VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
(June, 1996)
Basic Plan Document No. 03
The form of this Master Defined Contribution Plan and Trust has been
designed to comply with the requirements of the Internal Revenue Code, as
amended through the Omnibus Budget Reconciliation Act of 1993. The Basic Plan
Document 03 and Profit Sharing Thrift Plan with Employer Stock Investment
Adoption Agreement (001) was made available October 1, 1995 and revised
effective July 1, 1996 to reflect different investment options available under
the Plan. This Basic Plan Document and Adoption Agreement have been submitted to
the Internal Revenue Service for approval as to form for use by Employer members
of the Virginia Bankers Association as a retirement plan under Section 401 of
the Internal Revenue Code. Employers adopting the Plan should consult with their
own legal counsel to determine whether employer stock investments under the Plan
as adopted by the Employer are subject to reporting and/or registration under
the Securities Exchange Act of 1934 or any other federal or state law.
It is intended that Plans maintained pursuant to this Basic Plan
Document 03 and its Adoption Agreement will be held in the same master trust as
plans maintained through the Virginia Bankers Association Master Defined
Contribution Plan and Trust (Basic Plan Document 02) and its related adoption
agreements.
An Employer desiring to adopt this Plan should adopt it without change,
except for completion of the necessary information in the Adoption Agreement,
and should properly notify all interested parties in accordance with Internal
Revenue Service procedures. While neither the Virginia Bankers Association nor
the Virginia Bankers Association Benefits Corporation can guarantee that any
Plan adopted by an Employer will be deemed to satisfy, or will actually satisfy,
the qualified plan requirements of the Internal Revenue Code, each Employer
adopting the Plan and properly completing the Adoption Agreement should be able
to obtain a determination from the Internal Revenue Service as to the
"qualified" status of the Plan with respect to that Employer by applying to the
key District Director on Form 5307.
Employers considering the use of this Plan must recognize that neither
the Virginia Bankers Association, the Virginia Bankers Association Benefits
Corporation nor their employees or representatives can give any legal advice as
to the acceptability or application of this Plan in any particular situation.
The qualification of a retirement plan, both upon its establishment and in
operation, and the related tax consequences are the responsibilities of the
Employer and its own legal counsel.
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
(June, 1996)
Basic Plan Document No. 03
TABLE OF CONTENTS
Page
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ARTICLE I
Definition of Terms
1.1 Accrued Benefit ......................................................................................1
1.2 Act ......................................................................................2
1.3 Active Participant ......................................................................................2
1.4 Adjustment Factor ......................................................................................2
1.5 Administrator ......................................................................................2
1.6 Adoption Agreement ......................................................................................2
1.7 Affiliate ......................................................................................2
1.8 Annuity Starting Date ......................................................................................3
1.9 Association ......................................................................................3
1.10 Beneficiary ......................................................................................3
1.11 Benefits Corporation ......................................................................................3
1.12 Board ......................................................................................3
1.13 Code ......................................................................................3
1.14 Compensation ......................................................................................3
1.15 Compensation Limit ......................................................................................3
1.16 Contract ......................................................................................5
1.17 Covered Participant ......................................................................................5
1.18 Custodian ......................................................................................5
1.19 Earned Income ......................................................................................5
1.20 Effective Date ......................................................................................5
1.21 Eligible Employee ......................................................................................5
1.22 Employee ......................................................................................5
1.23 Employer ......................................................................................5
1.24 Family Member ......................................................................................6
1.25 Fund ......................................................................................6
1.26 Highly Compensated Employee......................................................................................6
1.27 Hour of Service ......................................................................................9
1.28 Inactive Participant ......................................................................................9
1.29 Insurer ......................................................................................9
1.30 Investment Manager ......................................................................................9
1.31 Key Employee ......................................................................................9
1.32 Leased Employee .....................................................................................10
1.33 Non-Highly Compensated Employee.................................................................................11
1.34 Non-Key Employee .....................................................................................11
1.35 Normal Retirement Age .....................................................................................11
1.36 Owner-Employee .....................................................................................11
1.37 Participant .....................................................................................11
1.38 Plan .....................................................................................11
1.39 Plan Year .....................................................................................11
1.40 Policy .....................................................................................11
1.41 QDRO .....................................................................................11
1.42 Restated Plan .....................................................................................11
1.43 Self-Employed Individual .....................................................................................11
1.44 Spouse .....................................................................................11
1.45 Statutory Compensation .....................................................................................12
1.46 Super Top Heavy Plan .....................................................................................12
1.47 Top Heavy Plan .......................................................................................
1.48 Total Compensation .....................................................................................12
1.49 Trustee .....................................................................................13
1.50 Valuation Date .....................................................................................13
1.51 Year of Benefit Service .....................................................................................13
1.52 Year of Broken Service .....................................................................................13
1.53 Year of Service .....................................................................................14
1.54 Year of Vesting Service .....................................................................................14
ARTICLE II
Eligibility and Participation
2.1 Eligibility and Date of Participation...........................................................................14
2.2 Eligibility Service Definitions and Rules.......................................................................14
ARTICLE III
Funding
3.1 Amount of Employer Contributions................................................................................16
3.2 No Duty of Trustee to Determine or Enforce Contributions........................................................18
3.3 Participant Pre-tax and After-tax Contributions.................................................................18
3.4 Limitations on Participant Pre-tax Contributions................................................................18
3.5 Participant Rollover Contributions..............................................................................20
3.6 Procedure for and Time of Making Participant Contributions......................................................20
3.7 Transfer of Funds from Prior Qualified Plan.....................................................................21
ARTICLE IV
Participants' Accounts and Adjustments
4.1 Accounts ...............................................................................................21
4.2 Allocation of Contributions and Forfeitures.....................................................................21
4.3 Dollar/25% Limitations on Annual Additions......................................................................22
4.4 Additional Limitations on Annual Additions Where Employer Maintains More Than
One Plan................................................................................................23
4.5 Special Account for Unallocated Annual Additions................................................................23
4.6 Valuation of Assets and Allocation of Valuation Adjustments.....................................................24
4.7 Determination of Account Balances...............................................................................25
4.8 Suspense Accounts...............................................................................................26
4.9 Limitation on and Distribution of Pre-Tax Contributions Made by or on behalf of
Highly Compensated Employees............................................................................26
4.10 Limitation on and Distribution of After-Tax or Matching Contributions Made by
or on behalf of Highly Compensated Employee.............................................................31
4.11 Limitation on Multiple Use of Alternative Limitations in Paragraphs 4.9 and 4.10................................36
4.12 Use of Forfeitures and Special Account Where Used to Reduce Contributions by
the Employer ..............................................................................................37
4.13 Equitable Adjustment in Case of Error or Omission...............................................................37
ARTICLE V
Retirement Dates
5.1 Normal Retirement Date..........................................................................................38
5.2 Delayed Retirement Date.........................................................................................38
5.3 Early Retirement Date...........................................................................................38
5.4 Disability Retirement Date......................................................................................38
ARTICLE VI
Vesting
6.1 Vesting at Retirement or Attainment of Normal Retirement Age....................................................38
6.2 Vesting at Death................................................................................................39
6.3 Vesting in Employer Active Account..............................................................................39
6.4 Vesting in Accrued Benefit Other Than Employer Active Account...................................................40
6.5 Vesting Service Rules...........................................................................................40
6.6 Forfeiture and Restoration of Employer Active Account...........................................................40
ARTICLE VII
Death Benefits
7.1 Death after Annuity Starting Date...............................................................................41
7.2 Death before Annuity Starting Date..............................................................................41
7.3 Beneficiary Designation.........................................................................................41
7.4 Pre-Retirement Spouse's Death Benefit...........................................................................41
7.5 Election Procedure for Waiver of Pre-Retirement Spouse's Death Benefit..........................................42
7.6 Spousal Consent ...............................................................................................42
ARTICLE VIII
Payment of Benefits
8.1 Time of Payment ...............................................................................................44
8.2 Form of Payment When Participant Is the Initial Recipient.......................................................45
8.3 Form of Payment When Beneficiary Is the Initial Recipient.......................................................47
8.4 Lump Sum Payments...............................................................................................48
8.5 Periodic Installments...........................................................................................48
8.6 Advance on or Acceleration of Deferred Payment or Periodic Installments.........................................49
8.7 Notice, Election and Consent Procedures Regarding Accrued Benefit Payment.......................................49
8.8 Benefit Determination and Payment Procedure.....................................................................51
8.9 Claims Procedure ...............................................................................................51
8.10 Payments to Minors and Incompetents.............................................................................52
8.11 Distribution of Benefit When Distributee Cannot Be Located......................................................52
8.12 Minimum Distribution Requirements...............................................................................53
ARTICLE IX
In-Service Withdrawals and Loans
9.1 Non-Hardship Withdrawals from After-tax Account, Voluntary Deductible Account
and/or Rollover Account.................................................................................56
9.2 Non-Hardship Withdrawals from Pre-tax Account and/or Employer Thrift Account....................................57
9.3 Suspension and Recommencement of Active Participation in Case of Certain Non-Hardship
Withdrawals from After-tax Matched Account and/or Pre-tax Matched Account...............................57
9.4 Non-Hardship Withdrawals from Employer Account..................................................................57
9.5 Hardship Withdrawals from Accounts Other Than Pre-tax Account and Employer Thrift
Account ..............................................................................................58
9.6 Hardship Withdrawals from Pre-tax Account and/or Employer Thrift Account........................................58
9.7 Withdrawal Restrictions and Procedure...........................................................................60
9.8 Payment of Withdrawals..........................................................................................60
9.9 No Withdrawal Restoration.......................................................................................61
9.10 Loans...........................................................................................................62
9.11 Instructions to Trustee.........................................................................................64
ARTICLE X
The Fund
10.1 Trust Fund and Exclusive Benefit................................................................................64
10.2 Plan and Fund Expenses..........................................................................................64
10.3 Reversions to the Employer......................................................................................64
10.4 No Interest Other Than Plan Benefit.............................................................................65
10.5 Provisions Relating to Insurer..................................................................................65
10.6 Payments from the Fund..........................................................................................65
ARTICLE XI
Fiduciaries
11.1 Named Fiduciaries and Duties and Responsibilities...............................................................66
11.2 Limitation of Duties and Responsibilities of Named Fiduciaries..................................................66
11.3 Service by Named Fiduciaries in More Than One Capacity..........................................................66
11.4 Allocation or Delegation of Duties and Responsibilities by Named Fiduciaries...................................66
11.5 Investment Manager..............................................................................................66
11.6 Custodian ..............................................................................................66
11.7 Instruments Allocating Duties and Responsibilities or Appointing Investment
Manger or Custodian as Part of Plan.....................................................................67
11.8 Assistance and Consultation.....................................................................................67
11.9 Indemnification ..............................................................................................67
11.10 Bond............................................................................................................67
ARTICLE XII
Powers and Duties of Trustee
12.1 Trustee Powers and Duties.......................................................................................67
12.2 Participant Directed Allocations among Fund Divisions...........................................................71
12.3 Accounts........................................................................................................72
12.4 Judicial Settlement of Accounts.................................................................................72
12.5 Enforcement of Trust-Legal Proceedings..........................................................................72
12.6 Two or More Trustees............................................................................................72
12.7 Trustee Compensation and Expenses...............................................................................72
12.8 Trustee Designation, Resignation, Removal or Death and Appointment of Successor
or Additional Trustee...................................................................................72
ARTICLE XIII
Plan Administration
13.1 Appointment of Plan Administrator...............................................................................74
13.2 Employer as Plan Administrator..................................................................................74
13.3 Compensation and Expenses.......................................................................................74
13.4 Procedure if a Committee........................................................................................74
13.5 Action by Majority Vote if a Committee..........................................................................74
13.6 Appointment of Successors.......................................................................................74
13.7 Additional Duties and Responsibilities..........................................................................74
13.8 Power and Authority.............................................................................................75
13.9 Availability of Records.........................................................................................75
13.10 No Action with Respect to Own Benefit...........................................................................75
13.11 Limitation on Powers and Authority..............................................................................75
ARTICLE XIV
Amendment and Termination of Plan
14.1 Amendment ......................................................................................................75
14.2 Merger, Consolidation or Transfer of Assets.....................................................................76
14.3 Plan Permanence and Termination.................................................................................77
14.4 Lapse in Contributions..........................................................................................77
14.5 Termination Events..............................................................................................77
14.6 Termination Allocations and Separate Accounts...................................................................78
14.7 Holding of Separate Accounts....................................................................................78
14.8 Distribution of Separate Accounts after Termination.............................................................79
14.9 Effects of Employer Merger, Consolidation or Liquidation........................................................79
14.10 Trustee Indemnification on Asset Transfer.......................................................................79
ARTICLE XV
Miscellaneous
15.1 Headings .......................................................................................................79
15.2 Gender and Number...............................................................................................79
15.3 Governing Law ..................................................................................................79
15.4 Employment Rights...............................................................................................80
15.5 Conclusiveness of Employer Records..............................................................................80
15.6 Right to Require Information and Reliance Thereon...............................................................80
15.7 Alienation and Assignment.......................................................................................80
15.8 Notices and Elections...........................................................................................80
15.9 Delegation of Authority.........................................................................................80
15.10 Service of Process..............................................................................................80
15.11 Construction ..............................................................................................80
ARTICLE XVI
Adoption of the Plan
16.1 Initial Adoption and Failure to Obtain Qualification............................................................81
16.2 Restated Adoption and Failure to Obtain Qualification...........................................................81
16.3 Failure to Attain or Retain Qualification.......................................................................81
16.4 Adoption by Additional Employer.................................................................................81
ARTICLE XVII
Special Rules for Plans with Employer Stock Investment
17.1 Special Definitions.............................................................................................81
17.2 Employer Contributions..........................................................................................82
17.3 Additional Allocation Rules.....................................................................................82
17.4 Additional Valuation Rules......................................................................................82
17.5 Determination of Account Balances Held in Employer Stock Fund...................................................82
17.6 Additional Payment Rules........................................................................................83
17.7 Withdrawals from Employer Stock Fund............................................................................83
17.8 Employer Stock Fund.............................................................................................83
17.9 Directions Regarding Stock Transactions.........................................................................84
17.10 Limitation of Trustee Responsibility............................................................................84
17.11 Voting Directions...............................................................................................84
17.12 Sales Prohibited if Registration or Qualification Required......................................................86
17.13 Limitation on Insiders' Interests in Stock......................................................................86
17.14 No Guarantee of Values..........................................................................................86
17.15 Legend Regarding Securities Laws Restriction on Sale or Transfer................................................86
17.16 Confidentiality of Participant Directions regarding and Holdings of Stock.......................................86
Appendix A - Determination of Hours of Service
Appendix B - Determination of Top Heavy Plan Status
Appendix C - Rules Pertaining to Limitations on Contributions and Benefits
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
(June, 1995)
Basic Plan Document No. 03
ARTICLE I
Definition of Terms
The following words and terms as used herein shall have the meaning set
forth below, unless a different meaning is clearly required by the context:
1.1 "Accrued Benefit": The sum of the balances of the following
accounts of a Participant under the Plan as of the most recent Valuation Date
(or as otherwise provided herein):
1.1(a) "Employer Account" or Employer Accounts": The account or
accounts of a Participant under the Plan attributable to Employer Base
Contributions made pursuant to subparagraph 3.1(a), Employer Matching
Contributions (to the extent allocated to this account) made pursuant to
subparagraph 3.1(c), Employer Top Heavy Contributions made pursuant to
subparagraph 3.1(d) and Supplemental Contributions made pursuant to subparagraph
3.1(e) and forfeitures consisting of his Employer Active Account and his
Employer Non-forfeitable Account as follows:
(i) "Employer Active Account": A Participant's account under
the Plan attributable to allocations of Employer Base Contributions,
Employer Matching Contributions (to the extent allocated to this
account), Employer Top Heavy Contributions and Supplemental
Contributions by the Employer and forfeitures with respect to his Years
of Benefit Service since his most recent forfeiture, if any, under
subparagraph 6.6(a) (and, where applicable, loss of restoration rights
under subparagraph 6.6(b)) or, if he has incurred no such forfeiture
(and, where applicable, loss of restoration rights), since his
commencement of participation in the Plan. This account was formerly
known as the "Employer Contribution Active Account".
