k) Deferrals to be assigned to the Plan with respect to a prior Plan Year. A Participant is deemed to notify the Committee of any Excess 401(k) Deferrals that arise if such Excess 401(k) Deferrals arise solely from 401(k) Contributions made under this Plan or any other plans of the Company. |
(a) | Distribution of Excess 401(k) Deferrals . Notwithstanding any other provision of the Plan, Excess 401(k) Deferrals, plus any income and minus any loss allocable thereto, shall be distributed to the Participant on or before April 15th of the calendar year following the close of the Participants taxable year in which such Excess 401(k) Deferrals arose in accordance with IRS guidance, rulings and regulations. The amount to be distributed with respect to a Participant for a Plan Year is reduced by any Excess 401(k) Deferrals previously distributed to the Participant for the Plan Year. | ||
Excess 401(k) Deferrals that are distributed after April 15th are includible in the Participants gross income in both the taxable year in which such Excess 401(k) Deferrals are deferred and in the taxable year in which such Excess 401(k) Deferrals are distributed. |
(b) | Determination of Income or Loss Allocable to Excess 401(k) Deferrals . Excess 401(k) Deferrals shall be adjusted for any income or loss allocable to such Contributions up to the date of distribution. The income or loss allocable to a Participants Excess 401(k) Deferrals shall be determined using any of the methods set forth below: |
(A) | Reasonable Method of Allocating Income . The Committee may use any reasonable method for computing the income allocable to Excess 401(k) Deferrals, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants Accounts. A Plan will not fail to use a reasonable method for computing the income allocable to Excess 401(k) Deferrals merely because the income allocable to Excess 401(k) Deferrals is determined on a date that is no more than seven (7) days before the distribution. | ||
(B) | Alternative Method of Allocating Income . The Committee may allocate income to Excess 401(k) Deferrals for the Plan Year by multiplying the income for the Plan Year allocable to the 401(k) |
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Contributions by a fraction, the numerator of which is the Excess 401(k) Deferrals for the Participant for the Plan Year, and the denominator of which is the sum of (1) the Account Balance attributable to 401(k) Contributions; and (2) any additional amount of such contributions made for the Plan Year. | |||
(C) | Safe Harbor Method of Allocating Gap Period Income . The Committee may use the safe harbor method in this paragraph to determine income on Excess 401(k) Deferrals for the gap period. Under this safe harbor method, income on Excess 401(k) Deferrals for the gap period is equal to ten percent (10%) of the income allocable to Excess 401(k) Deferrals for the Plan Year that would be determined under paragraph (B) above, multiplied by the number of calendar months that have elapsed since the end of the Plan Year. For purposes of calculating the number of calendar months that have elapsed under the safe harbor method, a corrective distribution that is made on or before the fifteenth day of a month is treated as made on the last day of the preceding month and a distribution made after the fifteenth day of a month is treated as made on the last day of the month. | ||
(D) | Alternative method for Allocating Plan Year and Gap Period Income . The Committee may determine the income for the aggregate of the Plan Year and the gap period, by applying the alternative method provided by paragraph (B) above to the aggregate period. This is accomplished by (1) substituting the income for the Plan Year and the gap period, for the income for the Plan Year, and (2) substituting the amounts taken into account for the Plan Year and the gap period, for the amounts taken into account for the Plan Year in determining the fraction that is multiplied by that income. |
For purposes of this section, the gap period means the period between the end of the Plan Year to a date determined by the Plan Administrator, which date shall not be more than seven days prior to the date of distribution. | |||
(c) | Attributable Matching Contributions. If Excess 401(k) Deferrals are distributed to a Participant, no Matching Contributions will be made with respect to the Excess 401(k) Deferrals. If Matching Contributions have already been allocated based on such Excess 401(k) Deferrals, the Matching Contributions attributable to the Excess 401(k) Deferrals shall be forfeited. |
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1. | International Helicopter Transport, Inc. | |
2. | Evangeline Airmotive, Inc. | |
3. | Acadian Composites, Limited Liability Co. | |
4. | Air Evac Services, Inc. | |
5. | PHI Aeromedical Services, Inc. | |
6. | Petroleum Helicopters International, Inc. |
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(Budgeted Operating Income), the Option shall vest with respect to ___of the shares covered thereby. |
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1. | Purpose . The purpose of the Petroleum Helicopters, Inc. Officer Deferred Compensation Plan II (the Plan) is to provide certain officers of Petroleum Helicopters, Inc. and its subsidiaries and affiliates (hereinafter collectively referred to as PHI) designated by the Compensation Committee of the Board of Directors of Petroleum Helicopters, Inc. with an opportunity to defer compensation earned in calendar years beginning on and after January 1, 2005, to assist said officers in their individual financial planning. This Plan is intended to be an unfunded nonqualified deferred compensation plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of Sections 2.01(2), 3.01(a)(3) and 401(a)(1) of ERISA. It shall be maintained, interpreted and administered in accordance with Internal Revenue Code Section 409A and applicable regulations and rulings. |
2. | Effective Date and Term of Plan . The effective date of the Plan is January 1, 2005, and the Plan shall remain in effect until terminated by the Board. |
3. | Duties of General Administration Vested in Committee . The general administration of the Plan shall be the responsibility of the Committee. The Committee shall have full discretionary power and authority necessary or appropriate to enable it to carry out its administrative duties, including but not limited to: the power to make rules and regulations relating to the Plan; the power to construe and interpret the Plan and to determine all questions that arise thereunder; the power to determine all questions of the eligibility, rights and status of Participants and others under the Plan; the power to determine from time to time the method for crediting earnings and losses on Accounts; and the power to review and decide all disputes arising under the provisions of the Plan. The Committee may delegate its rights and duties under this Plan, including administration of the Plan. The Committee may also delegate responsibility for maintenance of each Account to a director or officer of the Company other than the Participant with respect to whom any such Account is maintained or to an unrelated third party. The Committee shall have the broadest discretion with respect to interpretation and amendment of the Plan to ensure its compliance with applicable law. |
4. | Definitions . |
4.1. | Account means the notational account established by the Committee with respect to each Participant pursuant to Section 6. | ||
4.2. | Beneficiary means the person or persons, including a trust, last designated by a Participant, by written notice filed with the Committee, as the recipient of any benefits payable under the Plan with respect to such Participant after his or her death. If a Participant fails to designate a Beneficiary, or if no designated |
Beneficiary survives the Participant, then the Beneficiary shall be the Participants estate. |
