Document:

Exhibit

Exhibit 10.1

EIGHTH AMENDMENT TO
SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

THIS EIGHTH AMENDMENT TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Amendment”), dated as of June 21, 2019 is by and between DHI Mortgage Company, Ltd., a Texas limited partnership (the “Seller”), the Buyers party to the Repurchase Agreement (defined below) (the “Buyers”), and U.S. Bank National Association, a national banking association, as administrative agent for the Buyers (the “Administrative Agent”).
RECITALS
A.    The Seller, the Buyers, and the Administrative Agent are parties to a Second Amended and Restated Master Repurchase Agreement dated as of February 27, 2015, a First Amendment to Second Amended and Restated Master Repurchase Agreement dated as of February 26, 2016, a Second Amendment to Second Amended and Restated Master Repurchase Agreement dated as of June 24, 2016, a Third Amendment to Second Amended and Restated Master Repurchase Agreement dated as of September 23, 2016, a Fourth Amendment to Second Amended and Restated Master Repurchase Agreement dated as of February 24, 2017, a Fifth Amendment to Second Amended and Restated Master Repurchase Agreement dated as of February 23, 2018, a Sixth Amendment to Second Amended and Restated Master Repurchase Agreement dated as of February 22, 2019, and a Seventh Amendment to Second Amended and Restated Master Repurchase Agreement dated as of March 26, 2019 (as amended, restated, or otherwise modified from time to time, the “Repurchase Agreement”).
B.    The parties hereto desire to amend the Repurchase Agreement as provided herein.
AGREEMENT
In consideration of the premises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1.Definitions.  Capitalized terms used and not otherwise defined in this Amendment have the meanings specified in the Repurchase Agreement.
Section 2.Amendments.
2.1    Definitions.  Section 1.2 of the Repurchase Agreement is amended by adding or amending and restating, as applicable, the following definitions thereto, to read in their entireties as follows:
“Swing Line Limit” means, for any day, the lesser of (x) $150,000,000, and (y) the Maximum Aggregate Commitment minus the Aggregate Outstanding Purchase Price outstanding on that day, being the maximum amount that may be funded and outstanding on that day under the Swing Line.
2.2    Request for Increase in Maximum Aggregate Commitment. Section 2.3 of the Repurchase Agreement is amended and restated in its entirety as follows:
2.3. Request for Increase in Maximum Aggregate Commitment. The Seller may from time to time, by giving advanced written notice of at least two Business Days to the Administrative Agent in the form of Exhibit G hereto, request an increase in the Maximum Aggregate Commitment in increments of $25,000,000, with a minimum increase of $25,000,000 to a specified amount up to $1,200,000,000 for a period for such increase being designated by the Seller (but not less than 30 days, or if less, the period remaining until the Termination Date); provided that no Default has occurred that has not been cured before it has become an Event of Default, and no Event of Default has occurred that the Administrative Agent has not declared in writing to have been waived or cured. Upon receipt of such request, the Administrative Agent may request one or more existing Buyers or new Buyers (which new Buyers are acceptable to the Seller) to provide increased Commitments to finance all or a portion of the requested increase. The Administrative Agent shall notify the Seller of such new and existing Buyers’ responses to requests for increased or new Commitments. Following such notice, to achieve the full amount of a requested increase, with the prior consent of the Administrative Agent, the Seller may invite additional new Buyers to provide such increase. Any increase under this Section 2.3 shall be in the 

