Exhibit 10(l)
BANKNORTH GROUP, INC. 401(K) PLAN
AS AMENDED AND RESTATED GENERALLY EFFECTIVE JANUARY 1, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS............................................................................1
ARTICLE II. PARTICIPATION.........................................................................13
2.01 ELIGIBILITY...........................................................................13
2.02 TERMINATION OF PARTICIPATION..........................................................13
2.03 SPECIAL RULE FOR INSIDERS.............................................................13
2.04 SPECIAL PARTICIPATION RULE............................................................14
ARTICLE III. PARTICIPANT CONTRIBUTIONS.............................................................14
3.01 SALARY DEFERRALS......................................................................14
3.02 ANNUAL LIMITATION ON SALARY DEFERRALS.................................................15
3.03 TIME AND FORM OF SALARY DEFERRAL CONTRIBUTIONS........................................15
3.04 LIMITATIONS ON ACTUAL DEFERRAL PERCENTAGE.............................................15
3.05 RESTRICTIONS AND ADJUSTMENTS..........................................................17
3.06 ROLLOVER CONTRIBUTIONS................................................................18
ARTICLE IV. COMPANY CONTRIBUTIONS.................................................................19
4.01 COMPANY CONTRIBUTIONS.................................................................19
4.02 TIME AND FORM OF COMPANY CONTRIBUTIONS................................................19
4.03 SPECIAL RULES FOR MATCHING CONTRIBUTIONS..............................................20
4.04 RETURN OF CONTRIBUTIONS TO THE COMPANY................................................22
4.05 MAXIMUM CONTRIBUTIONS.................................................................22
ARTICLE V. ALLOCATIONS...........................................................................22
5.01 SUSPENSE ACCOUNTS.....................................................................22
5.02 ALLOCATION OF CONTRIBUTIONS...........................................................23
5.03 ALLOCATION OF NET INCOME OR LOSS......................................................23
5.04 LIMITATION ON ALLOCATIONS.............................................................24
ARTICLE VI. INVESTMENT OF CONTRIBUTIONS IN GENERAL................................................26
6.01 INVESTMENT FUNDS......................................................................26
6.02 INVESTMENT OF CONTRIBUTIONS...........................................................27
6.03 VALUATION OF INVESTMENT FUNDS.........................................................27
ARTICLE VII. EMPLOYEE STOCK OWNERSHIP; ACQUISITION LOANS...........................................28
7.01 ESOP ASSETS...........................................................................28
7.02 ACQUISITION LOANS.....................................................................28
7.03 PURCHASE OF STOCK.....................................................................29
7.04 CUSTODY AND VOTING OF STOCK...........................................................30
7.05 DIVIDENDS ON STOCK....................................................................30
7.06 FORFEITURES OF STOCK..................................................................31
7.07 STOCK SPLITS AND OTHER CAPITAL REORGANIZATIONS........................................31
7.08 TENDER OF STOCK.......................................................................31
7.09 SPECIAL RESTRICTIONS ON INSIDERS......................................................32
7.10 OPTION TO REQUIRE EMPLOYER TO PURCHASE STOCK..........................................32
7.11 NO OTHER RIGHTS TO PUT OR CALL STOCK..................................................33
ARTICLE VIII. WITHDRAWALS AND LOANS.................................................................34
8.01 IN-SERVICE WITHDRAWALS................................................................34
8.02 HARDSHIP WITHDRAWALS..................................................................34
8.03 LOANS.................................................................................35
ARTICLE IX. VESTING...............................................................................38
9.01 ACTIVE PARTICIPANTS ON AND AFTER JANUARY 1, 2002......................................38
9.02 TERMINATED PARTICIPANTS...............................................................38
9.03 FORFEITURES...........................................................................39
ARTICLE X. BENEFITS AND DISTRIBUTIONS............................................................40
10.01 NORMAL RETIREMENT BENEFIT.............................................................40
10.02 DISABILITY BENEFIT....................................................................40
10.03 BENEFIT ON TERMINATION OF EMPLOYMENT..................................................40
10.04 DEATH BENEFIT.........................................................................40
10.05 DISTRIBUTION OF BENEFITS TO A PARTICIPANT.............................................40
10.06 DISTRIBUTION OF BENEFITS UPON DEATH...................................................43
10.07 COMMENCEMENT OF BENEFITS..............................................................44
10.08 PAYMENT UPON INCAPACITY...............................................................44
10.09 PAYMENT UNDER QUALIFIED DOMESTIC RELATIONS ORDER......................................44
10.10 DIRECT ROLLOVERS......................................................................44
10.11 ANNUITIES.............................................................................46
10.12 DISTRIBUTIONS TO QUALIFIED PARTICIPANTS...............................................47
ARTICLE XI. ADMINISTRATION OF THE PLAN............................................................48
11.01 PLAN ADMINISTRATOR....................................................................48
11.02 POWERS AND DUTIES.....................................................................48
11.03 DELEGATION OF MINISTERIAL DUTIES......................................................49
11.04 INVESTMENT MANAGER....................................................................49
11.05 BENEFIT CLAIM PROCEDURE...............................................................50
11.06 CONCLUSIVENESS OF RECORDS.............................................................51
11.07 CONCLUSIVENESS OF ACTIONS.............................................................51
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ARTICLE XII. ADMINISTRATION OF THE FUND............................................................51
12.01 PAYMENT OF EXPENSES...................................................................51
12.02 TRUST FUND PROPERTY...................................................................52
12.03 DISBURSEMENTS AND DISTRIBUTIONS.......................................................52
12.04 TRUST ACCOUNTING......................................................................52
ARTICLE XIII. TRUSTEES..............................................................................52
13.01 APPOINTMENT AND SUCCESSION............................................................53
13.02 RESIGNATION AND REMOVAL...............................................................53
13.03 TRUSTEE POWERS........................................................................53
ARTICLE XIV. AMENDMENT AND TERMINATION.............................................................53
14.01 AMENDMENTS............................................................................53
14.02 DISCONTINUANCE OF CONTRIBUTIONS.......................................................54
14.03 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS...........................................55
14.04 MANNER OF AMENDMENT OR TERMINATION....................................................55
ARTICLE XV. PARTICIPATING EMPLOYERS...............................................................55
15.01 ADOPTION BY PARTICIPATING EMPLOYERS...................................................55
15.02 SINGLE PLAN...........................................................................55
ARTICLE XVI. PREDECESSOR PLANS AND ACCOUNTS........................................................56
16.01 ARTICLE CONTROLS......................................................................56
16.02 PREDECESSOR PLANS.....................................................................56
16.03 MERGER PROVISIONS.....................................................................56
16.04 PREDECESSOR PLAN ACCOUNTS.............................................................56
16.05 DISTRIBUTION OF PREDECESSOR PLAN ACCOUNTS.............................................56
16.06 PREDECESSOR PLAN ACCOUNTS SUBJECT TO SURVIVOR ANNUITY REQUIREMENTS....................57
16.07 PREDECESSOR PLAN ESOP ACCOUNTS........................................................58
ARTICLE XVII. TOP HEAVY PROVISIONS..................................................................58
17.01 ARTICLE CONTROLS......................................................................58
17.02 DEFINITIONS...........................................................................58
17.03 TOP-HEAVY STATUS......................................................................59
17.04 TERMINATION OF TOP-HEAVY STATUS.......................................................60
17.05 EFFECT OF ARTICLE.....................................................................61
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ARTICLE XVIII. MISCELLANEOUS.........................................................................61
18.01 NOT CONTRACT OF EMPLOYMENT............................................................61
18.02 NON-ASSIGNABILITY OF THE RIGHT TO RECEIVE BENEFITS....................................61
18.03 PAYMENTS SOLELY FROM TRUST FUND.......................................................62
18.04 NO BENEFITS TO THE COMPANY............................................................62
18.05 SEVERABILITY..........................................................................62
18.06 GOVERNING LAW; INTERPRETATION.........................................................62
18.07 HEADINGS OF SECTIONS..................................................................62
18.08 EFFECT OF MISTAKE.....................................................................62
18.09 BONDING...............................................................................62
18.10 USERRA REQUIREMENTS...................................................................63
18.11 EPCRS, ETC. ADJUSTMENTS...............................................................63
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BANKNORTH GROUP, INC. 401(K) PLAN
The Banknorth Group, Inc. 401(k) Plan (the "Plan") set forth herein is
effective generally January 1, 2001 ("Effective Date"). The Plan is a
continuation of the Banknorth Group, Inc. Thrift Incentive Plan, which was last
amended and restated effective generally January 1, 1996, and the Banknorth
Group, Inc. Profit Sharing and Employee Stock Ownership Plan, which was last
amended and restated effective generally January 1, 1997, and reflects the
merger of such plans as of the Effective Date. The provisions of the Plan shall
apply to eligible employees who terminate employment with Banknorth Group, Inc.
and all affiliated companies on or after January 1, 2001, except as is otherwise
indicated herein or may be required in accordance with applicable law.
The Plan is intended to qualify as a profit-sharing plan with a cash or
deferred arrangement under Section 401(a) and (k) of the Internal Revenue Code
of 1986, as amended ("Code"), as a stock bonus plan under Section 401(a) of the
Code, and as an employee stock ownership plan under Section 4975(e)(7) of the
Code. The related Trust is intended to be exempt from federal income tax under
Section 501(a) of the Code. The Plan and Trust are further intended to comply
with all applicable requirements of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The Plan and trust agreement shall be construed,
wherever possible, so as to maintain such qualified and tax-exempt status and to
satisfy the applicable requirements of ERISA.
ARTICLE I. DEFINITIONS
When the following words and phrases appear in the Plan, they shall have
the respective meanings set forth below, unless their context clearly indicates
to the contrary. Additional words and phrases are defined in the text of the
Plan. Words in the masculine gender shall be construed to include the feminine
gender, and words in the singular shall be construed to included the plural and
vice versa, unless the context clearly indicates otherwise.
1.01 "Acquisition Loan" means a loan (or other extension of credit) made to
the Trustee for the purpose of financing the acquisition of Stock or repaying a
prior Acquisition Loan pursuant to Article VII, which loan may constitute an
extension of credit to the Trustee and the Trust Fund from a Party in Interest
and is intended to fall within the scope of the exemptions set forth in ERISA
Section 408(b)(3) and Code Section 4975(d)(3).
1.02 "Actual Deferral Percentage" means, for any Plan Year, the average of
the ratios, calculated separately for each Participant in a specified group of
Participants, of (a) the amount of the Salary Deferrals actually paid to the
Trust on behalf of each such Participant for such Plan Year, over (b) the total
Section 415 Compensation paid to each such Participant during such Plan Year.
Prior to computing such average, the ratio of each Participant shall be
expressed as a percentage that is rounded to the nearest one hundredth of one
percent (0.01%). If a Participant does not make any Salary Deferrals for the
Plan Year, such Participant's ratio for such year shall be zero. At the election
of the Plan Administrator, Matching Contributions and Qualified Nonelective
Contributions may be treated as Salary Deferrals in accordance with the
provisions of Treas. Reg. Sections 1.401(k)-l(b)(5), which is incorporated by
reference herein. Notwithstanding the foregoing, any Salary Deferrals or
Qualified Nonelective Contributions that are taken into
account in determining the Average Contribution Percentage for a Plan Year shall
be disregarded in determining the Actual Deferral Percentage for such year.
1.03 "Affiliate" means an organization that is a member of a "controlled
group" (as defined in Section 414(b) or (c) of the Code) or an "affiliated
service group" (as defined in Section 414(m) of the Code) with Banknorth Group,
Inc., and any other entity required to be aggregated with Banknorth Group, Inc.
under regulations promulgated under Section 414(o) of the Code; provided,
however, that for purposes of Section 5.04, the definitions prescribed by
Section 414(b) and (c) of the Code are to be modified as provided by Code
Section 415(h).
1.04 "Aggregate Account" means the account established and maintained by
the Trustee for each Participant that reflects the Participant's share of the
Trust Fund and separately reflects the balance of the following sub-accounts:
Salary Deferral Contribution Account, Matching Contribution Account, ESOP
Account, Discretionary Contribution Account, Rollover Contribution Account, and
Predecessor Plan Account(s) (to the extent not included in the foregoing).
1.05 "Annuity Starting Date" means the first day of the first period for
which an amount is paid as a benefit under the Plan.
1.06 "Average Contribution Percentage" means, for any Plan Year, the
average of the ratios, calculated separately for each Participant in a specified
group of Participants, of (a) the amount of the Matching Contributions paid on
behalf of each such Participant for such Plan Year, over (b) the total Section
415 Compensation paid to each such Participant during such Plan Year. Prior to
computing such average, the ratio of each Participant shall be expressed as a
percentage that is rounded to the nearest one hundredth of one percent (0.01%).
At the election of the Plan Administrator, Salary Deferrals and Discretionary
Contributions shall be treated as Matching Contributions in accordance with the
provisions of Treas. Reg. sections 1.401(m)-l(b)(5), which is incorporated by
reference herein. Notwithstanding the foregoing, any Matching Contributions or
Discretionary Contributions that are taken into account in determining the
Actual Deferral Percentage for a Plan Year shall be disregarded in determining
the Average Contribution Percentage for such year.
1.07 "Beneficiary" means the person, trust, estate or other entity last
designated by a Participant to receive benefits which may be payable on account
of the death of the Participant; provided, however, that in the case of a
married Participant, the Participant's spouse shall be the Beneficiary unless
the Participant's spouse waives his or her rights as the Beneficiary, the
Participant is legally separated or has been abandoned and the Participant has a
court order to such effect, or the Participant's current spouse cannot be
located. A Participant may at any time during his or her lifetime change or
revoke a Beneficiary designation, provided that such action may not be taken
without subsequent spousal consent unless the original consent expressly permits
designation by the Participant without any requirement of further spousal
consent. Any consent by the Participant's spouse to waive rights to death
benefits must be in writing, must acknowledge the effect of such waiver and must
be witnessed by a notary public. The Participant's spouse may not revoke consent
to a specific waiver of a joint and survivor form of benefit.
2
1.08 "Board" means the Board of Directors of Banknorth Group, Inc. (or,
before May 10, 2000, Peoples Heritage Financial Group, Inc.), as constituted
from time to time.
1.09 "Break in Service" means a vesting computation period beginning on or
after January 1, 1976, during which an Employee is credited with no more than
five hundred (500) Hours of Service.
(a) In determining whether an Employee has completed at least five hundred
(500) Hours of Service during a vesting computation period, an individual who is
absent from work for maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to such individual but
for such absence, or in any case in which such hours cannot be determined, eight
(8) Hours of Service per day of such absence. An absence from work for maternity
or paternity reasons shall mean an absence by reason of the individual's
pregnancy, the birth of the individual's child, a child's placement with the
individual in connection with the individual's adoption of such child, or the
individual's caring for such child for a period beginning immediately following
such birth or placement. Hours of Service hereunder shall be credited to the
computation period in which the absence begins if such crediting is necessary to
prevent a Break in Service in that period, or in all other cases, in the
following computation period.
(b) Notwithstanding anything to the contrary in this Section, employment
with the Company and its Affiliates shall not be deemed to have been interrupted
by a Break in Service solely by reason of a leave of absence granted by the
Company or an Affiliate on a uniform and nondiscriminatory basis for sickness,
military service, accident or other cause, provided that an Employee granted a
leave of absence who fails to return to active employment at or before the
expiration of such leave (other than on account of death, disability or
retirement) shall, for purposes of this Plan, be deemed to have terminated
employment as of the beginning of such Employee's leave of absence.
1.10 "Calendar Quarter" means, for any Plan Year, the three-month period
beginning on January 1, April 1, July 1, and October 1.
1.11 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.12 "Company" means Banknorth Group, Inc., known before May 10, 2000, as
Peoples Heritage Financial Group, Inc.
1.13 "Company Contributions" means Fixed Contributions, Discretionary
Contributions and Qualified Nonelective Contributions.
1.14 "Direct Rollover" means the direct transfer of all or a portion of an
Eligible Rollover Distribution from the Plan, as elected by an eligible
distributee, to an eligible retirement plan in accordance with the requirements
under Section 401(a)(31) of the Code and Section 10.10.
1.15 "Disability" means that an injury or illness prevents a Participant
from engaging in any substantial gainful activity by reason of an illness or
injury that can be expected to result in death, or which has lasted (or can be
expected to last) a continuous period of not less than
3
twelve (12) months. Notwithstanding the foregoing, a Participant shall be deemed
disabled upon becoming eligible to receive disability benefits under the terms
of a long-term disability plan maintained by Company or an Affiliate.
1.16 "Discretionary Contributions" means contributions made to the Plan by
the Company under Section 4.01(b).
1.17 "Discretionary Contribution Account" means a bookkeeping entry
maintained by the Plan Administrator for each Participant that records the
Discretionary Contributions allocated to the Participant under Article IV,
adjustments for allocations of income or loss, distributions and all other
information affecting the value of such account.
1.18 "Earnings" means the total compensation paid by the Company to the
Employee for services rendered while a Participant that constitutes wages as
defined in Section 3401(a) of the Code and all other payments made by the
Company to an Employee for services rendered while a Participant for which the
Company is required to furnish the Employee a written statement under Sections
6041(d), 6051(a)(3) and 6052 of the Code without regard to any rules under
Section 3401(a) of the Code that limit the remuneration included in wages based
on the nature or location of the employment or service performed.
Notwithstanding the forgoing to the contrary, Earnings shall include (a)
effective January 1, 1998, elective contributions made by the Company on behalf
of an Employee that are not includable in income under Section 125, Section
402(e)(3), or Section 402(h) of the Code; and (b) effective January 1, 2001,
elective amounts that are not includable in the gross income of the Employee by
reason of Code Section 132(f). In all cases, Earnings shall be reduced by
reimbursements or other expense allowances, fringe benefits (cash and non-cash),
moving expenses, deferred compensation and welfare benefits.
Notwithstanding the foregoing to the contrary, effective January 1, 1994,
the annual Earnings of any Employee in excess of one hundred fifty thousand
dollars ($150,000) (or such higher amount as may be prescribed by statute or
applicable guidance) shall not be taken into account under the Plan. In the
event Earnings are determined based on a period of time which contains fewer
than twelve (12) calendar months, the annual Earnings limit shall be an amount
equal to the annual Earnings limit for the calendar year in which the period
begins multiplied by a fraction, the numerator of which is the number of full
calendar months and the denominator of which is twelve (12).
For purposes of the annual Earnings limit for any Plan Year beginning
before January 1, 1997, any Earnings paid to an Employee who is the spouse or a
lineal descendant (who has not attained age nineteen (19) by the close of the
Plan Year) of an Employee who is a 5-percent owner (within the meaning of Code
Section 416(i)(1)) or one of the ten (10) highly compensated employees (within
the meaning of Code Section 414(q) as in effect for such year) paid the highest
Section 415 Compensation for the Plan Year shall be treated as paid to or on
behalf of such 5-percent owner or highly compensated employee. If the annual
Earnings limit is exceeded as a result of the application of the preceding
sentence, then the limit shall be prorated among the affected Employees'
Earnings as determined prior to the application of the annual Earnings limit.
1.19 "Effective Date" means January 1, 2001, as to this amendment and
restatement of the Plan, except as otherwise specifically provided herein or
required by applicable law.
4
1.20 "Eligible Employee" means each Employee of a Participating Employer.
1.21 "Eligible Rollover Distribution" means any distribution to a
Participant or Beneficiary from the Plan in the amount of two hundred dollars
($200) or more, or any distribution to an Employee of all or any portion of his
or her benefit from another qualified trust, but excluding the following:
(a) a distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for a specified period of ten
(10) years or longer, for the distributee's life expectancy (or the joint life
expectancy of the distributee and his or her designated Beneficiary), or for the
distributee's life (or the joint lives of the distributee and his or her
designated Beneficiary);
(b) a required distribution pursuant to Section 401(a)(9) of the Code;
(c) a return of Salary Deferrals pursuant to Section 5.04;
(d) a corrective distribution pursuant to Section 3.02, 3.04, or 4.03;
(e) the portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized appreciation
described in Section 402(e)(4) of the Code);
(f) a loan pursuant to Section 8.03 that is treated as a deemed
distribution pursuant to Section 72(p) of the Code;
(g) effective for distributions made after December 31, 1998, a hardship
withdrawal pursuant to Section 8.02;
(h) any similar item designated by the Commissioner of Internal Revenue as
set forth in a Treasury regulation, revenue ruling, notice, or other document of
general applicability.
1.22 "Employee" means any individual regularly employed, whether on a
full-time or part-time basis, by the Company or any Affiliate, excluding the
following: (a) any person serving solely as a director of the Company or any
Affiliate, (b) any person who is an independent contractor for whom neither the
Company nor any Affiliate is required to make FICA contributions, and (c) any
person who is a "leased employee" of the Company or an Affiliate within the
meaning of Section 414(n)(2) of the Code. The determination whether an
individual is a director or independent contractor under clauses (a) and (b)
shall be based upon the classification by the Employer (without regard to the
classification of such individual by a third party).
1.23 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.24 "ESOP Account" means the bookkeeping entry maintained by the Plan
Administrator for each Participant that records the Participant's interest in
the Trust Fund attributable to the Separate ESOP for Plan Years ending before
the Effective Date and to
5
allocations of Stock or cash on and after the Effective Date resulting from
payments of principal and interest on any Acquisition Loan under Article VII,
plus adjustments for allocations of income or loss, distributions and all other
information affecting the value of such account. Each Participant's ESOP Account
shall be divided into sub-accounts reflecting the part of the ESOP Account
consisting of Stock at any date of determination and the part of the ESOP
Account consisting of investments other than Stock at any date of determination.
1.25 "Excess Aggregate Contributions" means, for any Plan Year, the excess
of (a) the aggregate amount of contributions actually taken into account in
computing the Average Contribution Percentage of the group of Participants who
are Highly Compensated Employees, over (b) the maximum amount of such
contributions permitted under Section 4.03.