4.3. | Beneficiary Designation Form means a Beneficiary Designation Form in the form attached hereto as Exhibit B , as it may be revised by the Committee from time to time. Any designation of a Beneficiary shall be made by the Participant on a Beneficiary Designation Form filed with the Committee, and may be changed by the Participant at any time by filing a new Beneficiary Designation Form. | ||
4.4. | Board means the Board of Directors or similar governing body of the Company. | ||
4.5. | Bonus Compensation means cash bonuses payable by the Company which may include Performance-Based Compensation payable with respect to a specified calendar year. | ||
4.6. | Code means the Internal Revenue Code of 1986, as amended. | ||
4.7. | Committee means the Compensation Committee of the Board of Directors of the Company. | ||
4.8. | Company means Petroleum Helicopters, Inc. | ||
4.9. | Compensation means the Participants base pay as reflected on the Companys payroll records, excluding all other types of remuneration such as, but not limited to, Bonus Compensation or any benefits or special allowances. | ||
4.10. | Deferral Election Form means a Deferral Election Form in the form attached hereto as Exhibit A , as it may be revised by the Committee from time to time. | ||
4.11. | Deferred Compensation means the aggregate amount of all Compensation and Bonus Compensation that the Participant elects to defer from time to time under the Plan. | ||
4.12. | Disabled means with respect to a Participant: |
(a) | being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or | ||
(b) | having received income replacement benefits for a period of not less than 3 months under an accident and health plan of the Company by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, |
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4.13. | Eligible Employee means an officer of the Company designated by the Committee as eligible to participate in the Plan. | ||
4.14. | Eligible Securities means the investments selected by the Committee which may be chosen by a Participant to measure gains and loss on Deferred Compensation. | ||
4.15. | ERISA means the Employee Retirement Income Security Act of 1974, as amended. | ||
4.16. | Key Employee means an employee of a publicly-traded company who is determined to be a key employee under Internal Revenue Code Section 416(i). | ||
4.17. | Participant means an Eligible Employee who participates in the Plan in accordance with Article 5. | ||
4.18. | Payment Commencement Date means the date elected by the Participant in accordance with Article 6, on which the Account will begin to be paid to the Participant. | ||
4.19. | Payment Election Form means a Payment Election Form in the form attached hereto as Exhibit C , as it may be revised by the Committee from time to time. | ||
4.20. | Performance-Based Compensation means compensation based on services performed by the Participant over a period of at least 12 months that is |
(a) | variable and contingent on the satisfaction of pre-established organizational or individual performance criteria, and | ||
(b) | not readily ascertainable at the time of election, and will be determined based on the rules and regulations issued by the Secretary of the Treasury. |
4.21. | Rabbi Trust means the trust attached as Exhibit D which is intended to satisfy the requirements of Revenue Procedure 92-64. | ||
4.22. | Unforeseeable Emergency means a severe financial hardship to the Participant, resulting from: |
(a) | an illness or accident of the Participant, the Participants spouse, or a dependent (as defined in Code Section 152(a)); | ||
(b) | loss of the Participants property due to casualty; or | ||
(c) | other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. |
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5. | Election to Defer Compensation and Bonus Compensation . |
5.1. | Deferral Election Amount . Each Participant may elect to defer up to twenty-five percent (25%) of his Compensation in one percent (1%) increments and up to one hundred percent (100%) of any Bonus Compensation received for services provided to PHI in one percent (1%) increments up to twenty-five (25%) of said bonus and in five percent (5%) increments thereafter. | ||
5.2. | Deferral Election Form. |
(a) | An election to defer Compensation and Bonus Compensation shall be made by the Participant on a Deferral Election Form. Deferrals shall be effective only if the Participant executes a Deferral Election Form and such Deferral Election Form is received by the Committee prior to January 1 of the calendar year for which the election is to be effective. | ||
(b) | If a Participant first becomes eligible to participate in the Plan after January 1 of a particular year, he may, in that year only, make an election to defer Compensation or Bonus Compensation to be paid for services that he will perform after the date of said election and until the end of such year, within thirty (30) days after the date on which such officer becomes eligible to participate in the Plan. | ||
(c) | A Participant shall make a new deferral election with respect to each calendar year for which he wishes to defer Compensation or Bonus Compensation by completing and returning a Deferral Election Form to the Committee in accordance with paragraph (a) above. |
5.3. | Revocation of Election . A Participants election made pursuant to Section 5.2 may be revoked only if such revocation is in writing and received by the Committee prior to January 1 of the calendar year for which the election is made. Any such revocation shall also be subject to such other rules as may be established by the Committee. If a Participant revokes an election to defer Compensation, he may not again elect to participate in the Plan for the calendar year for which the election was revoked. On and after January 1 of a calendar an election is irrevocable. | ||
5.4. | Election as to Time and Form of Payment. Not later than the date an Eligible Employee files a Deferral Election Form with the Committee, the Eligible Employee also may file a Payment Election Form. Participants shall elect on the Payment Election Form to have the payment of the Account commence upon: |
(a) | Attainment of an age not younger than 50 and not older than 70; or | ||
(b) | Termination of the Participants employment with the Company. |
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Participants also may elect to have payments made in either a single lump sum payment or annual installments over a specified period not to exceed 20 years. | |||
Except as provided in Section 5.5, all elections made pursuant to this section shall be irrevocable. | |||
Notwithstanding the foregoing, the Company reserves the right to modify a Participants election in any manner to the extent necessary to comply with applicable representations and rulings. |
5.5. | Changes in Time and Form of Payment . Deferral Election Forms. A Participant may make a subsequent election to change the time or form of payment but such election is effective only if: |
(a) | Such election is not effective for at least 12 months after the date the election is made; | ||
(b) | The first payment with respect to which the election is made is deferred for at least 5 years from the date such payment, would otherwise have been made; and | ||
(c) | The election is made not less than 12 months prior to the date of the first scheduled payment. |
The acceleration of the time or schedule of any payment under the Plan is not permitted, except as provided in regulations issued by the Secretary of the Treasury. |
6. | Deferred Compensation Accounts . |
6.1. | Establishment of Deferred Compensation Accounts . A separate Account shall be established for each Participants Deferred Compensation. Each Account shall be deemed to have been invested and reinvested from time to time in such Eligible Securities as the Participant shall designate. Accounts shall periodically be adjusted for gains or losses to reflect the investment performance of the Eligible Securities and any payments made to a Participant under the Plan. | ||
6.2. | Unfunded Plan . |