sole discretion of the Administrative Agent and the Buyers, and no Buyer will have any obligation to increase its Committed Sum. The consent of the Administrative Agent and the Buyers to an increase under this Section 2.3 shall be evidenced by the Administrative Agent providing to the parties to this Agreement an updated Schedule BC. If an increase in the Maximum Aggregate Commitment is achieved, then the Pro Rata ownership interest in the Purchased Loans of each Buyer shall, following funding by the Buyers increasing their Commitment Sums or by the new Buyers, automatically be adjusted proportionately. Upon the expiration of any such increase, the Seller shall, to the extent required, reduce the Aggregate Outstanding Purchase Price to the amount of the Maximum Aggregate Commitment as then in effect, and the ownership interests in the Purchased Loans of each Buyer shall automatically be adjusted accordingly.
2.3    Transaction Sublimits. Section 4.2(b) of the Repurchase Agreement is amended and restated in its entirety as follows:
(b)    The outstanding Purchase Prices of all Purchased Loans that are Wet Loans shall not exceed (x) 65% of the Maximum Aggregate Commitment for the last five Business Days of each March, June, September and December, and the first five Business Days of each April, July, October and January; (y) 55% of the Maximum Aggregate Commitment on any of the first five and last five Business Days of any other month; or (z) 35% of the Maximum Aggregate Commitment on any other day (the “Wet Loans Sublimit”).
2.4    Schedules.  Schedule BC to the Repurchase Agreement is amended and restated to read in its entirety as set forth on Schedule BC hereto.
Section 3.Effectiveness.  This Amendment shall become effective as of the date first above written upon the Seller’s fulfillment of the following conditions precedent:
3.1    The Administrative Agent shall have received (or be satisfied that it will receive by such deadline as the Administrative Agent shall specify) the following, all of which must be satisfactory in form and content to the Administrative Agent:
(a)this Amendment, duly executed by the Seller, the Required Buyers, and the Administrative Agent; 
(b)a closing fee in the amount of $300,000, for distribution to the Buyers in accordance with each Buyer’s Pro Rata Share of the increase in the base Maximum Aggregate Commitment; and
(c)a certificate of the General Partner’s corporate secretary or assistant secretary or other authorized officer dated as of the date hereof as to (i) the incumbency of the officers of the Seller executing this Amendment and all other Repurchase Documents executed or to be executed by or on behalf of the Seller, (ii) the authenticity of their signatures, and specimens of their signatures shall be included in such certificate or set forth on an exhibit attached to it (the Administrative Agent, the Buyers and the Custodian shall be entitled to rely on that certificate until the Seller has furnished a new certificate to the Administrative Agent), (iii) resolutions of the General Partner’s board of directors, authorizing the execution, delivery and performance by the Seller of this Amendment and all other Repurchase Documents to be delivered by the Seller pursuant to this Amendment and (iv) copies of the Seller’s (1) limited partnership agreement, (2) certificate of limited partnership issued by the state of Texas, (3) articles of incorporation certified by the Secretary of State of the State of the General Partner, and (4) bylaws and all amendments, or certification that there have been no changes to such documents since a true and correct copy thereof was delivered to the Administrative Agent and that such documents are in full force and effect.
3.2    Payment to the Administrative Agent or the Custodian, as applicable, of all fees and expenses (including the disbursements and reasonable fees of the Administrative Agent’s attorneys) of the Administrative Agent and the Buyers payable by Seller pursuant to Section 9 of the Repurchase Agreement accrued and billed for to the date of the Seller’s execution and delivery of this Agreement.

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Section 4.Miscellaneous.
4.1    Ratifications.  This Amendment shall modify and supersede all terms and provisions set forth in the Repurchase Documents that are inconsistent with this Amendment, and the terms and provisions of the Repurchase Documents are ratified and confirmed and shall continue in full force and effect.
4.2    Seller Representations and Warranties.  The Seller hereby represents and warrants that the representations and warranties set forth in Section 15 of the Repurchase Agreement are true and correct in all material respects with the same force and effect on and as of the date hereof as though made as of the date hereof.
4.3    Survival.  The representations and warranties made by the Seller in this Amendment shall survive the execution and delivery of this Amendment.
4.4    Reference to Repurchase Agreement.  Each of the Repurchase Documents, including the Repurchase Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Repurchase Agreement as amended hereby, is hereby amended so that any reference in such Repurchase Document to the Repurchase Agreement shall refer to the Repurchase Agreement as amended and modified hereby.
4.5    Applicable Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York as applicable to the Repurchase Agreement.
4.6    Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of the Seller, the Buyers, the Administrative Agent, and their respective successors and assigns, except that the Seller may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and, to the extent required by the Repurchase Agreement, the Buyers.
4.7    Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.
4.8    Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.
4.9    ENTIRE AGREEMENT.  THIS AMENDMENT AND THE OTHER REPURCHASE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signature Pages Follow]

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IN WITNESS WHEREOF the parties have caused this Amendment to be executed as of the date first set forth above.
DHI MORTGAGE COMPANY, LTD., 
as Seller and Servicer

By:  DHI Mortgage Company GP, Inc.
Its General Partner

By:   /s/ MARK C. WINTER                 
Name:   Mark C. Winter
Title:   Executive Vice President