(ii) "Employer Non-forfeitable Account": A Participant's
account under the Plan attributable to allocations of Employer Base
Contributions, Employer Matching Contributions (to the extent allocated
to this account), Employer Top Heavy Contributions and Supplemental
Contributions by the Employer and, in the case of a Participant who has
incurred a forfeiture, if any, under subparagraph 6.6(a), that portion
of any former Employer Active Account of such Participant, attributable
to allocations made with respect to Plan Years prior to such forfeiture
(and, where applicable loss of restoration rights), to which he has a
non-forfeitable right as provided in the Plan. This account was
formerly known as the "Employer Contribution Non-forfeitable Account".
1.1(b) "Employer Thrift Account": A Participant's account under the
Plan attributable to allocations of Employer Thrift Contributions made pursuant
to subparagraph 3.1(b) and of Employer Matching Contributions (to the extent
allocated to this account) made pursuant to subparagraph 3.1(c) hereof. This
account was formerly known as the "Employer Contribution Thrift Account":
1.1(c) "Pre-tax Account" or "Pre-tax Accounts": The account or accounts
of a Participant under the Plan attributable to his Participant Pre-tax
Contributions to the Plan, consisting of his Pre-tax Matched Account and his
Pre-tax Unmatched Account as follows:
(i) "Pre-tax Matched Account": The Participant's account
under the Plan attributable to his Pre-tax Matched Contributions. This
account was formerly known as the "Pre-tax Matching Employee
Contribution Account".
(ii) "Pre-tax Unmatched Account": The Participant's account
under the Plan attributable to the Employer Pre- tax Contributions and
his Pre-tax Unmatched Contributions. This account was formerly known as
the "Pre-tax Non-matching Employee Contribution Account".
1.1(d) "After-tax Account": The account of a Participant under the Plan
attributable to his After-tax Contributions to the Plan, consisting of his
After-tax Matched Account and his After-tax Unmatched Account as follows:
(i) "After-tax Matched Account": The Participant's account
under the Plan attributable to his After-tax Matched Contributions.
This account was formerly known as the "Basic Employee Contribution
Account".
(ii) "After-tax Unmatched Account": The Participant's account
under the Plan attributable to his After-tax Unmatched Contributions.
This account was formerly known as the "Non-deductible Employee
Contribution Account".
1.1(e) "Rollover Account": The account of a Participant under the
Plan attributable to his Rollover Contributions, other than Rollover
Contributions of accumulated deductible employee contributions within the
meaning of Section 72(o)(5)(B) of the Code.
1.1(f) "Voluntary Deductible Account": The account under the Plan
attributable to the Participant's voluntary contributions to the Plan which are
designated pursuant to his election as "qualified voluntary employee
contributions" under Section 219 of the Code made for calendar years beginning
before January 1, 1987, and to his Rollover Contributions of accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B) of
the Code. This account was formerly known as the "Deductible Employee
Contribution Account."
1.2 "Act": The Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time, or the corresponding sections of any
subsequent legislation which replaces it, and, to the extent not inconsistent
therewith, the regulations issued thereunder.
1.3 "Active Participant": A Participant who is an Eligible Employee.
1.4 "Adjustment Factor": The cost of living adjustment factor
prescribed by the Secretary of the Treasury or his delegate under Section 415(d)
of the Code for years beginning after December 31, 1987, applied to such items
and in such manner as the Secretary of the Treasury or his delegate shall
prescribe.
1.5 "Administrator": The Plan Administrator named and serving in
accordance with ARTICLE XIII hereof, and any successor or additional
Administrator appointed and serving in accordance herewith, all as selected in
Option 3(c) of the Adoption Agreement or as appointed, resigned or removed by
separate instrument attached thereto.
1.6 "Adoption Agreement": The adoption agreement, and any amendment
thereto, which sets forth certain elections and representations of the Employer
and by execution of which the Employer adopts the Plan. There is one Adoption
Agreement, the Profit Sharing Thrift Plan with Employer Stock Investment
Adoption Agreement (001).
1.7 "Affiliate": The Employer and each of the following business
entities or other organizations (whether or not incorporated) which during the
relevant period is treated (but only for the portion of the period so treated
and for the purpose and to the extent required to be so treated) together with
the Employer as a single employer pursuant to the following sections of the Code
(as modified where applicable by Section 415(h) of the Code):
(i) Any corporation which is a member of a controlled group
of corporations (as defined in Section 414(b) of the Code) which
includes the Employer,
(ii) Any trade or business (whether or not incorporated)
which is under common control (as defined in Section 414(c) of the
Code) with the Employer,
(iii) Any organization (whether or not incorporated) which is
a member of an affiliated service group as defined in Section 414(m) of
the Code) which includes the Employer, and
(iv) Any other entity required to be aggregated with the
Employer pursuant to regulations under Section 414(o) of the Code.
1.8 "Annuity Starting Date": The first day of the first period for
which a benefit is paid in the form of a life annuity or in any other form.
1.9 "Association": The Virginia Bankers Association, a non-stock
corporation organized under the laws of the Commonwealth of Virginia.
1.10 "Beneficiary": The person or persons designated by a Participant
or otherwise entitled pursuant to paragraph 7.3 to receive benefits under the
Plan attributable to such Participant after the death of such Participant.
1.11 "Benefits Corporation": The Virginia Bankers Association Benefits
Corporation, a Virginia corporation which is a wholly owned subsidiary of the
Association.
1.12 "Board": The present and any succeeding Board of Directors of the
Employer or Employers adopting this Plan, unless such term is used with respect
to a particular Employer and its Employees or Participants, in which event it
shall mean the present and any succeeding Board of Directors of that Employer.
1.13 "Code": The Internal Revenue Code of 1986, as the same may be
amended from time to time, or the corresponding section of any subsequent
Internal Revenue Code, and, to the extent not inconsistent therewith,
regulations issued thereunder.
1.14 "Compensation":
1.14(a) A Participant's remuneration determined with respect to a Plan
Year on the basis designated by the Employer in Option 4(a) of the Adoption
Agreement.
1.14(b) Any such remuneration in excess of the Compensation Limit for a
Plan Year shall be disregarded.
1.15 "Compensation Limit": $200,000 (as adjusted by the Adjustment
Factor).
1.15(a) The Compensation Limit shall apply:
(i) For Plan Years beginning before January 1, 1989, in
determining benefits accrued for Plan Year(s) with respect to which the
Plan is a Top Heavy Plan, and
(ii) For all Plan Years beginning after December 31, 1988
regardless of whether the Plan is a Top Heavy Plan.
When a Participant becomes subject to the Compensation Limit, the Accrued
Benefit of the Participant at the end of the last Plan Year (or other stated
computation period) immediately preceding the Plan Year (or other stated
computation period) for which the limitation first applies shall not be reduced
below his Accrued Benefit calculated as of the end of such last Plan Year (or
other stated computation period) by reason of the application of such limitation
hereunder.
1.15(b) In determining the Compensation (or other amounts which may
refer to the Compensation Limit) of any Employee who is a Highly Compensated
Employee for purposes of applying the Compensation Limit in Plan Years beginning
after December 31, 1988, the Compensation (or other amount which may refer to
the Compensation Limit) of his Family Members who are his spouse or any of his
lineal descendants who have not attained the age of nineteen (19) by the end of
the Plan Year (or other stated computation period) shall be aggregated with and
treated as part of the Employee's Compensation (or any other amount which may
refer to the Compensation Limit). When Compensation (or any other amount which
may refer to the Compensation Limit) is limited by the Compensation Limit, it
shall be disregarded in the following order, determined on a Plan Year by Plan
Year basis:
(i) First, Compensation (or other amounts which may refer to
the Compensation Limit) of Employees who are not participants in any
qualified retirement plan maintained by any Affiliate shall be
disregarded.
(ii) Then, Compensation (or other amounts which may refer to
the Compensation Limit) shall be disregarded proportionately based on
the applicable amount determined without regard to the Compensation
Limit.
Notwithstanding the foregoing, such prorated Compensation of a Highly
Compensated Employee and his aforesaid Family Members shall not be aggregated
for purposes of determining the Compensation below the applicable level at which
Excess Compensation is determined (as provided in subparagraph Option 7(d) of
the Adoption Agreements) of each such person.
1.15(c) In the event of a Plan Year which is less than twelve (12)
months resulting from a change in the Plan Year of the Plan, the amount of the
Compensation Limit for the short Plan Year shall be prorated by multiplying the
otherwise applicable dollar limit by a fraction, the numerator of which is the
number of months in the short Plan Year and the denominator of which is twelve
(12).
1.15(d) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual compensation of
each employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment
in effect for a calendar year applies to any period, not exceeding 12 months,
over which compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current Plan Year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.16 "Contract": A group annuity contract, deposit administration
contract, immediate participation guarantee contract, or other
investment-oriented or funding contract or agreement issued by an Insurer to
hold the assets of the Plan.
1.17 "Covered Participant": With respect to a Plan Year, a
Participant described in Option 7(b) of the Adoption Agreement.
1.18 "Custodian": A fiduciary of the Plan appointed to hold all or part
of the assets of the Fund and serving pursuant to ARTICLE XI.
1.19 "Earned Income": The net earnings from self-employment with the
Employer, for which personal services of the individual is a material income
producing factor. Net earnings shall be determined without regard to items not
included in gross income and the deductions allocable to such items. Net
earnings shall be reduced by contributions by the Employer to a qualified plan
to the extent deductible under Section 404 of the Code and to the extent not
attributable to salary reduction or similar contributions under Section 401(k)
of the Code. Net earnings shall be determined with regard to the deduction
allowed to the taxpayer by Section 164(f) of the Code for taxable years
beginning after December 31, 1989.
1.20 "Effective Date": The "Effective Date of the Plan", the "Effective
Date of this Restatement of the Plan," and/or the "Effective Date of the 1976
Restatement of the Plan" with respect to each Employer shall be that date or
dates specified in Option 3 of the Adoption Agreement.
1.21 "Eligible Employee": Any Employee included within the definition
of Eligible Employee as specified in Option 4(b) of the Adoption Agreement;
provided, however, that Self-Employed Individuals and Owner-Employees shall in
no event be eligible to participate in the Plan.
1.22 "Employee": Any individual employed in the service of the Employer
as a common law employee, any Owner- Employee and Self-Employed Individual, any
sole proprietor or partner of a partnership constituting an Affiliate, and any
Leased Employee (but only for the purpose and to the extent treated under
Sections 414(n) or (o) of the Code as an employee of the Employer).
1.23 "Employer":
1.23(a) That Employer, or those Employers all of which shall be members
of the same controlled group which are treated as a single employer under
Section 414(b) of the Code, named in Option 1 of the Adoption Agreement adopting
the Plan as a participating employer through the same Adoption Agreement,
collectively unless the context otherwise indicates, for as long as it remains a
participating employer; and with respect to any Employee, any one or more of
such Employers by which he is at any time employed (unless or to the extent
otherwise specified by resolution of the Board or in a merger or acquisition
agreement or plan approved the Board or in any applicable asset transfer, plan
merger or consolidation or adoption agreement).
1.23(b) For purposes of determining:
(i) Service for all purposes of the Plan (other than for
purposes of determining non-Top Heavy Plan benefit accrual, Eligible
Employees and Years of Benefit Service unless otherwise specifically
provided) and commencement of service and termination of employment
with the Employer,
(ii) Employees, Family Members, Highly Compensated
Employees, Key Employees, and Leased Employees,
(iii) Top Heavy Plan status, contributions and benefits,
(iv) Statutory Compensation and Total Compensation,
(v) Any limitations of contributions and forfeitures
hereunder, and
(vi) Maintenance of or participation in other qualified plans
under Section 401(a) of the Code, tax sheltered annuities under Section
403(b) of the Code, simplified employee pensions under Section 408(k)
of the Code, and any other plan required or, as applicable, permitted
to be aggregated with this Plan for purposes of the Code,
the term "Employer" shall include each Affiliate which during any year
commencing after September 2, 1974 if the Plan was not maintained on or before
such date, or otherwise during any year commencing after December 31, 1975, is
treated as an Affiliate and each predecessor employer which maintained this Plan
(but not beyond the time it ceased to maintain the Plan) within the meaning of
Section 414(a) of the Code, but only for the portion of any such year or years
so treated and for the purpose and to the extent required to be so treated.
1.23(c) For purposes of determining compensation and service with any
business entity, or predecessor thereto, which is merged into an Employer, or a
predecessor thereto, or all or substantially all the assets or the operating
assets acquired by an Employer, or predecessor thereto, compensation from and
service with such business entity and predecessor thereto shall be treated as
compensation from and service with an Employer but only to the extent provided
in Option 1(g) or (h) of the Adoption Agreement.
1.24 "Family Member":
1.24(a) With respect to a Plan Year, an individual (whether or not
himself a Highly Compensated Employee) who is considered a family member
described in Section 414(q)(6)(A) of the Code with respect to the Employee; and,
to the extent not inconsistent therewith, an individual who is a member of the
family (consisting, with respect to an Employee, of such Employee's spouse and
lineal ascendants and descendants and the spouses of lineal ascendants and
descendants) on any day of the Determination Year or Look-Back Year with respect
to such Plan Year of a Highly Compensated Employee who is either (i) a more than
five percent (5%) owner of the Employer or (ii) in the group consisting of the
ten (10) Highly Compensated Employees with the greatest Statutory Compensation
(as determined for purposes of determining Highly Compensated Employees) for the
relevant Determination Year or Look-Back Year.
1.24(b) For purposes hereof, the terms "Determination Year", "Look-Back
Year", and "more than five percent (5%) owner of the Employer" have the same
meaning provided herein for purposes of determining Highly Compensated
Employees.
1.25 "Fund": The trust fund created under and subject to the Plan.
1.26 "Highly Compensated Employee":
1.26(a) With respect to a Plan Year, an individual who is considered a
"highly compensated employee" with respect to the Employer within the meaning of
Section 414(q) of the Code; and, to the extent not inconsistent therewith, any
Employee who is considered a Highly Compensated Active Employee or a Highly
Compensated Former Employee for the Determination Year ending with or within
such Plan Year, defined as follows:
(i) The term "Highly Compensated Active Employee" means,
with respect to a Determination Year, an Employee who is an Active
Employee during the Determination Year and who during the Determination
Year or the Look-Back Year either:
(A) Was at any time a more than five percent (5%) owner of
the Employer (as defined for purposes of determining Key
Employees);
(B) Received Statutory Compensation in excess of $75,000
(as adjusted by the Adjustment Factor);
(C) Received Statutory Compensation in excess of $50,000
(as adjusted by the Adjustment Factor), and was a member of the
twenty percent (20%) top-paid group of Employees; or
(D) Was one of the fifty (50) (or if less, the greater of
three (3) or ten percent (10%) of total Employees) officers of the
Employer having the largest annual Statutory Compensation and
having Statutory Compensation in excess of $45,000 (or fifty
percent (50%) of any amount, as adjusted by the Adjustment Factor,
in effect under Section 415(b)(1)(A) of the Code), provided,
however, that if no officers received Statutory Compensation for
either such Plan Year in excess of such dollar amount, then the
officer receiving the largest annual Statutory Compensation shall
be a Highly Compensated Active Employee.
Notwithstanding the foregoing, an Employee shall not be considered described in
clauses (i)(B), (C) and (D) of this subparagraph for a Determination Year
(although he may for a Look-Back Year) unless he also is one of the one hundred
(100) Active Employees who receive the greatest Statutory Compensation for the
Determination Year.