(a) | This Plan is an unfunded arrangement, maintained primarily to provide deferred compensation benefits to Participants. Should the Company elect to set aside assets for any obligations under this Plan outside the Rabbi Trust through the purchase of mutual funds, such assets shall not constitute funding for the Plan, shall be owned by the Company and shall be subject to the claims of the Companys creditors. The Company |
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reserves the right in its sole and absolute discretion to sell any such assets, in whole or in part, at any time. Notwithstanding anything to the contrary contained herein, the Company shall not be required to purchase, set aside or segregate assets of any kind to meet any obligations that it may have hereunder; and any obligations of the Company to pay benefits hereunder shall be an unsecured promise only, and a Participants right to enforce such obligation shall be solely as a general unsecured creditor of the Company. | |||
(b) | Notwithstanding the foregoing, it is the intention of the Company to hold assets equal to the value of the Participants Accounts in the Rabbi Trust attached as Exhibit D. |
6.3. | Distribution of Account . |
(a) | Except as otherwise provided in this Plan, the value of a Participants Account shall be distributed in either a single lump sum or annual installments (not to exceed twenty (20) installments), as designated by the Participant on his Deferral Election Form. Distribution of such amount shall be made (in the case of a lump sum payment) or commence (in the case of installment payments) thirty (30) days following the Payment Commencement Date elected by the Participant on the Deferral Election Form. | ||
(b) | If a Participant elects to have the value of his Account distributed in installments, the amount of the first installment shall be a fraction of the value of the Account, the numerator of which is one and denominator of which is the total number of installments elected, and the amount of each subsequent installment shall be a fraction of the value of the Account on the date preceding each subsequent payment, the numerator of which is one and the denominator of which is the total number of installments elected minus the number of installments previously paid. |
6.4. | Death Benefits . Upon the death of a Participant either (a) prior to the Payment Commencement Date or (b) subsequent to the Payment Commencement Date but prior to the distribution of the full value of the Participants Account, the Company shall distribute to the Beneficiary of such Participant, within 90 days of the death of such Participant, a lump-sum benefit equal to the remaining balance of the Participants Account, notwithstanding any election made by the Participant on the Deferral Election Form as to the time and form of payment. | ||
6.5. | Benefits for Unforeseeable Emergencies . If a Participant experiences unforeseen, adverse circumstances that the Committee determines to constitute an Unforeseeable Emergency, then the Committee, in its sole discretion, may pay to such Participant, from the Participants Account, a lump-sum emergency benefit as soon as administratively practicable. Any benefits distributable pursuant to this section shall not exceed the amount that the Committee determines is necessary to |
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defray the costs arising from or attributable to such Unforeseeable Emergency, including any federal, state or local income taxes reasonably anticipated to result from such distribution. The Committee shall take into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participants assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). |
6.6. | Disabled Participants. A Participants Account shall be paid in a lump sum to the Participant within 90 days of a determination by the Committee that the Participant is Disabled, notwithstanding any election made by the Participant on the Deferral Election Form as to the time and form of payment. | ||
6.7. | Distribution Restrictions . Notwithstanding anything to the contrary contained herein, in the case of any Key Employee who separates from service, distributions may not be made for six months after the date of separation from service. However, Section 6.4 will apply in the event of the Participants death. | ||
6.8. | Taxes . All federal, state or local taxes that the Plan Administrator determines are required to be withheld from any payments made pursuant to the Plan shall be withheld. | ||
6.9. | Statement of Account . Each Participant shall be provided with a statement of his Account not less frequently than one time per year. |
7. | No Right to Continue as an Officer or an Employee . Neither this Plan nor any action taken pursuant to this Plan shall constitute evidence of any agreement or understanding, express or implied, that the Company will retain a Participant in the capacity of an officer or as an employee in any capacity for any period of time, or at any particular rate of Compensation. | |
8. | Rules of Construction . All pronouns used in the Plan shall include all genders. Words used in the singular shall be construed to include the plural, where appropriate, and vice versa. The headings and subheadings in the Plan are inserted for convenience of reference only and are not to be considered as conclusive in the construction of any provision of the Plan. The provisions of the Plan shall be construed and governed by the laws of the State of Louisiana, to the extent not preempted by ERISA. | |
9. | Amendment, Modification and Termination . The Committee may at any time terminate, amend or modify this Plan. No amendment, modification or termination of the Plan shall in any manner adversely affect the amount credited to a Participants Account immediately prior to such amendment, modification or termination. The Committee shall have the right to merge this Plan with another nonqualified deferred compensation plan or to accept the merger of another such plan into this one. | |
10. | Nonalienation of Benefits . No Participant or Beneficiary shall have any power or right to transfer, assign, anticipate, pledge, hypothecate or otherwise encumber all or any part |
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of any amount credited to his Account or any right to payment of benefits hereunder, which credits, benefits and rights are expressly declared to be nonassignable and nontransferable. |
11. | Notices . Unless otherwise expressly provided by applicable federal law, if any, any notice, consent or demand required or permitted to be given under the provisions of this Plan shall be in writing and shall be signed by the party giving or making the same. If such notice, consent or demand is mailed, it shall be sent by United Stats certified mail, postage prepaid. If the intended recipient is a Participant or Beneficiary, such notice, consent or demand shall be addressed to such person at such persons last known address as shown on Companys records. If the intended recipient is the Company, such notice, consent or demand shall be addressed to the Company at its principal place of business at the time of the mailing of such notice, consent or demand. Unless otherwise expressly provided by applicable federal law, if any, the date of such mailing shall be deemed the date of such notice, consent or demand. | |
12. | Claims Procedure . Any Participant or Beneficiary (Claimant) who believes he or she is entitled to benefits under this Plan that have not been granted, may submit a written claim for benefits to the Committee which shall be handled in accordance with the Plans claim procedure set forth in Exhibit E . | |
13. | Waiver and Severability . No waiver of any term shall constitute a continuing waiver nor shall it constitute a waiver of any other term. The waiver by any party of a breach or violation of any provision of this Plan shall not operate as, or be construed to constitute, a waiver of any subsequent breach of the same or any other provision hereof. If a provision of the Plan is held to be invalid or does not comply with applicable federal law, it shall be severed from the Plan unless appropriately modified by the Committee. |