1.26 "Excess Salary Deferrals" means, for any Plan Year, the excess of (a)
the aggregate amount of Salary Deferrals actually taken into account in
computing the Actual Deferral Percentage of the group of Participants who are
Highly Compensated Employees, over (b) the maximum amount of such deferrals
permitted under Section 3.04.
1.27 "Fair Market Value" means, with respect to shares of Stock, the sale
price at the time in question of such shares on the principal United States
securities exchange registered under the Securities Exchange of 1934, as
amended, on which such Stock is listed or, if such Stock is not listed on any
such exchange, the sale price with respect to a share of such Stock on the
NASDAQ National Market System or any system then in use; or if no quotations are
available, the Fair Market Value at the time in question of a share of Stock
shall be determined by independent appraisal in compliance with applicable
provisions of ERISA.
1.28 "Financed Shares" means shares of Stock acquired by the Trust Fund
with the proceeds of an Acquisition Loan, whether or not pledged as collateral
to secure the repayment of that Acquisition Loan.
1.29 "Fixed Contributions" means contributions made to the Plan by the
Company under Section 4.01(a).
1.30 "Highly Compensated Employee" means effective January 1, 1997 (and, on
and after such date, for purposes of determining whether an employee was a
Highly Compensated Employee for the Plan Year beginning January 1, 1996), any
employee of the Company or any Affiliate who (a) at any time during the Plan
Year or the preceding Plan Year is a 5-percent owner (as defined in Section
416(i)(1) of the Code), or (b) for the preceding Plan Year received Section 415
Compensation from the Company or any Affiliate in excess of eighty thousand
dollars ($80,000) (or such higher amount as the Secretary of the Treasury may
prescribe) and, if the Company elects, was in the group consisting of the top
twenty percent (20%) of the employees of the Company and all Affiliates when
ranked on the basis of such compensation paid during the Plan Year. A former
employee of the Company or an Affiliate shall be treated as a Highly Compensated
Employee if that employee was a Highly Compensated Employee when he or she
separated from service or at any time after attaining age fifty-five (55). The
determination of who is a Highly Compensated Employee, including the number and
identity of employees in the group consisting of the top twenty percent (20%) of
employees described
6
above, shall be made in accordance with Section 414(q) of the Code and the
regulations thereunder.
1.31 "Hour of Service" means:
(a) each hour during which an Employee is directly or indirectly paid, or
entitled to payment, for the performance of duties,
(b) each hour during which an Employee is directly or indirectly paid, or
entitled to payment, on account of a period of time during which no duties are
performed due to vacation, holiday, illness, incapacity (including disability,
pregnancy and any other similar condition which prevents an employee from
performing duties), layoff, jury duty, military duty or leave of absence, and
(c) each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Company or an Affiliate and for which credit
is not otherwise counted.
Notwithstanding the foregoing, no Hours of Service shall be recognized for
any payment made due to severance of employment or in compliance with worker's
compensation, unemployment compensation or disability insurance laws, or any
payments made solely to reimburse an Employee for medical or medically-related
expenses.
(d) In the case of a payment described in Paragraph (b) above, during which
no duties are performed, the number of Hours of Service counted shall be
determined as follows:
(i) If the payment for a period in which no duties are performed is
calculated on the basis of a unit of time, the number of Hours of Service
counted for such period shall be the number of hours regularly scheduled
for performance of duties during such period.
(ii) If the payment for a period in which no duties are performed is
not calculated on the basis of a unit of time, the number of hours counted
for such period shall be determined by dividing the total of such payments
by the Employee's most recent hourly rate of compensation as determined
under the provisions of Department of Labor Regulation Section
2530.200b-2(b)(2)(ii), but shall not exceed the number of hours scheduled
for performance of duties during such period.
(e) Hours of service shall be credited to the computation period determined
under the provisions of paragraph (c) of Department of Labor Regulation Section
2530.200b-2, which is hereby incorporated by reference into this Plan.
(f) Solely for determining whether a Break in Service has occurred, an
Employee who is absent from employment for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise have been credited
but for such absence, or in any case in which such hours cannot be determined,
eight (8) Hours of Service per day of such absence; provided, however, that the
credit given under this Paragraph (d) for any such reason shall not exceed five
hundred one (501) hours. For purposes of this Paragraph (f), absence for
maternity
7
or paternity reasons hereunder shall mean the Employee's absence on account of
pregnancy of the Employee, the birth of a child of the Employee, the placement
of a child with the Employee in connection with the adoption of such child by
such Employee, or for purposes of caring for such child for a period immediately
following such birth or placement. The Hours of Service to be credited under
this Paragraph (d) shall be credited in the Plan Year in which the absence
begins if the crediting is necessary to prevent a Break in Service in that
period, or in all other cases, in the following Plan Year.
(g) Nothing in this Plan shall be construed to deny any employee credit for
an hour of service if such credit is otherwise required by federal law.
1.32 "Insider" means a Participant who is subject to the provisions of
Section 16 of the Securities and Exchange Act of 1934 with respect to
transactions involving shares of Stock.
1.33 "Matching Contributions" means Fixed Contributions made to the Plan by
the Company under Section 4.01(a) for the purpose of matching Salary Deferrals
in cash or stock at the rate specified in such subsection.
1.34 "Matching Contribution Account" means a bookkeeping entry maintained
by the Plan Administrator for each Participant that records the Matching
Contributions allocated to the Participant under Article V, adjustments for
allocations of income or loss, distributions and all other information affecting
the value of such account.
1.35 "Normal Retirement Age" means the first day of the month coincident
with or next following the date the Participant attains age sixty-five (65).
1.36 "Participant" means any Eligible Employee who has met the requirements
of Article II and is participating in the Plan, or who is a former Eligible
Employee who has not received a distribution of his or her entire Vested
Interest. Notwithstanding the above, an Eligible Employee who would be a
Participant but for the failure to make Salary Deferrals shall be treated as a
Participant for purposes of Sections 3.04 and 4.03.
1.37 "Participating Employer" means the Company and any Affiliate that
adopts this Plan in accordance with the provisions of Article XV.
1.38 "Participation Agreement" means an election by the Participant that
(a) authorizes the Company to withhold a portion of such Participant's current
Earnings as a Salary Deferral under Section 3.01, (b) specifies the investment
funds under Article V in which the Participant's allocable share of the Trust
Fund shall be invested, and (c) designates the Beneficiary or Beneficiaries to
receive the death benefits provided under Article X, or any permitted
modification thereof. A Participation Agreement shall be made by such written,
electronic or telephonic means and at such time as the Plan Administrator shall
specify.
1.39 "Plan" means the Banknorth Group, Inc. 401(k) Plan, as set forth
herein and as it may be amended from time to time.
1.40 "Plan Administrator" means a committee of not less than four (4)
individuals appointed by the Board.
8
1.41 "Plan Affiliation Date" means the date on which a Predecessor Plan was
merged into or consolidated with the Plan. The Plan Affiliation Date for each
Predecessor Plan shall be separately set forth in Appendix A attached to the
Plan and made a part hereof.
1.42 "Plan Year" means the calendar year.
1.43 "Predecessor Plan" means each plan listed in Appendix A attached to
the Plan and made a part hereof. Any defined contribution plan, maintained by a
corporation or other organization that becomes a Participating Employer after
the Effective Date, or of which some or all of the business and assets are
acquired by, merged with or consolidated with the Company or an Affiliate after
the Effective Date, shall be a Predecessor Plan if the Board of Directors
authorizes such plan to be merged with this Plan.
1.44 "Predecessor Plan Account" means the aggregate value of a Predecessor
Plan Participant's interest in his or her account or accounts under a
Predecessor Plan, determined as of the Plan Affiliation Date.
1.45 "Predecessor Plan Participant" means an individual who was a
participant in a Predecessor Plan on the day immediately preceding such plan's
Plan Affiliation Date.
1.46 "Qualified Domestic Relations Order" means any judgment, decree, or
order (including approval of a property settlement agreement) relating to the
provision of child support, alimony payment, or marital property rights to a
spouse, former spouse, child, or other dependent of a Participant which (a) is
made pursuant to a State domestic relations law (including a community property
law), (b) creates or recognizes the existence of an alternate payee's right to,
or assigns to an alternate payee the right to, receive all or a portion of the
benefits or funds payable with respect to a Participant under the Plan, and (c)
satisfies the requirements of Section 414(p)(2) and (3) of the Code.
1.47 "Qualified Nonelective Contributions" means a contribution, other than
a Salary Deferral Contribution, Fixed Contribution or Discretionary
Contribution, made to the Plan under Section 4.01(c) which (a) is treated as a
Salary Deferral Contribution, (b) is nonforfeitable when made, (c) is
distributable only in accordance with the provisions of Article X that apply to
Salary Deferral Contributions, and (d) satisfies the requirements of Section
401(a)(4) of the Code.
1.48 "Rollover Contribution Account" means a bookkeeping entry maintained
by the Plan Administrator for each Participant who makes a rollover contribution
in accordance with Section 3.06, in which shall be recorded the amount of his or
her rollover contributions, adjustments for allocations of income or loss,
distributions and all other information affecting the value of such account.
1.49 "Salary Deferrals" means amounts that a Participant elects to defer by
payroll withholding from current Earnings under a Participation Agreement, which
amounts are contributed to the Plan by the Company and allocated to such
Participant's Salary Deferral Contribution Account as described in Section 3.01.
1.50 "Salary Deferral Contribution Account" means a bookkeeping entry
maintained by the Plan Administrator for each Participant who has elected to
make Salary Deferrals in
9
which shall be recorded the Salary Deferrals and Qualified Nonelective
Contributions to be allocated on the Participant's behalf under Articles III and
IV, adjustments for allocations of income or loss, distributions and all other
information affecting the value of such account.
1.51 "Section 415 Compensation" means, with respect to a Plan Year, the
total compensation paid by the Company to an Employee for services rendered
while an Employee that constitutes wages as defined in Section 3401(a) of the
Code and all other payments by the Company to an Employee for services rendered
while an Employee for which the Company is required to furnish the Employee a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code
without regard to any rules under Section 3401(a) of the Code that limit the
remuneration included in wages based on the nature or location of the employment
or services performed.
(a) For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of Section 5.04, Section 415 Compensation for a
Limitation Year shall mean the compensation actually paid or includable in gross
income during such Limitation Year. Notwithstanding the preceding sentence,
Section 415 Compensation with respect to a Participant who is permanently and
totally disabled (within the meaning of Section 22(e)(3) of the Code) shall mean
the compensation such Participant would have received for the Limitation Year if
he or she had been paid at the rate of earnings paid immediately before becoming
permanently and totally disabled; provided such imputed earnings may be taken
into account only if the Participant is not a Highly Compensated Employee and
contributions made on behalf of such Participant are not forfeitable when made.
(b) For purposes of applying the limitations of Section 5.04, computing the
Actual Deferral Percentage and/or computing the Average Contribution Percentage:
(i) For Limitation Years beginning after December 31, 1997, Section
415 Compensation for a year shall also include any elective deferrals
within the meaning of Section 402(g)(3) of the Code and any amount that is
contributed or deferred by the Employer or an Affiliate at the election of
an Employee and which is not includable in the gross income of the Employee
by reason of Section 125 of the Code, unless the Plan Administrator elects
not to include such amounts; and
(ii) For Limitation Years beginning after December 31, 2000, Section
415 Compensation for a year shall also include any elective amounts that
are not includable in gross income of the Employee by reason of Code
Section 132(f).
1.52 "Separate ESOP" means the Banknorth Group, Inc. Profit Sharing and
Employee Stock Ownership Plan as in effect on December 31, 2000.
1.53 "Stock" means common stock, $.01 par value per share, of Banknorth
Group, Inc. (or, before May 10, 2000, Peoples Heritage Financial Group, Inc.),
that is readily tradable on an established securities market or that otherwise
constitutes "employer securities" within the meaning of Section 409(l) of the
Code and "qualifying employer securities" within the meaning of Section
4975(e)(8) of the Code and Section 407(d)(5) of ERISA.
10
1.54 "Thrift Incentive Plan" means the Banknorth Group, Inc. Thrift
Incentive Plan, as in effect on December 31, 2000.
1.55 "Trust" means the legal entity created under the Trust Agreement to
hold the Trust Fund.
1.56 "Trust Agreement" means the separate agreement entered into by
Banknorth Group, Inc. and the Trustee for the purpose of holding the Trust Fund.
1.57 "Trust Fund" means all monies, securities and assets held by the
Trustee for the benefit of Participants and Beneficiaries.
1.58 "Trustee" means the trustee appointed by the Board under the Trust
Agreement.
1.59 "Valuation Date" means, for any Plan Year, the last day of each
Calendar Quarter and such additional dates as the Plan Administrator may
designate.
1.60 "Vested Interest" means the fair market value of the Participant's
nonforfeitable interest in his or her Aggregate Account determined as of the
next following Valuation Date.
1.61 "Year of Service" means a computation period of twelve (12)
consecutive months during which an Employee is credited with at least one
thousand (1,000) Hours of Service.
(a) For participation purposes, the initial computation period shall begin
with the date that the Employee first performs one Hour of Service upon
commencing employment or re-employment, as the case may be, with the Company or
an Affiliate. Upon completion of the initial computation period, the computation
period for participation shall shift to the Plan Year and shall include the Plan
Year in which the initial computation period is completed.
(b) For vesting purposes, the computation period shall begin with the date
that the Employee first performs one Hour of Service upon commencing employment,
and each anniversary thereafter; provided, however, that if the Employee
terminates employment and is re-employed by the Company or an Affiliate, the
computation period for future service shall begin with the date that the
Employee first performs one Hour of Service upon re-commencing employment, and
each anniversary thereafter. Notwithstanding the foregoing to the contrary, in
the case of a Employee who commences participation in the Plan on or after
January 1, 1998, the computation period for vesting purposes shall be the Plan
Year.
(c) All Years of Service prior to and following the Effective Date, with
the Company and any Affiliate, shall be recognized for participation and vesting
purposes under the Plan. In the case of any Participant who was a participant in
any Predecessor Plan, his or her years of service credited under the Predecessor
Plan shall be credited for participation and vesting purposes under this Plan.
In addition, in the case of any other Participant who was an employee of any of
the following banks or other organizations (including any affiliated
organizations the stock or assets of which were acquired by or merged or
consolidated with the Company) on the acquisition date identified below, years
of service with such bank or other organization shall be credited for
participation and vesting purposes under this Plan as of the effective date
stated below, provided that no year of service shall be counted more than once
under this Section:
11
ORGANIZATION ACQUISITION DATE EFFECTIVE DATE
- ------------ ---------------- --------------
Mid Maine Savings Bank/Hampton July 31, 1994 August 1, 1994
Co-operative Savings Bank
North Conway Bank July 1, 1995 July 1, 1995
Bank of New Hampshire July 1, 1996 July 1, 1996 (except for purposes
of the allocation made under the
Separate ESOP for the plan year
ending December 31, 1996)
Family Bank, FSB December 6, 1996 January 1, 1997
Atlantic Bank October 1, 1997 October 1, 1997 (for purposes of
the Thrift Incentive Plan);
January 1, 1998 (for purposes of
the Separate ESOP)
CFX Corporation April 10, 1998 May 22, 1998 (for employees of
Safety Fund National Bank making
deferrals to the CFX 401(k) plan
on such date); July 1, 1998 (all
other CFX employees)
Concord Savings Bank April 10, 1998 July 1, 1998
Springfield Institution for Savings January 1, 1999 September 30, 1999 (for purposes
of the Separate ESOP); December
31, 1999 (for purposes of the
Thrift Incentive Plan)
Pre-Merger Banknorth Group, Inc. May 10, 2000 October 1, 2000
Morse, Payson & Noyes October 10, 1997 Later of May 1, 2001 and
commencement of employment for a
Participating Employer
Andover Savings Bank October 31, 2001 January 1, 2002
MetroWest Bank October 31, 2001 January 1, 2002
(d) For any other Eligible Employee who was an employee of any corporation
or other organization that becomes a Participating Employer after the Effective
Date, or some or all of the business and assets of which are acquired by or
merged or consolidated with the Participating Employer after such date, Years of
Service for purposes of eligibility for participation and vesting shall include
all years of service with such corporation or other organization prior to the
time it became a Participating Employer, or prior to the effective date of the
acquisition of its business and assets by or its merger or consolidation with
the Participating Employer, to the same extent as if employees of such
corporation or other organization had been employed by the Participating
Employer instead of by such corporation or other organization, if the Board of
Directors shall so provide by resolution or otherwise.
12
ARTICLE II. PARTICIPATION
2.01 ELIGIBILITY. Each participant in the Thrift Incentive Plan or the
Separate ESOP immediately prior to the Effective Date who is an Eligible
Employee on the Effective Date shall be an active Participant in this Plan as of
the Effective Date. In the case of any other Eligible Employee on or after the
Effective Date:
(a) SALARY DEFERRAL CONTRIBUTIONS. Effective October 1, 2000, each Eligible
Employee may commence participation with respect to Salary Reduction
Contributions on the first day of the month coincident with or next following
his or her completion of one month of service (measured from the date on which
he or she first performs an Hour of Service to the corresponding date in the
following month) ("initial entry date"), provided that a timely Participation
Agreement has been filed with the Plan Administrator. If the Eligible Employee
does not commence participation on his or her initial entry date, then he or she
may commence participation on the first day of any month thereafter by filing a
timely Participation Agreement. For purposes of the Plan, a Participation
Agreement is timely if it is filed with the Plan Administrator not later than
the fifteenth (15th) day of the month immediately preceding the date
participation is to begin.
NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, EFFECTIVE JANUARY 1, 2002,
THE INITIAL ENTRY DATE OF AN ELIGIBLE EMPLOYEE WHO IS CLASSIFIED ON THE PAYROLL
RECORDS OF THE EMPLOYER AS A TEMPORARY EMPLOYEE SHALL BE THE FIRST DAY OF THE
MONTH COINCIDENT OR NEXT FOLLOWING HIS OR HER COMPLETION OF ONE YEAR OF
SERVICE.(1)
(b) COMPANY CONTRIBUTIONS. Each Eligible Employee shall become a
Participant with respect to Company Contributions on the first day of the
Calendar Quarter coincident with or next following his or her completion of one
Year of Service.
2.02 TERMINATION OF PARTICIPATION. A Participant who fails to qualify as an
Eligible Employee for any reason shall be ineligible thereafter to make Salary
Deferrals for any succeeding payroll periods or to share in the allocation of
any future Company Contributions. Such individual again shall become a
Participant as of the first day of the Calendar Quarter immediately following
the date on which he or she again becomes an Eligible Employee, provided that a
Participation Agreement has been filed with the Plan Administrator by the
fifteenth (15th) day of the month immediately preceding such Calendar Quarter.
2.03 SPECIAL RULE FOR INSIDERS. Notwithstanding any other provision of this
Article II, an Insider may not recommence participation in the Plan for at least
six (6) months after he or she ceases to participate in the Plan for any
reason.(2)
- --------------------------
(1) This provision will be included if you decide to go ahead with this rule
for temps.
(2) Do you want to retain this rule in the Plan, or simply leave all
decisions involving Insiders and the Act to the Committee, as set forth in
Section 7.09?
13
2.04 SPECIAL PARTICIPATION RULE. Each Employee who was previously employed
by CFX Corporation or any of its subsidiaries (collectively, "CFX") immediately
prior to the date on which CFX was acquired by the Company and -
(a) is both employed by any former CFX subsidiary except Safety Fund
National Bank on June 30, 1998, and a participant receiving elective deferrals
under the CFX Corporation 401(k) Plan ("CFX Plan") or the Concord Savings Bank
401(k) Plan on such date, then his or her deferral election in effect under the
applicable plan on such date shall constitute his or her initial Participation
Agreement under this Plan, provided that any terms of such deferral election
that are not consistent with the provisions of this Plan shall be of no effect
hereunder, and provided further that the Employee may file a new Participation
Agreement by June 15, 1998.
(b) is both employed by Safety Fund National Bank on May 22, 1998, and a
participant receiving elective deferrals under the CFX Plan on such date, then
such Employee shall be eligible to participate in this Plan as of May 22, 1998,
and his or her deferral election in effect under the CFX Plan on such date shall
constitute his or her initial Participation Agreement under this Plan, provided
that any terms of such deferral election that are not consistent with the
provisions of this Plan shall be of no effect hereunder.
ARTICLE III. PARTICIPANT CONTRIBUTIONS
3.01 SALARY DEFERRALS. A Participant may elect, subject to the right of the
Plan Administrator to establish uniform and nondiscriminatory rules and, from
time to time, to modify or change such rules governing the manner and methods by
which Salary Deferrals shall be made, to reduce his or her current Earnings by a
deferral percentage, which amount the Company shall then contribute to the Trust
for allocation to the Participant's Salary Deferral Contribution Account in
accordance with the following provisions:
(a) A Participant may elect to defer between one percent (1%) and fifteen
percent (15%) of his or her Earnings, in increments of one percent (1%).
(b) A Participant may direct the Plan Administrator to cease Salary
Deferrals as soon as practicable after written notice to such effect has been
delivered by such Participant to the Plan Administrator. If a Participant ceases
to make Salary Deferrals, such Participant shall not be entitled to again make
Salary Deferrals until the first payroll period of the following Calendar
Quarter.
(c) A Participant may increase or decrease the amount of his or her Salary
Deferrals during the Plan Year. Changes in the deferral percentage shall be
effective as of the first day of any Calendar Quarter coincident with or next
following the end of the thirty-day period beginning on the date that the Plan
Administrator receives such change.