S-1
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

U.S. BANK NATIONAL ASSOCIATION, 
as Administrative Agent and a Buyer

By:   /s/ EDWIN D. JENKINS                
Name:   Edwin D. Jenkins            
Title:   Senior Vice President

S-2
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

ASSOCIATED BANK, N.A., as a Buyer

By:   /s/ MATTHEW O'ROURKE            
Name:   Matthew O'Rourke            
Title:   Assistant Vice President

S-3
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

BRANCH BANKING & TRUST COMPANY, as a Buyer

By:   /s/ DARYL HARDY            
Name:   Daryl Hardy    
Title:   Vice President

S-4
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

COMERICA BANK, as a Buyer

By:   /s/ ART SHAFER                    
Name:   Art Shafer                
Title:   Senior Vice President

S-5
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

TIAA, FSB, formerly known as EVERBANK, as a Buyer

By:   /s/ E.R. MOORE                    
Name:   E.R. Moore                
Title:   Vice President

S-6
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

BMO HARRIS BANK N.A., as a Buyer

By:   /s/ ROBERT BOMBEN                    
Name:   Robert Bomben                
Title:   Director

S-7
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

STERLING NATIONAL BANK, as a Buyer

By:   /s/ EDDIE OTHMAN                    
Name:   Eddie Othman                
Title:   Senior Vice President

S-8
Eighth Amendment to Second Amended and Restated Master Repurchase Agreement

SCHEDULE BC TO EIGHTH AMENDMENT
TO SECOND AMENDED AND RESTATED
MASTER REPURCHASE AGREEMENT

SCHEDULE BC
TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

THE BUYERS' COMMITTED SUMS

	
				
	Buyer
	Except as provided in the below chart, 
Committed Sum for any period:

	U.S. Bank National Association
	$
	250,000,000
	

	Branch Banking & Trust Company
	$
	150,000,000
	

	Comerica Bank
	$
	150,000,000
	

	TIAA, FSB, f/k/a EverBank
	$
	150,000,000
	

	BMO Harris Bank N.A.
	$
	75,000,000
	

	Sterling National Bank
	$
	75,000,000
	

	Associated Bank, N.A.
	$
	50,000,000
	

	Maximum Aggregate Commitment
	$
	900,000,000
	

	
				
	Buyer
	Committed Sum for 
June 21, 2019 through and including July 22, 2019, 
and September 20, 2019 through and including November 5, 2019

	U.S. Bank National Association
	$
	305,555,556
	

	Branch Banking & Trust Company
	$
	183,333,333
	

	Comerica Bank
	$
	183,333,333
	

	TIAA, FSB, f/k/a EverBank
	$
	183,333,333
	

	BMO Harris Bank N.A.
	$
	91,666,667
	

	Sterling National Bank
	$
	91,666,667
	

	Associated Bank, N.A.
	$
	61,111,111
	

	Maximum Aggregate Commitment
	$
	1,100,000,000
	

Sch. BCExhibit 4.4

 

AMENDMENT 2014-1 TO THE
 HAWAIIAN ELECTRIC INDUSTRIES RETIREMENT SAVINGS PLAN

 

This amendment to the Hawaiian Electric Industries Retirement Savings Plan adds an automatic enrollment feature.  This amendment is effective January 1, 2015.

 

1.                                      Articles I and II are amended and restated in their entirety to read as attached hereto.

 

2.                                      Section 12.29 is restated in its entirety to read as follows:

 

12.29                 “Regular Salary Reduction Contribution” means a Salary Reduction Contribution that is subject to the limits in Section 2.1(b).

 

3.                                      Section 12.32 is restated in its entirety to read as follows:

 

12.32                 “Salary Reduction Contributions” means a Participant’s affirmative elective contributions and default elective contributions described in Sections 2.1 and 2.2.

 

TO RECORD the adoption of this amendment, Hawaiian Electric Industries, Inc. has executed this document November 26, 2014.

 

 

	
 
    	
HAWAIIAN ELECTRIC INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Chester A. Richardson
    
	
 
    	
Its Executive Vice President, General   Counsel, 
   Secretary & Chief Administrative Officer
    

 

 

ARTICLE I
 PARTICIPATION

 

Section 1.1                                    Eligibility to Participate

 

(a)                                 Non-bargaining Unit Employees.  A non-bargaining unit Eligible Employee shall become eligible to participate as of the date he or she first performs one Hour of Service for a Participating Employer.