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Table of Contents | Page | |||
Preamble
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1 | |||
Article 1. Purpose of Agreement
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2 | |||
Article 2. Recognition
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3 | |||
Article 3. Pilot Status
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4 | |||
Article 4. Nondiscrimination
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5 | |||
Article 5. Seniority
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6 | |||
Article 6. Seniority List
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7 | |||
Article 7. Reductions in Work Force
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8 | |||
Article 8. Categories of Aircraft
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10 | |||
Article 9. Job Posting & Bidding
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11 | |||
Article 10. Schedules of Service
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14 | |||
Article 11. Leaves of Absence
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15 | |||
Article 12. Paid Days Off and Banked Days
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18 | |||
Article 13. On the Job Injury/Workers Compensation
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22 | |||
Article 14. Bereavement Leave
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24 | |||
Article 15. Jury Duty
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25 | |||
Article 16. Fees and Physical Examinations
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26 | |||
Article 17
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Training
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27 | |||
Article 18. Facilities, Equipment and Uniforms
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31 | |||
Article 19. Severance Pay
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34 | |||
Article 20. Moving Expense
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35 | |||
Article 21. Base Pay
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37 | |||
Article 22. Pilot Bonuses
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40 | |||
Article 23. Other Bonuses
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41 | |||
Article 24. Workover
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42 | |||
Article 25. Travel Pay
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45 | |||
Article 26. Per Diem
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46 | |||
Article 27. Insurance Benefits
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47 | |||
Article 28. 401(k) Plan
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48 | |||
Article 29. General & Miscellaneous
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49 | |||
Article 30. Safety/Accident Prevention
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51 | |||
Article 31. Sexual and Workplace Harassment Policy
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52 | |||
Article 32. Environmental Compliance
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53 | |||
Article 33. No Strike, No Lockout
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54 | |||
Article 34. Management Rights
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55 | |||
Article 35. Discipline and Discharge
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56 | |||
Article 36. Grievance Procedure
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57 | |||
Article 37. System Board of Adjustment
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59 | |||
Article 38. Union Representation
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61 | |||
Article 39. Union Bulletin Boards & Communications
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63 | |||
Article 40. Union Membership, Dues, Agency Fees & Checkoff
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64 | |||
Article 41. Savings Clause
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66 | |||
Article 42. Duration
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67 |
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A. | Company seniority - Company seniority shall be defined as the pilots length of employment from date of hire with the Employer, adjusted for any breaks in service as defined in Section 2 of this Article. Company seniority shall be used for determining eligibility for, and the level of, all benefits. | ||
B. | Bidding seniority - Bidding seniority shall be defined as the pilots length of employment as a pilot with the Employer. |
A. | resignation or retirement; | ||
B. | discharge; | ||
C. | absent from work for forty-eight (48) consecutive hours without proper notification of the reason to the Director of Operations or his designee, unless the Employer determines the pilot is physically incapable of providing the Employer with the proper notification of his absence; | ||
D. | failure to return to work from an authorized leave of absence in the time provided by the Employer, giving a false reason for obtaining a leave of absence or accepting gainful employment while on a leave of absence (when the employment was not specifically authorized by the Employer); | ||
E. | failure to inform Human Resources in person or by certified mail of his intention to return to work or failure to return to work on or before a date specified in the notice of recall as provided for in Article 7, Section 8(A); or | ||
F. | a pilot who is furloughed and who is not recalled to service with the Employer within thirty-six (36) months from the date of furlough. |
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A. | Each pilot accepting recall shall answer his recall notice no later than five (5) calendar days after the Employer contacts the pilot or the date the pilot signs for the certified letter, whichever is earlier. Pilots who fail to respond to a recall |
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notice within the time limits set forth above, pilots who refuse recall, or pilots who reject a recall notice shall forfeit all recall rights and have their name stricken from the seniority list. | |||
B. | A furloughed pilot who is recalled must report to work no later than fourteen (14) calendar days after the date of recall notification to report to duty. Nothing shall prevent the Employer from beginning recurrent or requalification training for recalled pilots prior to the fourteen (14) day period if a sufficient number of pilots agree to return from recall early. |
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A. | Small Aircraft: A single engine or multi-engine aircraft, type-certificated to carry nine (9) passengers or less, and with a maximum certified gross weight of 7000 pounds or less. | ||
B. | Medium Aircraft: An aircraft type-certificated to carry more than nine (9), but less than twenty (20) passengers, and with a maximum certified gross weight of more than 7000 pounds, but less than 12,500 pounds. | ||
C. | Large Aircraft: An aircraft type-certificated to carry more than nine (9) passengers, and with a maximum certified gross weight of 12,500 pounds or greater. |
10
A. | A new customer contract is obtained, unless contract requirements dictate that specific pilots fill the job, or | ||
B. | A pilot on a non-temporary job accepts another position, or | ||
C. | A pilot is removed from a job. |
A. | A customer changes aircraft type, and requests that the assigned pilot(s) remain on the job, or | ||
B. | The pilot on a non-temporary job is either on an extended leave (i.e- sick leave, occupational injury leave or personal leave) for ninety (90) days or less; or the pilot is on a special assignment or temporary assignment for one hundred eighty (180) days or less, or | ||
C. | The customer owns or dry leases the aircraft and retains the right to select pilots for these aircraft. If the customer requests that the employer select the pilot(s), then the job will be posted in accordance with this section. |
11
7. | Nothing in this Article prevents the Employer from hiring pilots into the pilot pool. | |