(ii) The term "Highly Compensated Former Employee" means:
(A) With respect to a Determination Year, a Former Employee
who has had a Separation Year prior to the Determination Year and
who was a Highly Compensated Active Employee for either such
Separation Year or any Determination Year ending on or after his
attainment of the age of fifty-five (55).
(B) Notwithstanding the foregoing, an Employee shall not be
treated as a Highly Compensated Former Employee by reason of having
a Deemed Separation Year after such Employee actually separates
from service with the Employer if, after such Deemed Separation
Year and before his Actual Separation Year, his services for the
Employer and Statutory Compensation for a Determination Year
increase significantly so that the Employee is treated as having a
Deemed Resumption of Employment.
1.26(b) For purposes hereof:
(i) The term "Active Employee" means, with respect to a
Determination Year, a current Employee who performs services for the
Employer as an Employee at any time during the Determination Year.
(ii) The term "Deemed Resumption of Employment" means an
increase in both services performed for the Employer as an Employee and
Statutory Compensation, based on the facts and circumstances, and at a
minimum shall include an increase in Statutory Compensation to the
extent that such increased Statutory Compensation would not result in a
Deemed Separation Year.
(iii) The term "Determination Year" means the Plan Year.
(iv) The term "Former Employee" means, with respect to a
Determination Year, a current or former Employee who performs no
services for the Employer as an Employee during the Determination Year.
(v) The term "Look-Back Year" means, with respect to a
Determination Year, the immediately preceding year to the Determination
Year in question.
(vi) The term "Separation Year" means:
(A) An "Actual Separation Year" which is a
Determination Year in which a Former Employee last
performed services for the Employer as an Employee; or
(B) A "Deemed Separation Year" which is a
Determination Year prior to the Employee's attainment of
the age of fifty-five (55) in which he is an Active
Employee and in which his Statutory Compensation is less
than fifty percent (50%) of his average annual Statutory
Compensation for the three (3) consecutive calendar years
preceding the Determination Year during which his
Statutory Compensation was the highest (or the total
period of the Employee's service with the Employer if
less). A Deemed Separation Year is relevant for purposes
of determining whether an Employee is a Highly Compensated
Former Employee after he has an Actual Separation Year,
but is not relevant for purposes of identifying him as an
Active or Former Employee.
1.26(c) For purposes hereof:
(i) The Adjustment Factor for a Determination Year or a
Look-Back Year shall be applied on the basis of the calendar year in
which such Determination Year or Look-Back Year begins.
(ii) The Administrator may adopt any rounding or tie-breaking
rules it desires in making relevant determinations for a Determination
Year or a Look-Back Year so long as such rules are reasonable,
non-discriminatory and uniformly and consistently applied.
(iii) An Employee is a member of the twenty percent (20%)
top-paid group for a year if he is one of the top twenty percent (20%)
of Active Employees for the year when ranked on the basis of descending
Statutory Compensation for such year (whether or not the Employee in
question is excluded in determining the number of Employees in the
twenty percent (20%) top-paid group). For this purpose, if bargaining
unit Employees are not taken into account in determining the number of
Employees in the twenty percent (20%) top-paid group pursuant to clause
(iv)(E) of this subparagraph, they also shall not be taken into account
in determining other Employees who are in twenty percent (20%) top-paid
group.
(iv) For purposes of determining the number of persons in the
twenty percent (20%) top-paid group and the number of persons who may
be considered officers for a year, the following rules shall apply:
(A) The number of Employees who are in the twenty
percent (20%) top-paid group for a year is twenty percent
(20%), rounded to the nearest integer, of the total
number of Active Employees who are not excluded Employees
for such year.
(B) The number of Employees equal to ten percent
(10%) of total Employees for a year is ten percent (10%),
rounded to the nearest integer, of the total number of
Active Employees who are not excluded Employees for such
year.
(C) All Former Employees for the year are excluded.
(D) Employees who are non-resident aliens and who
receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer that constitutes
income from sources within the United States for the year
are excluded.
(E) Employees who are in a unit of employees
covered by a collective bargaining agreement between the
Employer and employee representatives for the year are
excluded if and only if ninety percent (90%) or more of
the total Employees for the year are covered by a
collective bargaining agreement with the Employer and the
Active Participants in the Plan do not include any such
bargaining unit Employees.
(F) Employees shall not be excluded on the basis of
age or length of prior service.
(v) In the event the Plan Year is changed, all dollar
limitations pertaining to the determination of Highly Compensated
Employees shall be prorated to reflect any Plan Year of less than
twelve (12) months resulting from the change.
1.27 "Hour of Service":
(i) Each hour for which an Employee is paid by the Employer,
or entitled to payment, for the performance of duties for the Employer
or for periods during which no duties are required to be performed,
including each hour for which credit has not theretofore been given and
for which back pay, irrespective of mitigation of damages, has either
been awarded or agreed to by the Employer, and
(ii) Solely for purposes of determining Years of Broken
Service, each hour of absence from work due to pregnancy, childbirth,
adoption or related child care,
all as more specifically provided in Appendix A and in Option 13 of the Adoption
Agreement.
1.28 "Inactive Participant": A Participant who is not an
Eligible Employee.
1.29 "Insurer": Any insurance company which issues a Contract to hold
assets of the Plan or a Policy to provide for payment of benefits under the
Plan.
1.30 "Investment Manager": A fiduciary of the Plan appointed to manage
all or part of the assets of the Fund and serving pursuant to ARTICLE XI and
qualifying as an "investment manager" within the meaning of Section 3(38) of the
Act.
1.31 "Key Employee":
1.31(a) With respect to a Plan Year, any Employee or former Employee
(or his Beneficiary if he is deceased) considered to be a "key employee" with
respect to the Employer at the time in question within the meaning of Section
416(i)(1) of the Code; and to the extent not inconsistent therewith, any
Employee or former Employee (or his Beneficiary if he is deceased) who at any
time during such Plan Year, or any of the preceding four (4) Plan Years, is
either:
(i) One of the fifty (50) (or if less, the greater of three
(3) or ten percent (10%) of total Employees, as determined for purposes
of determining Highly Compensated Employees) officers of the Employer
having the largest annual Statutory Compensation during any such Plan
Year and having Statutory Compensation in excess of $45,000 (or fifty
percent (50%) of any amount, as adjusted by the Adjustment Factor, in
effect for the relevant Plan Year under Section 415(b)(1)(A) of the
Code);
(ii) One of the ten (10) Employees having Statutory
Compensation in excess of $30,000 (or any other amount, as adjusted by
the Adjustment Factor, in effect for the relevant Plan Year under
Section 415(c)(1)(A) of the Code) and owning more than a one-half
percent (.5%) interest in the Employer, who owns the largest interests
in the Employer, provided that if two such Employees have the same
interest in the Employer, the Employee having the greater Statutory
Compensation shall be treated as having a larger interest;
(iii) A more than five percent (5%) owner of the Employer; or
(iv) A more than one percent (1%) owner of the Employer
having an annual Statutory Compensation of more
than $150,000.
1.31(b) For purposes hereof:
(i) In determining ownership in the Employer, the
constructive ownership rules of Section 318 of the Code (as modified by
Section 416(i)(1)(B)(iii) of the Code) shall apply, and the rules of
Sections 414(b), (c), (m) and (o) of the Code shall not apply.
(ii) In the event the Plan Year is changed, all dollar
limitations pertaining to the determination of Key Employees shall be
prorated to reflect any Plan Year of less than twelve (12) months
resulting from the change.
1.32 "Leased Employee":
1.32(a) An individual who is considered a leased employee of the
Employer within the meaning of Section 414(n)(2) of the Code and, to the extent
not inconsistent therewith, any person:
(i) Who, pursuant to an agreement between the recipient
Employer and any other person (the "leasing organization"), has
performed services for the recipient Employer or for the recipient
Employer and related persons (determined in accordance with Section
414(n)(6) of the Code),
(ii) Whose services are performed on a substantially
full-time basis for a period of at least one year, and
(iii) Whose services are of a type historically performed by
employees in the business field of the recipient Employer.
1.32(b) Notwithstanding the foregoing, if such leased employees
constitute less than twenty percent (20%) of the Employer's non-highly
compensated work force within the meaning of Section 414(n)(1)(C)(ii) of the
Code, individuals otherwise considered to be Leased Employees shall not include
those leased employees covered by a plan described in Section 414(n)(5) of the
Code (unless otherwise provided by the terms of the Plan) and, to the extent not
inconsistent therewith, which:
(i) Is maintained by the leasing organization,
(ii) Is a money purchase pension plan with a non-integrated
employer contribution rate of at least seven and one-half percent
(7-1/2%) of compensation in the case of services performed before
January 1, 1987 or ten percent (10%) of compensation in the case of
services performed after December 31, 1986,
(iii) Provides full and immediate vesting, and
(iv) Provides for immediate participation by each employee of
the leasing organization (other than employees who perform
substantially all their services for the leasing organization or whose
compensation from the leasing organization in each of the four (4) Plan
Years ending with the Plan Year in question is less than $1,000).
For purposes hereof "compensation" means compensation as defined in Section
415(c)(3) of the Code but including amounts contributed by the leasing
organization pursuant to a salary reduction agreement which are excludable from
the leased employee's gross income under Section 125, 402(a)(8), 402(h)(1)(B) or
403(b) of the Code.
1.32(c) Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable service performed for the recipient
Employer and related persons (determined in accordance with Section 414(n)(6) of
the Code) shall be treated as provided by such recipient Employer or related
persons.
1.33 "Non-Highly Compensated Employee": Any Employee who is not a
Highly Compensated Employee.
1.34 "Non-Key Employee": Any Employee (including the Beneficiary
of such Employee) who is not a Key Employee.
1.35 "Normal Retirement Age": The age selected by the Employer in
Option 4(c) of the Adoption Agreement. If the Employer enforces a mandatory
retirement age, the Normal Retirement Age is the lesser of that mandatory age or
the age specified in the Adoption Agreement.
1.36 "Owner-Employee": With respect to the Employer, an individual who
is a sole proprietor, or who is a partner owning more than a ten percent (10%)
interest in either the capital or the profits of a partnership.
1.37 "Participant": An Eligible Employee or other person qualified to
participate in the Plan for so long as he is considered a Participant as
provided in ARTICLE II hereof.
1.38 "Plan": This Agreement, including the Appendices hereto, as
contained herein or duly amended all as adopted by the Employer through the
Adoption Agreement.
1.39 "Plan Year": The twelve consecutive month period commencing upon
the first day of January of each year provided, however in the event that this
is a Restated Plan which was maintained previously on the basis of a different
Plan Year, the prior Plan Year and short Plan Year needed to effect the Plan
Year change shall be as set forth in Option 4(d) of the Adoption Agreement.
1.40 "Policy": A group or individual policy, contract or other
agreement (including a certificate) issued by an Insurer which is not a Contract
and which is obtained to provide for the accumulation and/or payment of benefits
under the Plan.
1.41 "QDRO": A qualified domestic relations order within the meaning
of Section 206(d)(3) of the Act and Section 414(p) of the Code and as determined
by the Administrator pursuant to the Plan.
1.42 "Restated Plan": The Plan, if it is indicated in Option 3(b) of
the Adoption Agreement that the Plan is adopted as an amendment or restatement
of a previously existing defined contribution plan.
1.43 "Self-Employed Individual": An individual who has Earned Income
for a Plan Year from the Employer and an individual who would have had Earned
Income but for the fact that the Employer had no net profits during the Plan
Year.
1.44 "Spouse":
1.44(a) In the case of a Plan which is a direct or indirect transferee
of a pension plan (when the transfer occurred in a Plan Year beginning after
December 31, 1984), for the purpose of:
(i) Qualifying to receive survivor annuity benefits under
the Plan, waiving the Pre-Retirement Spouse's Death Benefit and
consenting to a Beneficiary designation, the individual to whom a
Participant is married:
(A) On his Annuity Starting Date, or
(B) If he has not reached his Annuity Starting
date, on his date of death.
(ii) Giving consent to a withdrawal under ARTICLE IX, the
individual to whom the Participant is married at the date the
withdrawal payment is made.
(iii) Giving consent to a loan to the Participant and any
offset or other benefit reduction rules pertaining thereto under
ARTICLE IX, the individual to whom the Participant is married at the
date the loan is made.
1.44(b) In the case of a Plan not described above, for purposes of
receiving a death benefit, the individual to whom the Participant is married on
the date of his death.
1.44(c) The determination of the marital status of a Participant shall
be made pursuant to applicable local law.
1.45 "Statutory Compensation": An Employee's Total Compensation plus
employee elective salary reduction or similar contributions excluded from Total
Compensation by reason of Sections 125, 402(a)(8) and 402(h)(1)(B) of the Code
and employer contributions made pursuant to salary reduction agreements under
Section 403(b) of the Code. Statutory Compensation for a Plan Year (or other
applicable computation period) shall be limited by the Compensation Limit for
all purposes other than determining Family Members, Highly Compensated Employees
and Key Employees.
1.46 "Super Top Heavy Plan": The Plan, if it would still be considered
a Top Heavy Plan if ninety percent (90%) were substituted for sixty percent
(60%) in each place it appears in the definition of a Top Heavy Plan.
1.47 "Top Heavy Plan": The Plan, for any Plan Year beginning after
December 31, 1983, if the sum of the present values of the cumulative Accrued
Benefits of Key Employees under the Plan, and the present values of the
cumulative accrued benefits of Key Employees under all plans aggregated with it,
exceeds sixty percent (60%) of the aggregate of the present value of the
cumulative Accrued Benefits under this Plan and accrued benefits under such
plan(s) at the applicable determination date. For purposes hereof, aggregation,
accrued benefits (including Accrued Benefits) taken into account, the
determination date and all other standards and criteria for determining
top-heaviness under this Plan and such other plan(s) shall be determined under
Section 416 of the Code. Subject to the foregoing, more specific rules for
determining whether the Plan is a Top Heavy Plan are provided in Appendix B. If
a Plan is a Top Heavy Plan, the applicable Top Heavy Plan provisions of
subparagraphs 3.1(d), 4.2(d) and 6.3(b) of the Plan and Option 9 of the Adoption
Agreement shall supersede any conflicting provision in the Plan or Adoption
Agreement.
1.48 "Total Compensation": With respect to a Self-Employed Individual,
such individual's Earned Income. Otherwise, the total compensation from the
Employer received by or made available to an Employee determined as selected in
Option 4(e) of the Adoption Agreement to be either (i), (ii) or (iii):
(i) "Wages, Tips and Other Compensation Box on Form W-2".
Wages as defined in Section 3401(a) and all other payments of
compensation to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to
furnish the Employee a written statement under Sections 6041(d) and
6051(a)(3) of the Code. Such compensation must be determined without
regard to any rules under Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or
the services performed (such as the exception for agricultural labor in
Section 3401(a)(2)).
(ii) "Section 3401(a) Wages". Wages as defined in Section
3401(a) of the Code for the purposes of income tax withholding at the
source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code).
(iii) "415 Safe Harbor Compensation". Wages, salaries, and
fees for professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the
Employer to the extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits and reimbursements,
or expense allowances under a nonaccountable plan (as described in
Treas. Reg. 1.62-2(c)), and excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not includible in the employee's
gross income for the taxable year in which contributed, or
employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by
the employee, or any distributions from a plan of deferred
compensation;
(B) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by the employee either becomes freely
transferable or is no longer subject to a substantial risk
of forfeiture;
(C) Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified
stock option; and
(D) Other amounts which received special tax
benefits, or contributions made by the employer (whether
or not under a salary reduction agreement) towards the
purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions are
actually excludible from the gross income of the
Employee).
1.49 "Trustee": The Trustee or Trustees named and serving in accordance
with ARTICLE XI hereof, and any successor Trustee or Trustees, including any
Co-Trustee, appointed and serving in accordance herewith.