 

(b)                                 Bargaining Unit Employees.  An Eligible Employee whose employment with a Participating Employer is governed by a collective bargaining agreement shall become eligible to participate as of the date he or she first performs one Hour of Service as a “regular” bargaining unit Eligible Employee.  “Regular” employment is defined by reference to the governing collective bargaining agreement.

 

Section 1.2                                    Re-employment

 

If a Participant terminates employment from the Participating Employers and later returns to employment as an Eligible Employee, the Participant shall immediately recommence active participation in the Plan.

 

Section 1.3                                    Duration of Participation

 

Once an Eligible Employee becomes a Participant, he or she shall have all rights to active participation (applicable contributions, etc.) as long as he or she receives Compensation from a Participating Employer and continues to be an Eligible Employee.  A Participant who terminates employment with the Participating Employers with a vested Account balance shall continue to be a Participant on an inactive basis until his or her entire vested Account balance is distributed in accordance with the terms of the Plan.

 

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ARTICLE II
 CONTRIBUTIONS

 

There are three types of possible contributions to the Plan.  Salary Reduction Contributions (which include Catch-up Contributions) and Rollover Contributions may be made by all Participants.  Matching Contributions are made only for Participants who are first employed by a Participating Employer after April 30, 2011, or who are deemed to be new Employees after April 30, 2011, under Section 1.2 of the HEI Retirement Plan.

 

Section 2.1                                    Salary Reduction Contributions

 

Each Participating Employer shall make Salary Reduction Contributions in accordance with this Section 2.1 (affirmative elections) and Section 2.2 (automatic enrollment).

 

(a)                                 Salary Reduction Election.  An Eligible Employee who has met the requirements for participation in Section 1.1(a) or (b), as applicable, may begin making Salary Reduction Contributions by making an affirmative salary reduction election.  A salary reduction election is an election by the Participant to forego taxable cash compensation in return for a pre-tax contribution of equal amount to the Participant’s Account in the Plan.  A Participant’s affirmative salary reduction election becomes effective as soon as practicable following its completion and submission in accordance with procedures approved by the Administrative Committee, but only with respect to amounts that are not “currently available” to the Participant at the time the election is made.  An amount is “currently available” if it has been paid to the Participant or if the Participant is able currently to receive the amount at the Participant’s discretion.

 

(b)                                 Pre-tax, Regular Salary Reduction Contributions.  A Participant may elect to make pre-tax, Regular Salary Reduction Contributions of up to 30% of the Participant’s Compensation for the period in the Plan Year during which he or she is a Participant.  In addition to this percentage limitation, a Participant’s Regular Salary Reduction Contributions are subject to the limitations in Article III of the Plan.

 

(c)                                  Catch-up Contributions.  Any Participant who will have attained age 50 before the end of the Plan Year (a “catch-up eligible Participant”) is eligible as of the first day of the Plan Year to make Catch-up Contributions in accordance with, and subject to the limitations in, Section 3.2(b) of the Plan and Section 414(v) of the Code.  Catch-up Contributions are not subject to the 30%-of-Compensation limit that applies to Regular Salary Reduction Contributions, but total Salary Reduction Contributions (Regular Salary Reduction Contributions plus Catch-up Contributions) may not exceed 75% of a Participant’s Compensation.

 

Catch-up Contributions are not subject to the limits on annual additions, are not counted in the ADP test, and are not counted in determining the minimum allocation under Section 416 of the Code (but Catch-up Contributions made in prior years are counted in determining whether the Plan is top-heavy).

 

A catch-up eligible Participant may elect to make Catch-up Contributions for the Plan Year regardless of whether his or her Regular Salary Reduction Contributions have yet reached the Plan limitation set forth in Section 2.1(b) or the Code limitations set forth in Sections 3.2 or 

 

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3.4. However, if such catch-up eligible Participant’s Regular Salary Reduction Contributions do not reach at least one those limits by the end of the Plan Year, the Catch-up Contributions shall be recharacterized as Regular Salary Reduction Contributions to the extent necessary to meet the requirements of Section 414(v) of the Code.