(d) The Plan Administrator may reduce or discontinue, as necessary, future
Salary Deferrals to some or all of the Participants who are Highly Compensated
Employees for the Plan Year in order to maintain the qualified status of the
Plan or to avoid subjecting the Highly Compensated Employees to Federal income
tax currently with respect to such Salary Deferrals. The amount by which a
Participant's Salary Deferrals are reduced or discontinued shall be paid to such
Participant in cash.
14
3.02 ANNUAL LIMITATION ON SALARY DEFERRALS.
(a) Effective January 1, 1997, the Salary Deferrals that may be allocated
to a Participant's Salary Deferral Contribution Account for any calendar year
shall not exceed nine thousand five hundred dollars ($9,500), reduced by the
amount of any employer contributions for such year on behalf of the Participant
pursuant to an election to defer compensation under any qualified cash or
deferred arrangement within the meaning of Section 401(k) of the Code, any
simplified employee pension cash or deferred arrangement within the meaning of
Section 402(h)(1)(B) of the Code, any eligible deferred compensation plan under
Section 457 of the Code, any plan within the meaning of Section 501(c)(18) of
the Code and a salary reduction agreement for the purchase of an annuity
contract under Section 403(b) of the Code. For purposes of this Section, any
Salary Deferrals returned to a Participant pursuant to Section 5.04 shall be
disregarded. The dollar limitation of this Section shall be automatically
adjusted to reflect any cost of living or other adjustment made under Section
402(g)(5) of the Code.
(b) In the event that the limitation of Paragraph (a) is exceeded with
respect to any Participant, not later than April 15 of the following calendar
year, the Plan Administrator shall distribute the excess deferral (plus any
income and minus any loss allocable thereto), provided that the Plan
Administrator has received the notice prescribed in Paragraph (c). Excess
deferrals shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to excess deferrals shall be
determined in the same manner in which income or loss is allocated to the
Participants' Aggregate Accounts under Article V of the Plan.
The amount of excess deferral with respect to a Participant for any
calendar year shall be reduced by the amount of any contributions previously
distributed to such Participant under this Article for the Plan Year beginning
with or within the calendar year.
(c) It shall be the responsibility of the Participant to notify the Plan
Administrator of any excess deferral for a calendar year. Such notice shall be
in writing; shall specify the amount of the excess deferral; shall state that if
the excess deferral is not distributed, such excess shall be includable in the
Participant's gross income under Section 402(g) of the Code; and shall be
submitted to the Plan Administrator not later than March 1 of the following
calendar year. A Participant shall be deemed to have notified the Plan
Administrator of an excess deferral to the extent such Participant has an excess
deferral for a calendar year, taking into account only Salary Deferrals under
the Plan and any other plans of the Company or its Affiliates subject to Section
402(g) of the Code.
3.03 TIME AND FORM OF SALARY DEFERRAL CONTRIBUTIONS. The Company shall
contribute Salary Deferrals to the Trust as of the earliest date on which said
contributions can reasonably be segregated from the general assets of the
Participant's Employer; provided in no event shall the date determined pursuant
to this provision occur later than the fifteenth (15th) business day of the
month following the month in which such contributions would otherwise have been
payable to the Participant in cash (the "maximum time period"), unless the
Employer extends the maximum time period as provided in 29 C.F.R. Section
2510.3-102(d).
3.04 LIMITATIONS ON ACTUAL DEFERRAL PERCENTAGE. In the event a Participant
who is a Highly Compensated Employee ("Highly Compensated Participant")
participates in two or more
15
cash or deferred arrangements (under Section 401(k) of the Code) that have
different plan years, for purposes of this Section, all such arrangements ending
with or within the same calendar year shall be treated as a single arrangement.
For purposes of this Section, this Plan and any other Code Section 401(k) plan
maintained by the Company or any of its Affiliates shall be treated as a single
plan if such plans are treated as one plan for purposes of Section 401(a)(4) or
Section 410(b) of the Code or if a Highly Compensated Employee participates in
such other plan. Plans may be aggregated to satisfy Section 401(k) of the Code
only if such plans have the same Plan Year.
For purposes of this Section and Code Sections 401(a)(4) and 410(b), the
Salary Deferral Contribution portion of the Plan benefiting Participants who
have satisfied the greatest permissible age and service conditions may, at the
election of the Plan Administrator, be disaggregated from the Salary Deferral
Contribution portion of the Plan benefiting Participants who have not satisfied
such conditions ("early participants"). Effective January 1, 1999, for any Plan
Year for which the Plan Administrator elects to disregard early participants in
determining whether the Salary Deferral Contribution portion of the Plan
satisfies Code Section 401(k)(3)(A)(i), the Plan Administrator may elect to
disregard non-Highly Compensated early participants for purposes of this
Section.
(a) The Actual Deferral Percentage for Highly Compensated Participants for
any Plan Year commencing after December 31, 1996, shall not exceed the greater
of:
(i) the Actual Deferral Percentage for all other Participants for the
preceding Plan Year multiplied by 1.25; or
(ii) the lesser of the Actual Deferral Percentage for all other
Participants for the preceding Plan Year multiplied by two (2), or the
Actual Deferral Percentage for such Participants for the preceding Plan
Year plus two percent (2%).
(b) The sum of the Actual Deferral Percentage and the Average Contribution
Percentage for Highly Compensated Participants for any Plan Year commencing
after December 31, 1996, shall not exceed the greater of:
(i) the sum of (A) the greater of the Actual Deferral Percentage for
all other Participants for the preceding Plan Year multiplied by 1.25 or
the Average Contribution Percentage for all other Participants for the
preceding Plan Year multiplied by 1.25, and (2) the lesser of the Actual
Deferral Percentage for all other Participants for the preceding Plan Year
plus two (2) or the Average Contribution Percentage for all other
Participants for the preceding Plan Year plus two (2), provided that in no
event shall such percentage plus two (2) exceed such percentage multiplied
by two (2).
(ii) the sum of (1) the lesser of the Actual Deferral Percentage for
all other Participants for the preceding Plan Year multiplied by 1.25 or
the Average Contribution Percentage for all other Participants for the
preceding Plan Year multiplied by 1.25, and (2) the greater of the Actual
Deferral Percentage for all other Participants for the preceding Plan Year
plus two (2) or the Average Contribution Percentage for all other
16
Participants for the preceding Plan Year plus two (2), provided that in no
event shall such percentage plus two (2) exceed such percentage multiplied
by two (2).
Paragraph (b) of this Section shall not apply if the respective Actual
Deferral Percentage and Average Contribution Percentage of the Highly
Compensated Participants for any Plan Year commencing after December 31, 1996,
does not exceed the respective Actual Deferral Percentage and Average
Contribution Percentage of all other Participants for the preceding Plan Year
multiplied by 1.25.
Notwithstanding the foregoing provisions of this Section to the contrary,
with respect to the Plan Year commencing January 1, 1997, the Company may elect,
pursuant to IRS Notice 97-2, to apply Paragraphs (a) and (b) of this Section by
substituting the phrase "such Plan Year" for the phrase "the preceding Plan
Year" in said Paragraphs and in the sentence immediately following Paragraph
(b).
For purposes of this Section, Salary Deferrals and Matching Contributions
must be made before the last day of the twelve (12) month period immediately
following the Plan Year to which such contributions relate. For purposes of this
Section, any Salary Deferrals returned to a Participant pursuant to Section 5.04
shall be disregarded.
The Company shall maintain records sufficient to demonstrate compliance
with this Section and the amount of any Matching Contributions used to satisfy
this Section. The determination and treatment of the contributions on behalf of
any Participant that are taken into account for purposes of this Section shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
3.05 RESTRICTIONS AND ADJUSTMENTS. The Plan Administrator may restrict the
deferral percentages elected by Participants if the Plan Administrator
determines such restriction is necessary to comply with Section 3.02,
Section 3.04, Section 4.03 or Section 5.04.
In the event that the Actual Deferral Percentage of the Highly Compensated
Participants for any Plan Year exceeds the limitations prescribed in Paragraph
3.6(a), the Plan Administrator shall, within two and one half (2 1/2) months
after the end of such year, distribute the Excess Salary Deferrals (plus any
income and minus any loss allocable thereto) to such Participants on the basis
of the respective portions of the Excess Salary Deferrals attributable to each
such Participant and shall designate such distribution as a distribution of
Excess Salary Deferrals (plus any income and minus any loss allocable thereto).
For Plan Years beginning before January 1, 1997, Excess Salary Deferrals shall
be allocated to Participants who are subject to the family aggregation rules of
Section 414(q)(6) of the Code in the manner prescribed by regulations.
The amount of any Excess Salary Deferrals of a Highly Compensated
Participant shall be determined by reducing contributions on behalf of all such
Participants in the order of their respective amounts of Salary Deferrals,
beginning with the highest such amount. The amount of Excess Salary Deferrals
with respect to a Highly Compensated Participant for any Plan Year shall be
reduced by the amount of excess deferrals previously distributed to such
Participant under Section 3.02 for the calendar year ending with or within the
Plan Year; provided, however, that notwithstanding the distribution of an excess
deferral in accordance with Section 3.02 to a
17
Highly Compensated Participant, such distributed amount shall be taken into
account under Section 4.03.
Excess Salary Deferrals shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Salary Deferrals
shall be determined by the same manner in which income or loss is allocated to
Participants' Aggregate Accounts under Article V of the Plan.
In the event that the sum of the Actual Deferral Percentage for Highly
Compensated Participants and the Average Contribution Percentage for Highly
Compensated Participants for any Plan Year exceeds the limitations prescribed in
Paragraph 3.04(b), the Plan Administrator shall, within two and one half (2 1/2)
months after the end of such year, reduce the Average Contribution Percentage
for Highly Compensated Participants in the manner prescribed in subsections (g)
through (j) of Section 4.03.
Notwithstanding the foregoing provisions of this Section to the contrary,
in lieu of distributing Excess Salary Deferrals (plus any income and minus any
loss allocable thereto) or reducing the Average Contribution Percentage for
Highly Compensated Participants in the manner prescribed in subsections (g)
through (j) of Section 4.03 in order to comply with Paragraph 3.04(b) for any
Plan Year, the Company may make Qualified Nonelective Contributions to the Plan.
3.06 ROLLOVER CONTRIBUTIONS. An Eligible Employee who has received an
Eligible Rollover Distribution may transfer all or any portion of such
distribution to the Trust, provided the transfer is made to the Trust not later
than the sixtieth (60th) day following the day on which he or she received such
distribution. In addition, an Employee who receives a distribution from an
individual retirement account (within the meaning of Section 408(a) of the Code)
that is attributable solely to an Eligible Rollover Distribution may transfer
the entire amount distributed to the Trust, provided the transfer is made to the
Trust not later than the sixtieth (60th) day following the day on which he or
she received such distribution. Notwithstanding the foregoing to the contrary,
an Employee who has received an Eligible Rollover Distribution solely by reason
of the death of his or her spouse, or a distribution from an individual
retirement account (as hereinabove defined) of amounts received by reason of the
death of his or her spouse, may not transfer any portion of such distribution to
the Trust. Before January 1, 1997, the amount transferred to the Trust under
this Section must be one thousand dollars ($1,000) or more.
A rollover contribution shall be credited to a Rollover Contributions
Account on behalf of the contributing Employee, and such Employee shall have a
fully vested and nonforfeitable interest in his or her Rollover Contributions
Account.
An Eligible Employee who has made a rollover contribution in accordance
with this Section who has not otherwise become a Participant shall become a
Participant coincident with such rollover contribution, provided that such
Participant shall not have a right to defer Earnings or to share in any Matching
Contributions until he or she has otherwise satisfied the eligibility
requirements imposed by Article II.
18
Effective October 31, 2001, with respect to an Eligible Employee who was
employed on such date by MetroWest Bank or Andover Savings Bank, if the Employee
elects a direct rollover to this Plan of his or her vested interest in the SBERA
401(k) Plan as Adopted by MetroWest Bank or the SBERA 401(k) Plan as Adopted by
Andover Savings Bank, and his or her vested interested in the applicable plan
includes any outstanding loans that are not in default, then he or she may
transfer such unpaid loans to this Plan. The promissory note(s) evidencing such
loan(s) shall be assigned to this Plan, and the Participant's obligation
thereunder shall be as set forth in Section 8.03.
ARTICLE IV. COMPANY CONTRIBUTIONS
4.01 COMPANY CONTRIBUTIONS. For each Plan Year, in addition to Salary
Deferral Contributions under Section 3.01, the Company shall contribute to the
Plan:
(a) Fixed Contributions, in the amount required to allocate Matching
Contributions to each Participant entitled to receive such contributions for the
Plan Year at the rate of:
(i) For pay periods ending before October 1, 2001, fifty percent (50%)
of such Participant's Salary Deferrals under Section 3.01 not in excess of
six percent (6%) of Earnings; and
(ii) For pay periods ending on or after October 1, 2001, one dollar
($1.00) for each one dollar ($1.00) of Salary Deferrals made on behalf of
the Participant up to three percent (3%) of his or her Earnings; plus fifty
cents ($0.50) for each one dollar ($1.00) of Salary Deferrals made on his
or her behalf in excess of three percent (3%) and not exceeding six percent
(6%) of such Earnings;
provided, however, that no Matching Contribution shall be allocated with respect
to any excess deferral under Section 3.02, any Excess Salary Deferral under
Section 3.04, or any Salary Deferral that is returned to the Participant
pursuant to Section 5.04; and provided further that the Fixed Contributions for
a Plan Year shall not be less than the sum of any required principal and
interest payments on all Acquisition Loans.
(b) Discretionary Contributions, if any, in such amount as may be
determined by the Board; and
(c) the Qualified Nonelective Contributions, if any, to be made on behalf
of non-Highly Compensated Employees in an amount that enables the Plan to
satisfy the requirements set forth in Section 3.04 or 4.03.
4.02 TIME AND FORM OF COMPANY CONTRIBUTIONS.
(a) Fixed Contributions and Discretionary Contributions, if any, with
respect to any Plan Year shall be paid to the Trust at such time or times as may
be determined by the Company, but not later than the date prescribed by law for
filing the Company's federal income tax return for its taxable year which ends
with or within such Plan Year, including extensions which have been granted for
filing such return; provided that amounts contributed to allocate Matching
Contributions with respect to Salary Deferrals made during a Plan Year quarter
shall be paid to
19
the Trust no later than the last day of the following Plan Year
quarter. Qualified Nonelective Contributions, if any, with respect to any Plan
Year shall be paid to the Trust within twelve (12) months after the end of such
Plan Year.
(b) Contributions shall be made in cash or in shares of Stock (including
Treasury shares or authorized by unissued shares) to the extent that
contributions are to be invested in the Company Stock Fund, as determined by the
Company in its sole discretion, provided that Fixed Contributions are paid in
cash in such amounts (and at such times, notwithstanding Paragraph (b)) as may
be needed to provide the Trust Fund with cash sufficient to pay any currently
maturing debt service obligation, including interest as well as principal, of
the Trust Fund with respect to any Acquisition Loan. If and to the extent that a
contribution is made in shares of Stock, the value of the shares of Stock for
purposes of determining the amount of the contribution shall be the Fair Market
Value of such shares on the trading day next following the day on which such
contributions are delivered to the Trustee.
4.03 SPECIAL RULES FOR MATCHING CONTRIBUTIONS.
(a) The Contribution Percentage for Highly Compensated Participants for any
Plan Year commencing after December 31, 1996, shall not exceed the greater of:
(i) the Contribution Percentage for all other Participants for the
preceding Plan Year multiplied by 1.25; or
(ii) the lesser of the Contribution Percentage for all other
Participants for the preceding Plan Year multiplied by 2, or the
Contribution Percentage for such Participants for the preceding Plan Year
plus two percent (2%).
Notwithstanding the foregoing provisions to the contrary, with respect to the
Plan Year beginning January 1, 1997, the Company may elect, pursuant to IRS
Notice 97-2, to apply this Paragraph (a) by substituting the phrase "such Plan
Year" for the phrase "the preceding Plan Year."
(b) For purposes of this Section, if two or more qualified plans maintained
by the Company or any of its Affiliates are treated as one plan to meet the
requirements of Section 401(a)(4), Section 410(b) or Section 401(m) of the Code,
such plans shall be treated as a single plan. If a Highly Compensated
Participant participates in any other qualified plan maintained by the Company
to which Matching Contributions or Employee contributions are made, all such
contributions for Plan Years ending with or within the same calendar year shall
be aggregated for purposes of this Section. If a Highly Compensated Participant
participates in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement. For Plan Years beginning
after December 31, 1989, plans may be aggregated in order to satisfy Section
401(m) of the Code only if they have the same plan year.
For purposes of this Section and Code Sections 401(a)(4) and 410(b), the
Matching Contributions portion of the Plan benefiting Participants who have
satisfied the greatest permissible age and service conditions may, at the
election of the Plan Administrator, be disaggregated from the Matching
Contributions portion of the Plan benefiting Participants who
20
have not satisfied such conditions ("early participants"). Effective January 1,
1999, for any Plan Year for which the Plan Administrator elects to disregard
early participants in determining whether the Matching Contribution portion of
the Plan satisfies Code Section 410(b), the Plan Administrator may elect to
disregard non-Highly Compensated early participants for purposes of this
Section.
(c) To the extent Salary Deferrals are taken into account under this
Section, any Salary Deferrals returned to a Participant pursuant to Section 5.04
shall be disregarded for purposes of Paragraph (a).
(d) Notwithstanding Article IX to the contrary, any Matching Contribution
that is attributable to an excess deferral under Section 3.02 or an Excess
Salary Deferral shall be forfeited and shall be disregarded for purposes of
Paragraph (a). Such forfeitures shall be used to reduce future Matching
Contributions.
(e) For purposes of this Section, Matching Contributions shall be treated
as made for a Plan Year if such contributions are made no later than the end of
the twelve (12) month period beginning on the day after the close of the Plan
Year. The Company shall maintain records sufficient to demonstrate satisfaction
of this Section and the amount of any Salary Deferrals taken into account under
this Section. The determination and treatment of the individual contribution
percentage of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(f) In the event that the Average Contribution Percentage of the Highly
Compensated Participants for any Plan Year on or after the Effective Date
exceeds the limitation of Paragraph (a) above, the Plan Administrator shall,
within two and one half (2 1/2) months after the end of such year, distribute
the Excess Aggregate Contributions (plus any income and minus any loss allocable
thereto) to such Participants on the basis of the respective portions of the
Excess Aggregate Contributions attributable to each such Participant and shall
designate such distribution as a distribution of Excess Aggregate Contributions
(plus any income and minus any loss allocable thereto).
(g) Excess Aggregate Contributions shall be adjusted for any income or loss
up to the date of distribution. The income or loss allocable to Excess Aggregate
Contributions shall be determined in the same manner in which income or loss is
allocated to Participants' Aggregate Accounts under Article V.
(h) The amount of Excess Aggregate Contributions of any Highly Compensated
Participant shall be determined by reducing contributions on behalf of all such
Participants in the order of their respective amounts, beginning with the
highest such amount. The determination of the amount of Excess Aggregate
Contributions with respect to the Plan shall be made after first determining the
amount of excess deferrals under Section 3.02 and second determining the amount
of Excess Salary Deferrals under Section 3.04.
(i) Notwithstanding the foregoing provisions of this Section to the
contrary, in lieu of distributing Excess Aggregate Contributions (plus any
income and minus any loss allocable thereto) to Highly Compensated Participants
in order to comply with Paragraph (a) above for any Plan Year, the Company may
make Qualified Nonelective Contributions as provided in Section 4.01(c).
21
4.04 RETURN OF CONTRIBUTIONS TO THE COMPANY. Notwithstanding any other
provisions of the Plan to the contrary:
(a) Contributions to the Plan by the Company are contingent upon their
deductibility under Section 404 of the Code. To the extent that a deduction for
any contribution hereunder is disallowed, such contribution shall, upon the
written demand of the Company, be returned to the Company by the Trustee within
one year after the date of disallowance, reduced by any net losses of the Trust
Fund attributable thereto but not increased by any net earnings of the Trust
Fund attributable thereto.
(b) If any contribution to the Plan is made as a result of a mistake of
fact, such contribution shall, upon the written demand of the Company, be
returned to the Company by the Trustee no later than one (1) year after the
payment thereof, reduced by any net losses of the Trust Fund attributable
thereto but not increased by any net earnings of the Trust Fund attributable
thereto. The portion of any contribution returned to the Company in accordance
with this Section that represents Salary Deferrals shall be paid promptly to the
Participants on whose behalf such deferrals were made.
4.05 MAXIMUM CONTRIBUTIONS. In no event shall the contributions made by the
Company for any Plan Year exceed the maximum amount that the Company is
permitted to deduct for federal income tax purposes or cause the Annual Addition
(as defined in Section 5.04) for any Participant to exceed the amount permitted
under the Plan.
ARTICLE V. ALLOCATIONS
5.01 SUSPENSE ACCOUNTS.
(a) All contributions and net income (or net loss) of the Trust Fund shall
be held in a suspense account until allocated to Participants' Aggregate
Accounts under this Article or applied by the Trustee (as directed by the Plan
Administrator) to make payments of principal or interest on any Acquisition
Loan.
(b) Any Financed Shares acquired with the proceeds of an Acquisition Loan
or a prior Acquisition Loan refinanced with a new Acquisition Loan, whether or
not pledged to secure repayment of an Acquisition Loan, must be credited to a
separate account (the "Acquisition Loan Suspense Account") and not to any
Participant's account. A number of shares of Stock equal to the number of
Financed Shares released from the pledge securing the repayment of an
Acquisition Loan (or, in the case of Financed Shares credited to the Acquisition
Loan Suspense Account that are not pledged to secure repayment of an Acquisition
Loan, that would have been so released had those Financed Shares been so
pledged), must be withdrawn from the Acquisition Loan Suspense Account as of the
Valuation Date next following the date on which the release occurs (or would
have occurred) and must be allocated to the ESOP Accounts of the Participants as
of that Valuation Date in the manner provided for in Section 5.02(b).