8. | Downgrades from a medium or heavy ship assignment require the approval of the Chief Pilot or Director of Operations. | |
9. | All job openings will be posted and awarded by the following method: |
A. | A job posting is issued and posted at all domestic company locations. | ||
B. | The Employer will use the following criteria to determine if a pilot meets the requirements to be considered for a job opening: |
1) | The customer must accept the pilot applicant, and | ||
2) | The Employer reserves the right to require a minimum of six (6) months in a previously awarded job; or twelve (12) months in a previously awarded job involving an upgrade or transition with a pay increase; or twenty-four (24) months in a previously awarded job involving a company paid relocation. Except for the six month requirement and a company paid relocation, nothing in this language prevents a pilot from an upgrade or promotion opportunity. |
C. | The job opening is awarded to the qualified pilot with the greatest bidding seniority. | ||
D. | If no qualified applicant submits a bid, the employer shall award the job using the following criteria: |
1) | In EMS: |
a) | Select and qualify the senior applicant who meets customer requirements. | ||
b) | Select and qualify the senior furloughed pilot who meets customer requirements. | ||
c) | Hire from outside the company as necessary to fill job opening. |
2) | In all other business units: |
a) | Transition the senior applicant who is otherwise qualified except as to aircraft type if the transition or specialized training does not involve a pay increase. | ||
b) | Select the least senior qualified pilot from the pilot pool. | ||
c) | Select and qualify the senior applicant who meets customer requirements (such as aircraft transition with a pay increase or upgrade). | ||
d) | Select and qualify the least senior pilot from the pilot pool who meets customer requirements. | ||
e) | Select the least senior qualified pilot. | ||
f) | Select and qualify the least senior pilot who meets customer requirements. | ||
g) | Select and qualify the senior furloughed pilot who meets customer requirements. | ||
h) | Hire from outside the company as necessary to fill job opening. |
12
13
A. | An earned day off for each day worked (e.g.- 6/6, 7/7, 14/14, 4/3/3/4, 5/2/5/9); | ||
B. | An earned day off for each two days worked (e.g.- 8/4, 10/5, 14/7); | ||
C. | Two days off for each 5 days worked (8 1 / 2 hour duty day where the pilot is required to remain at the base); | ||
D. | Two days off for each 5 days worked (14 hour duty day where the pilot is not required to remain at the base when there is no flight requirement); and | ||
E. | Continuous duty (e.g.- fire fighting, and other temporary assignments usually not exceeding ninety (90) days). The Employer will attempt to provide the pilot on continuous duty two (2) days rest for each fourteen (14) duty days. |
14
A. | Informal LOA (a reasonable time not to exceed 30 days) without pay may be granted to a pilot for urgent personal matters. Some examples include attending special schools for personal benefit, a need to handle family affairs associated with the death or serious illness of a close family member, or other special reasons. Except as approved by the Director of Human Resources, a pilot may be granted no more than one (1) Informal LOA in a 2-year period. | ||
B. | Formal LOA (a reasonable time up to one (1) year, or in cases of non-occupational injury or illness which may be extended an additional year if the Employer and the physician agree that the pilot is likely to return to active duty during the extension) without pay may be granted to a pilot to extend the time they are gone from work for recuperation from an injury or illness, or to allow a pilot with insufficient paid time off to fulfill the 90 day waiting period for the Long Term Disability Plan. A pilot on a Formal LOA may be required by the Employer to provide periodic proof that he remains disabled from work. Except as approved by the Director of Human Resources, a pilot may be granted no more than one Formal LOA in a 2-year period. | ||
C. | Military LOA - Military leaves of absence and reemployment rights upon return from such leave shall be granted in accordance with applicable laws. All orders for military duty, including National Guard and Reserve duty, shall be provided in writing to the Director of Operations, within four (4) calendar days of receiving the orders. A pilot on a military leave shall retain and accrue company and bidding seniority. | ||
D. | Family & Medical LOA (leave granted under the Family and Medical Leave Act) will be granted to eligible pilots as required by law. The Employers separate policy on leaves associated with the Family and Medical Leave Act will apply in these type leaves of absence. A pilot on FMLA will continue to accrue all seniority rights. In a case of a serious non-occupational health condition of a pilot who does not return to work within the twelve (12) week period provided for under the FMLA, he will be placed on a Formal Leave of Absence. |
15
16
17
Completed Years of Active | |||||
Service
As A Pilot
|
Accrual Units | ||||
1-5 Years
|
10 | ||||
6 Years
|
11 | ||||
7 Years
|
12 | ||||
8 Years
|
13 | ||||
9 Years
|
14 | ||||
10-11 Years
|
15 | ||||
12-13 Years
|
16 | ||||
14-15 Years
|
17 | ||||
16-17 Years
|
18 | ||||
18-19 Years
|
19 | ||||
20 Years and More
|
20 |
| 5&2, 8&4, 10&5 schedules: Multiply accrued units by 1.0 | ||
| All one for one schedules: Multiply accrued units by 0.7 & round to nearest day |
18
19
Completed Years of Active | |||||
Service
As A Pilot
|
Accrual Units/year | ||||
6 months but less than 1 Year
|
1 | ||||
1 Year but less than 2 Years
|
1 | ||||
2 Years but less than 3 Years
|
2 | ||||
3 Years but less than 4 Years
|
3 | ||||
4 Years and over
|
4 |
| 5&2, 8&4, 10& 5 schedules: Multiply accrued units by 5 | ||
| All one for one schedules: Multiply accrued units by 3.5 |
A. | Unscheduled absences due to personal illness or injury off the job will be taken from the STO Bank. | ||
B. | Once the STO Bank is exhausted, a pilot may use his remaining unused VSTO days. | ||
C. | Unbid accrued VSTO days must be used for any additional unscheduled absences. |
20
A. | A pilot who cannot perform his duties due to a non-occupational injury or illness shall immediately report such absence and the reason for it to his immediate supervisor. A pilot shall personally contact his supervisor on a daily basis during his scheduled work hitch unless physically unable to do so and shall advise the supervisor of his expected date of return and a telephone number where he can be reached during his absence. | ||
B. | Upon reasonable suspicion of misuse of such leave, the Employer reserves the right to require a physicians certificate or an examination by a Employer-designated physician. To the extent any Employer-requested examination is not covered by insurance, it shall be paid for by the Employer provided the pilot submits receipts for reimbursement in a timely manner. |
21
22
A. | he temporarily fills a vacant position; | ||
B. | he performs work which will offset overtime or vacation.; | ||
C. | he performs work which reduces the need for contractors or temporary pilots; or | ||
D. | he performs project work beneficial to the Employer. |
23
24
25
26
A. | Initial New Hire Training. This training category is for newly hired pilots who have not had previous experience with the Employer or rehires who are not eligible for recurrent training. It also applies to pilots employed by the Employer who have not previously held a crewmember position. | ||
B. | Initial Equipment Training. This category of training is for pilots who have been previously trained and qualified for a duty position by the Employer (not new hires) and who are being reassigned for any of the following reasons: |
C. | Transition Training. This category of training is for a pilot who has been previously trained and qualified for a specific duty position by the Employer and who is being assigned to the same duty position on a different aircraft type. | ||