1.50 "Valuation Date": The last business day of each June in the Plan
Year and such other date or dates as the Trustee may designate in a uniform and
non-discriminatory manner.
1.51 "Year of Benefit Service":
1.51(a) A Plan Year (which is the computation period) during which an
Employee is credited with at least one thousand (1,000) Hours of Service
(excluding service with any Affiliate which is not a participating employer
unless otherwise expressly provided) as an Eligible Employee.
1.51(b) In the event of a Plan Year which is less than twelve (12)
months resulting from a change in the Plan Year of the Plan, the number of Hours
of Service for the short Year of Benefit Service shall be prorated by
multiplying one thousand (1000) by a fraction, the numerator of which is the
number of months in the short Plan Year and the denominator of which is twelve
(12).
1.52 "Year of Broken Service":
1.52(a) A Plan Year (which is the computation period), commencing with
or after the date an individual becomes an Employee, during which such Employee
is not credited with more than five hundred (500) Hours of Service.
1.52(b) In the event of a Plan Year which is less than twelve (12)
months resulting from a change in the Plan Year of the Plan, the number of Hours
of Service for the short Year of Broken Service shall be prorated by multiplying
one thousand (1000) by a fraction, the numerator of which is the number of
months in the short Plan Year and the denominator of which is twelve (12). If
the Plan Year is less than twelve (12) months for any reason other than a change
in the Plan Year, an Employee shall not be required to complete any specified
number of Hours of Service to receive credit for such fractional year.
1.53 "Year of Service":
1.53(a) A twelve consecutive month period, based on the applicable
computation period stated when used in the Plan, during which an Employee is
credited with at least one thousand (1,000) Hours of Service.
1.53(b) In the event of a computation period which is less than twelve
(12) months resulting from a change in the Plan Year of the Plan, the number of
Hours of Service for a short Year of Service shall be prorated by multiplying
one thousand (1000) by a fraction, the numerator of which is the number of
months in the short computation period and the denominator of which is twelve
(12). If the Plan Year is less than twelve (12) months for any reason other than
a change in the Plan Year, an Employee shall not be required to complete any
specified number of Hours of Service to receive credit for such fractional year.
1.54 "Year of Vesting Service": A Plan Year (which is the computation
period) during which an Employee is credited with at least one thousand (1,000)
Hours of Service.
ARTICLE II
Eligibility and Participation
2.1 Eligibility and Date of Participation.
2.1(a) In the case of a Restated Plan, each individual who is a
Participant in the Plan on the day before the Effective Date of this Restatement
of the Plan shall continue to be a Participant in the Plan at such time.
Otherwise, each Eligible Employee or each other Eligible Employee who, prior to
an Entry Date has satisfied the age and service requirements selected by the
Employer pursuant to Option 5(a) and/or (b) of the Adoption Agreement shall
become a Participant on the earlier of the following dates:
(i) On the first Entry Date on which he is an Eligible
Employee following his completion of such age and service requirements.
(ii) If he is not an Eligible Employee on the first Entry
Date following his completion of such age and service requirements, on
the first day he thereafter becomes an Eligible Employee.
2.1(b) An individual who was, but ceased to be, a Participant
shall again be a Participant if and when he again becomes an Eligible Employee,
provided his prior service is not disregarded under the Eligibility Rule of
Parity contained in subparagraph 2.2(c).
2.1(c) An individual who becomes a Participant shall be or remain a
Participant for so long as he remains an Eligible Employee whose prior service
is not disregarded under the Eligibility Rule of Parity contained in
subparagraph 2.2(c) and thereafter while he is entitled to future benefits under
the terms of the Plan.
2.2 Eligibility Service Definitions and Rules. For purposes of this
ARTICLE II:
2.2(a) The following terms shall have the following meanings:
(i) The term "Entry Date" means with respect to each
Employee of an Employer:
(A) In the case of the initial establishment of the
Plan, the Effective Date of the Plan as to such Employer
and thereafter the date or dates specified in Option 5(c)
of the Adoption Agreement.
(B) In the case of a Restated Plan (unless
otherwise expressly provided in the Adoption Agreement),
the date or dates specified in Option 5(c) of the Adoption
Agreement commencing with the Plan Year containing the
Effective Date of this Restatement of the Plan.
Notwithstanding the foregoing, the first Entry Date with respect to an Employee
of an Employer which adopts the Plan as a participating employer as of a date
after the Effective Date of the Plan shall be the Effective Date of the adoption
of the Plan as to such Employer. Additional Entry Dates may be provided in a
participating employer's Adoption Agreement.
(ii) An Employee's "Initial Year" is:
(A) His first twelve consecutive months of
employment by the Employer commencing upon the date he
first completes an Hour of Service credited for the
performance of duties; or
(B) If his prior service is disregarded under the
Eligibility Rule of Parity contained in subparagraph
2.2(c), his first year of employment by the Employer
commencing upon the date he first completes an Hour of
Service credited for the performance of duties after the
last of the Year(s) of Broken Service described in
subparagraph 2.2(c).
(iii) The term "Year of Eligibility Service" means an
Employee's Initial Year (which is the initial computation period) and
thereafter a Plan Year (which is the computation period after the
initial computation period) commencing with, within or after the
Employee's Initial Year during which he is credited with at least one
thousand (1,000) Hours of Service. In the event of a Plan Year which is
less than twelve months resulting from a change in the Plan Year of the
Plan, the number of Hours of Service for a short Year of Eligibility
Service shall be prorated by multiplying one thousand (1000) by a
fraction, the numerator of which is the number of months in the short
Plan Year and the denominator of which is twelve (12). If the Year of
Eligibility Service is less than twelve (12) months for any reason
other than a change in the Plan Year, an Employee shall not be required
to complete any specified number of Hours of Service to receive credit
for such fractional year.
(iv) The term "Employment Commencement Date" means the date
an individual first completes an Hour of Service credited for the
performance of duties, or in the case of an individual who has incurred
one or more Years of Broken Service and whose Years of Eligibility
Service prior to such Years of Broken Service are disregarded under
subparagraph 2.2(c) of the Plan, the date such individual first
completes an Hour of Service in the employment of the Employer
following such Years of Broken Service.
2.2(b) A Year of Eligibility Service shall only be considered
to be completed by an Employee as of the time described in Option 5(b)(3) or (4)
of the Adoption Agreement as selected by the Employer.
2.2(c) If an Employee incurs one or more Years of Broken Service, he
shall be treated as a new Employee and must again satisfy the eligibility
requirements and become a Participant as provided in subparagraph 2.1(a) and no
prior service by such Employee shall be taken into account for purposes of
satisfying the requirements of paragraph 2.1 if he has, at the end of any Year
of Broken Service:
(i) No non-forfeitable right to an Accrued Benefit under the
Plan derived from the contributions by the Employer to this Plan, and
(ii) Consecutive Year(s) of Broken Service which equal or
exceed his aggregate Year(s) of Eligibility Service completed before
the commencement of such Year(s) of Broken Service, and
(iii) For service computations in Plan Years commencing after
December 31, 1984, at least five (5) consecutive Years of Broken
Service.
For purposes of this subparagraph, an Employee's aggregate Years of Eligibility
Service shall not include Years of Eligibility Service which are at any time
excluded by the application of the provisions of this subparagraph. The rule
contained in this subparagraph is sometimes referred to as the "Eligibility Rule
of Parity".
2.2(d) Except in the case of the Initial Year, Years of Eligibility
Service and Years of Broken Service will be measured on the same computation
period.
ARTICLE III
Funding
3.1 Amount of Employer Contributions. The Employer shall contribute to
the Plan with respect to each Plan Year the following:
3.1(a) An "Employer Base Contribution" in the amount, if any,
determined pursuant to Option 7(a) of the Adoption Agreement.
3.1(b) An "Employer Thrift Contribution" in the amount, if any,
determined pursuant to Option 7(a) of the Adoption Agreement.
3.1(c) An "Employer Matching Contribution" in the amount, if any,
determined pursuant to Option 7(a) of the Adoption Agreement.
3.1(d) An "Employer Top Heavy Contribution" for each Plan Year the Plan
is a Top Heavy Plan in the amount, if any, determined pursuant to Option 9(d) of
the Adoption Agreement. If the Employer wishes to specify a minimum allocation
percentage under the Plan for purposes of satisfying any applicable requirements
of Section 416 of the Code in lieu of the otherwise applicable percentage stated
in clauses (i), (ii) and (iii) of this subparagraph, the Employer shall do so in
the aforesaid Option 9(d)(1) of the Adoption Agreement by inserting the minimum
allocation percentage for purposes of this subparagraph of the Plan; and such
stated minimum percentage shall control over the otherwise applicable percentage
stated in clauses (i), (ii) and (iii) hereof. To the extent the Employer so
elects to have Employer Top Heavy Contributions made under this Plan and does
not change the otherwise applicable percentage as provided in the preceding
sentence, the Employer shall for any Plan Year the Plan is a Top Heavy Plan:
(i) Make an Employer Top Heavy Contribution on behalf of
each Non-Key Employee who is a Participant for such Plan Year, who is
an Eligible Employee on the last day of such Plan Year so that the
aggregate allocation of contributions by the Employer (other than
Supplemental Contributions to the Plan and similar contributions to
other plans) and forfeitures for each such Non-Key Employee under all
defined contribution plans maintained by the Employer is at least equal
to the lesser of:
(A) Three percent (3%) of his Top Heavy
Compensation for such Plan Year, or
(B) Such lesser percentage of his Top Heavy
Compensation for such Plan Year which is equal to the
percentage of Top Heavy Compensation of the Key Employee
for such Plan Year for whom the aggregate allocation of
contributions by the Employer (other than Supplemental
Contributions to this Plan and similar contributions to
other plans) and forfeitures under such plans is made
which is the highest such percentage for such Plan Year;
(ii) Make an Employer Top Heavy Contribution so that each
Non-Key Employee described in clause (i) receives an aggregate
allocation of contributions by the Employer (other than Supplemental
Contributions to this Plan and similar contributions to other plans)
and forfeitures under all defined contributions plans maintained by the
Employer equal to five percent (5%) of his Top Heavy Compensation for
such Plan Year where the Employer maintains a defined benefit plan and
the Non-Key Employee is an active participant or is considered a
participant for purposes of Section 416 of the Code in such defined
benefit plan for such Plan year; or
(iii) Make an Employer Top Heavy Contribution on behalf of
each Non-Key Employee described in clause (i) above in the amount
necessary to satisfy the requirement of clause (i) above if otherwise
applicable, but substituting four percent (4%) for three percent (3%)
each place it appears therein, or clause (ii) above if otherwise
applicable, but substituting seven and one-half percent (7-1/2%) for
five percent (5%) each place it appears therein, for any Plan Year if
necessary to avoid the application of Section 416(h)(1) of the Code
(relating to special adjustments to the limitations imposed by Section
415 of the Code for Top Heavy Plans) if the adjusted limitations of
Section 416(h)(1) of the Code would otherwise be exceeded and if the
Employer maintains or has maintained a defined benefit plan which is
included in the aggregated group of plans considered with this Plan to
be Top Heavy Plans for such Plan Year.
For purposes hereof, contributions considered made by the Employer (such as a
Participant's Pre-tax Matched Contributions and Pre-tax Unmatched Contributions)
which are attributable to a salary reduction or similar arrangement shall be
treated as contributions by the Employer for purposes of this subparagraph,
provided, however, that for Plan Years beginning after December 31, 1988, such
contributions and matching contributions (such as Employer Matching
Contributions and, if Option 7(b)(2)(A) or (B) of the Adoption Agreement is
selected, Employer Base Contributions) within the meaning of Section 401(m) of
the Code shall only be taken into account for purposes of determining the
highest percentage of any Key Employee pursuant to clause (iii)(B) of this
subparagraph. For purposes hereof, the term "Top Heavy Compensation" shall have
the meaning selected by the Employer in Option 9(a) of the Adoption Agreement
and shall not exceed the Compensation Limit.
3.1(e) A "Supplemental Contribution" in an amount, if any, required
pursuant to paragraph 6.6.
3.1(f) In no event shall the sum of the Employer contributions and the
Participant's Pre-tax Contributions considered made by the Employer for purposes
of Section 404 of the Code for any taxable year of the Employer exceed the
maximum amount deductible from the Employer's income for such taxable year under
the Code including the maximum amount deductible under the "carry over"
provisions relating to contributions in previous years of more or less than the
maximum amount permissible and including any amount deductible as a contribution
on behalf of an Affiliate, in which latter case any such contribution shall be
deemed, for purposes of the Plan, to have been made by such Affiliate. If a
reduction is thereby required, the excess amount shall be reduced in the
following manner:
(i) First, to the extent directed by the Employer by the
date, including extensions thereof, on which the Employer's federal
income tax return is due to be filed for such taxable year or any
earlier date required under Section 401(k) of the Code, the Pre-tax
Unmatched Contributions for such taxable year of all Participants or of
the Participants who are Highly Compensated Employees for such taxable
year shall first be returned, and then such Participant's Pre-tax
Matched Contributions for such taxable year shall be returned. Any such
returned contributions shall be considered as gross income to the
Participant for federal income tax purposes. Among such Participants,
there shall be a pro rata reduction in each class of contributions
which such Participants elected to contribute for such taxable year,
(ii) then, the Employer Base Contribution for such taxable
year shall be reduced,
(iii) then, the Employer Thrift Contribution for such taxable
year shall be reduced,
(iv) then, the Employer Matching Contribution for such
taxable year shall be reduced, and
(v) then, the Employer Top Heavy Contribution for such
taxable year shall be reduced,
to the extent necessary to reduce the excess amount to zero. Each such
contribution shall be conditioned upon such deductibility.
3.1(g) The contribution by the Employer for any Plan Year may be made
in one or more payments at any time, subject to the prohibition of paragraph
4.5, provided that the total amount of the contribution with respect to any
taxable year of the Employer shall be paid not later than the date, including
extensions thereof, or which the Employer's federal income tax return for such
taxable year is due to be filed. Notwithstanding the foregoing, if a
contribution is not timely made, it may still be allocated as a contribution for
the Plan Year for which contributed if so directed by the Employer.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
3.2 No Duty of Trustee to Determine or Enforce Contributions. The
Trustee shall not be required to determine the amount of any contribution for
any Plan Year or to enforce the duty of the Employer to make or pay over such
contributions; but the Trustee shall provide the Employer with such information
as it may reasonably require to determine the amount of its contribution.
3.3 Participant Pre-tax and After-tax Contributions.
3.3(a) If permitted by the Employer as indicated in Option 7(c) of the
Adoption Agreement, a Participant while an Eligible Employee may make "Pre-tax
Unmatched Contributions" which are intended to be a payment to the Plan pursuant
to Section 401(k) of the Code by payroll deduction pursuant to Option 7(c) of
the Adoption Agreement.
3.3(b) If permitted by the Employer as indicated in Option 7(c) of the
Adoption Agreement, a Participant while an Eligible Employee may make "Pre-tax
Matched Contributions" which are intended to be a payment to the Plan pursuant
to Section 401(k) of the Code by payroll deduction pursuant to Option 7(c) of
the Adoption Agreement.
3.3(c) If permitted by the Employer as indicated in Option 7(c) of the
Adoption Agreement, a Participant while an Eligible Employee may make "After-tax
Unmatched Contributions" by payroll deduction and/or lump sum deposit in cash
pursuant to Option 7(c) of the Adoption Agreement.
3.3(d) If permitted by the Employer as indicated in Option 7(c) of the
Adoption Agreement, a Participant while an Eligible Employee may make "After-tax
Matched Contributions" by payroll deduction pursuant to Option 7(c) of the
Adoption Agreement.
3.3(e) Voluntary Deductible Employee Contributions are not permitted to
be made to the Plan for any calendar year beginning after December 31, 1986.
3.4 Limitations on Participant Pre-tax Contributions.
3.4(a) The aggregate amount of Participant Pre-tax Contributions made
by a Participant to the Plan for a Plan Year shall not exceed the applicable
limits thereon specified in this paragraph and elsewhere in the Plan.