22
5.02 ALLOCATION OF CONTRIBUTIONS.
(a) Salary Deferral Contributions shall be allocated to each Participant's
Salary Deferral Contribution Account in an amount equal to each such
Participant's designated percentage of deferred Earnings effective no later than
the last day of the Calendar Quarter in which such contributions were paid to
the Trustee.
(b) Fixed Contributions shall be allocated to each Participant's Matching
Contribution Account in the amount determined under Section 4.03(a) effective no
later than the last day of the Calendar Quarter in which such contributions were
paid to the Trustee. Notwithstanding the preceding sentence, in the event that
Fixed Contributions are applied by the Trustee to make payments of principal or
interest on any Acquisition Loan, a number of shares of Stock equal to the
number of Financed Shares released from the pledge securing repayment of the
Acquisition Loan by such application of Fixed Contributions shall be allocated
to each Participant's ESOP Account as such Matching Contributions, and the
remainder of such contributions, if any, shall be allocated in accordance with
Paragraph (c). The value of the shares of Stock for purposes of determining the
allocation of Matching Contributions and Discretionary Contributions, if any,
shall be the Fair Market Value of such shares on the trading day [NEED TO
SUPPLY].(3)
(c) Discretionary Contributions shall be allocated to the Discretionary
Contributions Account of each Eligible Employee in the same proportion that his
or her Earnings for the applicable Plan Year bear to the total Earnings of all
Eligible Employees who are eligible to participate in allocations of
Discretionary Contributions under Section 2.01(b) for such Plan Year effective
no later than the last day of the Calendar Quarter in which such contributions
were paid to the Trustee.
(d) Qualified Nonelective Contributions shall be allocated to the Salary
Deferral Contribution Account of each Participant who is a non-Highly
Compensated Employee in the same proportion that his or her Earnings for the
applicable Plan Year bear to the total Earnings of all Participants who are
non-Highly Compensated Employees for such Plan Year effective no later than the
last day of the Calendar Quarter in which such contributions were paid to the
Trustee.
(e) Rollover Contributions made by a Participant under Section 3.06 shall
be allocated to his or her Rollover Contribution Account as of the Valuation
Date next following the receipt of such contribution by the Trustee.
5.03 ALLOCATION OF NET INCOME OR LOSS.
(a) As of each Valuation Date, the Trustee shall determine the fair market
value of the Trust Fund assets and the net income (or net loss) of the Trust
Fund. The net income (or net loss) of each investment fund within the Trust Fund
since the next preceding Valuation Date shall be ascertained by the Trustee and
shall be determined on the accrual basis of accounting;
- -----------------------------------
(3) I would like to identify the day in a payroll period (if at all possible)
as of which shares are valued for purposes of matching contribution
allocations. In addition, if a rounding rule is applied for purposes of
allocations, it should be stated here.
23
provided, however, that such net income (or net loss) shall include any net
increase or net decrease in the value of the assets of each such Fund since the
next preceding Valuation Date to the extent not otherwise accrued. As soon as is
practicable after each Valuation Date, the Trustee shall deliver to the Plan
Administrator a written statement of such determination.
(b) For purposes of allocations of net income (or net loss) of the Trust
Fund, a Participant's accounts shall be divided into subaccounts to reflect the
investment of such accounts under Article VI. As of each Valuation Date, the
Plan Administrator shall adjust such accounts of each Participant as follows:
(i) The net income (or net loss) of each investment fund, separately
and respectively, shall be allocated among the corresponding subaccounts of
the Participants who had such corresponding subaccounts on the next
preceding Valuation Date and each such corresponding subaccounts on such
date; provided, however, that the value of such subaccounts as of the next
preceding Valuation Date shall be reduced by the amount of any withdrawals
or distributions made therefrom since the next preceding Valuation Date.
(ii) The net appreciation (or net depreciation) in the value of the
ESOP Assets (as defined in Section 7.01) shall be determined by taking into
account expenses of the Plan with respect to such assets and excluding cash
dividends with respect to shares of Stock allocated to the ESOP Accounts of
the Participants as of the record date for which such dividends are
declared, cash dividends with respect to shares of Stock allocated to the
Acquisition Loan Suspense Account as of the record date for which such
dividends are declared to the extent that such dividends are applied to pay
principal and/or interest on an Acquisition Loan, and any other amount
applied to pay principal and/or interest on an Acquisition Loan.
(iii) Each Participant's accounts shall continue to receive
allocations under this Section so long as there is a balance in such
accounts; provided, however, that the value of such accounts as of the next
preceding Valuation Date shall be reduced by the amount of any payments
made therefrom since the next preceding Valuation Date.
5.04 LIMITATION ON ALLOCATIONS.
(a) For purposes of this Section, the following terms and phrases shall
have the meanings specified below:
(i) "Annual Addition" means, with respect to each Participant for any
Limitation Year, the sum of (A) the Salary Deferral Contributions allocated
to the Participant's Aggregate Account for the year; (B) the Company
Contributions allocated to the Participant's Aggregate Account for the
year; provided that, to the extent permitted by Section 415(c)(6) of the
Code, the portion, if any, of a Fixed Contribution applied to pay interest
on one or more Acquisition Loans not later than the time prescribed by law
(including permitted extensions of time) for filing the Company's federal
income tax return for the fiscal year for which the contribution is made
will not be taken into account for purposes of this clause (B); (C) any
forfeitures allocated to the Participant's
24
Aggregate Account for the year; provided that, to the extent permitted by
Section 415(c)(6) of the Code, forfeitures will not be taken into account
for purposes of this clause (C) to the extent that the forfeitures consist
of shares of Stock purchased with the proceeds of one or more Acquisition
Loans; and (D) any other amounts treated as an "annual addition" in
accordance with Section 415(c)(2) of the Code.
(ii) "Limitation Year" means the Plan Year.
(iii) "Maximum Annual Additions" means, for any Participant for any
Limitation Year, the lesser of (A) thirty thousand dollars ($30,000); or
(B) twenty-five percent (25%) of such Participant's Section 415
Compensation during such year, except the limitation in this Clause (B)
shall not apply to any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after a Participant's
termination of employment with the Company or an Affiliate which is
otherwise treated as an Annual Addition or to any amount otherwise treated
as an Annual Addition under Section 415(l)(1) of the Code.
(b) Notwithstanding any other provision in the Plan regarding the
allocation of contributions, under no circumstances shall the Annual Additions
credited to a Participant's Aggregate Account for any Limitation Year exceed the
Maximum Annual Additions for such Participant for such year. If, as a result of
a reasonable error in estimating a Participant's Earnings or because of other
limited facts and circumstances, the Annual Additions which would be credited to
a Participant's Aggregate Account for a Limitation Year would nonetheless exceed
the Maximum Annual Additions for such Participant for such year, the excess
Annual Additions which, but for this Section, would have been allocated to such
Participant's Aggregate Account shall be disposed of as follows:
(i) Any such excess Annual Additions in the form of Salary Deferrals,
shall, to the extent such amounts would have otherwise been allocated to
such Participant's Salary Deferral Contribution Account, be returned to the
Participant;
(ii) Any such excess Annual Additions in the form of Fixed
Contributions remaining in the Plan after the application of Paragraph
(b)(i) above, shall, to the extent such amounts would have otherwise been
allocated to such Participant as Matching Contributions, be allocated
instead to a suspense account and shall be held therein until used to
reduce future contributions in the same manner as a forfeiture;
(iii) Any such excess Annual Additions in the form of Discretionary
Contributions remaining in the Plan after the application of Paragraphs
(b)(i) and (ii) above, shall, to the extent such amounts would have
otherwise been allocated to such Participant's Discretionary Contribution
Account, be allocated instead to a suspense account and shall be held
therein until used to reduce future contributions in the same manner as a
forfeiture; and
(iv) Any such excess Annual Additions in the form of Qualified
Nonelective Contributions remaining in the Plan after the application of
Paragraphs (b)(i), (ii) and (iii) above, shall be allocated instead to a
suspense account and shall be held therein until
25
allocated to such Participant's Salary Deferral Contribution Account in
future Limitation Years before any Salary Deferral Contributions or
Qualified Nonelective Contributions are made to the Plan on behalf of such
Participant.
(c) If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, it will not participate in allocations of the net
income (or net loss) of the Trust Fund.
(d) For purposes of determining whether the Annual Additions under this
Plan exceed the limitations herein provided, all defined contribution plans of
the Company and its Affiliates shall be treated as one defined contribution
plan. If the Annual Additions credited to a Participant's Aggregate Account for
any Limitation Year under this Plan plus the additions credited on his or her
behalf under other defined contribution plans required to be aggregated pursuant
to this Paragraph would exceed the Maximum Annual Additions for such Participant
for such Limitation Year, the Annual Additions under this Plan and the additions
under such other plans shall be reduced first, in this Plan, from Salary
Deferrals above six percent (6%) of Earnings and then, as necessary, on a pro
rata basis and allocated, reallocated or returned in accordance with applicable
plan provisions regarding Annual Additions in excess of Maximum Annual
Additions.
(e) Effective for Limitation Years beginning before January 1, 2000, in the
case of a Participant who also participates in a defined benefit plan of the
Company or an Affiliate, the Annual Additions credited to the Aggregate Account
of such Participant shall be reduced to the extent necessary to prevent the
limitations set forth in Section 415(e) of the Code from being exceeded;
provided, however, that this Paragraph (e) shall not be operative to the extent
that such defined benefit plan provides for a reduction of benefits thereunder
to ensure that the limitation set forth in Section 415(e) of the Code is not
exceeded.
ARTICLE VI. INVESTMENT OF CONTRIBUTIONS IN GENERAL
6.01 INVESTMENT FUNDS. The Trustee shall establish a Company Stock Fund and
one or more other Investment Funds, as the Plan Administrator shall from time to
time direct. Each Investment Fund, other than the Company Stock Fund, shall be
invested, as the Plan Administrator shall direct:
(a) at the discretion of the Trustee in accordance with such investment
guidelines and objectives as may be established by the Plan Administrator for
such Investment Fund;
(b) at the discretion of a duly appointed Investment Manager in accordance
with such investment guidelines and objectives as may be established by the Plan
Administrator; or
(c) in such investments as the Plan Administrator may specify for such
Investment Fund.
The Plan Administrator may from time to time change its direction with
respect to any Investment Fund and may, at any time, eliminate any Investment
Fund. Whenever an Investment Fund is eliminated, the Trustee shall promptly
liquidate the assets of such Investment
26
Fund and reinvest the proceeds thereof in accordance with the direction of the
Plan Administrator.
The Trustee shall transfer to each Investment Fund such portion of the
assets of the Trust as the Plan Administrator may from time to time direct in
accordance with the terms of the Plan. All interest, dividends and other income
received with respect to, and any proceeds realized from the sale or other
disposition of, assets held in any Investment Fund shall be credited to and
reinvested in such Investment Fund, and all expenses properly attributable to
any Investment Fund shall be paid therefrom unless paid by the Company.
6.02 INVESTMENT OF CONTRIBUTIONS.
(a) On and after the Effective Date, each Participant may direct that
contributions made on his or her behalf shall be invested in any one or more of
the Investment Funds. An investment direction shall be made by such written,
telephonic or electronic means as shall be prescribed by the Plan Administrator.
A Participant's investment direction, if received by the Plan Administrator
prior to the date he or she commences participation, shall be effective as of
said date. If a Participant does not make an investment direction or an
investment direction is not received by the Plan Administrator before the
Participant commences participation, contributions on behalf of such Participant
to his or her ESOP Account shall remain invested in Stock and all other
contributions shall be invested in the fund which presents the least risk of
loss as determined by the Plan Administrator. An investment direction received
by the Plan Administrator after the date a Participant commences participation
shall be effective as soon as practicable following receipt by the Plan
Administrator (or by the person or persons specified by the Plan Administrator).
(b) A Participant may modify an investment direction to have future
contributions on his or her behalf invested in the Investment Funds in
proportions other than those previously elected, by such written, telephonic or
electronic means as shall be prescribed by the Plan Administrator. A
modification shall be effective as soon as practicable following receipt by the
Plan Administrator (or by the person or persons specified by the Plan
Administrator).
(c) A Participant may elect to reinvest all or a portion of the balance
credited to one or more of his or her accounts in any one or more of the
Investment Funds; provided that he or she may not reinvest any portion of the
balance credited his or her ESOP Account that is attributable to periods before
the Effective Date; and provided further that no Participant shall be permitted
to reinvest any portion of such account if the Trustee determines that
reinvestment would cause the ESOP Assets (as defined in Section 7.01) to fail to
be invested primarily in Stock. An election to reinvest shall be made by such
written, telephonic or electronic means as shall be prescribed by the Plan
Administrator, and shall be effective as soon as practicable after receipt by
the Plan Administrator (or by the person or persons specified by the Plan
Administrator).
6.03 VALUATION OF INVESTMENT FUNDS. As of each Valuation Date, the Trust
Fund, and each of the investment funds comprising the Trust Fund, shall be
valued on the basis of its current fair market value. For purposes of allocating
accruals pursuant to Section 5.03, the Trust
27
Fund and each of the investment funds of the Trust Fund shall be valued as of a
Valuation Date as if each contribution to, reallocation to, reallocation out of,
or benefit payment out of the Trust Fund made after the last preceding Valuation
Date had been made immediately following the valuation of the Trust Fund then
being made.
ARTICLE VII. EMPLOYEE STOCK OWNERSHIP; ACQUISITION LOANS
7.01 ESOP ASSETS. The Trustee shall invest the assets of the Plan
attributable to Participants' ESOP Accounts and any Acquisition Loan Suspense
Account (collectively, "ESOP Assets") in accordance with the Plan and Trust
Agreement and the applicable provisions of the Code, ERISA, and any other laws
affecting tax qualified pension benefit plans designed to qualify as employee
stock ownership plans; provided that, in aggregate, the ESOP Assets shall be
invested primarily in Stock.
7.02 ACQUISITION LOANS. The Company may direct the Trustee to incur
Acquisition Loans from time to time to finance the acquisition by the Trust Fund
of shares of Stock or to repay a prior Acquisition Loan. An Acquisition Loan may
be made by a Party in Interest and may be guaranteed by the Company or one or
more Affiliates. Any Acquisition Loan must be primarily for the benefit of the
Participants and their Beneficiaries. In furtherance of the foregoing:
(a) The interest rate payable with respect to any Acquisition Loan and the
price of any Stock to be acquired with the proceeds thereof must not be such
that the Trust Fund might be "drained off" (as such term is used in the
applicable regulations under Section 4975 of the Code), and the terms of any
Acquisition Loan, whether or not the lender is a Party in Interest, must at the
time such Acquisition Loan is made be at least as favorable to the Trust Fund as
the terms of a comparable loan resulting from arm's length negotiations between
independent parties would be. An Acquisition Loan must be for a specific term,
must bear a reasonable rate of interest, and must not be payable upon demand
except in the event of a default; however, if the lender of the Acquisition Loan
is a "disqualified person" within the meaning of Section 4975(e)(2) of the Code,
the Acquisition Loan must be payable upon demand in the event of a default only
to the extent of any default in any required payments due and payable under that
Acquisition Loan (without regard to any rights of acceleration on the part of
the lender).
(b) An Acquisition Loan may be secured by a collateral pledge of the
Financed Shares acquired with the proceeds of that Acquisition Loan (or any
prior Acquisition Loan repaid with the proceeds from the Acquisition Loan);
however, no lender or guarantor of an Acquisition Loan that is a Participating
Employer or an Affiliate may have any rights or recourse with respect to the
Financed Shares, if any, pledged as collateral to secure the repayment of that
Acquisition Loan. No other assets of the Trust Fund (including any other shares
of Stock held as part of the Trust Fund) may be pledged as collateral for an
Acquisition Loan, and no Acquisition Loan lender shall have recourse against the
Plan, the Trustee, or any assets of the Trust Fund, other than any Financed
Shares pledged to secure that Acquisition Loan and not released from that pledge
as provided for in the second sentence immediately after this sentence. Any
pledge of Financed Shares as collateral for an Acquisition Loan shall provide
that the value of the Financed Shares that are subject to that pledge and are
transferred in satisfaction of the Acquisition Loan upon a default on that
Acquisition Loan must not exceed the amount of that default.
28
(c) Any pledge of Financed Shares as collateral for an Acquisition Loan
must also provide for the release of the Financed Shares so pledged on a
pro-rata basis as principal and interest on such Acquisition Loan is paid by the
Trustee. Unless the Trustee elects to apply the special rule for releasing
Financed Shares under Treasury Regulation Section 54.4975-7(b)(8)(ii), the
number of Financed Shares to be released from any such pledge in any Plan Year
is to be determined by multiplying (i) the total number of Financed Shares
subject to that pledge immediately prior to the release for such Plan Year by
(ii) a fraction, the numerator of which is the amount of principal and interest
paid on that Acquisition Loan for the Plan Year and the denominator of which is
the sum of the numerator plus all principal and interest to be paid with respect
to that Acquisition Loan for all future years of the term of that Acquisition
Loan (without regard to any possible extensions or renewal periods). In the
event that the interest rate payable with respect to such Acquisition Loan is
variable, the interest to be paid in future years must be determined for
purposes of the preceding sentence as if the interest rate that is applicable
for that Acquisition Loan at the end of such Plan Year were to remain in effect
over the remaining term of that Acquisition Loan. If the Trustee elects to apply
the special rule for releasing Financed Shares, the number of Financed Shares to
be released from encumbrance is determined solely with reference to principal
payments. If the Trustee elects to apply the special rule, however, three
additional rules apply: the Acquisition Loan must provide for annual payments of
principal and interest at a cumulative rate that is not less rapid at any time
than level annual payments of the amount for ten (10) years; the interest
included in any payment is disregarded only to the extent that it would be
determined to be interest under standard loan amortization tables; and the
special rule is inapplicable from the time that by reason of a renewal,
extension, or refinancing the sum of the expired duration of the Acquisition
Loan, the renewal period, the extension period, and the duration of a new
Acquisition Loan exceeds ten (10) years.
(d) Payments of principal or interest on any Acquisition Loan must be made
by the Trustee (as directed by the Plan Administrator) only from Company
Contributions paid in cash to enable the Trustee to repay the Acquisition Loan,
any earnings of the Trust Fund attributable to such contributions, and any
earnings received by the Trust Fund on Financed Shares pledged to secure the
repayment of the Acquisition Loan. Payments of principal or interest for any
Acquisition Loan during any Plan Year must not exceed (i) the sum of the
following for that Plan Year and all prior Plan Years: the aggregate Company
Contributions paid in cash to enable the Trustee to repay one or more
Acquisition Loans; any earnings of the Trust Fund attributable to such
contributions; and any earnings attributable to Financed Shares pledged to
secure one or more Acquisition Loans; (ii) less all payments of principal or
interest made with respect to Acquisition Loans in earlier Plan Years.
7.03 PURCHASE OF STOCK.
(a) Whenever required by the terms of the Plan or the Participants'
investment directions under Article VI, the Trustee shall purchase shares of
Stock from such source and in such manner as the Trustee may determine. If the
Trustee and the Company agree, any such shares may be purchased from the Company
and may either be treasury shares or authorized but unissued shares; provided,
however, that no shares of Stock purchased with the proceeds of an
29
Acquisition Loan shall be purchased from a Participating Employer (other than
the Company) or any Affiliate. If shares of Stock are acquired by the Plan other
than on an exchange or other national market system, such shares shall be
purchased at prices that do not exceed Fair Market Value.
(b) For purposes of crediting cash contributions invested in the Company
Stock Fund, the credit shall be based on the average cost per share (including
brokerage fees and transfer fees) of Stock purchased by the Trustee for all
Participants for the month in which the contributions were made, and for this
purpose contributions of shares of Stock shall be valued at the closing price of
such stock for the date of contributions, or, if no sale occurred on such date,
for the next preceding day on which a sale occurred.
(c) Notwithstanding any other provision of this Section, the Trustee shall
not purchase shares of Stock during any period in which such purchase is, in the
opinion of counsel for the Company or the Plan Administrator, restricted by any
law or regulation applicable thereto. During such period, amounts that would
otherwise be invested in shares of Stock shall be invested in such other assets
as the Trustee may in its discretion determine, or the Trustee may hold such
amounts uninvested for a reasonable period pending the designated investment.
7.04 CUSTODY AND VOTING OF STOCK.
(a) All shares of Stock acquired by the Trustee shall be held in the
possession of the Trustee or its designee until disposed of pursuant to
provisions of the Plan. Such shares may be registered in the name of the Trustee
or its nominee.
(b) Each Participant (or, in the event of a Participant's death, the
Participant's Beneficiary) shall have the right, to the extent of shares of
Stock allocated to the Participant's Aggregate Account, to direct the Trustee in
writing as to the manner in which to vote with respect to such shares of Stock.
Before each annual or special meeting of the shareholders of the Company, the
Plan Administrator shall cause to be sent to each Participant a copy of the
proxy solicitation material for the meeting, together with a form requesting
confidential instructions to the Trustee as to the voting of the shares of Stock
allocated to each Participant's Aggregate Account, whether or not vested. The
Trustee, itself or by proxy, shall vote the shares of Stock in such Aggregate
Account in accordance with the instructions of the Participant; provided, that
if the Trustee determines (in its sole discretion) that adherence to any such
instructions is inconsistent with the discharge of its fiduciary duties under
ERISA, the Trustee shall vote the affected shares of Stock in a manner
consistent with the proper exercise of its fiduciary duties. If the Trustee
shall not have received instructions as to the manner in which to vote any
shares of Stock held in the Trust Fund (whether because instructions have not
been timely received or because the shares of Stock are not allocated to any
Participant's Aggregate Account), the Trustee, itself or by proxy, shall vote
all such shares in a manner consistent with the proper exercise of its fiduciary
duties under ERISA, as determined in its sole discretion.