 

(d)                                 Amendment or Revocation of a Salary Reduction Election.  A Participant may amend or revoke a salary reduction election for any reason, such changes to take effect prospectively beginning with the first payroll period in which it is administratively practicable to effect the change.  If a Participant voluntarily terminates a salary reduction election, the Participant may resume Salary Reduction Contributions by making and submitting a new election.  A Participating Employer or the Administrative Committee may also revoke or amend a salary reduction election to prevent the Participant from exceeding one of the maximum limitations described in Article III or in the event of a conflict between the Participant’s salary reduction election and other payroll deductions authorized by the Participant or required by law.  The Administrative Committee may adopt and modify rules and procedures for salary reduction elections.  Such rules and procedures will control in the event of any conflict between the rules and procedures and this Section 2.1.

 

(e)                                  Application of Section 401(a)(17) Limit.  Section 401(a)(17) of the Code limits the amount of Compensation that may be taken into account in determining contributions for a Plan Year, and this limit is reflected in the definition of Compensation in Article XII.  The limit applies on an annual basis.  However, salary reduction elections are applied on a payroll period basis.  In accordance with Section 2.1(d), a Participant may change the salary reduction percentage in effect at any time.  Since contributions are limited by dollar amount under Section 402(g) of the Code ($18,000 for 2015), the Section 402(g) limit will apply to stop contributions before a Participant is limited by the Plan’s 30% limit on Compensation, as capped by Section 401(a)(17) of the Code ($265,000 for 2015).

 

Example:  Participant A, age 45, earns $12,000 per payroll period.  For the first twenty payroll periods in 2015, Participant A has a salary reduction election in effect to contribute 4% of Compensation ($480) to the Plan.  By the end of the twentieth payroll period, Participant A has contributed $9,600 to the Plan.  Beginning with the twenty-first payroll period, Participant A decides to maximize her Salary Reduction Contributions for the year up to the Section 402(g) limit.  Participant A increases her contributions to 15% of Compensation.  During the next five payroll periods, Participant A contributes a total of $8,400 to the Plan, reaching the 402(g) limit.  During the year, Participant A has not contributed in excess of 30% of the Section 401(a)(17) limit.

 

(f)                                   No Other Benefits Conditioned on Salary Reduction Election.  No other employee benefit, including, but not limited to, benefits under a defined benefit plan, non-elective employer contributions to a defined contribution plan (other than Matching Contributions), the availability, cost, or amount of health benefits, vacations or vacation pay, life insurance, dental 

 

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benefits, legal services plans, loans (including Plan loans), financial planning services, subsidized retirement benefits, stock options, property subject to Code Section 83, or dependent care assistance, shall be directly or indirectly conditioned upon any Participant making a salary reduction election.

 

(g)                                  Deposit of Salary Reduction Contributions.  The Participating Employers shall deposit Salary Reduction Contributions with the Trustee on the earliest date such contributions can reasonably be segregated from the Participating Employer’s general assets.

 

(h)                                 No Prefunding of Salary Reduction Contributions.  In accordance with Section 1.401(k)-1(a)(3)(iii) of the Treasury Regulations, the Participating Employers may not make Salary Reduction Contributions prior to the Participant’s salary reduction election and the Participant’s performance of service with respect to which the Salary Reduction Contributions are made.  However, this “prefunding” limitation shall not apply to contributions that are made due to bona fide administrative considerations as provided in the Treasury Regulations.

 

Section 2.2                                    Eligible Automatic Contribution Arrangement

 

(a)                                 “Covered Employees”.  There are two categories of Eligible Employees who are “covered employees,” as defined in Section 1.414(w)-1(e)(3) of the Treasury Regulations, in the eligible automatic contribution arrangement (“EACA”) established with this Plan amendment.  The first category of “covered employees” are Eligible Employees who: (i) first performed one Hour of Service with a Participating Employer after April 30, 2011 and before January 1, 2015, or who are treated as such under Section 1.2 of the HEI Retirement Plan; (ii) have never made an affirmative salary reduction election; and (iii) do not make an affirmative salary reduction election (i.e., an election to contribute any percentage of Compensation as a Salary Reduction Contribution or an election to opt-out of automatic enrollment) during the “Election Period” described in Section 2.2(b).  The second category of “covered employees” are Eligible Employees who first perform one Hour of Service with a Participating Employer after December 31, 2014, and who do not make an affirmative salary reduction election (i.e., an election to contribute any percentage of Compensation as a Salary Reduction Contribution or an election to opt-out of automatic enrollment) during the “Election Period” described in Section 2.2(b).  “Covered employees” are referred to as “EACA Participants” in this Plan.