3.4(b) Notwithstanding anything to the contrary herein, the aggregate
Pre-tax Contributions and other Elective Deferrals made by a Participant for any
calendar year beginning on or after January 1, 1987 may not exceed the Elective
Deferral Dollar Limitation. In no event shall the aggregate Elective Deferrals
made by any Employee for any calendar year to this Plan and any other plan
maintained by the Employer exceed the Elective Deferral Dollar Limitation, and
the Administrator shall, whenever necessary to comply with this limitation,
cause such Employee's Elective Deferrals to this Plan to cease being made for
such calendar year and to take such other actions as it may deem appropriate in
connection therewith.
(i) If a Participant's Pre-tax Contributions for a calendar
year beginning on or after January 1, 1987 would otherwise exceed the
Elective Deferral Dollar Limitation for such calendar year, all such
contributions in excess of the Elective Deferral Dollar Limitation for
such calendar year shall automatically cease to be made by the
Participant for the balance of such calendar year.
(ii) For purposes hereof:
(A) The term "Elective Deferral Dollar Limitation"
means $7,000, as adjusted by the Adjustment Factor and as
otherwise adjusted pursuant to Section 402(g) of the Code.
(B) The term "Elective Deferrals" means a
Participant's Pre-tax Contributions to the Plan and his
other elective or salary reduction contributions to a cash
or deferred arrangement, tax sheltered annuity or
simplified employee pension, any eligible deferred
compensation plan, or "Section 501(c)(18)" trust to the
extent not includable in or to the extent deductible from
the Participant's gross income for his taxable year of
contribution on account of or as described in Section
401(k), 402(h)(1)(B), 403(b), 408(k), 457 or 501(c)(18) of
the Code and required to be taken into account and
aggregated for purposes of applying the limitations of
Section 402(g) to the Plan.
(C) The term "Excess Elective Deferrals" means a
Participant's Elective Deferrals for a calendar year in
excess of the Elective Deferral Dollar Limitation for such
calendar year.
(iii) Not later than the January 31 following each calendar
year beginning on or after January 1, 1987, the Administrator shall
inform each Participant of his aggregate Pre-tax Contributions for such
calendar year.
(iv) Not later than the March 1 following each calendar year
beginning on or after January 1, 1987, the Participant may allocate the
amount of his Excess Deferrals, if any, for such calendar year among
the plans to which contributed and notify the Administrator of the
portion, if any, allocated to the Plan. Any such allocation by the
Participant shall be made in a written notice filed with the
Administrator in which the Participant states both the amount of Excess
Elective Deferrals allocated to the Plan and that such amount is in
excess of the aggregate Elective Deferrals permitted to be made by him
for the calendar year under Section 402(g) of the Code. A Participant
is deemed to have notified the Administrator of the Excess Elective
Deferral and to have allocated such excess to the Plan to the extent
that the Excess Elective Deferral for a calendar year is calculated by
taking into account only Elective Deferrals under the Plan and other
plans of the Employer.
(v) Any Excess Elective Deferrals allocated to the Plan or
deemed allocated to the Plan shall then be distributed to the
Participant (together with income thereon as determined pursuant to
Section 402(g) of the Code) as soon as reasonably practical.
(vi) For purposes hereof and except to the extent otherwise
provided under Section 401(k) or 402(g) of the Code:
(A) Excess Elective Deferrals allocated to the Plan
shall be considered first to be Pre-tax Unmatched
Contributions and then to be Pre-tax Matched
Contributions.
(B) The income allocated to any Excess Elective
Deferrals allocated to the Plan shall be the amount
determined by multiplying (a) the income for the Plan Year
or other period in question allocable to the account to
which such Excess Elective Deferrals are allocated by (b)
a fraction, the numerator of which is the amount of the
Participant's Excess Elective Deferrals allocated to such
account for the Plan Year or other period in question and
entitled to a share of the valuation adjustment therefor
under paragraph 4.6 and the denominator of which is the
balance in such account on the last day of such Plan Year
or other period in question, reduced by the earnings
allocable thereto and increased by the losses allocable
thereto in the Plan Year or other period in question.
(vii) If a Participant's Pre-tax Contributions are returned
pursuant to this subparagraph, such contributions shall nevertheless
still be considered made for any benefit accrual requirements
contingent thereon.
3.5 Participant Rollover Contributions. If permitted by the Employer as
indicated in Option 7(c) of the Adoption Agreement, a Participant while an
Eligible Employee may make a "Rollover Contribution" which is a qualifying
rollover contribution under Section 402(a) of the Code of cash or other property
acceptable to the Trustee, or cash attributable to a sale of property,
distributed (other than any distribution if any part of the distribution is
attributable to contributions made on behalf of the Participant while a key
employee (defined in the same sense as Key Employee, but with respect to the
employer maintaining the plan in question) in a top heavy plan described in
Section 416 of the Code) from an eligible retirement plan. Before accepting any
such contribution, the Trustee may require that the Participant, and/or the
trustee, custodian or other funding agent of any such plan, trust, bond, annuity
or account from which the cash or property is to be deposited, make such
certification as the Trustee deems necessary respecting the distributing plan,
trust, bond, annuity or account, the amount and nature of the distribution and
any other information the Trustee may reasonably require.
3.6 Procedure for and Time of Making Participant Contributions.
3.6(a) A Participant's contributions which may be made by payroll
deposit shall commence to be made starting as of the effective date of his
application to make such contribution. A Participant who is an Eligible Employee
may commence making payroll deposit contributions initially as of the date he
first becomes a Participant and thereafter he may commence, terminate, change
the rate or type or recommence (subject however to the provisions of paragraph
9.3 and, where applicable, clause (ii) of subparagraph 9.6(b)) his payroll
deposit contributions as of the first day of any payroll period, the first day
of any calendar month, the first day of any calendar quarter, or the first day
of any Plan Year, as permitted by the Employer in Option 7(c) of the Adoption
Agreement, by delivering a written payroll deposit election form to the
Administrator no later than twenty (20) days (or such shorter period as the
Administrator may permit on a uniform and non-discriminatory basis) before such
first day and prior to the time the amounts in question are payable or otherwise
made available to the Participant.
3.6(b) If a Participant ceases to be an Eligible Employee, his
contributions to the Plan shall cease to be made. Except as otherwise prohibited
by paragraph 9.3 and, where applicable, clause (ii) of subparagraph 9.6(b)
hereof, if such individual again becomes an Eligible Employee, he shall again be
entitled to recommence his payroll deposit contributions at a rate designated by
him as of the first payroll period of any succeeding calendar quarter by
delivering a new written payroll deposit election form to the Administrator no
later twenty (20) days (or such shorter period as the Administrator may permit
on a uniform and non-discriminatory basis) before its effective date and prior
to the time that the amounts in question are payable or otherwise made available
to the Participant.
3.6(c) A Participant's contributions which may be made by lump sum
contribution may be made at any time, but in the aggregate shall be made no more
than two (2) times in any Plan Year, provided, however, that such restriction
shall be waived in the case of a Rollover Contribution. Such Participant
contributions shall be made by delivering the same to the Administrator together
with an appropriate written contribution form.
3.6(d) Each Participant shall when electing to make contributions
designate the amount, type and rate of contribution elected on the applicable
form.
3.6(e) Participant contributions received by the Administrator or
withheld by the Employer shall be paid over to the Trustee as soon as is
reasonably practical after the applicable form is received in the case of lump
sum contributions and as soon as is reasonably practical after the amount can be
segregated from the general assets of the Employer and no event later than
ninety (90) days after such segregation in the case of payroll deposit
contributions; provided, however, that Pre-tax Contributions shall be paid over
to the Trustee not later than the end of the Plan Year immediately following the
Plan Year for which withheld by the Employer.
3.6(f) Notwithstanding anything to the contrary herein, the
Administrator may on a non-discriminatory basis at any time and from time to
time:
(i) Permit changes by Participants in the type or
rate of their payroll deposit contributions prospectively,
(ii) Unilaterally and prospectively limit Pre-tax and/or
After-tax Contributions which may be made to the Plan, and/or
(iii) Unilaterally and prospectively change designations by
Participants of contributions from Pre-tax Contributions to After-tax
Contributions,
to the extent considered advisable by the Administrator in order to satisfy the
requirements of paragraphs 4.3, 4.4, 4.9, 4.10 and/or 4.11 and/or to prevent the
sum of Pre-tax Contributions by Participants and the contributions by the
Employer for a taxable year of the Employer from exceeding the amount thereof
deductible for such taxable year by the Employer for federal income tax
purposes.
3.6(g) All Pre-tax Contributions are intended to be payments to the
Plan by the Employer under a cash or deferred arrangement described in Section
401(k) of the Code, and any reference herein to such contributions as employee
or participant contributions is for convenience only and is not intended as a
designation of such contributions as employee contributions within the meaning
of Section 414(h)(1) of the Code.
3.6(h) If a Participant has no Fund division investment direction for
contributions in force when he makes a lump sum contribution, he may file a
direction as to the divisions of the Fund into which such contribution and his
allocable share of future contributions shall be invested as permitted by
paragraph 12.2 by filing a contribution investment direction form with the
Administrator when he makes the contribution.
3.7 Transfer of Funds from Prior Qualified Plan. To the extent that
this Plan is an amendment to or restatement of a plan of the Employer qualified
under Section 401(a) of the Code, the Trustee shall accept transfers of cash and
property acceptable to the Trustee from such plan provided that such assets are
transferred directly from the exempt funding vehicle of such plan. All such
transferred assets shall be valued by the Trustee at their current fair market
value at the date of transfer and shall be allocated to the account(s) under
this Plan of each Participant on whose behalf transferred which corresponds to
the account(s) under such other plan from which transferred as determined by the
Employer. All such transferred assets shall be held by the Trustee as part of
the Fund to provide benefits under the Plan.
ARTICLE IV
Participants' Accounts and Adjustments
4.1 Accounts. The Administrator shall establish and maintain on the
books of the Fund for all Participants and all other persons having an interest
therein separate accounts reflecting the Accrued Benefit of each Participant.
Such accounts of each Participant shall be separate with respect to the Accrued
Benefit of such Participant represented by his accounts in each division and
each subdivision of the Fund.
4.2 Allocation of Contributions and Forfeitures. Subject to the
applicable limitations contained herein:
4.2(a) As of the last day of each Plan Year, the Trustee shall allocate
the Employer Base Contribution and, where applicable, forfeitures for such Plan
Year to the Employer Active Account of each Covered Participant in the manner
selected in Option 7(b) of the Adoption Agreement.
4.2(b) As of the last day of each Plan Year, the Trustee shall allocate
the Employer Thrift Contribution for such Plan Year to the Employer Thrift
Account of each Participant having Compensation for such Plan Year in proportion
to each such Participant's Compensation for such Plan Year.
4.2(c) As of the last day of each month or quarter of each Plan Year or
as of the last day of each Plan Year as selected in Option 7(a) of the Adoption
Agreement, the Trustee shall allocate the Employer Matching Contribution made on
behalf of a Participant pursuant to Option 7(a) of the Adoption Agreement for
such month, quarter or Plan Year to the Employer Active Account, the Employer
Non-forfeitable Account or the Employer Thrift Account, as selected in Option
7(a) of the Adoption Agreement, of the Participant with respect to whom the
Employer Matching Contribution is made.
4.2(d) As of the last day of each Plan Year, the Trustee shall allocate
the Employer Top Heavy Contribution made on behalf of a Participant for such
Plan Year, as determined pursuant to Option 9(d) of the Adoption Agreement, to
the Employer Active Account of such Participant.
4.2(e) As of the last day of each Plan Year or as of the date repaid,
the Trustee shall allocate the Supplemental Contribution made to the Fund on
behalf of a Participant for each Plan Year and/or the amount repaid to the Plan
by the Participant pursuant to paragraph 6.6, respectively, to the account of
the Participant from which forfeited or distributed.
4.2(f) Upon receipt, the Trustee shall allocate each Participant's:
(i) Pre-tax Unmatched Contribution to his Pre-tax Unmatched
Account.
(ii) Pre-tax Matched Contribution to his Pre-tax Matched
Account.
(iii) After-tax Unmatched Contribution to his After-tax
Unmatched Account.
(iv) After-tax Matched Contribution to his After-tax Matched
Account.
(v) Rollover Contribution to the extent not consisting of
the Participant's "accumulated deductible employee contributions"
within the meaning of Section 72(o)(5)(B) of the Code to his Rollover
Account.
(vi) Rollover Contribution to the extent consisting of the
Participant's "accumulated deductible employer contributions" within
the meaning of Section 72(o)(5)(B) of the Code to his Voluntary
Deductible Account.
4.3 Dollar/25% Limitations on Annual Additions.
4.3(a) Notwithstanding any other provision of the Plan, the sum of all
Annual Additions (as defined in subparagraph 4.3(c)) allocated to the accounts
of any Participant for any Limitation Year may not exceed the lesser of:
(i) $30,000 (referred to herein as the "Dollar
Limitation"), or
(ii) Twenty-five percent (25%) of such Participant's Total
Compensation for such Limitation Year, which limitations are jointly
referred to herein as the "Dollar/25% Limitations".
4.3(b) The Dollar Limitation shall be automatically adjusted by
the Adjustment Factor, from time to time, to reflect any annual cost of living
adjustments and any such adjustment (which with the original Dollar Limitation
is referred to herein as the "adjusted Dollar Limitation") shall be effective
for the Limitation Year which ends with or within the calendar year for which
such increase is effective.
4.3(c) The term "Annual Additions" shall mean the sum of the following
amounts allocated to a Participant's account under the Plan for a Limitation
Year:
(i) All contributions by the Employer (including Pre-tax
Contributions considered made by the Employer) other than Supplemental
Contributions;
(ii) All forfeitures;
(iii) All Participant After-tax Contributions; and
(iv) Any other amounts defined as Annual Additions in
Appendix C.
Notwithstanding the foregoing, amounts described in Appendix C which are
excluded from being Annual Additions shall not be considered Annual Additions
for purposes hereof.
4.3(d) For purposes hereof, the term "Limitation Year" means the year
selected by the Employer in Option 14(e) of the Adoption Agreement. In the event
of a Limitation Year which is less than twelve (12) months resulting from a
change in the Limitation Year of the Plan, the Dollar Limitation in clause (i)
of subparagraph 4.3(a) for the short Limitation Year shall be prorated by
multiplying the otherwise applicable Dollar Limitation by a fraction, the
numerator of which is the number of months in such short Limitation Year and the
denominator of which is twelve (12).
4.4 Additional Limitations on Annual Additions Where Employer Maintains
More Than One Plan. In the event the Employer maintains any other qualified
plan, any welfare benefit fund (as defined in Section 419(e) of the Code) or any
other plan subject to the limitations of Section 415 of the Code, a
Participant's Annual Additions shall be further limited where applicable as
provided in Appendix C.
4.5 Special Account for Unallocated Annual Additions.
4.5(a) Any Annual Additions allocable to Participants' accounts for the
Plan Year which exceed the Dollar/25% Limitations of paragraph 4.3 shall be
reallocated among the other Participants as though such excess Annual Additions
were Employer Base and, where applicable, Top Heavy Contributions; provided,
however, that no such reallocation shall cause the Annual Additions to the
accounts of any such Participant for the Plan Year to exceed the Dollar/25%
Limitations.
4.5(b) If, because of the Dollar/25% Limitations provided in paragraph
4.3, no other Participant is eligible to receive any amount reallocated
hereunder, or any part thereof, such amount, or part thereof, shall be retained
as an undesignated account on the books of the Fund for allocation among the
accounts of the Participants as a part of the Employer's contribution next due
for the next and ensuing Plan Years until exhausted. Any such amounts so used
shall be treated for allocation purposes of the Plan as a part of the
contribution by the Employer.