7.05 DIVIDENDS ON STOCK.
(a) Any stock dividends received with respect to Stock must be credited pro
rata to the Participant accounts (or, in the case of Financed Shares securing
the repayment of an
30
Acquisition Loan, to the Acquisition Loan Suspense Account) to which the
corresponding shares of Stock on which the stock dividends are received are
allocated as of the record date for which the stock dividends are declared.
(b) Any cash dividends received on shares of Stock allocated to Participant
accounts as of the record date on which the dividends are declared shall be
allocated to the accounts of the Participants to whose accounts those shares of
Stock are allocated as of the record date for which such cash dividends are
declared. Any cash dividends received on shares of Stock allocated to an
Acquisition Loan Suspense Account shall be allocated to such account; provided
that such cash dividends may be applied by the Trustee to pay principal or
interest on an Acquisition Loan as described in Code Section 404(k)(2)(c) Any
cash dividends received on shares of Stock either not allocated to Participant
accounts or not allocated to the Acquisition Loan Suspense Account as of the
record date for which the dividends are declared shall be included in the
computation of net income (or loss) of the Trust Fund and allocated as set forth
in Section 5.03.
7.06 FORFEITURES OF STOCK. Notwithstanding any other provision of the Plan
to the contrary, any Stock that was acquired with the proceeds of an Acquisition
Loan and was forfeited during a Plan Year shall be allocated to the ESOP
Accounts, as of the last day of the Plan Year, as follows: first, an amount
sufficient to restore forfeitures as provided in Section 9.03 and second, the
remainder of such forfeitures among the ESOP Accounts in the same proportion
that each Participant's Compensation for the Plan Year bears to the total
Compensation of all Participants who either (a) are credited with one Year of
Service for the Plan Year and are employed by the Employer or an Affiliate on
the last day of the Plan Year or (b) terminated employment during the Plan Year
on account of death, retirement or Disability.
7.07 STOCK SPLITS AND OTHER CAPITAL REORGANIZATIONS. Except to the extent
necessary to restore forfeitures, any shares of Stock received as a result of a
Stock split, reorganization or other recapitalization of the Company shall be
allocated in the same manner as the shares of Stock to which any proceeds in
such transaction are attributable.
7.08 TENDER OF STOCK.
(a) Each Participant (or, in the event of a Participant's death, the
Participant's Beneficiary) shall have the right, to the extent of shares of
Stock allocated to the Participant's Aggregate Account, to direct the Trustee in
writing as to the manner in which to respond to a tender or exchange offer with
respect to Stock. The Plan Administrator shall utilize its best efforts to
timely distribute or cause to be distributed to each Participant such
information as will be distributed to shareholders of the Company in connection
with any such tender or exchange offer. The Trustee shall respond to the tender
or exchange offer with respect to the shares of Stock in each Participant's
Aggregate Account in accordance with the instructions of the Participant;
provided, that if the Trustee determines (in its sole discretion) that adherence
to any such instructions is inconsistent with the discharge of its fiduciary
duties under ERISA, the Trustee shall respond to the tender or exchange offer
with respect to the affected shares of Stock in a manner consistent with the
proper exercise of its fiduciary duties. If the Trustee shall not have received
instructions as to the manner in which to respond to a tender or exchange offer
with respect to any shares of Stock held in the Trust Fund (whether because
instructions have not been timely received or because the shares of Stock are
not allocated to any Participant's
31
Aggregate Account), the Trustee, itself or by proxy, shall vote all such shares
in a manner consistent with the proper exercise of its fiduciary duties under
ERISA, as determined in its sole discretion.
(b) Cash proceeds received by the Trustee from the sale or exchange of any
shares of Stock under this Section shall be invested by the Trustee in one or
more other Investment Funds in ten percent (10%) increments, in accordance with
directions obtained from Participants at the time of the receipt of such
proceeds, which directions shall be independent of the investment directions
made by the Participants pursuant to Section 6.02 hereof. If timely investment
direction is not received from a Participant, such Participant's interest in
such cash proceeds shall be invested in the fund that presents the least risk of
loss as determined by the Plan Administrator.
(c) Any decision by a Participant to tender (or not tender) or to exchange
(or not exchange) under Paragraph (a) of this Section and any direction made by
a Participant under Paragraph (b) of this Section shall constitute an exercise
of control by the Participant over the assets credited to his or her Aggregate
Account within the meaning of Section 404(c) of ERISA. Each Participant who so
exercises such control shall, by such exercise, release and agree, on the
Participant's own behalf and on behalf of the Participant's Beneficiary, to
indemnify and hold harmless the Trustee, the Company and the Plan Administrator
from and against any claim, demand, loss, liability, cost or expense (including
reasonable attorney's fees) caused by or arising out of such exercise, including
without limitation any diminution in value or losses incurred from such
exercise.
7.09 SPECIAL RESTRICTIONS ON INSIDERS. Notwithstanding any other provision
of the Plan to the contrary, each transaction involving shares of Stock
allocated to the Aggregate Account of an Insider (including any investment or
reinvestment election under the Plan) shall comply with all applicable
requirements of Section 16(b) of the Securities Exchange Act of 1934, as
amended, the regulations thereunder, and any successor thereto. The Committee
shall be responsible for developing administrative rules to carry out this
provision.
7.10 OPTION TO REQUIRE EMPLOYER TO PURCHASE STOCK.
(a) If any Stock distributed pursuant to this Plan is not "readily tradable
on an established securities market" at the time distributed, then the recipient
of those shares of Stock received pursuant to the distribution has the right
during the Put Option Period to require the Employer, by notice in writing to
the Employer within the applicable Put Option Period, to purchase the shares of
Stock at a price equal to the Fair Market Value of those shares, determined as
of the Valuation Date coinciding with or immediately preceding the date of the
purchase. In addition, the Plan shall have the option, but shall not be
required, to purchase the Stock from a Participant exercising his or her put
right.
(b) For purposes of this Section:
(i) The term "Put Option Period" means (A) the 60-day period beginning
on the date following the date of the distribution of the shares of Stock,
and (B) sixty (60) days during the following Plan Year, which second 60-day
period is to be designated by
32
the Employer in accordance with Section 409(h)(4) of the Code and the
regulations thereunder, provided, however, that such second 60-day period
must not begin before (X) the first Valuation Date following termination of
the initial 60-day period set forth in (A) above and (Y) written notice to
the Participant of the value of the shares of Stock determined as of the
Valuation Date. The "Put Option Period" does not include any time during
which the Employers are prohibited by applicable federal or state law from
honoring their obligations under this Section.
(ii) Shares of Stock will be considered not "readily tradable on an
established securities market" if the shares either are not traded on a
national securities exchange or quoted on a system sponsored by a national
securities association, or are subject to a restriction under any federal
or state securities law, any regulation thereunder, or any agreement
affecting the shares that renders such shares less freely tradable than
would be the case if the restriction did not exist.
(c) The put option right provided for in this Section is exercisable only
by a Participant, the Participant's Beneficiary, the donee of a Participant or
Beneficiary (but only with respect to shares of Stock received as a gift by such
donee), or the person (including an estate or a distributee thereof) to whom
shares of Stock pass as the result of the death of the Participant or the
Participant's Beneficiary. The Plan has a first right of refusal (but no
obligation) to purchase any shares of Stock tendered to the Employer or the
Sponsor, pursuant to this Section. The Employer or the Sponsor (or the Plan, in
the event that the Plan exercises its right described in the immediately
preceding sentence) shall have the right, in its sole and absolute discretion,
to elect to pay the purchase price for any shares of Stock that were distributed
as part of a total distribution (within the meaning of Section 409(h)(5) of the
Code) and are purchased pursuant to this Section, in a single lump sum or in
substantially equal annual installments over a period beginning not later than
thirty (30) days after the exercise of the put option right provided for in this
Section and not exceeding five (5) years, with interest payable at a reasonable
rate (as determined by the Employer, or in the event the Plan elects to purchase
such shares, the Plan Administrator) on any unpaid installment balance. If a
Participating Employer or the Company (or the Plan, in the event that the Plan
exercises its right described in the second preceding sentence) is required to
purchase Stock pursuant to this Section that was distributed as part of an
installment distribution, the payment of the purchase price for the Stock must
occur in a single lump sum not later than thirty (30) days after the exercise of
the put option right provided for in this Section.
7.11 NO OTHER RIGHTS TO PUT OR CALL STOCK. Except as set forth in Section
7.10, and except as otherwise required by applicable federal or state law, no
shares of Stock acquired with the proceeds of an Acquisition Loan are subject to
any put, call, or other option, or any buy-sell or similar agreement, either
while held by the Plan or when distributed by the Plan, irrespective of whether
or not the Plan then qualifies as an "employee stock ownership plan" under
Section 4975(e)(7) of the Code. Notwithstanding anything to the contrary
contained in this Plan, this Section 7.11 and the rights and protections
afforded Participants and Beneficiaries under Section 7.10 are not subject to
termination, amendment, or modification insofar as those provisions apply to
shares of Stock acquired with the proceeds of one or more Acquisition Loans.
33
ARTICLE VIII. WITHDRAWALS AND LOANS
8.01 IN-SERVICE WITHDRAWALS. A Participant may withdraw all or a part of
his or her Vested Interest prior to his or her termination of employment with
the Company and all Affiliates as follows:
(a) The Participant may withdraw all or any part his or Vested Interest
attributable to Salary Deferrals and Rollover Contributions after attaining
fifty-nine and one half (59 1/2) years of age.
(b) Effective January 1, 1998, the Participant may withdraw all or any part
of his or her Vested Interest in his or her Aggregate Account after attaining
Normal Retirement Age.
(c) Effective January 1, 2000, the Participant may withdraw all (but not
less than all) of his or her Vested Interest attributable to Rollover
Contributions at any time before attaining fifty-nine and one half (59 1/2)
years of age.
The Plan Administrator shall establish reasonable procedures for handling
withdrawal requests under this Section.
8.02 HARDSHIP WITHDRAWALS. The Plan Administrator may direct the Trustee to
make a hardship withdrawal distribution to a Participant from the accounts
designated by the Participant, excluding the Participant's ESOP Account and
investment earnings allocated to the Participant's Salary Deferral Account after
December 31, 1988, subject to the following:
(a) Each request for a hardship withdrawal shall be made by such written,
telephonic or electronic means as may be prescribed by the Plan Administrator.
The request shall specify the reason for such withdrawal and shall include such
other information and documentation as the Plan Administrator may request.
(b) A hardship withdrawal may be made only in cash and may not exceed the
Participant's Vested Interest in his or her accounts, excluding the
Participant's ESOP Account and investment earnings allocated to the
Participant's Salary Deferral Account (or to the comparable portion of his or
her Predecessor Plan Account, as determined under the applicable Schedule) after
December 31, 1988.
(c) A hardship withdrawal shall be permitted only if the distribution is on
account of an immediate and heavy financial need of the Participant and is
necessary to satisfy such financial need.
(i) A financial need may qualify as immediate and heavy without regard
to whether such need was foreseeable or voluntarily incurred by the
Participant. The following shall be deemed immediate and heavy financial
needs:
(A) Payment of medical expenses described in Section 213(d) of
the Code previously incurred by the Participant, his or her spouse or
dependent (within the meaning of Section 152 of the Code) or payment
necessary for such persons to obtain medical care as described in
Section 213(d) of the Code;
34
(B) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;
(C) Payment of tuition, related educational fees and room and
board expenses for the next twelve (12) months of post-secondary
education for the Participant, his or her spouse or dependent (within
the meaning of Section 152 of the Code);
(D) Payment to prevent eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of the
Participant's principal residence; and
(E) Any other financial need deemed to be immediate and heavy by
the Commissioner of Internal Revenue as set forth in a Treasury
regulation, revenue ruling, notice, or other document of general
applicability.
The above list of deemed immediate and heavy financial needs shall not be
exclusive, and other needs may qualify as immediate and heavy financial
needs.
(ii) A distribution shall be treated as necessary to satisfy an
immediate and heavy financial need of the Participant only to the extent
(A) the amount of such distribution does not exceed the amount required to
relieve the financial need (including the amount of any federal, state or
local income taxes or penalties reasonably anticipated to result from the
distribution) and (B) the amount of such distribution is not reasonably
available to the Participant from other resources. The Plan Administrator
may reasonably rely (unless the Plan Administrator has actual knowledge to
the contrary) on the Participant's written representations that the need
cannot be relieved through reimbursement or compensation by insurance or
otherwise; by reasonable liquidation of the Participant's assets; by
cessation of Salary Deferral Contributions under the Plan; or by other
distributions or nontaxable (at the time of the loan) loans from plans
maintained by any present or former employer of the Participant or from
commercial lenders. A Participant's resources shall be deemed to include
those assets of his or her spouse and minor children that are reasonably
available to the Participant.
(iii) The amount of an immediate and heavy financial need may include
any amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution.
(d) A request for a hardship distribution shall be treated as a claim for
benefits under the Plan. A hardship withdrawal shall be made as soon as
practicable following approval of the request by the Plan Administrator.
(e) The Plan Administrator may from time to time establish rules governing
withdrawals. Such rules shall be applied on a uniform and nondiscriminatory
basis.
8.03 LOANS. The Plan Administrator may, upon the request of a Participant
or Beneficiary who is a "party in interest" as defined in Section 3(14) of
ERISA, direct the Trustee to make a loan to such Participant or Beneficiary from
the Participant's Salary Deferral
35
Contribution Account, Matching Contribution Account [(EXCLUDING AMOUNTS
ATTRIBUTABLE TO FINANCED SHARES)],(4) and Rollover Contribution Account, if
any, subject to the following:
(a) The amount of each loan shall be determined with reference to the fair
market value of the Participant's Aggregate Account as of the most recent
Valuation Date for which valuation data has been received by the Plan
Administrator.
(b) Any loan made on or after January 1, 1987, when added to the balance of
all other outstanding loans with respect to a Participant's Aggregate Account,
shall not exceed the lesser of:
(i) Fifty thousand dollars ($50,000), reduced by the excess, if any,
of the Participant's highest outstanding loan balance under the Plan for
the one (1) year period ending on the day before such loan is made, over
the Participant's loan balance under the Plan on the day such loan is made,
or
(ii) Fifty percent (50%) of the sum of the Participant's Salary
Deferral Contribution Account, the nonforfeitable portion of his or her
Matching Contribution Account, and his or her Rollover Contribution
Account.
The total unpaid balance of all loans (including accrued but unpaid interest)
made with respect to a Participant's Aggregate Account under the Plan and all
other qualified plans maintained by his or her Employer shall not exceed the
maximum amount permitted under Section 72(p) of the Code.
(c) Effective January 1, 1998, no loan shall be made in an amount less than
one thousand dollars ($1,000), nor shall a loan be made if a Participant has any
other loan outstanding with respect to his or her Aggregate Account under the
Plan. Notwithstanding the preceding sentence to the contrary, a loan may be made
in an amount less than one thousand dollars ($1,000) if the Participant is also
a participant or beneficiary who is a "party in interest" as defined in Section
3(14) of ERISA with respect to the SIS Bank Employees' Savings Incentive Plan
("SIS Plan"); his or her Aggregate Account balance under this Plan is not
sufficient to permit a loan to be made in the amount of at least one thousand
dollars ($1,000); and each of the following requirements is satisfied:
(i) the sum of the Participant's account balance under the SIS Plan
plus the Participant's Aggregate Account balance under this Plan would be
sufficient to permit a loan to be made in the amount of at least one
thousand dollars ($1,000) if the separate accounts were treated as a single
account;
(ii) the Participant does not have any other loan outstanding with
respect to either his or her Aggregate Account under this Plan or his or
her account under the SIS Plan;
- --------------------------------
(4) Please confirm that this restriction is correct.
36
(iii) the loan is made during the period beginning July 15, 1999, and
ending on the SIS Plan Affiliation Date; and
(iv) the loan is made in compliance with all provisions of this
Section except for the one thousand dollar ($1,000) minimum amount
requirement.
Each loan shall be evidenced by a promissory note bearing a reasonable rate
of interest as determined by the Plan Administrator, taking into consideration
interest rates currently being charged by commercial lenders for loans made
under similar circumstances, and shall be adequately secured in such manner as
the Plan Administrator may determine. Collateral for a loan may consist of an
assignment of not more than fifty percent (50%) of a Participant's Vested
Interest in his or her Aggregate Account, provided such collateral adequately
secures repayment of the loan. In the event of a default on a loan, the Plan
Administrator shall, after giving the Participant or Beneficiary written notice
of the default and an opportunity to cure the default, in accordance with the
terms and conditions of such loan, foreclose upon the collateral to the extent
necessary to satisfy the Participant's obligation. If the collateral for such
loan is the Participant's interest in his or her Aggregate Account, such
foreclosure may not occur prior to the Participant's termination of employment.
(d) Each loan shall be made for such term and, subject to the foregoing,
upon such terms and conditions as the Plan Administrator shall determine;
provided that substantially level amortization, with payments not less
frequently than quarterly, shall be required over the term of any loan; and
further provided that the term shall not exceed five (5) years unless the loan
is used to acquire a principal residence for the Participant, in which case the
term shall not exceed fifteen (15) years.
(e) Each loan to a Participant or Beneficiary shall be treated and
accounted for as an investment of such Participant's Aggregate Account, and
loans shall be charged against the Investment Funds in which the Participant's
Aggregate Account is invested as of the date such loan is made. Amounts of
principal and interest paid on any loan shall be transferred to the Investment
Funds in accordance with the Participant's investment direction in effect at the
time of payment.
(f) No loan shall be made to any owner-employee or shareholder-employee.
For purposes of this subsection (g), an "owner-employee" means a self-employed
individual who is a sole proprietor or who is a partner in an Employer who owns
more than ten percent (10%) of either the capital or profits interest in such
Employer, and a "shareholder-employee" means an employee or officer of an
electing small business corporation (S corporation) who owns (or is considered
as owning within the meaning of Section 318(a)(1) of the Code), on any day
during the taxable year of such corporation, more than five percent (5%) of the
outstanding stock of the corporation.
(g) No distribution (other than a deemed distribution under Section 72(p)
of the Code) shall be made to any Participant or Former Participant or to a
Beneficiary of any Participant until all unpaid loans with respect to the
Participant's Aggregate Account, including accrued interest thereon, have been
paid in full. In the event a Participant or Beneficiary becomes entitled to a
distribution of his or her Aggregate Account under the Plan, and at the
37
time of such distribution there remain outstanding any unpaid loans with respect
to his or her Aggregate Account, then
(i) such unpaid loan shall be treated as due and payable immediately
as of the date distribution is made or commences;
(ii) the Aggregate Account of the Participant or Beneficiary shall be
reduced prior to any such distribution by the amount of the principal and
accrued interest outstanding on such loan;
(iii) the loan shall be deemed to be paid in full as of the date the
distribution is made or commences; and
(iv) such Participant or Beneficiary shall be treated as receiving or
commencing to receive a distribution of his or her entire Aggregate
Account.
(h) The Plan Administrator shall suspend the obligation to repay any loan
made to a Participant pursuant to this Section for any period during which such
Participant is performing service in the uniformed services (within the meaning
of the Uniformed Services Employment and Reemployment Rights Act), and such
suspension shall not be taken into account for purposes of Sections 72(p),
401(a), or 4975(d)(1) of the Code.
(i) The Plan Administrator shall follow a uniform and nondiscriminatory
policy in making loans to assure that loans are available to all Participants
and Beneficiaries who are "parties in interest" on a reasonably equivalent basis
as required under 29 C.F.R. Section 2550.408b-1 and to further assure that the
Plan meets the requirements of Section 401(a)(4) of the Code.
(j) The Plan Administrator shall establish, in writing, administrative
procedures to carry out the provisions of this Section. A request for a loan
shall be made by such written, telephonic or electronic means as may be
prescribed by the Plan Administrator.
(k) The provisions of this Section shall be applicable to loans granted or
renewed under the Plan on or after January 1, 1998, and loans granted or renewed
prior to such date shall be governed by the provisions of the Plan as in effect
on the date of such grant or renewal; provided that, with respect to a
Predecessor Plan Account, the provisions of this Section shall be applicable to
loans granted or renewed after the Plan Affiliation Date, if later.
ARTICLE IX. VESTING
9.01 ACTIVE PARTICIPANTS ON AND AFTER JANUARY 1, 2002. Each Participant who
is an Eligible Employee on or after the Effective Date shall have a fully vested
and nonforfeitable interest in all amounts credited to his or her Aggregate
Account.
9.02 TERMINATED PARTICIPANTS. Each Participant who terminated employment
with the Company and all Affiliates before the Effective Date and is not an
Employee at any time after December 31, 2000, shall have a fully vested and
nonforfeitable interest in all amounts credited to his or her Salary Deferral
Contribution Account and Rollover Contribution Account. If the
38
Participant terminated employment on or after attainment of Normal Retirement
Age, or an account of Disability, or death, then all amounts credited to his or
her Aggregate Account shall be nonforfeitable. If the Participant terminated
employment for any other reason, the vested percentage of his or her Company
Contribution accounts shall be determined as follows:
YEARS OF SERVICE NONFORFEITABLE INTEREST
- ---------------- -----------------------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 100%
If the Participant is subsequently reemployed by the Company on or after the
Effective Date, then the Participant's nonforfeitable interest in his or her
Aggregate Account on or after the reemployment date shall be determined in
accordance with Section 9.01.
9.03 FORFEITURES. If a Participant terminated employment before the
Effective Date, the nonvested portion of a Participant's Company Contribution
accounts prior to such termination shall be forfeited as of the last day of the
Plan Year in which the Participant incurs a one-year Break in Service, or, if
earlier, upon a complete distribution of the nonforfeitable portion of such
accounts under Article X. If the Participant is reemployed by a Participating
Employer before incurring five (5) consecutive Breaks in Service:
(a) If the Participant was not vested in any portion of his or her Company
Contribution accounts at the time he or she ceased to be employed, the
Participant shall be entitled to restoration of the amount previously forfeited,
unadjusted by any subsequent gains or losses, as of the Valuation Date
coincident with or next following the date of reemployment.