 

(b)                                 Election Period; Automatic Enrollment Date; Default Election.  Every Eligible Employee who is eligible for the EACA shall be given a 60-day election period to opt-out of automatic enrollment or to make an affirmative salary reduction election.   The 60-day election period begins on the date the “EACA Notice,” described in Section 2.2(e), is provided to the Eligible Employee.  If, at the end of the 60-day election period, the Eligible Employee has not opted out of automatic enrollment or made an affirmative salary reduction election, the Eligible Employee shall be deemed to have elected to become an “EACA Participant” and to have made a default salary reduction election to contribute 3% of his or her Compensation as a pre-tax, Regular Salary Reduction Contribution, and the 60th day of the election period shall be the EACA Participant’s “Automatic Enrollment Date”.   The EACA Participant’s default salary reduction election shall become effective as soon as administratively practicable following the EACA Participant’s Automatic Enrollment Date.

 

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(c)                                  Termination of EACA Participant Status

 

(i)                                     General Rules.  An EACA Participant’s default salary reduction election will continue until the EACA Participant makes an affirmative election to change (increase, decrease, or stop) the default Salary Reduction Contributions, at which point the Participant will no longer be an EACA Participant.  Any change in an EACA Participant’s default salary reduction election will take effect as soon as administratively practicable after the change in accordance with Section 2.1(d) (setting forth the Plan’s normal rules for changes in salary reduction elections).  If an EACA Participant qualifies for and takes a hardship distribution, the EACA Participant will also cease to be an EACA Participant.  After the Salary Reduction Contributions have been suspended for six months, the Participant will have to make an affirmative election to recommence Salary Reduction Contributions.

 

(ii)                                  Rehired EACA Participants.  If an Eligible Employee is an EACA Participant when the Eligible Employee terminates employment with the Participating Employers and the Eligible Employee is subsequently re-employed as an Eligible Employee, the Eligible Employee will again be an EACA Participant and default pre-tax, Regular Salary Reduction Contributions shall commence immediately upon rehire.  If an Eligible Employee is not an EACA Participant when the Eligible Employee terminates employment with the Participating Employers (either because the Eligible Employee was never an EACA Participant or because the Eligible Employee’s EACA Participant status had terminated), the Eligible Employee will not be an EACA Participant if the Eligible Employee is re-employed by a Participating Employer and must make an affirmative salary reduction election to commence or re-commence participation in the Plan.

 

(d)                                 Reasonable Opportunity To Make an Affirmative Election.  An EACA Participant shall have a reasonable opportunity after receipt of the EACA Notice to opt-out of automatic enrollment or to make an affirmative salary reduction election.  The rules in Section 2.2(b) are intended to meet this requirement.

 

(e)                                  Advance Notice Requirement.  At least 30 days, but not more than 90 days, before the beginning of each Plan Year the Plan Administrator shall provide each EACA Participant with a comprehensive notice (the “EACA Notice”) of the EACA Participant’s rights and obligations under the EACA.  If an Eligible Employee becomes an EACA Participant after the 90th day before the beginning of the Plan Year and does not receive the EACA Notice for that reason, the EACA Notice will be provided no more than 90 days before the Eligible Employee becomes an EACA Participant but not later than the date the Eligible Employee becomes an EACA Participant.  The EACA Notice shall (1) describe the EACA Participant’s right to opt-out of automatic enrollment or to make an affirmative salary reduction election; (2) state that a default pre-tax, Regular Salary Reduction Contribution equal to 3% of the EACA Participant’s Compensation shall be made in the absence of an affirmative election; (3) describe how the default Salary Reduction Contributions will be invested in the absence of affirmative investment instructions from the EACA Participant; and (4) describe the EACA Participant’s right to elect a withdrawal of default contributions in accordance with Section 2.2(g).

 

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(f)                                   Default Investment.  In the absence of investment directions from an EACA Participant, the EACA Participant’s default Salary Reduction Contributions shall be invested in the qualified default investment alternative described in Section 4.3(c).