4.5(c) Before any reallocation shall be made in accordance with this
paragraph:
(i) There shall be returned to each Participant,
first that amount of his After-tax Unmatched Contributions, if any,
(ii) Then that amount of his Pre-tax Unmatched Contributions,
if any,
(iii) Then that amount of his After-tax Matched Contributions,
if any, and
(iv) Then that amount of his Pre-tax Matched Contribution, if
any,
(adjusted in each case for any income or loss in value, if any, allocable
thereto) for the Plan Year which are included in the Annual Additions taken into
account under the provisions of paragraph 4.3 to the extent necessary to achieve
compliance with the Dollar/25% Limitations of paragraph 4.3. After the return to
such Participant of any After-tax and Pre-tax Contributions pursuant to the
preceding sentence, any reallocation made in accordance with this paragraph
shall be made first from the Employer Base Contributions and forfeitures
allocated to him, then from Employer Matching Contributions allocated to him
then from Employer Thrift Contributions allocated to him, and lastly from
Employer Top Heavy Contributions allocated to him for such Plan Year. If a
Participant's After-tax and/or Pre-tax Matched Contributions are returned
pursuant to the foregoing, such contributions shall nevertheless still be
considered made for any benefit accrual requirements contingent thereon.
4.5(d) Notwithstanding any other provisions of the Plan, no
contributions by the Employer or by the Participant which would constitute
amounts subject to the Dollar/25% Limitations of paragraph 4.3 for a Plan Year
may be made to the Plan until any balance at the beginning of such Plan Year in
the undesignated account maintained pursuant to this paragraph has been
allocated among the accounts of Participants.
4.5(e). The undesignated account maintained pursuant to this paragraph
shall share in the valuation adjustments for the Plan Year and shall be invested
in divisions of the Fund directed by the Employer pursuant to paragraph 12.2 as
through the Employer were a Participant.
4.6 Valuation of Assets and Allocation of Valuation Adjustments.
Earnings, losses and valuation change adjustments (referred to herein
collectively as the "net increase or decrease in value" or as the "valuation
adjustments") shall be made at least annually to Participants' accounts as
hereinafter provided:
4.6(a) Upon direction pursuant to the applicable provisions of the
Plan, if any, the Trustee shall segregate the directed portion of a
Participant's account or accounts within the Fund and the Trustee shall, as of
and within a reasonable time after each Valuation Date and with respect to any
affected segregated account as of the date of any transfer out of or benefit
payment from such segregated account, value each such segregated account and
adjust the same to reflect its net increases and decreases since the last
valuation thereof. Expenses incurred and paid out of Plan assets in connection
with the administration and investment by such a segregated account shall be
charged to the segregated account incurring the same in such non-discriminatory
manner as determined by the Trustee.
4.6(b) Within a reasonable time after each Valuation Date, the Trustee
shall determine the value of the assets held by the Fund in the accounts as of
such Valuation Date and shall then adjust each account on the books of the Fund
proportionately to reflect the net increase or decrease in such value since the
last Valuation Date. Such valuation and adjustments shall be made separately
with respect to each division of the Fund and with respect to each of the
Participant's accounts in such division of the Fund. Solely for purposes of
determining such net increase or decrease in value and the proportionate
adjustment to each such account, the rules set forth in either (i) or (ii) below
will apply with respect to "post- valuation additions" and "post-valuation
reductions". "Post-valuation additions" are the amounts of the following
additions or allocations made to such accounts as of a date after the last
Valuation Date: contributions by the Employer; transfers from segregated
accounts; transfers from unsegregated accounts in another division of the Fund;
Participant contributions; and direct transfers. "Post-valuation reductions" are
the amounts of distributions or other payments which have been made from the
Fund and charged to such accounts and transfers to segregated accounts or to
unsegregated accounts in another division of the Fund since the last Valuation
Date.
(i) Except as otherwise provided in clause (ii) of this
subparagraph, in determining such values and in making such adjustments
there shall not be taken into consideration any post-valuation
additions or reductions.
(ii) Notwithstanding the foregoing provisions of clause (i),
if the Trustee shall so determine, the determination of such values and
adjustments shall be made by considering a portion of any individual
items of post- valuation additions which have not been distributed or
otherwise paid out of the Fund since the last Valuation Date and a
portion of any individual items of post-valuation reductions for
transfers to segregated accounts or for transfers to unsegregated
accounts in another division of the Fund on a uniform and
non-discriminatory basis to reflect their contribution to the net
increase or decrease in value. The portion of any such item taken into
account for such purposes shall be determined by multiplying such item
by a fraction, the numerator of which is the number of whole calendar
months (or payroll periods or calendar weeks or days as determined by
the Trustee) since the last Valuation Date during which such item was
held in an unsegregated account in the Fund and the denominator of
which is the number of whole calendar months (or payroll periods or
calendar weeks or days) since the last Valuation Date.
4.6(c) The valuation adjustment contemplated by this paragraph shall be
made before amounts are forfeited from accounts each Plan Year.
4.6(d) Promissory notes of Participants held by the Trustee in
segregated loan accounts shall be valued at the face amount of their unpaid
principal balances and, in the event the accrual method of accounting is used
for such purpose, any interest accrued but unpaid thereon.
4.6(e) Notwithstanding anything to the contrary in the foregoing:
(i) In making such adjustments, expenses allocable to each
division of the Fund shall be borne by such division, and expenses
allocable to the Fund as a whole shall be borne by each division of the
Fund on a pro rata basis (determined on the basis of account balances
to which such adjustments are made). Such allocation of expenses shall
be made in the manner determined by the Trustee; and
(ii) At each Valuation Date, the Trustee in its discretion
shall cause any negative balance in each Participant's account in the
Fund to be eliminated by means of a transfer thereto of amounts held in
the same classification of account of the Participant in another
division of the Fund, and a corresponding pro rata transfer from the
accounts of other Participants between divisions of the Fund.
4.6(f) The Trustee shall select the method of accounting (either the
cash method or the accrual method or some permissible combination thereof) to be
used for purposes hereof.
4.6(g) If the Trustee determines in making any valuation, allocation or
adjustment to any Participant's account under the provisions of the Plan that
the strict application of the provisions of the Plan will not produce equitable
and nondiscriminatory allocation among the Participants' accounts, it may modify
any procedures specified in the Plan for purposes of achieving an equal and
nondiscriminatory allocation in accordance with the general concepts and
purposes of the Plan; provided, however, that any such modification shall not be
inconsistent with the provisions of Section 401(a)(4) of the Code.
4.6(h) The value of the assets shall be at their fair market value as
of the Valuation Date and such other valuation thereof.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
4.7 Determination of Account Balances. The value of any account on the
books of the Fund at any time shall be that amount determined by adding the
amount of all contributions and, where applicable, forfeitures which have been
allocated to such account and all adjustments and transfers by which such
account has been increased, and further by subtracting all amounts forfeited
from such account, all adjustments by which such account has been decreased and
all distributions, other payments and transfers made from such account, all as
provided in the Plan.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
4.8 Suspense Accounts.
4.8(a) If any distribution of an Accrued Benefit is made to a
Participant from his Employer Active Account before such Participant has a
non-forfeitable right to his entire Accrued Benefit and before such Participant
has incurred five (5) consecutive Years of Broken Service (referred to herein as
the "requisite break in service") and before such Participant has forfeited the
non-vested portion of his Employer Active Account due to his death or the
distribution of his entire non-forfeitable Accrued Benefit as provided in clause
(i)(C) of subparagraph 6.6(a) (referred to herein as the "requisite
forfeiture"), the balance of such Employer Active Account after each such
distribution shall be maintained as a suspended portion of his Employer Active
Account until either:
(i) Such Participant has incurred the requisite break in
service or requisite forfeiture, in which event his non-forfeitable
interest in each such suspended portion shall be designated as or added
to his Employer Non- forfeitable Account pursuant to subparagraph
6.3(c), or
(ii) Such Participant has become entitled to a
non-forfeitable interest in his entire Accrued Benefit, in which event
such portion shall no longer be suspended.
In no event shall any contributions or forfeitures be allocated to that
part of a Participant's Employer Active Account which has been so
suspended, but such suspended portion shall nevertheless be adjusted to
reflect the increases or decreases in the value of the Fund pursuant to
paragraph 4.6.
4.8(b) A Participant's non-forfeitable interest at any relevant time in
any suspended portion of his Employer Active Account shall be determined by
first determining:
(i) A "factor", which is the ratio of the value of such
suspended portion at such relevant time to the value of the balance in
such suspended portion immediately after such distribution, and
(ii) The "adjusted distribution", which is the product
obtained by multiplying such factor by the sum of the last adjusted
distribution, if any, plus the amount of the distribution which brought
about the suspension of such portion of his Employer Active Account.
The Participant's non-forfeitable interest in any suspended portion of his
Employer Active Account at any relevant time shall equal the excess of:
(iii) The product obtained by multiplying such Participant's
non-forfeitable percentage, determined under subparagraph 6.3(a) or (b), as the
case may be, at such relevant time, by the sum obtained by adding the adjusted
distribution to the value of the suspended portion at such relevant time, over
(iv) The adjusted distribution.
4.9 Limitation on and Distribution of Pre-Tax Contributions Made by
or on behalf of Highly Compensated Employees.
4.9(a) Notwithstanding the Pre-tax Contributions permitted to be made
pursuant to the Plan, the Average Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for a Plan Year shall not exceed the
greater of (i) or (ii) as follows:
(i) The "regular limitation" percentage which is equal to
one hundred twenty-five percent (125%) of the Average Deferral
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the Plan Year, or
(ii) The "alternative limitation" percentage which is equal
to the lesser of:
(A) Two hundred percent (200%) of the Average Deferral
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year, or
(B) Two (2) percentage points over the Average
Deferral Percentage for the Eligible Participants who are
Non-Highly Compensated Employees.
4.9(b) For purposes hereof:
(i) The term "Average Deferral Percentage" means the average
(expressed as a percentage) of the Deferral Percentages of the Eligible
Participants in a group.
(ii) The term "Eligible Compensation" means an Eligible
Participant's Statutory Compensation since he became an Eligible
Participant determined without regard to suspensions from participation
thereafter.
(iii) The term "Deferral Percentage" means the ratio
(expressed as a percentage and calculated to the nearest one-hundredth
of one percent (.01%)) of (A) the Pre-tax Contributions under the Plan
(and, where provided or elected in accordance with the special
operating rules of subparagraph 4.9(c), any other Deferral
Contributions) made by or on behalf of an Eligible Participant for the
Plan Year to (B) the Eligible Participant's Eligible Compensation for
the Plan Year. The Deferred Percentage of an Eligible Participant who
fails to make or receive an allocation of Deferral Contributions for a
Plan Year shall be 0%.
(iv) The term "Eligible Participant" means any Employee who
is authorized under the terms of the Plan to make Pre-tax Contributions
for the Plan Year, determined without regard to suspensions from
participation for any reason other than not being an Eligible Employee
(or, where provided or elected in accordance with the special operating
rules of subparagraph 4.9(c), who is authorized under the terms of the
applicable plan to make or receive an allocation of Deferral
Contributions for the Plan Year).
(v) The term "Deferral Contributions" means:
(A) Participant Pre-tax Contributions, Employer
Thrift Contributions, and
(B) To the extent provided or elected pursuant to
the special operating rules of subparagraph 4.9(c):
4.9(c)
(I) Qualified non-elective contributions within
the meaning of Section 401(m)(4)(C) of the Code (that is,
any employer contributions (other than matching
contributions within the meaning of Section 401(m)(4)(A)
of the Code) which the Employee may not elect to
have paid to him instead of being contributed to the
plan, which are subject to the restrictions on
distributions contained in Section 401(k)(2)(B) of the
Code (generally prohibiting distribution before separation
from service, death, or disability unless the Employee
has a hardship or has reached age fifty-nine and one-half
(59-1/2) or after plan termination), and which are
immediately fully vested and non-forfeitable),
(II) Qualified matching contributions within
the meaning of Section 401(k)(3)(C)(I) of the Code (that
is, matching contributions as defined in Section
401(m)(4)(A) of the Code, which are subject to the
restrictions on distributions contained in Section
401(k)(2)(B) of the Code (generally prohibiting
distribution before separation from service, death, or
disability unless the Employee has a hardship or has
reached the age fifty-nine and one-half (59-1/2) or
after plan termination) and which are immediately
fully vested and non-forfeitable), and/or
(III) Any other elective deferrals under a
cash or deferred arrangement described in Section 401(k)
of the Code.
(C) Notwithstanding the foregoing, a Pre-tax
Contribution and any other elective deferral shall not be
considered a Deferral Contribution for a Plan Year unless
both:
(I) It is allocated as of a date within the
Plan Year (which generally means that it is not
contingent upon the Employee's participation in the plan
or arrangement or performance of services on any date
subsequent to that date and that is actually paid to the
funding vehicle of the plan or arrangement no later than
the end of the 12-month period immediately following such
Plan Year), and
(II) It either relates to compensation that
either would have been received by the Employee in such
Plan Year but for his election to contribute to the plan
or arrangement or is attributable to services performed
by the Employee in the Plan Year, and but for the
Employee's election to contribute to the plan or
arrangement, would have been received by the Employee
within two and one-half (2-1/2) months after the end of
such Plan Year.
(vi) The term "Excess Deferral Contributions" means the
amount of Deferral Contributions for a Plan Year which must be
eliminated in order for the restrictions of subparagraph 4.9(a) to be
satisfied for the Plan Year.
4.9(c) The following special rules shall apply for purposes of this
paragraph:
(i) The Deferral Percentage for any Eligible Participant who
is a Highly Compensated Employee for the Plan Year and who is eligible
to make Pre-tax Contributions or have other elective deferrals
allocated to his account under two or more cash or deferred
arrangements described in Section 401(k) of the Code that are
maintained by the Employer shall be determined as if all such Pre-tax
Contributions and elective deferrals were made under a single plan.
Such aggregation shall be effected on the basis of plan years ending
with or within the same calendar year.
(ii) In the event that this Plan satisfies the requirements
of Section 401(a)(4) or 410(b) (other than 410(b)(2)(A)(ii)) of the
Code only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Section 401(a)(4) or 410(b)
(other than Section 410(b)(2)(A)(ii)) of the Code only if aggregated
with this Plan, then this paragraph shall be applied by determining the
Deferral Percentages of Eligible Participants as if all such plans were
a single plan.
(iii) For purposes of determining the Deferral Percentage of
an Eligible Participant who is a Highly Compensated Employee, the
Deferral Contributions and Eligible Compensation of such Participant
shall include the Deferral Contributions and Eligible Compensation of
his Family Members, and such Family Members shall be disregarded in
determining the Deferral Percentage for Eligible Participants who are
Non-Highly Compensated Employees. Such aggregation shall be effected
under the following rules:
(A) The combined Deferral Percentage of the Family
Group (which shall be treated as one Highly Compensated
Employee for purposes of determining the Average Deferral
Percentage of Highly Compensated Employees) shall be the
Deferral Percentage determined for the Family Group.
(B) Except as provided in clause (A), the Deferral
Contributions and Eligible Compensation of the Family
Group shall be disregarded in determining the Average
Deferral Percentages of Eligible Participants who are
Highly Compensated Employees and Non-Highly Compensated
Employees.
(C) For purposes hereof, the term "Family Group"
means a Highly Compensated Employee and his Family Members
who are required to be treated as a single Highly
Compensated Employee pursuant hereto. If an Employee is
required to be aggregated as a member of more than one
Family Group, then all Eligible Participants who are
members of those Family Groups that include the Employee
shall be aggregated and treated as one Family Group.
(iv) At the option of the Administrator, each Eligible
Participant's Deferral Contributions for a Plan Year consisting of
qualified non-elective contributions and/or qualified matching
contributions under any plan or arrangement may be included in
determining the Deferral Percentages for the Plan Year provided,
however, that:
(A) The non-elective contributions (both including
and excluding the qualified non-elective contributions
which are treated as Deferral Contributions) satisfy the
requirements of Section 401(a) of the Code.