(b) If the Participant was vested in any portion of his or her Company
Contribution accounts at the time he or she ceased to be employed, the
Participant shall be entitled to restoration of the amount previously forfeited
(unadjusted by any subsequent gains or losses) if he or she repays the full
amount of the vested portion of such accounts distributed to him or her in
accordance with Article X before the earlier of (i) five (5) years from the date
of reemployment, or (ii) the close of the first period of five (5) consecutive
Breaks in Service commencing after the date of distribution. Such restoration
shall be made as of the Valuation Date coincident with or next following the
date of repayment.(5)
Any forfeiture under this Section shall be applied first to make
restorations hereunder and then, subject to Section 7.06, to reduce Fixed
Contributions. If forfeitures are insufficient to
- -----------------------------------
(5) As drafted, if someone term'd before 1/1/2001, and subsequently returns
before a 5-year break, he or she is entitled to immediate 100% vesting and
restoration to the extent described. If he or she returns after 5 or more
years, there is no opportunity for restoration of any forfeited amounts but
he or she would immediately be 100% vested in any amounts still in the Plan
from the prior period of employment. Please confirm that this is correct.
39
restore the Participant's Company Contribution accounts, the Company shall
contribute such additional amounts as are required to make restoration.
ARTICLE X. BENEFITS AND DISTRIBUTIONS
10.01 NORMAL RETIREMENT BENEFIT. A Participant shall be entitled to receive
his or her Vested Interest in one or more of the forms of payment provided under
Section 10.05(a) upon attaining Normal Retirement Age. If the Participant
remains employed with the Company past Normal Retirement Age, he or she shall be
entitled to continue active participation in the Plan, and no distribution shall
be made hereunder prior to a request for retirement benefits by such Participant
unless a distribution is required under Section 10.05(d).
10.02 DISABILITY BENEFIT. A Participant shall be entitled to receive his or
her Vested Interest in or more of the forms of payment provided under Section
10.05(a) upon suffering a Disability prior to attaining Normal Retirement Age.
10.03 BENEFIT ON TERMINATION OF EMPLOYMENT. A Participant shall be entitled
to receive his or her Vested Interest in one or more of the forms of payment
provided under Section 10.05(a) upon his or her termination of employment prior
to Normal Retirement Age for any reason other than Disability or death.
10.04 DEATH BENEFIT. In the event of a Participant's death, the remaining
Vested Interest of such Participant, reduced by any security interest held by
the Plan by reason of a loan outstanding to such Participant, shall be paid to
the Participant's Beneficiary as provided under Section 10.06. If there is no
such Beneficiary, such Vested Interest shall be payable to the Participant's
estate. The Plan Administrator may require such proof of death and such evidence
of the right of any person to receive payment of the deceased Participant's
remaining Vested Interest as it deems necessary and appropriate.
10.05 DISTRIBUTION OF BENEFITS TO A PARTICIPANT.
(a) A Participant shall have the right to receive all or a portion of his
or her Vested Interest as a Retirement Benefit, Disability Benefit or Benefit on
Termination of Employment, as the case may be, as a single lump sum payment in
cash. Notwithstanding the preceding sentence:
(i) a Participant may elect to receive payment of the Vested Interest
in his or her ESOP Account in substantially equal annual installments over
a specified period, which period may not exceed five (5) years; provided
that the maximum period over which such distribution may be made is
extended by one year (up to five (5) additional years) for each one hundred
thousand dollars ($100,000) or fraction thereof by which the balance of the
accounts exceeds five hundred thousand dollars ($500,000) (or such higher
amount as the Secretary of the Treasury may prescribe);
(ii) a Participant may elect to receive distribution in Stock of all
or a portion of the Vested Interest in (A) his or her ESOP Account and (B)
his or her Salary Deferral Contribution Account, Matching Contribution
Account, Discretionary Contribution Account, Rollover Contribution Account,
and/or Predecessor Plan Account(s), to the
40
extent invested in Stock on the Annuity Starting Date. If a Participant
elects to receive a distribution in Stock, cash must be distributed in lieu
of any fractional shares of Stock allocated to the Participant's accounts
that are to be distributed in Stock. The Participant may direct the
Committee to issue shares of Stock in the sole name of the distributee or
in the joint names of the distributee and his or her spouse, child, or
other dependent; and
(iii) a Participant may elect to receive all or a portion of the
Vested Interest in his or her Salary Deferral Contribution Account,
Matching Contribution Account, Discretionary Contribution Account and
Rollover Contribution Account as an Annuity if the distribution is made or
commences before January 1, 2002.
(b) Notwithstanding Paragraph (a) to the contrary, if a Participant's
Vested Interest does not exceed the applicable cash-out amount as of the date
distribution is to commence, his or her Vested Interest shall be distributed in
a single lump sum as soon as administratively feasible after his or her
termination of employment for any reason. If the value of the Participant's
vested interest in his or her Company Contribution accounts upon terminating
employment is zero dollars ($0), such Participant shall be deemed to have
received an immediate distribution of such interest.
For purposes of this Paragraph, the "applicable cash-out amount" means
three thousand five hundred dollars ($3,500) before January 1, 1998, and five
thousand dollars ($5,000) (or such higher amount as may be permitted by Code
Section 417(e)(1)) on or after January 1, 1998.
For periods before March 22, 1999, this Paragraph shall not apply if the
Participant's Vested Interest exceeded the applicable cash-out amount at the
time of any prior distribution.
(c) Any distribution to a Participant except a cash-out distribution under
Paragraph (b) shall require such Participant's written consent if such
distribution commences prior to Normal Retirement Age. With regard to such
consent:
(i) The Participant shall receive the written notice described in
Treas. Reg. Section 1.411(a)-11(c)(2)(i), including notice of his or her
right to defer payment of benefits under this Article, no less than thirty
days (30) and no more than ninety (90) days before the date on which such
distribution is paid or commences to be paid. If a Participant declines or
fails to consent, it shall be deemed to be an election to defer payment of
such benefits. However, any election to defer payment shall not apply with
respect to distributions that are required under Paragraph (d).
(ii) Notwithstanding the foregoing to the contrary, if a Participant,
after receiving written notice under Paragraph (c)(i), affirmatively elects
a distribution, then the distribution may be paid or may commence to be
paid less than thirty (30) days after the date such written explanation was
given, provided the Plan Administrator has informed such Participant, in
writing, of his or her right to a period of at least thirty (30) days to
consider whether to consent to the distribution.
(d) Notwithstanding any other provision of the Plan to the contrary, a
Participant's Vested Interest shall be distributed commencing not later than the
required beginning date or shall be distributed, beginning not later than the
required beginning date, over a period not
41
extending beyond the life expectancy of such Participant or the life expectancy
of the Participant and the joint annuitant of the Participant. For purposes of
this Paragraph, the "required beginning date" means the following, effective
January 1, 1998:
(i) For a Participant who attains age seventy and one half (70 1/2)
before January 1, 1999, April 1 of the calendar year following the calendar
year in which the Participant attains age seventy and one half (70 1/2).
(ii) For a Participant who attains age seventy and one half (70 1/2)
after December 31, 1998, April 1 of the calendar year following the later
of (A) the calendar year in which the Participant attains age seventy and
one half (70 1/2), or (B) the calendar year in which the Participant
retires; provided that this clause (B) shall not apply in the case of a
Participant who is a five percent (5%) owner (within the meaning of Section
416(i) of the Code) with respect to the Plan Year ending in the calendar
year in which the Participant attains age seventy and one half (70 1/2);
and provided further that in the case of a Participant to whom this clause
(B) applies and who retires in a calendar year after the calendar year in
which he or she attains age seventy and one half (70 1/2), the
Participant's Accrued Benefit shall be actuarially increased, in the manner
prescribed by the Secretary of the Treasury, to take into account the
period after age seventy and one half (70 1/2) in which the Participant was
not receiving any benefits under the Plan.
(e) Notwithstanding any other provision of the Plan to the contrary,
distributions shall be made in accordance with the regulations under Section
401(a)(9) of the Code, including the minimum distribution incidental death
benefit requirements of Section 1.401(a)(9)-2, and shall be distributed over the
life of such Participant (or over the lives of such Participant and his or her
Beneficiary) or over a period not extending beyond the life expectancy of such
Participant (or the life expectancy of such Participant and his or her
Beneficiary). The provisions of Section 401(a)(9) of the Code and the
regulations thereunder shall override any distribution options inconsistent
therewith.
For purposes of this Paragraph, before January 1, 2002 [2001], the life
expectancy of a Participant and a Participant's spouse shall be determined in
accordance with applicable Treasury Regulations without annual recalculation.
Life expectancies and joint and last survivor expectancy shall be determined
using the return multiples in Tables V and VI of Treas. Reg. Section 1.72-9.
WITH RESPECT TO DISTRIBUTIONS UNDER THE PLAN MADE FOR CALENDAR YEARS
BEGINNING ON OR AFTER JANUARY 1, 2001 [2002] (INCLUDING DISTRIBUTIONS UNDER THIS
SECTION AND SECTION 10.06), THE PLAN WILL APPLY THE MINIMUM DISTRIBUTION
REQUIREMENTS OF SECTION 401(a)(9) OF THE INTERNAL REVENUE CODE IN ACCORDANCE
WITH THE REGULATIONS UNDER SECTION 401(a)(9) THAT WERE PROPOSED ON JANUARY 17,
2001, NOTWITHSTANDING ANY PROVISION OF THE PLAN TO THE CONTRARY. THIS AMENDMENT
SHALL CONTINUE IN EFFECT UNTIL THE END OF THE LAST CALENDAR YEAR BEGINNING
BEFORE THE EFFECTIVE DATE OF FINAL REGULATIONS UNDER SECTION 401(a)(9) OR SUCH
OTHER DATE AS MAY BE SPECIFIED IN GUIDANCE PUBLISHED BY THE INTERNAL REVENUE
SERVICE.
42
10.06 DISTRIBUTION OF BENEFITS UPON DEATH.
(a) Subject to Paragraph (c) below, the death benefits payable under
Section 10.04 shall be paid to the Participant's Beneficiary within a reasonable
time after the Participant's death as a single lump sum payment in cash.
Notwithstanding the preceding sentence:
(i) the Beneficiary may elect to receive payment of the Vested
Interest in the Participant's ESOP Account in substantially equal annual
installments over a specified period, which period may not exceed five (5)
years; provided that the maximum period over which such distribution may be
made is extended by one year (up to five (5) additional years) for each one
hundred thousand dollars ($100,000) or fraction thereof by which the
balance of the accounts exceeds five hundred thousand dollars ($500,000)
(or such higher amount as the Secretary of the Treasury may prescribe);
(ii) a Beneficiary may elect to receive distribution in Stock of all
or a portion of the Vested Interest in (A) the Participant's ESOP Account
and (B) the Participant's Salary Deferral Contribution Account, Matching
Contribution Account, Discretionary Contribution Account, Rollover
Contribution Account, and/or Predecessor Plan Account(s), to the extent
invested in Stock on the Annuity Starting Date. If the Beneficiary elects
to receive a distribution in Stock, cash must be distributed in lieu of any
fractional shares of Stock allocated to the accounts that are to be
distributed in Stock. The Beneficiary may direct the Committee to issue
shares of Stock in the sole name of the distributee or in the joint names
of the distributee and his or her spouse, child, or other dependent; and
(iii) a Beneficiary may elect to receive all or a portion of the
Vested Interest the Participant's Salary Deferral Contribution Account,
Matching Contribution Account, Discretionary Contribution Account and
Rollover Contribution Account as an Annuity if the distribution is made or
commences before January 1, 2002.
(b) Notwithstanding Paragraph (a) to the contrary, if a Participant's
Vested Interest does not exceed the applicable cash-out amount as of the date
distribution is to commence, his or her Vested Interest shall be distributed to
the Beneficiary in a single lump sum as soon as administratively feasible after
the Participant's death.
For purposes of this Paragraph, the "applicable cash-out amount" means
three thousand five hundred dollars ($3,500) before January 1, 1998, and five
thousand dollars ($5,000) (or such higher amount as may be permitted by Code
Section 417(e)(1)) on or after January 1, 1998.
For periods before March 22, 1999, this Paragraph shall not apply if the
Participant's Vested Interest exceeded the applicable cash-out amount at the
time of any prior distribution.
(c) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance with
the following requirements and shall otherwise comply with Section 401(a)(9) and
the regulations thereunder, which are hereby incorporated by reference into this
Plan:
(i) If the Participant dies after the distribution of his or her
Vested Interest has begun and the Participant dies before his or her entire
interest has been distributed to him,
43
the remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected under Section 10.05 as
of his or her date of death.
(ii) Subject to clause (iii) below, if a Participant dies before the
distribution of his or her Vested Interest has begun, then the death
benefits payable hereunder shall be distributed to such Participant's
Beneficiary by the end of the calendar year in which the fifth (5th)
anniversary of the Participant's date of death occurs.
(iii) If the Participant's spouse (determined as of the Participant's
date of death) is the Beneficiary, distributions must be made over a period
not extending beyond the life expectancy of the spouse and must commence on
or before the later of the end of the calendar year immediately following
the calendar year in which the Participant died or would have attained
seventy and one half (70 1/2) years of age. If the surviving spouse dies
before distribution to such spouse has begun, then the five-year
distribution requirement of clause (ii) shall apply as if the spouse was
the Participant.
10.07 COMMENCEMENT OF BENEFITS. Any payment of benefits from the Plan will
be made as soon as administratively feasible following the Valuation Date on
which the Participant's Vested Interest is to be determined. Notwithstanding the
foregoing, unless the Participant elects to defer the payment of benefits, the
payment of benefits will commence no later than the sixtieth (60th) day
following the close of the Plan Year in which the latest of the following events
occurs: (a) the date on which the Participant attains Normal Retirement Age, (b)
the tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan, and (c) the date the Participant terminates
employment with the Company.
10.08 PAYMENT UPON INCAPACITY. The Plan Administrator may suspend the
payment of benefits under the Plan to any person if it determines in its sole
discretion that such person is incapacitated so as to be unable to manage his or
her financial affairs. In such case, the Plan Administrator shall direct the
Trustee to resume the payment of benefits under the Plan to the conservator or
other legal representative appointed for such incapacitated person.
10.09 PAYMENT UNDER QUALIFIED DOMESTIC RELATIONS ORDER. All rights and
benefits provided to a Participant under this Plan shall be subject to the
rights of any alternate payee under a Qualified Domestic Relations Order. If
authorized by a Qualified Domestic Relations Order, an alternate payee may elect
to receive an immediate distribution of all or a portion of the Participant's
Vested Interest even if the affected Participant has not reached his or her
earliest retirement age. For purposes of this Section, "alternate payee" and
"earliest retirement age" shall have the meaning set forth in Section 414(p) of
the Code.
10.10 DIRECT ROLLOVERS.
(a) A Participant who is entitled to receive an Eligible Rollover
Distribution may elect to have such distribution (or a portion thereof not less
than five hundred dollars ($500)) made directly to an eligible retirement plan
("direct rollover election").
An alternate payee who is entitled to receive an Eligible Rollover
Distribution pursuant to a Qualified Domestic Relations Order and who is the
spouse or a former spouse of a Participant may make a direct rollover election
as if such alternate payee were the Participant.
44
A surviving spouse who is entitled to receive an Eligible Rollover
Distribution by reason of the Participant's death may make a direct rollover
election; provided that such election is restricted to an eligible retirement
plan that is an individual retirement account described in Section 408(a) of the
Code or an individual retirement annuity described in Section 408(b) of the
Code.
(b) No earlier than ninety (90) days and no later than thirty (30) days
before an Eligible Rollover Distribution is to be made, the Plan Administrator
shall provide the Participant, alternate payee, or surviving spouse, as the case
may be, with a written explanation of:
(i) the rules under which he or she may make a direct rollover
election;
(ii) the legal requirement that federal income tax be withheld from
the distribution if he or she does not elect a direct rollover;
(iii) the rules under which the amount that he or she actually
receives will not be subject to federal income tax if such amount is
transferred ("rolled over") within sixty (60) days after being received
pursuant to Section 402(c) of the Code;
(iv) the rules, if applicable, for receiving special income tax
averaging, or capital gain treatment, under Section 402(d) of the Code; and
(v) the Plan provisions under which a direct rollover election with
respect to one payment in a series of periodic payments will apply to all
subsequent payments until such election is changed.
Notwithstanding the foregoing to the contrary, if an Eligible Rollover
Distribution is one of a series of periodic payments, the explanation required
by this Paragraph (b) shall be provided annually as long as such payments
continue.
(c) A direct rollover election shall be made in such manner and at such
time as the Plan Administrator shall prescribe, and shall include:
(i) the name of the eligible retirement plan;
(ii) a statement that such plan is an eligible retirement plan; and
(iii) any other information necessary to permit a direct rollover by
the means selected by the Plan Administrator.
An election to make a direct rollover with respect to one payment in a
series of periodic payments shall apply to all subsequent payments in the series
until such election is changed; such change with respect to subsequent payments
may be made at any time.
(d) Notwithstanding Paragraph (b) to the contrary, if an individual, after
receiving the written explanation required by subsection (b) affirmatively
elects to make or not make a direct rollover, an eligible rollover distribution
may be made less than thirty (30) days after the date such written explanation
was given, provided the Plan Administrator has informed such
45
individual, in writing, of his or her right to a period of at least thirty (30)
days to make such election.
(e) As used in this Section, the term "eligible retirement plan" means an
individual retirement account described in Section 408(a) of the Code; an
individual retirement annuity described in Section 408(b) of the Code (other
than an endowment contract); a trust described in Section 401(a) of the Code
which is exempt from tax under Section 501(a) of the Code and which is part of a
defined contribution plan described in Section 414(i) of the Code that permits
rollover contributions; or an annuity plan described in Section 403(a) of the
Code.
(f) A direct rollover shall be made in cash; provided, however, with
respect to a Participant who ceases to be employed by the Company (and is no
longer employed by the Company or an Affiliate) as a result of the sale of
certain branches of Peoples Heritage Bank to Katahdin Trust Company on November
17, 2000, and who elects a direct rollover of his or her Vested Interest to the
Katahdin Trust Company 401(k) Plan ("Katahdin Plan"), and at the time of such
distribution there remain any outstanding loans with respect to his or her
Aggregate Account that are not in default, then, notwithstanding Section 8.03(g)
to the contrary, such unpaid loans shall not be treated as due and payable
immediately as of the date such distribution is made and instead shall be
transferred to the Katahdin Plan. The promissory note(s) evidencing such loan(s)
shall be assigned to the Katahdin Plan, and the Participant's obligation to this
Plan shall be deemed to be paid in full as of the date distribution is made.
Such a Participant shall be treated as receiving a distribution of his or her
entire Aggregate Account.
10.11 ANNUITIES. A Participant who is entitled to and elects to receive all
or a portion of his or her Vested Interest as an Annuity shall receive an
annuity contract purchased from an insurance company, bank, or other similar
financial institution, subject to the following requirements:
(a) Except for surrender to the issuer, the contract shall be
nontransferable, and no benefit thereunder may be sold, assigned, discounted, or
pledged.
(b) The normal form of the annuity contract for a Participant who is
married on the Annuity Starting Date shall be a 50% joint and survivor annuity
with the Participant's spouse as joint annuitant. Any other Participant shall be
entitled to elect an annuity contract in the form of a single life annuity, a
ten (10) year certain and continuous annuity, or a 50% joint and survivor
annuity.
(c) In lieu of a 50% joint and survivor annuity with the spouse as joint
annuitant, a married Participant may elect to receive a single life annuity, a
ten (10) year certain and continuous annuity or a 50% joint and survivor annuity
with another individual as joint annuitant, if the Participant's spouse consents
to such election. Such election may be made, with spousal consent, during the
ninety-day period ending on the Annuity Starting Date, provided, however, that
(1) if the written explanation required by Section 417(a)(3) of the Code has not
been furnished to the Participant at least thirty (30) days before the Annuity
Starting Date, the election period will be extended, if necessary, to include
the thirty-day period following the date on which such information is furnished
to the Participant, and (2) if the Participant requests additional information
described in Treas. Reg. Section 1.401(a)-11(c)(3)(iii), the election period
shall
46
be extended, if necessary, to include the thirty-day period following the day on
which such additional information is personally delivered or mailed to the
Participant.
Notwithstanding the foregoing to the contrary, if a Participant, after
receiving the written explanation required by Section 417(a)(3) of the Code,
affirmatively elects a form of distribution, with spousal consent, an Annuity
may commence no less than seven (7) days after the date such written explanation
was given, provided the Plan Administrator has informed such Participant, in
writing, of his or her right to a period of at least thirty (30) days to make
such election.
Any consent by the Participant's spouse to waive rights to survivor
benefits under a joint and survivor annuity must be in writing, must acknowledge
the effect of such waiver and must be witnessed by a notary public. Subject to
the spousal consent requirement above, the Participant may change an election
under this Paragraph (c) at any time and any number of times before the Annuity
Starting Date, in the form and the manner required by the Plan Administrator
from time to time. The Participant's spouse may not revoke consent to a specific
waiver of a joint and survivor form of benefit.
10.12 DISTRIBUTIONS TO QUALIFIED PARTICIPANTS.
(a) Each Qualified Participant may elect annually within ninety (90) days
after the close of each Plan Year in the Qualified Election Period withdraw not
more than twenty-five percent (25%) of the amounts credited to his or her ESOP
Account as of the last day of the Plan Year (taking into account in applying the
twenty-five percent (25%) limitation any amounts previously withdrawn pursuant
to this Section); provided, however, that in the case of the Plan Year with
respect to which the Qualified Participant can make his or her last withdrawal
election pursuant to this Section, this sentence shall be applied by
substituting "fifty percent (50%)" for "twenty-five percent (25%)." Any election
pursuant to this Section must be in writing, on a form or forms supplied by the
Committee, and must be received by the Employer not later than ninety (90) days
after the close of the Plan Year to which the election relates.