 

(g)                                  Elective Withdrawal of Default Salary Reduction Contributions

 

(i)                                     Election.  No later than 90 days after an EACA Participant’s Automatic Enrollment Date (which will occur earlier than 90 days after default Salary Reduction Contributions are first withheld from the EACA Participant’s pay), the EACA Participant may elect to withdraw all of the default Salary Reduction Contributions made to the EACA Participant’s Account, as adjusted for earnings and losses to the date of the withdrawal.  An EACA Participant’s election to withdraw default Salary Reduction Contributions shall be effective as soon as administratively practicable after the election but no later than the earlier of (1) the pay date for the second payroll period that begins after the date the election is made or (2) the first pay date that occurs at least 30 days after the election is made.

 

(ii)                                  Deemed Election To Stop Default Salary Reduction Contributions.  Unless the EACA Participant affirmatively elects otherwise, any withdrawal request under this Section 2.2(g) shall be treated as an affirmative election to stop making Salary Reduction Contributions to the Participant’s Account.  Any EACA Participant who withdraws his or her default Salary Reduction Contributions under this Section 2.2(g) shall no longer be an EACA Participant and will have to make an affirmative election to continue or recommence Salary Reduction Contributions.

 

(iii)                               No Effect on Section 402(g) Limit or ADP Test.  Any default Salary Reduction Contributions withdrawn under this Section 2.2(g) are not counted towards the dollar limitation on elective deferrals set forth in Section 402(g) of the Code and described in Section 3.2 of the Plan.  Furthermore, such withdrawn default Salary Reduction Contributions are not taken into account in performing the ADP test described in Section 3.1 of the Plan.

 

(iv)                              Effect on Matching Contributions.  Matching Contributions that would otherwise be allocated to an EACA Participant’s Account will not be allocated to the extent the EACA Participant withdraws his or her default Salary Reduction Contributions under this Section 2.2(g), and any Matching Contributions that have already been made on account of default Salary Reduction Contributions that are later withdrawn shall be forfeited.

 

(h)                                 Preemption of State Wage Laws.  Section 514(e) of ERISA preempts any state wage law (or any other state law) that would directly or indirectly prohibit an automatic contribution arrangement (i.e., the withholding of wages without the Employee’s express written consent).

 

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Section 2.3                                    Matching Contributions for Participants First Employed by a Participating Employer After April 30, 2011 (or Deemed To Be New Employees After April 30, 2011, Under Section 1.2 of the HEI Retirement Plan)

 

A Participant who is first employed by a Participating Employer after April 30, 2011, or who is deemed to be a new Employee of a Participating Employer after April 30, 2011, under Section 1.2 of the HEI Retirement Plan, shall be eligible for the Matching Contributions described in this Section 2.3.  Any Participant who was first employed by a Participating Employer prior to May 1, 2011, and who is not deemed to be a new Employee after April 30, 2011, under Section 1.2 of the HEI Retirement Plan, is not eligible for the Matching Contributions described in this Section 2.3.

 

(a)                                 Amount.  The Participating Employers shall match the Salary Reduction Contributions of their eligible Participants on the following basis: a 50% match on the first 6% of annual Compensation deferred by the Participant (i.e., maximum Matching Contribution of 3% of the Participant’s annual Compensation).  Since Section 12.8 limits the Compensation taken into account in determining contributions to Compensation earned after an Eligible Employee becomes a Participant, in a Participant’s first year of participation, Compensation earned before the Participant begins participation shall not be counted in the Participant’s annual Compensation for purposes of calculating the Participant’s Matching Contribution.

 

(b)                                 Matching Contributions on Catch-up Contributions.  Catch-up Contributions are treated as “elective deferrals” under the Code and Treasury Regulations.  Accordingly, Catch-up Contributions are eligible for Matching Contributions.  However, since Matching Contributions are made only on the first 6% of Compensation deferred, so long as the interplay of the limitations in Sections 401(a)(17) and 402(g) of the Code make it impossible for Catch-up Contributions to be within the first 6% of a Participant’s Compensation, no Matching Contributions shall be made on Catch-up Contributions.

 

(c)                                  Deposit of Matching Contributions; True-up.  The Participating Employers will pay the Matching Contributions to the Trustee no later than the due date, including extensions thereof, for filing the Company’s tax return for the taxable year with respect to which the Matching Contributions are made.  If the Participating Employers pay the Matching Contributions to the Trustee prior to the end of the year with respect to which the Matching Contributions are made, the Participating Employers shall true-up the Matching Contributions at or after the end of the year to make sure that each Participant received a Matching Contribution equal to 50% of the first 6% of annual Compensation deferred by the Participant for the year.