D. | Upgrade or Promotion Training. This category of training is for a pilot who has been previously trained and qualified as First Officer, IFR (SIC or second in command) by the Employer and is being assigned as a Captain, IFR (PIC or pilot in command) to the same aircraft type for which the pilot was previously trained and qualified. | ||
E. | Recurrent Training. This category of training is for a pilot who has been trained and qualified by the Employer, who will continue to serve in the same duty position and aircraft type, and who must receive recurring training and/or checking within an appropriate eligibility period to maintain currency. | ||
F. | Requalification Training. This category of training is for a pilot who has been trained and qualified by the Employer, but is not current to serve in a particular duty position and/or aircraft due to not having received recurrent training and/or a required flight or competency check within the appropriate eligibility period. Requalification training is also applicable if a crewmember fails a required test or check. | ||
G. | Specialized Training. This is training conducted for pilots who are assigned to a job they have not previously flown for the Employer or is supplemental training. Some examples, but not a complete list, of specialized training are; fire fighting, long line, mountain, EMS, Offshore, and rescue hoisting; and some examples of supplemental training are water survival and customer required training. | ||
H. | Duty Position: The functional or operating position of a crewmember. For purposes of this agreement, duty positions are Captain, IFR; First Officer, IFR; and Captain, VFR. |
27
A. | Recurrent training will be conducted in accordance with the Employers FAA approved training program. Pay for recurrent training will be in accordance with Article 21, Section 9. | ||
B. | Each month the Employer will publish a list of those who are scheduled for recurrent training; however, it is the pilots responsibility to know when his recurrent training and/or checkrides are due, and to notify the director of training if he has not been scheduled at the appropriate time. In the event a pilot is unable to attend training on the day(s) scheduled, he will notify the director of training or his representatives as far in advance as possible. If a mutually acceptable date cannot be agreed upon by the pilot and the Director of Training, the pilot shall be obligated to attend on the originally scheduled date(s). |
A. | Transition, Upgrade, and Initial Equipment training will be conducted in accordance with PHIs FAA approved training program. Pay for Transition, Upgrade, and Initial Equipment training will be in accordance with Article 21, Section 9. | ||
B. | A pilot who fails training during an upgrade, transition, initial equipment or specialized course will not be eligible to reapply (in writing) for that training for six (6) months unless approved by the Chief Pilot, the Director of Operations or their representative. A second failure of an upgrade, transition, initial equipment training or specialized course will make the pilot ineligible for that course for at least twelve (12) months, and only then with the approval of the Chief Pilot, the Director of Operations or their representative. |
A. | Initial New Hire training will be conducted in accordance with PHIs FAA approved training program. Pay for Initial New Hire will be in accordance with Article 21, Section 9. |
A. | Training (Initial New Hire, Recurrent, Initial Equipment, Transition, Upgrade, or specialized training). A pilot who is unable to successfully complete a required portion of training will have that training discontinued. The Director of Training will consult with the pilot in an effort to determine the cause of the of the pilots inability to complete the training. The pilot may request a change of instructor, |
28
and the Employer will grant this request if another instructor is available. If the pilot is still unable to successfully complete the training, the Director of Training will determine if training is to be continued or stopped. If the Director of Training stops the training, the pilot will be returned to his previous job. If that job no longer exists, the pilot will be assigned to the pilot pool. In the case of Initial New Hire training, the Chief Pilot or the Director of Operations will review the pilots training records and make a determination as to the appropriate course of action. | |||
B. | Checking or Testing Failures. A pilot who fails a required test or check will immediately be removed from flight duty. The pilot will be offered additional training if necessary, and a recheck, if he successfully completes the additional training , providing that the pilot has had no previous failures within the past three (3) years. The pilot may request a change of instructor or check airman, and the Employer will grant this request if another check airman is available. If the pilot has had a previous failure within the past three (3) years, the Chief Pilot or the Director of Operations, will consult with the pilot and determine an appropriate course of action. If further training, testing or checking is approved by the Chief Pilot or the Director of Operations, the pilot may request a check airman change. The Employer will grant this request if another check airman is available. The pilot may request a recheck by an FAA inspector, and the Employer will make an effort to accommodate this recheck request, but does not control the availability of an FAA inspector. If the pilot fails the recheck, the Chief Pilot or Director of Operations will determine an appropriate course of action. | ||
C. | Pay Procedures for Checking or Testing Failures. The Employer will make a reasonable effort to retest or recheck within seven (7) days of the date of the initial test or check failure. If the pilot fails a retest or recheck, he will be returned to his previous job, if qualified. If that job is not available, the pilot will be reassigned to the pilot pool, if qualified. The Employer will provide housing and per diem for time spent in training, testing or retesting, and; |
(1) | A pilot who fails any required test or check and has not failed a test or check within the past thirty-six (36) months will be ineligible for any additional pay during his earned time off and will be removed from flight duty. The pilot will be eligible for up to seven (7) scheduled workdays pay following the failure provided he has not declined to retest or recheck during his earned time off. If the additional time beyond the seven (7) scheduled missed workdays is due to the pilots unavailability or the pilot declines the opportunity to retest or recheck during his earned time off, then all time for missed scheduled workdays will be either leave without pay or VSTO, until the pilot completes the retest or recheck. | ||
(2) | A pilot who fails any required test or check and has failed a test or check within the preceeding thirty-six (36) months will be ineligible for any additional pay during his earned time off and will be removed from flight duty and will be placed on leave without pay or VSTO, until he successfully passes the retest or recheck. |
29
A. | The parties agree to create to a joint training committee, which shall consist of two (2) representatives designated by the Employer, and two pilots designated by the Union. The role of the Training Committee shall be to jointly review pilot recommendations for changes and improvements in the pilot training programs. Pilot representatives shall function in an advisory capacity. The training committee will meet periodically as necessary, but no less than once per year. |
30
A. | When a pilot does not work within thirty (30) miles of his home regardless of whether he is on regular work schedule or workover; or | ||
B. | When travel back to his home would prevent the pilot from receiving minimum rest in accordance with FARs. |
31
32
33
A. | He refuses to accept a job or assignment within his category as pilot with the Employer; | ||
B. | The lay off is caused by circumstances beyond the control of the Employer; or | ||