(b) Unless otherwise elected by the Qualified Participant in accordance
with the following sentence, distributions of amounts withdrawn from the ESOP
Account of a Qualified Participant pursuant to this Section shall be made in
cash. A Qualified Participant may elect in writing on the election form
described in Paragraph (a) to receive all or a portion of the amounts withdrawn
from the Qualified Participant's ESOP Account pursuant to this Section in whole
shares of Stock, with cash distributed in lieu of any fractional shares.
Distributions of amounts withdrawn pursuant to this Section, whether in shares
of Stock or cash, shall be made no later than ninety (90) days after the close
of the period during which the withdrawal election may be made.
(c) For purposes of this Section, the term "Qualified Participant" means
any Participant who has completed at least ten (10) years of participation under
the Plan and has attained age fifty-five (55), and the term "Qualified Election
Period" means the six (6) Plan Year period beginning with the first Plan Year in
which the Participant first became a Qualified Participant.
47
(d) Notwithstanding the foregoing to the contrary, if the Fair Market Value
(determined as of the Valuation Date immediately preceding the first day on
which a Qualified Participant is otherwise eligible to make an election under
Paragraph (a) of the shares of Stock acquired by or contributed to the Plan and
allocated to the Qualified Participant's ESOP Account is five hundred dollars
($500) or less, then the Qualified Participant shall not be eligible to make an
election to receive a distribution under this Section; provided that, if the
Fair Market Value of the shares of Stock acquired by or contributed to the Plan
and allocated to the Qualified Participant's ESOP Account should thereafter
exceed five hundred dollars ($500) on a Valuation Date that falls within the
Qualified Election Period, then all shares of Stock allocated to such account
shall be subject to the election provided in this Section for the remainder of
the Qualified Election Period.
(e) Notwithstanding the foregoing to the contrary, a Predecessor Plan
Participant shall be a Qualified Participant with respect to his or Predecessor
Plan Account attributable to the Separate ESOP if he or she has completed at
least ten (10) years of participation under the Plan and the Predecessor Plan
and has attained age fifty-five (55) (or such lesser number of years of
participation or lower age as is provided under the Predecessor Plan on its Plan
Affiliation Date).
ARTICLE XI. ADMINISTRATION OF THE PLAN
11.01 PLAN ADMINISTRATOR. The general administration of the Plan shall be
vested in the Plan Administrator, who shall be a named fiduciary for purposes of
Section 402(a)(2) of ERISA. In performing its duties hereunder, the Plan
Administrator shall have the fullest discretion permitted by law and shall have
all powers granted by the provisions of the Plan except those specifically
granted or allocated to the Board, the Trustee and any investment manager.
11.02 POWERS AND DUTIES. The Plan Administrator shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority and duty:
(a) to make rules, regulations and bylaws for the administration of the
Plan which are not inconsistent with the terms and provisions hereof;
(b) to construe all terms, provisions, conditions and limitations of the
Plan;
(c) to correct any defect or supply any omission or reconcile any
inconsistency that may appear in the Plan, in such manner and to such extent as
it shall deem expedient to carry the Plan into effect for the greatest benefit
of all interested parties;
(d) to employ and compensate such accountants, attorneys, investment
advisors and other agents and employees as the Plan Administrator may deem
necessary or advisable in the proper and efficient administration of the Plan;
(e) to determine all factual and interpretation questions relating to
benefits under the Plan;
48
(f) to prescribe procedures to be followed by Participants, Beneficiaries
and alternate payees when requesting benefits hereunder;
(g) to prepare, file and distribute, in such manner as the Plan
Administrator determines to be appropriate, such information and material as is
required by the reporting and disclosure requirements of ERISA;
(h) to make a determination as to the right of any person to a benefit
under the Plan;
(i) to select any investment managers;
(j) to receive and review reports from the Trustee and any investment
managers as to the financial condition of the Trust Fund, including its receipts
and disbursements;
(k) to instruct the Trustee to grant loans as provided under Section 8.03,
above;
(l) to determine and instruct the Trustee and any investment manager on the
funding and investment policies, methods and objectives of the Trust;
(m) to designate those Trust assets over which the Trustee and each
investment manager shall have control; and
(n) to prepare and submit all reports, notices, insurance premiums and
applications with respect to the Plan and the Trust required by law and for the
continued qualification of the Plan and Trust under Sections 401 and 501 of the
Code.
11.03 DELEGATION OF MINISTERIAL DUTIES. The Plan Administrator may delegate
to any of its members or to any Employee or Employees, severally or jointly, the
authority to perform any ministerial act in connection with the administration
of the Plan.
11.04 INVESTMENT MANAGER. The Plan Administrator may, in its sole
discretion, appoint an investment manager, with power to manage, acquire or
dispose of all or any portion of the Trust Fund who (a) is registered as an
investment adviser under the Investment Advisers Act of 1940; is not so
registered by reason of paragraph (1) of Section 203(A)(a) of such Act, is
registered as an investment adviser under the laws of the state (referred to in
such paragraph (1)) in which it maintains its principal office and place of
business, and at the time the fiduciary last filed the registration form most
recently filed by the fiduciary with such state in order to maintain the
fiduciary's registration under the laws of such state, also filed a copy of such
form with the Secretary; is a bank, as defined in said Act; or is an insurance
company qualified to manage, acquire, or dispose of all or any portion of the
Trust Fund under the laws of more than one state; and (b) has acknowledged, in
writing, that it is a fiduciary with respect to the Plan and Trust. Upon such
appointment, the Plan Administrator shall not be liable for the acts of the
investment manager. The Trustee shall follow the directions of such investment
manager and shall not be liable for the acts or omissions of such investment
manager. The investment manager may be removed by the Plan Administrator at any
time and within its sole discretion.
49
11.05 BENEFIT CLAIM PROCEDURE.
(a) A claim for a benefit under the Plan shall be submitted to the Plan
Administrator by the claimant or his or her authorized representative.
Submissions shall be made by such written, telephonic or electronic means as are
prescribed by the Plan Administrator and within the time period specified by the
Plan Administrator, provided, however that a claim for a Disability Benefit
shall be made within six (6) months from the date the Participant suffered a
Total and Permanent Disability, or his or her last full day of active
employment, whichever is later. Satisfactory proof of eligibility and
information necessary to determine the amount of such payments, including, where
appropriate, proof of age, Social Security status, death of an Employee or a
prior beneficiary, appointment as executor, administrator or guardian and such
other information as is reasonably required in the circumstances must be
submitted.
(b) If a claim is wholly or partially denied, the Plan Administrator shall
furnish the claimant with written or electronic notification of the adverse
benefit determination. Any electronic notification shall comply with the
standards imposed by 29 C.F.R. sections 2520.104(b)-1(c)(i), (iii) and (iv). The
notification shall set forth in a manner calculated to be understood by the
claimant:
(i) The specific reason or reasons for the adverse benefit
determination;
(ii) Reference to the specific Plan provisions on which the
determination is based;
(iii) A description of any additional material or information
necessary for the claimant to perfect his or her claim and an explanation
why such material or information is necessary; and
(iv) A description of the Plan's procedures for review of an adverse
benefit determination and the time limits applicable to such procedures,
including, effective January 1, 2002, a statement of the claimant's right
to bring a civil action under Section 502(a) of ERISA following an adverse
benefit determination on review.
Such notification shall be furnished to the claimant within ninety (90) days
after receipt of his or her claim, unless special circumstances require an
extension of time for processing his or her claim. If an extension of time for
processing is required, the Plan Administrator shall, prior to the termination
of the initial ninety (90) day period, furnish the claimant with written notice
indicating the special circumstances requiring an extension and the date by
which the Plan Administrator expects to render the benefit determination. In no
event shall an extension exceed a period of ninety (90) days from the end of the
initial ninety (90) day period.
(c) A claimant or his or her authorized representative may appeal an
adverse benefit determination by filing a written request for review with the
Plan Administrator. Such request must be delivered to the Plan Administrator
within sixty (60) days after receipt by the claimant of notification of the
adverse benefit determination. A claimant or his or her duly authorized
representative may review pertinent documents and submit issues and comments in
writing. In particular, effective January 1, 2002, a claimant and his or her
duly authorized representative:
50
(i) May submit to the Plan Administrator written comments, documents,
records, and other information relating to the claim for benefits; and
(ii) Shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information
relevant to the claimant's claim for benefits.
Effective January 1, 2002, the Plan Administrator's review of any adverse
benefit determination shall take into account all comments, documents, records
and other information submitted by the claimant or his or her authorized
representative relating to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination.
(d) The Plan Administrator shall provide the claimant with written or
electronic notification of the benefit determination on review not later than
sixty (60) days after receipt of a request for review, unless special
circumstances require an extension of time for processing. Any electronic
notification shall comply with the standards imposed by 29 C.F.R. sections
2520.104(b)-1(c)(i), (iii) and (iv). If an extension of time for processing is
required, the Plan Administrator shall, prior to the termination of the initial
60-day period, furnish the claimant with written notice indicating the special
circumstances requiring an extension of time and the date by which the Plan
Administrator expects to render the determination on review. In no event shall
such extension exceed a period of sixty (60) days from the end of the initial
60-day period.
In the case of an adverse benefit determination on review, the notification
shall set forth in a manner calculated to be understood by the claimant:
(i) The specific reason or reasons for the adverse determination;
(ii) Reference to the specific Plan provisions on which the
determination is based; and
(iii) Effective January 1, 2002, (A) a statement that the claimant is
entitled to receive, upon request and free of charge, reasonable access to,
and copies of, all documents, records and other information relevant to the
claimant's claim for benefits; and (B) a statement of the claimant's right
to bring a civil action under Section 502(a) of ERISA.
11.06 CONCLUSIVENESS OF RECORDS. In administering the Plan, the Plan
Administrator may conclusively rely upon the Company's payroll and personnel
records maintained in the ordinary course of business.
11.07 CONCLUSIVENESS OF ACTIONS. Any action or determination taken or made
by the Plan Administrator in its discretion shall be conclusive and binding upon
all individuals.
ARTICLE XII. ADMINISTRATION OF THE FUND
12.01 PAYMENT OF EXPENSES. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, expenses of the Plan Administrator and the cost of furnishing any bond or
security required of the Plan Administrator
51
shall be paid by the Company; provided, however, that the Board in its
discretion may elect at any time to require the Trust Fund to pay part or all
thereof (excluding Trustee fees), and, until paid, shall constitute a claim
against the Trust Fund which is paramount to the claims of Participants and
Beneficiaries. Any election for payment of expenses from the Trust Fund by the
Board shall not bind the Board as to its right to elect, with respect to the
same or other expenses, to have such expenses paid directly by the Company.
12.02 TRUST FUND PROPERTY. All income, profits, recoveries, contributions,
forfeitures and any and all moneys, securities and properties of any kind at any
time received or held by the Trustee hereunder shall be held for investment
purposes as a commingled Trust Fund. The Plan Administrator shall maintain a
Salary Deferral Contribution Account, Matching Contribution Account, ESOP
Account, Rollover Contribution Account, Predecessor Plan Account, and Aggregate
Account in the name of each Participant, but the maintenance of such accounts
shall not mean that such Participant shall have a greater or lesser interest
than that due him or her by operation of the Plan and shall not be considered as
segregating any funds or property from any other funds or property contained in
the commingled fund. No Participant shall have any title to any specific asset
in the Trust Fund.
12.03 DISBURSEMENTS AND DISTRIBUTIONS. The Trustee shall make disbursements
for the purposes of investment as the Trustee in its sole discretion deems
advisable and proper. The Trustee shall make disbursements for the payment of
expenses upon approval by the Plan Administrator, and the Trustee shall have no
other responsibility with respect to such disbursements. The Trustee shall make
distributions to Participants and Beneficiaries in accordance with the
instructions of the Plan Administrator, observing the amounts, frequency of
payment, names, addresses and other similar instructions given by the Plan
Administrator, and the Trustee shall have no other responsibility with respect
to such distributions.
12.04 TRUST ACCOUNTING. The Trustee shall keep full accounts of all its
receipts, disbursements, and investments in the Trust Fund. Within a reasonable
period following the close of each Plan Year or the termination of the Trust,
the Trustee shall render to the Plan Administrator an accounting of its
administration of the Trust during the preceding year or interim period. Said
accounting shall be made available at all reasonable times for inspection or
audit by any person designated by the Plan Administrator and by any other person
or entity to the extent required by law. The written approval of any accounting
by the Plan Administrator (or failure to except or object in writing to the
Trustee as to any matter or transaction stated therein within sixty (60) days
after receipt of any account) shall be final and binding upon them and upon all
persons who may be or become interested in this Trust as to all matters and
transactions stated in such account.
ARTICLE XIII. TRUSTEES
13.01 APPOINTMENT AND SUCCESSION. The Company may appoint one or more
additional Trustees at any time. In the event of a vacancy in the office of
Trustee, whether by reason of the death, legal incapacity, resignation, or
removal of a Trustee, the Company may designate and appoint a successor Trustee,
but should there be no Trustee, then the Company shall designate one or more
successor Trustees. In the event that the Company shall go out of existence or
shall fail to appoint a required Trustee within a reasonable period of time,
then the remaining Trustee
52
or Trustees shall appoint a successor Trustee. The successor Trustee shall have
all the powers conferred herein upon an original Trustee, but shall not be
responsible for the acts, omissions, or accounts of his or her predecessor
Trustee. Any successor Trustee shall immediately and automatically vest in the
title to any property in the Trust Fund.
13.02 RESIGNATION AND REMOVAL. Any Trustee may resign from this Trust by
sending written notice to the Company. The Company may remove a Trustee at any
time by sending written notice to the Trustee. Thereupon, the Trustee shall
render to the Company an accounting of his or her administration of this Trust
from the Trustee's last annual accounting to the date of resignation or removal
and shall perform all acts necessary to transfer the assets of this Trust to his
or her successor.
13.03 TRUSTEE POWERS. The Trustee shall have the power to do all such acts,
take all such proceedings, and exercise all such rights and privileges as the
Trustee may deem necessary to administer the funds and to carry out the purposes
of the Plan and Trust.
ARTICLE XIV. AMENDMENT AND TERMINATION
14.01 AMENDMENTS.
(a) No amendment may be made which would vary the Plan's exclusive purpose
of providing benefits to Participants, and their beneficiaries, and defraying
reasonable expenses of administering the Plan or which would permit the
diversion of any part of the Trust Fund from that exclusive purpose. No
amendment shall, except to the extent permitted under Section 412(c)(8) of the
Code, decrease a Participant's Aggregate Account balance or, except to the
extent permitted by regulations, eliminate an optional form of benefit. In
addition, no amendment shall have the effect of decreasing a Participant's
Vested Interest determined without regard to such amendment as of the later of
the date such amendment is adopted or the date it becomes effective.
(b) Subject to the limitations in Paragraph (a) of this Section and any
other limitations contained in ERISA or the Code, the Board may make any
amendment to the Plan including, but not limited to, an increase or decrease of
contributions, a change or modification of the method of allocation of
contributions or forfeitures, or a change of the provisions relating to the
administration of the Plan.
(c) Nothing herein shall be construed as prohibiting any amendment or
modification of the Plan which is required in order to comply with provisions of
any law or regulation relating to the establishment or maintenance of the Plan,
including but not limited to the establishment and maintenance of the Plan as a
qualified retirement plan or trust under applicable provisions of the Code and
to comply with ERISA, even though such amendment or modification is made
retroactively or adversely affects the rights or interests of a Participant of
the Plan. Any such modifications or amendment shall be approved by the Plan
Administrator without further authorization from the Board.
(d) If the vesting schedule in effect under the Plan is amended, each
Participant who has completed at least three (3) Years of Service may elect to
have the vested percentage of such portion of his or her Aggregate Account
determined without regard to such amendment. The
53
Plan Administrator shall promptly give each such Participant written notice of
the adoption of any such amendment and the availability of the election to have
the vested percentage of such portion of his or her Aggregate Account determined
without regard to such amendment. An election by a Participant shall be in
writing and shall be effective if filed with the Plan Administrator at any time
during the period beginning with the date such amendment is adopted and ending
on the later of (i) the date which is sixty (60) days after the day such
amendment is adopted, (ii) the date which is sixty (60) days after the day such
amendment becomes effective, or (iii) the date which is sixty (60) days after
the day the Participant receives written notice of such amendment. An election
once made shall be irrevocable. For purposes of this Section, a Participant
shall be considered to have completed three (3) Years of Service if the
Participant has completed three (3) Years of Service prior to the expiration of
the period in which an election could be made.
14.02 DISCONTINUANCE OF CONTRIBUTIONS.
(a) The Company has established the Plan with the bona fide intention and
expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the Company
realizes that circumstances not now foreseen, or circumstances beyond its
control, may make it either impossible or inadvisable to continue to make its
contributions to the Trust. Therefore, the Company shall have the power to
discontinue contributions to the Plan, terminate the Plan or partially terminate
the Plan at any time.
(b) If the Plan is amended so as to permanently discontinue Company
contributions, or if Company contributions are in fact permanently discontinued,
each affected Participant shall have a fully Vested Interest in his or her
Aggregate Account effective as of the date of discontinuance. In case of
discontinuance, the Plan Administrator shall continue to administer the Plan and
all other provisions of the Plan which are necessary, in the opinion of the Plan
Administrator, for equitable operation of the Plan shall remain in force.
(c) If the Plan is terminated or partially terminated, each affected
Participant shall have a fully Vested Interest effective as of the termination
date. Unless the Plan is otherwise amended prior to dissolution of the Company,
the Plan shall terminate as of the date of dissolution of the Company.
(d) Upon discontinuance or termination, any previously unallocated
contributions, forfeitures and net income (or net loss) shall be allocated to
the accounts of Participants on such date of discontinuance or termination as if
such date of discontinuance or termination were a Valuation Date. Thereafter,
net income (or net loss) shall continue to be allocated to Participants'
accounts until the balances thereunder are distributed. In the event of
termination, the date of the final distribution shall be treated as a Valuation
Date.
(e) In the case of a total or partial termination of the Plan, and in the
absence of a Plan amendment to the contrary, the Trustee shall be entitled in
its sole discretion to pay the balance of an affected Participant's Aggregate
Account in a single lump sum payment.
54
14.03 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. In the event of any
merger or consolidation of the Plan with, or transfer in whole or in part of the
assets and liabilities of the Trust Fund to another trust fund held under any
other retirement or pension plan maintained or to be established for the benefit
of some or all of the Participants in this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:
(a) each Participant would (if either this Plan or the other plan
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if this Plan had been terminated);
(b) the Board shall have authorized such merger, consolidation, or transfer
of assets, and the board of directors of any new or successor employer of the
affected Participants shall have agreed to an assumption of liabilities with
respect to such Participants' inclusion in the new or successor employer's plan;
and
(c) such other plan and trust are qualified under Sections 401(a) and
501(a) of the Code.
14.04 MANNER OF AMENDMENT OR TERMINATION. Except as otherwise provided in
the Plan, any amendment, modification, suspension, or termination of the Plan
shall be formally adopted or approved by the Board by resolution, unanimous
written consent, or any other method authorized under the by-laws of the
Company, and shall be effective on the date of its adoption or approval or such
other date as is specified therein; provided, however, the Board may delegate to
the Plan Administrator or other party (by formally-adopted or approved
resolution, unanimous written consent, or any other method authorized under the
by-laws of the Company) the authority to amend or modify the Plan.
ARTICLE XV. PARTICIPATING EMPLOYERS
15.01 ADOPTION BY PARTICIPATING EMPLOYERS. The Board or its delegate, which
may be the Plan Administrator, may cause any Affiliate, whether or not presently
existing, to become a Participating Employer hereunder. The provisions of the
Plan shall apply separately and equally to each Participating Employer and its
employees in the same manner as is expressly provided for the Company and its
Employees, except to the extent specifically provided otherwise in the Plan and
except that provisions granting powers, rights and duties under the Plan to the
Board shall apply exclusively to the board of directors of Banknorth Group, Inc.
The Board may, in its discretion, terminate a Participating Employer's
participation in this Plan at any time. If such discontinuance of participation
is due to the establishment of a separate plan, the Trustee shall take whatever
action is necessary to effect a transfer of the applicable assets to such
separate plan. Otherwise, such assets shall continue to be held under this Plan
and the provisions hereof shall govern.
15.02 SINGLE PLAN. For purposes of the Code and ERISA, the Plan as adopted
by the Participating Employers shall constitute a single plan rather than a
separate plan of each Participating Employer. All assets in the Trust Fund shall
be available to pay benefits to all Participants and their Beneficiaries.
55
ARTICLE XVI. PREDECESSOR PLANS AND ACCOUNTS
16.01 ARTICLE CONTROLS. The provisions of this Article shall take
precedence over any conflicting provisions of any other Article of the Plan with
respect to the benefits, rights, and features of a Predecessor Plan remaining in
effect with respect to a Participant's Predecessor Plan Account.
16.02 PREDECESSOR PLANS. The plans identified on Appendix A to the Plan
shall be Predecessor Plans as of their respective Plan Affiliation Dates stated
therein.