(B) The matching contributions satisfy the
requirements of Section 401(m) of the Code, provided that
the qualified non-elective contributions and qualified
matching contributions treated as Deferral Contributions
are disregarded in making this determination.
(C) Except as provided in clauses (iv)(A) and (B)
of this subparagraph, the qualified non-elective
contributions and qualified matching contributions treated
as Deferral Contributions are not taken into account in
determining whether any other contributions or benefits
satisfy the requirements of Section 401(a) of the Code or
whether employee contributions and matching contributions
meet the requirements of Section 401(m) of the Code.
(D) The qualified non-elective contributions may
not be treated as Deferral Contributions if the effect is
to increase the difference between the Average Deferral
Percentages for Highly Compensated Employees and for
Non-Highly Compensated Employees.
(E) The qualified non-elective contributions and
qualified matching contributions satisfy the contingent
benefit limitations of Section 401(k)(4)(A) (which
generally prohibit benefits other than matching
contributions from being contingent on making or not
making elective deferrals).
(F) The plan years of the plans or arrangements
under which the qualified non-elective contributions and
qualified matching contributions treated as Deferral
Contributions are made is the same as the Plan Year.
(v) Two or more cash or deferred arrangements may be
permissively aggregated by the Administrator for purposes of satisfying
the requirements of Section 401(a)(4), 401(k) and 401(b) of the Code if
such arrangements each have the same plan year.
(vi) Notwithstanding the aggregation rules of this
subparagraph, no aggregation of contributions under an employee stock
ownership plan described in Section 4975(e)(7) of the Code (an "ESOP")
shall be permitted with contributions under a non-ESOP except as
permitted under Section 401(k) or 4975 of the Code.
(vii) The determination of Excess Deferral Contributions for a
Plan Year for purposes of this paragraph shall be made:
(A) After first determining the Excess Elective
Deferrals under subparagraph 3.4(b) for the Plan Year;
provided that the Excess Elective Deferrals of Non-Highly
Compensated Employees shall not be taken into account in
determining the Deferral Percentage of such Eligible
Participants to the extent that such Excess Elective
Deferrals are made under this Plan or other cash or
deferred arrangement maintained by the Employer and that
Excess Elective Deferrals of Highly Compensated Employees
shall be taken into account in determining the Deferral
Percentage of such Eligible Participants, and
(B) Before determining the Excess Aggregate
Contributions under paragraph 4.10 for the Plan Year.
(viii) The determination and treatment of the Deferral
Contributions and Deferral Percentage of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of the
Treasury or his delegate.
4.9(d) If the Average Deferral Percentage for the Eligible Participants
who are Highly Compensated Employees for a Plan Year is more than the amount
permitted under the above restrictions, then:
(i) The Excess Deferral Contributions for the Highly
Compensated Employees for the Plan Year shall be reduced by
distributing such contributions as required by Section 401(k) of the
Code (together with income thereon determined pursuant to this
subparagraph) to such Participants at such time as the Administrator
may determine but in no event later than the end of the following Plan
Year to the extent not inconsistent therewith, in the following manner:
(A) First, the excess amount shall be considered to
consist of the Participant's Pre-tax Unmatched
Contributions for such Plan Year to the extent thereof,
and
(B) Then, any remaining portion of the excess
amount shall be considered to consist of the Participant's
Pre-tax Matched Contributions for such Plan Year to the
extent thereof, and
(C) Then, any remaining portion of the excess
amount shall be considered to consist of the Participant's
Employer Thrift Contributions for such Plan Year to the
extent thereof, and
(D) Finally, any remaining portion of the excess
amount shall be considered to consist of the Participant's
other Deferral Contributions for such Plan Year.
Notwithstanding the time period described above for the return of Excess
Deferral Contributions, such amounts and any income thereon returned more
than two and one-half (2-1/2) months after the end of the Plan Year shall be
subject to the ten percent (10%) excise tax imposed on the Employer by Section
4979 of the Code.
(ii) Among such Participants, the reduction in the portion of
the Pre-tax Unmatched Contributions and Pre-tax Matched Contributions
which those Participants elected to contribute for such Plan Year shall
be effected by reducing contributions in the order of the highest
Deferral Percentages such that the applicable restrictions of
subparagraph 4.9(a) are satisfied; provided, however, that any required
reduction for any Eligible Participant will be reduced by his Excess
Elective Deferrals returned pursuant to subparagraph 3.4(b). In
effecting the needed reduction, if the Deferral Percentage of a Highly
Compensated Employee is determined by aggregating his Deferral
Contributions with those of his Family Members, then as between the
members of the Family Group, the reduction shall be effected pro rata
on the basis of the Deferral Contributions made by each member of the
Family Group compared to the total Deferral Contributions of all
members of the Family Group that are being reduced.
(iii) Except to the extent otherwise provided under Section
401(k) of the Code, the income allocated to any Excess Deferral
Contribution held under this Plan shall be the amount determined by
multiplying (I) the income for the Plan Year or other period in
question allocable to the account to which such contributions are
allocated by (II) a fraction, the numerator of which is the amount of
the Participant's Excess Deferral Contributions allocated to such
account for the Plan Year or other period in question and entitled to a
share of the valuation adjustments therefor under paragraph 4.6 and the
denominator of which is the balance in such account on the last day of
the Plan Year or other period in question, reduced by the earnings
allocable thereto and increased by the loss allocable thereto for the
Plan Year or other period in question.
(iv) When two or more plans are involved, contributions shall
be reduced in the following order: First, those under money purchase
pension plans, then those under stock bonus plans, then those under
profit sharing plans, and lastly, those under all other plans; and
reductions under plans of the same type shall be on a pro rata basis.
4.9(e) If a Participant's Pre-tax Contributions are returned pursuant
to this paragraph, such contributions shall nevertheless still be considered
made for any benefit accrual requirements contingent thereon.
4.10 Limitation on and Distribution of After-tax or Matching
Contributions Made by or on behalf of Highly Compensated Employees.
4.10(a) Notwithstanding the After-tax Contributions permitted to be
made under the Plan or the provisions of the Plan for the allocation of the
Employer Matching Contribution, the Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for a Plan Year shall not
exceed the greater of (i) or (ii) as follows:
(i) The "regular limitation" percentage which is equal to
one hundred twenty-five percent (125%) of the Average Contribution
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the Plan Year, or
(ii) The "alternative limitation" percentage which is equal
to the lesser of:
(A) Two hundred percent (200%) of the Average
Contribution Percentage for the Eligible Participants
who are Non-Highly Compensated Employees for the Plan
Year, or
(B) Two (2) percentage points over the Average
Contribution Percentage for the Eligible Participants who
are Non-Highly Compensated Employees.
4.10(b) For purposes hereof:
(i) The term "Average Contribution Percentage" means the
average (expressed as a percentage) of the Contribution Percentages of
the Eligible Participants in a group.
(ii) The term "Eligible Compensation" means an Eligible
Participant's Statutory Compensation since he became an Eligible
Participant determined without regard to suspensions from participation
thereafter.
(iii) The term "Contribution Percentage" means the ratio
(expressed as a percentage and calculated to the nearest one-hundredth
of one percent (.01%)) of (A) the After-tax Contributions and Employer
Matching Contributions under the Plan (and, where provided or elected
in accordance with the special operating rules of subparagraph 4.10(c),
any other Aggregate Contributions) made by or on behalf of an Eligible
Participant for the Plan Year to (B) the Eligible Participant's
Eligible Compensation for the Plan Year. The Contribution Percentage of
an Eligible Participant who fails to make or receive an allocation of
Aggregate Contributions for a Plan Year shall be 0%.
(iv) The term "Eligible Participant" means any Employee who
is authorized under the terms of the Plan to make After-tax
Contributions for the Plan Year or receive an allocation of the
Employer Matching Contribution for the Plan Year, determined without
regard to suspensions from participation for any reason other than not
being an Eligible Employee (or, where provided or elected in accordance
with the special operating rules of subparagraph 4.10(c), who is
authorized under the terms of the applicable plan to make or receive an
allocation of other Aggregate Contributions for the Plan Year).
(v) The term "Aggregate Contributions" means:
(A) After-tax Contributions and Employer Matching
Contributions, and, if Option 7(b)(2)(A) or (B) of the
Adoption Agreement is selected, Employer Base
Contributions
(B) To the extent provided or elected pursuant to
the special operating rules of subparagraph 4.10(c), any
other after-tax employee contributions which are allocated
to a separate account to which attributable earnings or
losses are allocated and consisting of either:
(I) Employee contributions to the defined
contribution portion of a plan described in Section
414(k) of the Code.
(II) Employee contributions to a qualified
cost-of-living arrangement described in Section
415(2)(B) of the Code.
(III) Employee contributions applied to the
purchase of whole life insurance protection or
survivor benefit protection under a defined
contribution plan.
(IV) Amounts attributable to excess
contributions to a cash or deferred arrangement
described in Section 401(k) of the Code which are
recharacterized as after-tax employee
contributions.
(V) Employee contributions to a contract
described in Section 403(b) of the Code.
Notwithstanding the foregoing, after-tax employee contributions do not include
loan repayments, cash-out buy- backs, qualifying rollover contributions,
employee contributions which are transferred to a plan or any other
amounts which are excluded from such term under Section 401(m) of the Code,
(C) To the extent provided or elected pursuant to
the special operating rules of subparagraph 4.10(c), any
other matching contributions within the meaning of Section
404(m)(4)(A) of the Code (that is, employer contributions
made on account of after-tax employee contributions under
any plan or elective deferrals under a cash or deferred
arrangement described in Section 401(k) of the Code),
and/or
(D) To the extent provided or elected pursuant to
the special operating rules of subparagraph 4.10(c):
(I) Pre-tax Contributions and/or Employer
Thrift Contributions,
(II) Qualified non-elective contributions
within the meaning of Section 401(m)(4)(C) of the
Code (that is, any employer contributions (other
than matching contributions) which the Employee may
not elect to have paid to him instead of being
contributed to the plan, which are subject to the
restrictions on distributions contained in Section
401(k)(2)(B) of the Code (generally prohibiting
distribution before separation from service, death,
or disability unless the Employee has a hardship or
has reached age fifty- nine and one-half (59-1/2)
or after plan termination), and which are
immediately fully vested and non- forfeitable),
and/or
(III) Any other elective deferrals under a
cash or deferred arrangement described in Section
401(k) of the Code.
(E) Notwithstanding the foregoing, a
contribution shall not be considered an Aggregate
Contribution for a Plan Year unless:
(I) In the case of an after-tax employee
contribution it is actually paid to the funding
vehicle of the plan or an agent of the plan who
remits the contribution to the funding vehicle
within a reasonable time.
(II) In the case of a matching contribution,
it is allocated as of a date within the Plan Year,
it is actually paid to the funding vehicle of the
plan no later than the end of the 12-month period
immediately following such plan year, and it is
made on behalf of the Employee's elective deferrals
or employee contributions for the plan year.
(vi) The term "Excess Aggregate Contributions" means the
amount of Aggregate Contributions for a Plan Year which must be
eliminated in order for the restrictions of subparagraph 4.10(a) to be
satisfied for the Plan Year.
4.10(c) The following special rules shall apply for purposes of this
paragraph:
(i) The Contribution Percentage for any Eligible Participant
who is a Highly Compensated Employee for the Plan Year and who is
eligible to make after-tax employee contributions, or to have matching
contributions, qualified nonelective contributions or elective
deferrals allocated to his account, under two or more plans described
in Section 401(a) or cash or deferred arrangements described in Section
401(k) of the Code that are maintained by the Employer shall be
determined as if all such after-tax employee contributions, matching
contributions, qualified non-elective contributions and elective
deferrals were made under a single plan. Such aggregation shall be
effected on the basis of plan years ending with or within the same
calendar year.
(ii) In the event that this Plan satisfies the requirements
of Sections 401(a)(4) or 410(b) (other than Section 410(b)(2)(A)(ii))
of the Code only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of Sections 401(a)(4) or
410(b) (other than Section 410(b)(2)(A)(ii)) of the Code only if
aggregated with this Plan, then this paragraph shall be applied by
determining the Contribution Percentages of Eligible Participants as if
all such plans were a single plan.
(iii) For purposes of determining the Contribution Percentage
of an Eligible Participant who is a Highly Compensated Employee, the
Aggregate Contributions and Eligible Compensation of such Participant
shall include the Aggregate Contributions and Eligible Compensation of
his Family Members, and such Family Members shall be disregarded in
determining the Contribution Percentage for Eligible Participants who
are Non-Highly Compensated Employees. Such aggregation shall be
effected under the following rules:
(A) The combined Contribution Percentage of the
Family Group (which shall be treated as one Highly
Compensated Employee for purposes of determining the
Average Contribution Percentage of Highly Compensated
Employees) shall be the Contribution Percentage determined
for the Family Group.
(B) Except as provided in this clause, the
Aggregate Contributions and Eligible Compensation of the
Family Group shall be disregarded in determining the
Average Contribution Percentages of Eligible Participants
who are Highly Compensated Employees and Non-Highly
Compensated Employees.
(C) For purposes hereof, the term "Family Group"
means a Highly Compensated Employee and his Family Members
who are required to be treated as a single Highly
Compensated Employee pursuant hereto. If an Employee is
required to be aggregated as a member of more than one
Family Group, then all Eligible Participants who are
members of those Family Groups that include the Employee
shall be aggregated and treated as one Family Group.
(iv) At the option of the Administrator, each Eligible
Participant's Aggregate Contributions for a Plan Year consisting of
qualified non-elective contributions and elective deferrals under any
plan or arrangement may be treated as matching contributions and
included in determining the Contribution Percentages for the Plan
Year provided, however, that:
(A) The non-elective contributions (both
including and excluding the qualified non-elective
contributions which are treated as Aggregate
Contributions and in the latter case also excluding the
qualified non-elective contributions treated as
elective deferrals under Section 401(k) of the Code)
satisfy the requirements of Section 401(a) of the Code.
(B) The elective deferrals (both including and
excluding elective deferrals treated as Aggregate
Contributions) satisfy the requirements of Section 401(k)
of the Code.
(C) Except as provided in clauses (iv)(A) and (B)
of this subparagraph, the qualified non-elective
contributions and elective deferrals treated as Aggregate
Contributions are not taken into account in determining
whether any other contributions or benefits satisfy the
requirements of Section 401(a) of the Code or whether
elective deferrals meet the requirements of Section
401(k) of the Code.
(D) The qualified non-elective contributions may
not be treated as Aggregate Contributions if the
effect is to increase the difference between the
Average Contribution Percentages for Highly Compensated
Employees and for Non-Highly Compensated Employees.
(E) The plan years of the plans or arrangements
under which the qualified non-elective contributions and
elective deferrals treated as Aggregate Contributions
are made is the same as the Plan Year.
(v) Two or more plans to which after-tax employee
contributions or matching contributions or both may be made may be
permissively aggregated by the Administrator for purposes of satisfying
the requirements of Section 401(a)(4), 401(m) and 401(b) of the Code if
such plans each have the same plan year.
(vi) Notwithstanding the aggregation rules of this
subparagraph, no aggregation of contributions under an employee stock
ownership plan described in Section 4975(e)(7) of the Code (an "ESOP")
shall be permitted with contributions under a non-ESOP except as
permitted under Section 401(m) or 4975 of the Code.
(vii) The determination of Excess Aggregate Contributions for
a Plan Year for purposes of this paragraph shall be made after:
(A) First determining the Excess Elective
Deferrals under subparagraph 3.4(b) for the Plan Year, and
(B) Then determining the Excess Deferral
Contributions under paragraph 4.10 for the Plan Year.
(viii) The determination and treatment of the Aggregate
Contributions and Contribution Percentage of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary
of the Treasury or his delegate.