C. | He is dismissed for cause, resigns or retires. |
Years Company Service | Calendar Weeks Severance Pay | |||
1 year but less than 4 years
|
2 | |||
4 years but less than 8 years
|
4 | |||
8 years but less than 12 years
|
6 | |||
12 years but less than 16 years
|
8 | |||
16 years or more
|
10 |
34
A. | Packing, insuring, shipping, unpacking and placement of household personal effects and reasonable items of furniture, furnishings, clothing, appliances, tools and equipment from the principal place of residence to the new home up to a maximum of 12,000 pounds. Special handling items as defined by the moving company will not be eligible for reimbursement (e.g.- transportation of pets/animals, boats, automobiles, motorcycles and heavy shop equipment). | ||
B. | Automobile(s) will not be transported as part of the household goods move. PHI will pay the cost of driving one vehicle per family by the most direct AAA highway mileage route at the current mileage rate established by the IRS. No expenses will be paid for a second vehicle. | ||
C. | Transportation of pilot and family at the time of the move: |
| Mileage at current IRS rate by the most direct AAA highway mileage route from home to home | ||
| Pilots will be allowed the following enroute expenses when properly substantiated by receipts during the period of enroute travel: |
I. | For pilot only - $30.00/day | ||
II. | For pilot and Spouse - $60.00/day | ||
III. | For each dependent child - $15.00/day |
| The period of enroute travel shall continue after arrival until the day the household effects arrive or until the end of the fifth (5 th ) day, whichever comes first. |
35
D. | For the purpose of determining necessary travel time, the Employer will allow one (1) travel day for each five hundred (500) miles or fraction thereof, to a maximum of five (5) travel days when driving a vehicle. The pilot is expected to move during his days off and be prepared to work on his assigned schedule. The most direct AAA mileage between the two (2) cities will determine travel time. |
36
1/1/2001 | June 2001 | June 2002 | June 2003 | |||||||||||||
STEP | Annual Pay | Annual Pay | Annual Pay | Annual Pay | ||||||||||||
1
|
$ | 37,000 | $ | 40,700 | $ | 42,735 | $ | 44,872 | ||||||||
2
|
$ | 38,000 | $ | 41,800 | $ | 43,890 | $ | 46,085 | ||||||||
3
|
$ | 39,000 | $ | 42,900 | $ | 45,045 | $ | 47,297 | ||||||||
4
|
$ | 40,000 | $ | 44,000 | $ | 46,200 | $ | 48,510 | ||||||||
5
|
$ | 41,250 | $ | 45,375 | $ | 47,644 | $ | 50,026 | ||||||||
6
|
$ | 43,250 | $ | 47,575 | $ | 49,954 | $ | 52,451 | ||||||||
7
|
$ | 45,250 | $ | 49,775 | $ | 52,264 | $ | 54,877 | ||||||||
8
|
$ | 46,750 | $ | 51,425 | $ | 53,996 | $ | 56,696 | ||||||||
9
|
$ | 47,300 | $ | 52,030 | $ | 54,632 | $ | 57,363 | ||||||||
10
|
$ | 47,550 | $ | 52,305 | $ | 54,920 | $ | 57,666 | ||||||||
11
|
$ | 47,800 | $ | 52,580 | $ | 55,209 | $ | 57,969 | ||||||||
12
|
$ | 48,100 | $ | 52,910 | $ | 55,556 | $ | 58,333 | ||||||||
13
|
$ | 48,750 | $ | 53,625 | $ | 56,307 | $ | 59,122 | ||||||||
14
|
$ | 49,401 | $ | 54,341 | $ | 57,058 | $ | 59,911 | ||||||||
15
|
$ | 50,051 | $ | 55,056 | $ | 57,809 | $ | 60,700 | ||||||||
16
|
$ | 50,702 | $ | 55,772 | $ | 58,560 | $ | 61,488 | ||||||||
17
|
$ | 51,352 | $ | 56,487 | $ | 59,311 | $ | 62,277 | ||||||||
18
|
$ | 52,002 | $ | 57,202 | $ | 60,063 | $ | 63,066 | ||||||||
19
|
$ | 52,653 | $ | 57,918 | $ | 60,814 | $ | 63,854 | ||||||||
20
|
$ | 53,303 | $ | 58,633 | $ | 61,565 | $ | 64,643 |
37
1/1/2001 | June 2001 | June 2002 | June 2003 | |||||||||||||
STEP | Annual Pay | Annual Pay | Annual Pay | Annual Pay | ||||||||||||
1
|
$ | 43,420 | $ | 47,762 | $ | 50,150 | $ | 52,658 | ||||||||
2
|
$ | 43,420 | $ | 47,762 | $ | 50,150 | $ | 52,658 | ||||||||
3
|
$ | 43,420 | $ | 47,762 | $ | 50,150 | $ | 52,658 | ||||||||
4
|
$ | 44,554 | $ | 49,009 | $ | 51,460 | $ | 54,033 | ||||||||
5
|
$ | 45,550 | $ | 50,105 | $ | 52,610 | $ | 55,241 | ||||||||
6
|
$ | 46,500 | $ | 51,150 | $ | 53,708 | $ | 56,393 | ||||||||
7
|
$ | 48,000 | $ | 52,800 | $ | 55,440 | $ | 58,212 | ||||||||
8
|
$ | 50,250 | $ | 55,275 | $ | 58,039 | $ | 60,941 | ||||||||
9
|
$ | 51,500 | $ | 56,650 | $ | 59,483 | $ | 62,457 | ||||||||
10
|
$ | 52,750 | $ | 58,025 | $ | 60,926 | $ | 63,973 | ||||||||
11
|
$ | 54,750 | $ | 60,225 | $ | 63,236 | $ | 66,398 | ||||||||
12
|
$ | 56,250 | $ | 61,875 | $ | 64,969 | $ | 68,217 | ||||||||
13
|
$ | 58,500 | $ | 64,350 | $ | 67,568 | $ | 70,946 | ||||||||
14
|
$ | 60,000 | $ | 66,000 | $ | 69,300 | $ | 72,765 | ||||||||
15
|
$ | 61,000 | $ | 67,100 | $ | 70,455 | $ | 73,978 | ||||||||
16
|
$ | 61,246 | $ | 67,641 | $ | 71,023 | $ | 74,574 | ||||||||
17
|
$ | 61,492 | $ | 68,182 | $ | 71,592 | $ | 75,171 | ||||||||
18
|
$ | 61,738 | $ | 68,724 | $ | 72,160 | $ | 75,768 | ||||||||
19
|
$ | 61,984 | $ | 69,265 | $ | 72,728 | $ | 76,364 | ||||||||
20
|
$ | 62,230 | $ | 69,806 | $ | 73,296 | $ | 76,961 | ||||||||
21
|
$ | 62,476 | $ | 70,347 | $ | 73,865 | $ | 77,558 | ||||||||
22
|
$ | 62,722 | $ | 70,888 | $ | 74,433 | $ | 78,154 | ||||||||
23
|
$ | 62,968 | $ | 71,430 | $ | 75,001 | $ | 78,751 | ||||||||
24
|
$ | 63,214 | $ | 71,971 | $ | 75,569 | $ | 79,348 | ||||||||
25
|
$ | 63,460 | $ | 72,512 | $ | 76,138 | $ | 79,944 | ||||||||
26
|
$ | 63,706 | ||||||||||||||
27
|
$ | 63,952 | ||||||||||||||
28
|
$ | 64,198 | ||||||||||||||
29
|
$ | 64,444 | ||||||||||||||
30
|
$ | 64,690 | ||||||||||||||
31
|
$ | 64,936 | ||||||||||||||
32
|
$ | 65,182 | ||||||||||||||
33
|
$ | 65,428 | ||||||||||||||
34
|
$ | 65,674 | ||||||||||||||
35
|
$ | 65,920 |
38
39
40
41
42
A. | A pilot is not qualified. | ||
B. | A customer requests a certain pilot or requests that a certain pilot not fly his job. | ||
C. | There is a conflict with a pilots regular job (i.e., FAR limitations). | ||
D. | The dates of a pilots availability conflict with the length of the workover requirement. | ||
E. | An off-duty pilot does not answer a phone call from the Employer or does not return a message left on his answering machine within fifteen (15) minutes. The time and date of the attempted call to contact the pilot will be documented by the Employer. | ||
F. | A pilot is unable to give a definitive answer at the time of the call. | ||
G. | An off-duty pilot will be allowed to use a beeper as his contact number only for normal workovers and will have fifteen (15) minutes to respond to his page or he will be passed over for a workover assignment. The pilot is responsible to make certain that his beeper is in working order. | ||
H. | An on-duty pilot cannot be contacted within two (2) hours. |
43
44
45
A. | Three (3) dollars per meal to a maximum of nine (9) dollars per day when the pilot is working at his regularly assigned base. | ||
B. | Five (5) dollars per meal to a maximum of fifteen (15) dollars per day for: |
(1) | Pilots assigned to the pilot pool; | ||
(2) | Replacement pilots for EMS; | ||
(3) | A pilot on a regular work schedule who is required to relocate via vehicle or aircraft after arriving at his assigned base; | ||
(4) | A pilot attending training at locations other than PHI facilities (e.g., Flight Safety Training); and | ||
(5) | A pilot assigned to an offshore contract and normally required to remain offshore who is required to RON onshore during his work schedule |
46
47
48
49
50
A. | Safety is the primary consideration in all aspects of the job; | ||
B. | Safe working conditions, proper training, proper equipment and appropriate protective devices are essential elements in this safety and accident prevention effort; | ||
C. | The Employer will train pilots in any new aircraft, its components or on any new procedures which pilots may be required to utilize; | ||
D. | All pilots must follow PHI safety policies and procedures, including safety practices as published and taught. Following safe work practices is a condition of employment. | ||
E. | Both PHI and the pilots shall adhere to all applicable Federal Aviation, or other controlling Regulations. | ||
F. | The Employer will ensure the continuation of the Notice to Airmen (NOTAM) system and weather reporting system. |
51
52
53
54
55
56
Step 1.