16.03 MERGER PROVISIONS. The following provisions shall be applicable to
the merger of each Predecessor Plan with this Plan as of the applicable Plan
Affiliation Date:
(a) All participant accounts, employer contributions accounts, suspense
accounts, outstanding forfeitures, and loans under the Predecessor Plan shall be
transferred to this Plan;
(b) All of the Predecessor Plan's assets shall be transferred to this Plan;
(c) All of the Predecessor Plan's benefit obligations shall be transferred
to this Plan and become the responsibility of the Plan;
(d) On and after the Plan Affiliation Date, the rights of participants and
beneficiaries of participants under the Predecessor Plan shall be determined
strictly in accordance with the terms of this Plan; provided that, in accordance
with Paragraph (g), each such participant's Predecessor Plan Account shall be
invested and reinvested in accordance with the applicable provisions of the
Predecessor Plan until the date on which the Predecessor Plan's assets are
transferred to the trust under this Plan ("transfer date");
(e) On the Plan Affiliation Date, the vested interest in the Plan of each
Participant whose account is transferred from the Predecessor Plan shall be no
less than his or her vested employer contributions account and his or her
participant contributions account under the Predecessor Plan on the date
preceding the merger;
(f) The Trustee shall accept the Predecessor Plan's assets when transferred
and shall have all the rights, duties, powers and responsibilities with respect
to such assets as prescribed under Article XIII of the Plan; and
(g) Pursuant to Article VI of the Plan, each Participant who has an account
transferred from the Predecessor Plan shall make an investment election with
respect to such Predecessor Plan Account which shall be applicable as of the
transfer date, and shall invest and reinvest his or her Predecessor Plan Account
in accordance with the provisions thereof.
16.04 PREDECESSOR PLAN ACCOUNTS. Each Predecessor Plan Account shall
separately reflect the balance of each sub-account thereunder as of the Plan
Affiliation Date.
16.05 DISTRIBUTION OF PREDECESSOR PLAN ACCOUNTS. Notwithstanding any other
provision of the Plan to the contrary, with respect to his or her Predecessor
Plan Account only, a Predecessor Plan Participant may elect an optional form of
payment made available under the
56
applicable Predecessor Plan as in effect immediately prior to the Plan
Affiliation Date if the distribution is made or commences before January 1, 2002
(or, if later, the earlier of: (i) the ninetieth (90th) day after the date such
Participant has been furnished a summary of material modifications (or summary
plan description) that reflects this provision, or (ii) the first day of Plan
Year following the Plan Year in which occurs the applicable Predecessor Plan
Affiliation Date). For purposes of this Section, an "optional form of payment"
is a distribution form with respect to a Predecessor Plan Account, including all
features relating to such form that are protected under Section 411(d)(6) of the
Code and Treasury Regulation Section 1.411(d)-4. Effective January 1, 1998, the
"required beginning date" for any distribution under this Section shall be
determined under Section 10.05(d)(i).
16.06 PREDECESSOR PLAN ACCOUNTS SUBJECT TO SURVIVOR ANNUITY REQUIREMENTS.
The Plan shall be a "transferee plan" (within the meaning of Treasury Regulation
Section 1.401(a)-20) with respect to each Predecessor Plan Account attributable
to the SBERA 401(k) Plan As Adopted by Family Mutual Savings Bank, and each
other Predecessor Plan Account that may be held under this Plan as a result of a
merger, spinoff, or other transaction having the effect of a transfer that is
subject to the survivor annuity requirements of Sections 401(a)(11) and 417 of
the Code. Notwithstanding any other provision of the Plan to the contrary, if
the Plan is a transferee plan with respect to any portion of a Participant's
Aggregate Account, then his or her entire Aggregate Account (excluding his or
her ESOP Account) shall be subject to such survivor annuity requirements. With
respect to such requirements:
(a) The Participant's Aggregate Account (excluding his or her ESOP Account)
shall be administered in accordance with the applicable Predecessor Plan as in
effect on the date immediately preceding the Plan Affiliation Date.
(b) The Participant may elect an optional form of payment made available
under the applicable Predecessor Plan as in effect immediately prior to the Plan
Affiliation Date if the distribution is made or commences before January 1, 2002
(or, if later, the earlier of: (i) the ninetieth (90th) day after the date such
Participant has been furnished a summary of material modifications (or summary
plan description) that reflects this provision, or (ii) the first day of Plan
Year following the Plan Year in which occurs the applicable Predecessor Plan
Affiliation Date).
(c) Effective for any distribution that is made or commences on or after
January 1, 2002 (or, if later, the earlier of: (i) the ninetieth (90th) day
after the date such Participant has been furnished a summary of material
modifications (or summary plan description) that reflects this provision, or
(ii) the first day of Plan Year following the Plan Year in which occurs the
applicable Predecessor Plan Affiliation Date), the normal form of payment shall
be determined in accordance with the applicable Predecessor Plan and the
survivor annuity requirements of Sections 401(a)(11) and 417 of the Code. The
Participant may elect, in the manner described in Section 10.11, to receive
payment of his or her Aggregate Account (excluding his or her ESOP Account) as a
single lump sum payment in cash that is otherwise identical (within the meaning
of subsection (e) of Q&A-2 of Treasury Regulation sections 1.411(d)-4) to the
optional forms of benefit that would have been available to the Participant
under the Predecessor Plan immediately prior to such date.
57
Each Aggregate Account (excluding the Predecessor Plan Participant's ESOP
Account) that is subject to survivor annuity requirements hereunder shall be
accounted for in the manner described in Treasury Regulation Section
1.401(a)-20, Q&A-5(b).
16.07 PREDECESSOR PLAN ESOP ACCOUNTS. For periods before the Effective
Date, each Predecessor Plan Account or portion thereof that is an ESOP account
under the Banknorth Group, Inc. Employee Savings Plan (the "KSOP") immediately
prior to the Plan Affiliation Date of the KSOP, including a matching
contribution account under the KSOP that is attributable to any period beginning
on or after January 1, 1999, shall, notwithstanding any other provision of this
Plan to the contrary, be subject to all applicable provisions of Article XVII of
the KSOP and shall be administered in accordance with such Article XVII as in
effect on the date immediately preceding the Plan Affiliation Date.
ARTICLE XVII. TOP HEAVY PROVISIONS
17.01 ARTICLE CONTROLS. Any Plan provisions to the contrary
notwithstanding, the provisions of this Article shall control to the extent
required to cause the Plan to comply with the requirements imposed under Section
416 of the Code.
17.02 DEFINITIONS. For purposes of this Article, the following terms and
phrases shall have the respective meanings set forth below:
(a) "Account Balance" means, as of any Valuation Date, the aggregate amount
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Company or an Affiliate (excluding employee
contributions which were deductible within the meaning of Section 219 of the
Code and rollover or transfer contributions made after December 31, 1983, by or
on behalf of such individual to such plan from another qualified plan sponsored
by an entity other than the Company or an Affiliate), increased by (1) the
aggregate distributions made to such individual from such plan during a
five-year period ending on the Determination Date and (2) the amount of any
contributions due as of the Determination Date immediately following such
Valuation Date.
(b) "Accrued Benefit" means, as of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative accrued benefit
(excluding the portion thereof which is attributable to employee contributions
which were deductible pursuant to Section 219 of the Code, to rollover or
transfer contributions made after December 31, 1983, by or on behalf of such
individual to such plan from another qualified plan sponsored by an entity other
than the Company or an Affiliate, to proportional subsidies or to ancillary
benefits) of an individual under a qualified defined benefit plan maintained by
the Company or an Affiliate increased by (1) the aggregate distributions made to
such individual from such plan during a five-year period ending on the
Determination Date and (2) the estimated benefit accrued by such individual
between such Valuation Date and the Determination Date immediately following
such Valuation Date. Solely for the purpose of determining top-heavy status, the
Accrued Benefit of an individual shall be determined under (1) the method, if
any, that uniformly applies for accrual purposes under all qualified defined
benefit plans maintained by the Company and the Controlled Entities or (2) if
there is no such method, as if such benefit accrued not more rapidly than under
the slowest accrual rate permitted under Section 411(b)(1)(C) of the Code.
58
(c) "Aggregation Group" means the group of qualified plans maintained by
the Company and each Affiliate consisting of (1) each plan in which a Key
Employee participates and each other plan which enables a plan in which a Key
Employee participates to meet the requirements of Sections 401(a)(4) or 410 of
the Code and any other plan which the Company elects to include as a part of
such group; provided, however, that the Company may not elect to include a plan
in such group if its inclusion would cause the group to fail to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
(d) "Assumptions" means the interest rate and mortality assumptions
specified for top-heavy status determination purposes in any defined benefit
plan included in the Aggregation Group including the Plan.
(e) "Determination Date" means, for the first Plan Year of any plan, the
last day of such Plan Year and for each subsequent Plan Year of such plan, the
last day of the preceding Plan Year.
(f) "Key Employee" means a "key employee" as defined in Section 416(i) of
the Code and the Treasury Regulations thereunder.
(g) "Remuneration" means compensation within the meaning of Section
415(c)(3) of the Code, as limited by Section 401(a)(17) of the Code.
(h) "Valuation Date" means, with respect to any Plan Year of any defined
contribution plan, the most recent date within the twelve-month period ending on
a Determination Date as of which the Trust Fund established under such plan was
valued and the net income (or loss) thereof allocated to participants' accounts.
With respect to any Plan Year of any defined benefit plan, the most recent date
within a twelve-month period ending on a Determination Date as of which the plan
assets were valued for purposes of computing plan costs for purposes of the
requirements imposed under Section 412 of the Code.
17.03 TOP-HEAVY STATUS.
(a) The Plan shall be deemed to be top-heavy for a Plan Year, if, as of the
Determination Date for such Plan Year, (1) the sum of Account Balances of
Participants who are Key Employees exceeds sixty percent (60%) of the sum of
Account Balances of all Participants unless an Aggregation Group including the
Plan is not top-heavy or (2) an Aggregation Group including the Plan is
top-heavy. An Aggregation Group shall be deemed to be top-heavy as of a
Determination Date if the sum (computed in accordance with Section 416(g)(2)(B)
of the Code and the Treasury Regulations promulgated thereunder) of (1) the
Account Balances of Key Employees under all defined contribution plans included
in the Aggregation Group and (2) the Accrued Benefits of Key Employees under all
defined benefit plans included in the Aggregation Group exceeds sixty percent
(60%) of the sum of the Account Balances and the Accrued Benefits of all
individuals under such plans. Notwithstanding the foregoing, the Account
Balances and Accrued Benefits of individuals who are not Key Employees in any
Plan Year but who were Key Employees in any prior Plan Year shall not be
considered in determining the top-heavy status of the Plan for such Plan Year.
Further, notwithstanding the foregoing, the Account Balances and Accrued
Benefits of individuals who have not performed services for the Company
59
at any time during the five-year period ending on the applicable Determination
Date shall not be considered.
(b) If the Plan is determined to be top-heavy for a Plan Year, the Company
shall contribute to the Plan for such Plan Year on behalf of each Participant
who is not a Key Employee and who has not terminated his or her employment as of
the last day of such Plan Year an amount equal to the lesser of (1) three
percent (3%) of such Participant's Remuneration for such Plan Year or (2) a
percent of such Participant's Remuneration for such Plan Year equal to the
greatest percent determined by dividing for each Key Employee the amounts
allocated to such Key Employee's Salary Deferral Contribution Account and
Company Contribution accounts for such Plan Year by such Key Employee's
Remuneration. The minimum contribution required to be made for a Plan Year
pursuant to this Paragraph for a Participant employed on the last day of such
Plan Year shall be made regardless of whether such Participant is otherwise
ineligible to receive an allocation of the Company's contributions for such Plan
Year. The minimum contribution required to be made pursuant to this Paragraph
shall also be made for an Employee who is not a Key Employee and who is excluded
from participation in the Plan for failing to make Salary Deferral
Contributions.
Notwithstanding the foregoing, if the Plan is deemed to be top-heavy for a
Plan Year beginning before January 1, 2000, the Company's contribution for such
Plan Year pursuant to this Paragraph shall be increased by substituting "four
percent" in lieu of "three percent" in Clause (1) hereof to the extent that the
Board determines to so increase such contribution to comply with the provisions
of Section 416(h)(2) of the Code.
Notwithstanding the foregoing, no contribution shall be made pursuant to
this Paragraph for a Plan Year with respect to a Participant who is a
participant in another defined contribution plan sponsored by the Company or an
Affiliate if such Participant receives under such other defined contribution
plan (for the Plan Year of such plan ending with or within the Plan Year of this
Plan) a contribution which is equal to or greater than the minimum contribution
required by Section 416(c)(2) of the Code. Notwithstanding the foregoing, no
contribution shall be made pursuant to this Paragraph for a Plan Year with
respect to a Participant who is a participant in a defined benefit plan
sponsored by the Company or an Affiliate if such Participant accrues under such
defined benefit plan (for the Plan Year of such plan ending with or within the
Plan Year of this Plan) a benefit which is at least equal to the benefit
described in Section 416(c)(1) of the Code. If the preceding sentence is not
applicable, the requirements of this Paragraph shall be met by providing a
minimum benefit under such defined benefit plan which, when considered with the
benefit provided under the Plan as an offset, is at least equal to the benefit
described in Section 416(c)(1) of the Code.
17.04 TERMINATION OF TOP-HEAVY STATUS. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined to no longer be top-heavy.
Notwithstanding the foregoing, the nonforfeitable interest of each Participant's
Aggregate Account as of such Determination Date shall not be reduced.
60
17.05 EFFECT OF ARTICLE. Notwithstanding anything contained herein to the
contrary, the provisions of this Article shall automatically become inoperative
and of no effect to the extent not required by the Code or ERISA.
ARTICLE XVIII. MISCELLANEOUS
18.01 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of this Plan
shall not be deemed to be a contract between the Company and any person or to be
consideration for the employment of any person. Nothing herein contained shall
be deemed to give any person the right to be retained in the employ of the
Company or to restrict the right of the Company to discharge any person at any
time, nor shall the Plan be deemed to give the Company the right to require any
person to remain in the employ of the Company or to restrict any person's right
to terminate his or her employment at any time.
18.02 NON-ASSIGNABILITY OF THE RIGHT TO RECEIVE BENEFITS.
(a) Except with respect to the creation, assignment, or recognition of a
right to a benefit payable with respect to a Participant pursuant to a Qualified
Domestic Relations Order, and subject to Paragraph (b), no benefit payable under
the Plan to any person shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void. No such benefit shall be in any manner liable
for, or subject to, the debts, contracts, liabilities, engagements, or torts of
any person nor shall it be subject to attachment or legal process for or against
any person, and the same shall not be recognized under the Plan, except to the
extent as may be provided pursuant to a Qualified Domestic Relations Order or an
order or requirement to pay described in Paragraph (b), or otherwise required by
law.
(b) Effective August 5, 1997, Paragraph (a) shall not apply to any offset
of a Participant's Aggregate Account balance against an amount that the
Participant is ordered or required to pay to the Plan, and the Plan shall not be
treated as failing to meet the requirements of Code Sections 401(a)(13) or
409(d) solely by reason of such an offset, provided:
(i) the order or requirement to pay arises (A) under a judgment of
conviction for a crime involving the Plan; (B) under a civil judgment
(including a consent order or decree) entered by a court in an action
brought in connection with a violation (or alleged violation) of Part 4 of
Subtitle B of Title I of ERISA; or (C) pursuant to a settlement agreement
between the Secretary of Labor and the Participant, or a settlement
agreement between the Pension Benefit Guaranty Corporation and the
Participant, in connection with a violation (or alleged violation) of Part
4 of Subtitle B of Title I of ERISA by a fiduciary or any other person;
(ii) the judgment, order, decree or settlement agreement expressly
provides for the offset of all or a part of the amount ordered or required
to be paid to the Plan against the Participant's Aggregate Account balance;
and
(iii) in the event that the survivor annuity requirements of Code
Section 401(a)(11) apply with respect to distribution of the Participant's
Aggregate Account, if
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the Participant has a spouse at the time at which the offset is to be made,
the requirements of Code Section 401(a)(13)(C)(iii) are satisfied.
18.03 PAYMENTS SOLELY FROM TRUST FUND. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund and neither the Company
nor the Trustee assumes any liability or responsibility for the adequacy
thereof. Each person entitled at any time to any payment hereunder shall look
solely for such payment to the Trust Fund. The Plan Administrator or the Trustee
may require execution and delivery of such instruments as are deemed necessary
to assure proper payment of any benefits.
18.04 NO BENEFITS TO THE COMPANY. No part of the corpus or income of the
Trust Fund shall be used for any purpose other than the exclusive purpose of
providing benefits for the Participants and their beneficiaries and defraying
reasonable expenses of administering the Plan. Anything to the contrary herein
notwithstanding, the Plan shall never be construed to vest any rights in the
Company other than those specifically given herein.
18.05 SEVERABILITY. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof. Instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
18.06 GOVERNING LAW; INTERPRETATION. The provisions of this Plan shall be
construed and enforced according to the laws of the State of Maine, to the
extent that such laws are not preempted by the laws of the United States of
America, and in such manner as will tend to carry out the purposes of the Plan.
Should this Plan be found or be held to contain contradictory clauses or should
there appear to be a conflict between different provisions hereof, the
interpretation that favors this Plan as a qualified plan under Section 401 of
the Code shall govern over any other interpretation; provided, however, that
neither the Trustee nor the Plan Administrator shall be under any liability or
responsibility for failure of this Plan or the Trust to qualify at any time or
for any period as a tax-exempt Plan and Trust under the provisions of the Code
or for any tax or increase in tax upon any Participant or Beneficiary by reason
of any benefits payable or contributions made hereunder.
18.07 HEADINGS OF SECTIONS. The headings of sections and articles are
included solely for convenience of reference, and if there is any conflict
between such headings and the text of the Plan, the text shall control.
18.08 EFFECT OF MISTAKE. In the event of a mistake or misstatement as to
age or eligibility of any individual, or the amount of accrued benefits
applicable to a Participant, or distributions made or to be made to a
Participant or other individual pursuant the Plan, the Plan Administrator shall,
to the extent it deems possible, make such adjustment in its sole discretion as
will in its judgment accord to such Participant or other individual the accrued
benefits or distributions to which he or she is properly entitled.
18.09 BONDING. Unless exempted by ERISA, every fiduciary (as defined under
Section 3(21)(A) of ERISA) shall be bonded in an amount not less than ten
percent (10%) of the amount of the funds such fiduciary handles; provided,
however, that the minimum bond shall be
62
one thousand dollars ($1,000) and the maximum bond five hundred thousand
dollars ($500,000). The amount of funds handled shall be determined at the
beginning of each Plan Year by the amount of funds handled by such persons,
group, or class to be covered and their predecessors, if any, during the
preceding Plan Year, or if there is no preceding Plan Year, then by the
amount of the funds to be handled during the then current year. The bond
shall provide protection to the Plan against any loss by reason of acts of
fraud or dishonesty by the fiduciary alone or with others. The surety shall
be a corporate surety company (as such term is used in Section 412(a)(2) of
ERISA), and the bond shall be in a form approved by the Secretary of Labor.
Notwithstanding anything in this Plan to the contrary, the cost of such
bonds shall be paid from the Trust Fund, unless otherwise directed by the
Plan Administrator.
18.10 USERRA REQUIREMENTS. Notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code.
18.11 EPCRS, ETC. ADJUSTMENTS. The Company, a Participating Employer, the
Plan Administrator, the Trustee, any Investment Manager and any other person
providing services to the Plan, acting jointly or singly, as the situation may
require, shall take such action, pursuant to the Employee Plans Compliance
Resolution System or any successor system, policy or program established by the
Internal Revenue Service as may be necessary or appropriate to correct any
operational failure occurring in the administration of the Plan.
IN WITNESS WHEREOF, to record the adoption of the Plan, as amended and
restated herein, Banknorth Group, Inc. has caused this instrument to be executed
by its duly authorized officer to become effective as of January 1, 2001.
BANKNORTH GROUP, INC.
By
------------------------------------
Its
Dated: , 2001
----------------------
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APPENDIX A PREDECESSOR PLANS
Each of the following tables identifies Predecessor Plans that were merged
into either the Banknorth Group, Inc. Thrift Incentive Plan or the Banknorth
Group, Inc. Profit Sharing and Employee Stock Ownership Plan prior to the merger
of the two Banknorth Group, Inc. plans as of the Effective Date. The provisions
of each Predecessor Plan remaining in effect solely with respect to a
Participant's Predecessor Plan Account in accordance with Article XIV hereof
shall be the provisions of each such plan as of the Plan Affiliation Date set
forth below, as modified through the Effective Date, except as is otherwise
specifically provided in this Plan to the contrary.
PREDECESSOR PLANS MERGED INTO THE
BANKNORTH GROUP, INC. THRIFT INCENTIVE PLAN
PREDECESSOR PLAN PLAN AFFILIATION DATE
- ---------------- ---------------------
Mid Maine Savings Bank, FSB 401(k) Savings Plan January 1, 1996
Bank of New Hampshire Corporation Tax Deferred Savings & Investment Plan July 1, 1996
SBERA 401(k) Plan As Adopted By Family Mutual Savings Bank April 1, 1997
Atlantic Bank 401(k) Profit Sharing Plan December 1, 1997
Concord Savings Bank 401(k) Plan November 1, 1998
CFX Corporation 401(k) Plan December 15, 1998
SIS Bank Employees' Savings Incentive Plan December 31, 1999
Individual Account Portion of the Peoples Heritage Financial Group, Inc. Retirement March 1, 2000
Plan
Banknorth Group, Inc. Employee Savings Plan October 1, 2000
PREDECESSOR PLANS MERGED INTO THE BANKNORTH GROUP, INC.
PROFIT SHARING AND EMPLOYEE STOCK OWNERSHIP PLAN
PREDECESSOR PLAN PLAN AFFILIATION DATE
- ---------------- ---------------------
Family Mutual Savings Bank Employee Stock Ownership Plan October 31, 1997
Mid Maine Savings Bank, FSB Employee Stock Ownership Plan December 1, 1997
Springfield Institution for Savings Employee Stock Ownership Plan September 30, 1999
64