 

(d)                                 Application of Section 401(a)(17) Limit.  The dollar limit in effect under Section 401(a)(17) of the Code shall be applied on an as-earned basis.  This means that once a Participant has earned Compensation equal to the dollar limit under Section 401(a)(17) for the Plan Year, no further Matching Contributions shall be made for that Participant for the Plan Year.

 

Section 2.4                                    Return of Contributions

 

(a)                                 Mistake of Fact.  If a contribution is made because of a mistake of fact, the contribution may be returned within one year after the contribution is made.  The amount that 

 

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may be returned is the amount contributed over the amount that would have been contributed had no mistake of fact occurred.  Earnings on mistaken Matching Contributions may not be returned, but losses attributable thereto reduce the amount returned.  Mistaken Regular Salary Reduction and Catch-up Contributions shall be adjusted for earnings or losses.

 

(b)                                 Loss of Deduction.  If a Matching Contribution is not deductible under the Code, such contribution (to the extent the deduction is disallowed) may be returned to the Participating Employer within one year after the disallowance of the deduction.  Earnings on nondeductible contributions may not be returned, but losses attributable thereto reduce the amount returned.

 

Section 2.5                                    Rollover Contributions

 

(a)                                 Direct Rollovers.  A Participant or an Eligible Employee (whether or not a Participant) may make a “direct rollover” to the Plan of an “eligible rollover distribution” from: (i) a retirement plan qualified under Section 401(a) of the Code; (ii) an annuity plan described in Section 403(a) of the Code; (iii) an annuity contract described in section 403(b) of the Code; (iv) an individual retirement account or individual retirement annuity described in Section 408 of the Code; or (v) an eligible Section 457(b) deferred compensation plan established and maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.

 

A “direct rollover” is a direct payment of an eligible rollover distribution by any reasonable means from the trustee, custodian, or annuity provider of the former plan or arrangement to the Trustee of this Plan.  For purposes of this Section 2.5, an “eligible rollover distribution” means a payment of cash, the full amount of which is not one of a series of periodic payments, is not a payment required to be distributed to the Participant under Section 401(a)(9) of the Code, and is not a hardship distribution from another plan.

 

The Administrative Committee may adopt reasonable standards and procedures for determining whether a proposed rollover is permissible.

 

(b)                                 Direct Rollovers of After-Tax Amounts.  The Plan may accept direct rollovers of after-tax amounts (other than Roth amounts) from retirement plans qualified under Section 401(a) of the Code or from annuity contracts described in Section 403(b) of the Code.  The Trustee shall separately account for the after-tax portion of any direct rollover under this Section 2.5(c).

 

(c)                                  Traditional Rollovers.  The Administrative Committee may consider traditional rollovers by Eligible Employees.  To protect the tax-qualified status of the Plan, the Administrative Committee may ask the Eligible Employee to provide an opinion of counsel or other evidence to establish that the requirements for a traditional rollover have been satisfied.

 

Section 2.6                                    USERRA Rights of Participants Returning from Qualified Military Service

 

If a Participant returns to employment with a Participating Employer following a leave of absence for Qualified Military Service, the Participant shall be eligible to have his or her military leave of absence counted as employment with the Participating Employer for purposes of Salary Reduction Contributions and Matching Contributions, as applicable.  The Administrative 

 

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Committee has established written procedures to meet the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”).  These procedures establish rules permitting reemployed veterans to make up Salary Reduction Contributions upon their return to employment with a Participating Employer and granting makeup Matching Contributions for returning Participants who would have been entitled to Matching Contributions during the military leave of absence.  The USERRA procedures are incorporated herein by this reference and may be amended at any time without notice and without further amendment to the Plan.

 

Section 2.7                                    Qualified Nonelective Contributions

 

The Participating Employers may make qualified nonelective contributions if necessary to correct a qualification failure in accordance with the Employee Plans Compliance Resolution System.  A “qualified nonelective contribution” is an employer contribution that is 100% vested when made, that the Participant may not elect to receive in cash, and that is distributable only in accordance with the distribution restrictions applicable to Salary Reduction Contributions, except that qualified nonelective contributions may not be distributed on account of hardship.

 

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