|
The pilot shall first attempt to resolve the grievance with his immediate supervisor within seven (7) calendar days from the date of the occurrence of the event giving rise to the grievance, or within seven (7) calendar days of the date the pilot knew or should have known of such event not to exceed twenty eight (28) calendar days from the date of the event. The supervisor shall give his answer within seven (7) calendar days from that date. | |
|
||
Step 2.
|
If the grievance is not resolved at Step 1 to the satisfaction of the grievant, the grievance shall be reduced to writing and presented to the designated representative of the Employer within ten (10) calendar days after the receipt of the immediate supervisors answer. The written grievance must state the nature of the grievance, the circumstances out of which it arose, the remedy or correction requested and the specific provisions of the Agreement alleged to have been violated. The Employer representative will give his answer to the grievant in writing with a copy to the Union within ten (10) calendar days after the receipt of the grievance. | |
|
||
Step 3.
|
In the event the decision by the Employer representative is unacceptable to the aggrieved party, it may be appealed in writing to the designated representative of the Employer with seven (7) days of the receipt of the decision. The appeal must include a statement of the reasons the grievant believes the decision was erroneous. The Employers representative shall render a decision on the appeal in writing within fourteen (14) calendar days of receipt of the appeal. In the event the decision at Step 3 is unacceptable to the grievant, the Union may appeal to the System Board of Adjustment in accordance with Article 37 of this agreement. |
57
58
59
A. |
The question or questions at issue;
|
||
B. | a statement of the facts with supporting documents; | ||
C. | a reference to the applicable provisions of the Agreement alleged to have been breached; | ||
D. | the position of the aggrieved party; | ||
E. | the remedy requested; and | ||
F. | the position of the opposing party. |
60
A. | To consult with a pilot(s) regarding a presentation of a complaint or grievance which the pilot(s) desires to present. Stewards shall be permitted to present grievances to management and attempt to resolve any grievance. | ||
B. | To present a grievance or complaint to a pilots immediate supervisor in an attempt to settle the matter. To the extent that it doesnt interfere with the Employers operations, Stewards shall be granted the right to consult with pilots at their base for the purpose of enforcing the provisions of this agreement. | ||
C. | To investigate a complaint or grievance of record in accordance with the Grievance Procedure. |
61
62
63
64
A. | the Pilot transfers to a position with the Employer not covered by the agreement; |
B. | the Pilots service with the Employer is terminated; | ||
C. | the Pilot is furloughed; or | ||
D. | the Pilot is on an authorized leave of absence. |
65
66
OFFICE AND PROFESSIONAL
EMPLOYEES INTERNATIONAL UNION |
PETROLEUM HELICOPTERS, INC. | |||||||
|
||||||||
By:
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/s/ Jack Bowers | By: | /s/ Richard Rovinelli | |||||
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OFFICE AND PROFESSIONAL
EMPLOYEES INTERNATIONAL UNION, LOCAL 108 |
PETROLEUM HELICOPTERS, INC. | |||||||
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By:
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/s/ Stephen D. Ragin | By: | /s/ Michael Hurst | |||||
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OFFICE AND PROFESSIONAL
EMPLOYEES INTERNATIONAL UNION |
PETROLEUM HELICOPTERS, INC. | |||||||
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By:
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/s/ Mike Dorsett | By: | /s/ Carlin Craig | |||||
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OFFICE AND PROFESSIONAL
EMPLOYEES INTERNATIONAL UNION |
PETROLEUM HELICOPTERS, INC. | |||||||
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By:
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/s/ Herbert J. Jenssen | By: | /s/ Edward Gatza | |||||
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OFFICE AND PROFESSIONAL .
EMPLOYEES INTERNATIONAL UNION |
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By:
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Paul Bohelski | |||||||
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67
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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68
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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69
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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70
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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71
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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72
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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73
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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74
Very truly yours,
|
Agreed: | |||
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||||
/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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75
Very truly yours,
|
Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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76
Very truly yours,
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Agreed: | |||
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/s/ Richard Rovinelli
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/s/ Stephen D. Ragin | |||
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77
Subsidiaries of the Registrant at December 31, 2006
PLACE OF
% OF VOTING
COMPANY
INCORPORATION
STOCK OWNED
Louisiana
100%
Louisiana
100%
Louisiana
100%
Louisiana
100%
Louisiana
100%
Louisiana
100%
Louisiana
100%
Florida
100%
Montana
100%
Angola
49%
Cayman
100%
Bermuda
100%
1. | I have reviewed this annual report on Form 10-K of PHI, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13(a)-15(f) and 15(d)-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ Al A. Gonsoulin | |||
Al A. Gonsoulin | ||||
Chief Executive Officer | ||||
1. | I have reviewed this annual report on Form 10-K of PHI, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13(a)-15(f) and 15(d)-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ Michael J. McCann | |||
Michael J. McCann | ||||
Chief Financial Officer and Treasurer | ||||
1. | the Annual Report on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by such Report. |
By: | /s/ Al A. Gonsoulin | |||
Al A. Gonsoulin | ||||
Chief Executive Officer | ||||
1. | the Annual Report on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period covered by such Report. |
By: | /s/ Michael J. McCann | |||
Michael J. McCann | ||||
Chief Financial Officer and Treasurer | ||||