4.10(d) If the Average Contribution Percentage for the Eligible
Participants who are Highly Compensated Employees for a Plan Year is more than
the amount permitted under the above restrictions, then:
(i) The Excess Aggregate Contributions for the Highly
Compensated Employees for the Plan Year shall be reduced as required by
Section 401(m) of the Code after the end of the Plan Year for which
made and, to the extent not inconsistent therewith, in the following
manner:
(A) First, the excess amount shall be considered to
consist of the Participant's After-tax Unmatched
Contributions for such Plan Year and similar contributions
under other plans taken into account for such Plan Year on
a pro rata basis to the extent thereof, which
contributions (and any income allocable thereto within the
meaning of Section 401(m) of the Code) shall be
distributed to the Participant at such time as the
Administrator may determine but in no event later than the
end of the following Plan Year, and
(B) Then, any remaining portion of the excess
amount shall be considered to consist of the Participant's
After-tax Matched Contributions, Employer Matching
Contributions, Employer Base Contributions (if Option
7(b)(2)(A) or (B) of the Adoption Agreement is selected),
other Aggregate Contributions treated as matching
contributions and similar contributions under other plans
taken into account for such Plan Year on a pro rata basis
to the extent thereof, which contributions (and any income
allocable thereto within the meaning of Section 401(m) of
the Code) shall be distributed to the Participant (or
forfeited, to the extent not vested) at such time as the
Administrator may determine but in no event later than the
end of the following Plan Year. Any amount forfeited shall
be applied to reduce employer contributions for the Plan
Year in which the excess arose as provided in paragraph
4.12.
Notwithstanding the time period described above for the return of Excess
Aggregate Contributions, such amounts and any income thereon returned more
than two and one-half (2-1/2) months after the end of the Plan Year shall be
subject to the ten percent (10%) excise tax imposed on the Employer by Section
4979 of the Code.
(ii) Among such Participants, the reduction in the portion of
the After-tax Unmatched Contributions and After-tax Matched
Contributions which those Participants elected to contribute for such
Plan Year and in the Employer Matching Contributions allocated to their
accounts for such Plan Year shall be effected by reducing contributions
in the order of the highest Contribution Percentages such that the
applicable restrictions of subparagraph 4.10(a) are satisfied. In
effecting the needed reduction, if the Contribution Percentage of a
Highly Compensated Employee is determined by aggregating his Aggregate
Contributions with those of his Family Members, then as between the
members of the Family Group, the reduction shall be effected pro rata
on the basis of the Aggregate Contributions made by each member of the
Family Group compared to the total Aggregate Contributions of all
members of the Family Group that are being reduced.
(iii) When two or more plans are involved, contributions shall
be reduced in the following order: First, those under defined benefit
plans shall be reduced, then those under target benefit pension plans,
then those under money purchase pension plans, then those under stock
bonus plans, then those under profit sharing plans, and lastly, those
under all other plans; and reductions under plans of the same type
shall be on a pro rata basis.
(iv) Except to the extent otherwise provided under Section
401(m) of the Code, the income allocated to any Excess Aggregate
Contributions held under this Plan shall be the amount determined by
multiplying (I) the income for the Plan Year or other period in
question allocable to the account to which such contributions are
allocated by (II) a fraction, the numerator of which is the amount of
the Participant's Excess Aggregate Contributions allocated to such
account for the Plan Year or other period in question and the
denominator of which is the balance in such account on the last day of
the Plan Year or other period in question, reduced by the earnings
allocable thereto and increased by the loss allocable thereto for the
Plan Year or other period in question.
(v) Any distribution of Excess Aggregate Contributions (and
income) shall clearly be designated by the Administrator as such.
4.10(e) If a Participant's After-tax Contributions are returned
pursuant to this paragraph, such contributions shall nevertheless still be
considered made for any benefit accrual requirements contingent thereon.
4.11 Limitation on Multiple Use of Alternative Limitations in
Paragraphs 4.9 and 4.10.
4.11(a) Multiple use of the alternative limitations under clause
(ii) of subparagraphs 4.9(a) and 4.10(a) is prohibited and is considered to
occur if all of the following occur for a Plan Year:
(i) One or more Highly Compensated Employees are Eligible
Participants for purposes of both paragraph 4.9 and 4.10, and
(ii) Both:
(A) The Average Deferral Percentage of the Highly
Compensated Employees who are Eligible Participants
exceeds one hundred twenty-five percent (125%) of the
Average Deferral Percentage of the Non-Highly
Compensated Employees who are Eligible
Participants, and
(B) The Average Contribution Percentage of the
Highly Compensated Employees who are Eligible Participants
exceeds one hundred twenty-five percent (125%) of the
Average Contribution Percentage of the Non- Highly
Compensated Employees who are Eligible Participants.
4.11(b) If the multiple use requirement of subparagraph 4.11(a) is not
satisfied for a Plan Year, then the Excess Multiple Use Contributions shall be
eliminated as provided in Sections 401(k) and 401(m) of the Code and, to the
extent not inconsistent therewith, as follows:
(i) The elimination shall be effected in the manner of
reduction described in paragraphs 4.9 and 4.10, depending on whether
the contribution eliminated is a Deferral Contribution or an Aggregate
Contribution.
(ii) Such reduction shall be effected first for Aggregate
Contributions and then for Deferral Contributions.
(iii) Such reduction shall be effected for all Highly
Compensated Employees who are Eligible Participants for purposes of
either paragraph 4.9 or 4.10.
4.11(c) For purposes hereof:
(i) The term "Excess Multiple Use Contributions" means the
amount of Deferral Contributions and/or Aggregate Contributions for a
Plan Year which must be eliminated so that the Multiple Use Limitation
Percentage will not be exceeded for the Plan Year.
(ii) The term "Multiple Use Limitation Percentage" means a
percentage equal to the sum of:
(A) One hundred twenty-five percent (125%) of the
greater of (I) the Average Deferral Percentage of the
Non-Highly Compensated Employees who are Eligible
Participants or (II) the Average Contribution Percentage
of the Non-Highly Compensated Employees who are Eligible
Participants, and
(B) Two (2) plus the lesser of (I) the Average
Deferral Percentage referred to in clause (ii)(A)(I) of
this subparagraph or (II) the Average Contribution
Percentage referred to in clause (ii)(A)(II) of this
subparagraph, provided that the amount determined under
this clause (ii)(B) shall in no event exceed two hundred
percent (200%) of such lesser Average Deferral Percentage
or Average Contribution Percentage.
Notwithstanding the foregoing, the Multiple Use Limitation Percentage shall be
appropriately adjusted as provided in Sections 401(k) and (m) of the Code in
cases where the Average Deferral Percentage or the Average Contribution
Percentage of the Non-Highly Compensated Employees who are Eligible Participants
is less than two percent (2%).
(iii) To the extent authorized under Sections 401(k) and
401(m) of the Code, the Administrator is authorized to change "greater"
to "lesser" and "lesser" to "greater" each place where those words
appear in the Multiple Use Limitation Percentage.
4.12 Use of Forfeitures and Special Account Where Used to Reduce
Contributions by the Employer. If the Employer has elected to make Employer Base
Contributions in Option 7(a) of such Adoption Agreement, forfeitures shall be
allocated as an additional Employer Base Contribution. Otherwise, forfeitures
shall be held in a special account and used to reduce the next due contributions
by the Employer to the Plan.
4.13 Equitable Adjustment in Case of Error or Omission.
4.13(a) When an error omission is discovered in the account of a
Participant, the Trustee shall be authorized to make such equitable adjustment
as are practical and as are approved by the Employer as of the Plan Year in
which the error or omission is discovered or corrected, including but not
limited to actual retroactive reallocations, reallocations based on reasonable
estimates, and other corrections described in this paragraph.
4.13(b) In the event that the error or omission is the erroneous
forfeiture from a Participant's account or the failure to permit contributions
to be made or to properly allocate contributions, forfeitures or valuation
adjustments to a Participant's account, the Employer in its sole discretion may
contribute or cause there to be contributed by any Employer funds or assets to
the Plan or may permit a makeup contribution by the Participant to be made to
correct such error or omission and such funds, assets or contributions shall be
allocated to the account or accounts of any such affected Participant as the
Employer may direct the Trustee in writing. Any such contributed amounts (other
than the portion thereof intended to compensate for previously unallocated
investment gain which shall not be considered an allocation subject to the
Dollar/25% Limitations of paragraph 4.3) shall be considered allocated to the
Participants's account for the Plan Year or Limitation Year to which they
relate, rather than the Plan Year or Limitation year in which actually made, for
purposes of such limitations.
4.13(c) In the event that the error or omission is the understatement
or overstatement of Fund earnings and losses, the Trustee is expressly
authorized to determine the appropriate equitable adjustment on the basis of a
standard of materiality therefor. If the understatement or overstatement does
not exceed the standard, the Trustee may direct that no correction in the
allocation for the valuation period of the understatement or overstatement be
made and that such error or omission be corrected solely by treating the amount
of the understatement or overstatement as additional earnings or loss for a
subsequent valuation period (which generally shall be the valuation period
immediately following the valuation period as of which both the error or
omission is discovered and a determination is made of the equitable adjustment
to correct the error or omission). Unless otherwise determined in writing by the
Trustee, the standard of materiality for purposes hereof for a valuation period
shall be an aggregate amount (determined on a monthly basis) equal to the
greater of Three Dollars ($3.00) per Participant in the affected division of the
Fund or one tenth of one percent (.1%) of the fair market value of the affected
division of the Fund at the Valuation Date of the understatement or
overstatement. In the case of a Restated Plan, this subparagraph shall apply to
all such errors or omissions not yet corrected as of the Effective Date of this
Restatement of the Plan.
ARTICLE V
Retirement Dates
5.1 Normal Retirement Date. The Normal Retirement Date of a Participant
shall be the first day of the calendar month coinciding with or next following
the date on which the Participant attains his Normal Retirement Age.
5.2 Delayed Retirement Date. A Participant who continues in the active
employment of the Employer beyond his Normal Retirement Date shall continue to
participate in the Plan, and his Delayed Retirement Date shall be the first day
of the calendar month coinciding with or next following the date of termination
of his employment with the Employer.
5.3 Early Retirement Date. If Option 6(a) of the Adoption Agreement has
been selected by the Employer, a Participant who has satisfied the age and
service requirements selected by the Employer in Option 6(a) of the Adoption
Agreement, may retire from the employment of the Employer prior to his Normal
Retirement Date and his Early Retirement Date shall be the first day of the
calendar month coinciding with or next following the date of such retirement.
5.4 Disability Retirement Date.
5.4(a) If Option 6(b) of the Adoption Agreement has been selected by
the Employer, a Participant who, while an Eligible Employee, is totally and
permanently disabled, as hereinafter determined, and who has satisfied the age
and service requirements selected by the Employer in Option 6(b) of the Adoption
Agreement, may retire from the employment of the Employer prior to his Normal
Retirement Date and his Disability Retirement Date shall be the first day of the
calendar month coinciding with or next following the date as of which he is
determined to be totally and permanently disabled.
5.4(b) The determination of total and permanent disability shall be
made in a manner consistent with the determination of and on the basis of total
and permanent disability under the Employer's employee welfare benefit plan
providing long term disability coverage, if the Employer maintains such a plan
through the Benefits Corporation. If the Employer does not maintain an employee
welfare benefit plan providing for long term disability coverage through the
Benefits Corporation, the determination of total and permanent disability shall
be made by the Administrator in accordance with the standards applied for
determining total and permanent disability under the Federal Social Security
Act, on the advice of one or more physicians appointed and approved by the
Employer, and the Administrator shall have the right to require further medical
examinations from time to time to determine whether there has been any change in
the Participant's physical condition.
ARTICLE VI
Vesting
6.1 Vesting at Retirement or Attainment of Normal Retirement Age.
Upon either:
(i) A Participant's having attained his Normal Retirement
Age while employed by the Employer,
(ii) If Option 6(a) of the Adoption Agreement has been
selected by the Employer, his satisfaction of the age and service
requirements, if any, for Early Retirement while Employee, or
(iii) His retirement from the employment of the Employer
on his Early or Disability Retirement Date if such a retirement date
is provided for in Option 6 of the Adoption Agreement,
the Accrued Benefit of such Participant shall be fully vested and
non-forfeitable.
6.2 Vesting at Death. If a Participant dies while employed by the
Employer, the Accrued Benefit of such Participant shall be fully vested and
non-forfeitable.
6.3 Vesting in Employer Active Account.
6.3(a) At any time when a Participant is not fully vested in his
Employer Active Account under paragraph 6.1 or 6.2, he shall have a
non-forfeitable interest in a percentage of his Employer Active Account computed
in accordance with the regular vesting schedule(s) selected by the Employer in
Option 8(a) and/or (b), as applicable to the Participant, of the Adoption
Agreement.
6.3(b) In addition to the vesting provisions provided in subparagraph
6.3(a), for each Plan Year the Plan is a Top Heavy Plan, the following schedule
shall also apply with respect to each Participant's Employer Active Account, and
each Participant to whom such schedule applies shall be entitled to the greater
of the non-forfeitable interest in such Accrued Benefit determined under
subparagraph 6.3(a) or the following schedule:
(i) A Participant who is credited with an Hour of Service
during the period that the Plan is a Top Heavy Plan shall have a
non-forfeitable interest in his Employer Active Account and the
percentage of such non-forfeitable interest shall depend upon the
number of Years of Vesting Service with which he is credited in
accordance with the top heavy vesting schedule selected by the Employer
in Option 9(b) of the Adoption Agreement.
(ii) In the event the Plan is a Top Heavy Plan for a Plan
Year or Years and subsequently ceases to be a Top Heavy Plan, the
vesting provisions of this subparagraph as applicable to the last such
Plan Year the Plan is a Top Heavy Plan during such period shall
continue to apply only to such Participants who were credited with at
least five (5) Years of Vesting Service (or for Participants who are
credited with an Hour of Service in a Plan Year beginning after
December 31, 1988, three (3) Years of Vesting Service) at the end of
the last such Plan Year; and each other such Participant in the Plan at
the end of the last such Plan Year shall have a non-forfeitable
interest in his Employer Active Account determined at the end of the
last such Plan Year which is not less than the non-forfeitable interest
therein determined at the end of the last such Plan Year.
6.3(c) Notwithstanding any amendment to the vesting schedule of the
Plan (including the automatic change upon becoming a Top Heavy Plan) or any
amendment that directly or indirectly affects the computation of a Participant's
non- forfeitable interest in his Employer Active Account:
(i) The non-forfeitable percentage of each Participant's
Employer Active Account determined as of the later of the date of
adoption or the effective date of any such amendment shall be the
greater of the non-forfeitable percentage of such Employer Active
Account determined under such amendment or the non-forfeitable
percentage of such Employer Active Account computed without regard to
such amendment; and
(ii) Each Participant credited with five (5) or more Years of
Vesting Service (or in the case of an Employee who is credited with an
Hour of Service in a Plan year beginning after December 31, 1988, three
(3) or more Years of Vesting Service) as of the end of the election
period below may, by irrevocable written election filed with the
Administrator within sixty (60) days after the later of (A) the date of
adoption of such amendment, (B) the effective date of such amendment or
(C) the issuance by the Administrator to the Participant of written
notice of such amendment and of the availability of this election,
elect to have his non-forfeitable percentage determined under the Plan
without regard to such amendment. This election is available only to a
Participant who is an Employee at the time such election is made and
whose non-forfeitable percentage determined under such amendment at any
time can be less than such percentage determined without regard to such
amendment.
6.4 Vesting in Accrued Benefit Other Than Employer Active Account. A
Participant shall at all times have a fully vested and non-forfeitable
interest in his Accrued Benefit other than his Employer Active Account.
6.5 Vesting Service Rules.
6.5(a) For the purpose of computing a Participant's non-forfeitable
right to a percentage of his Employer Active Account, all Years of Vesting
Service shall be included except Years of Vesting Service disregarded in
accordance with the provisions selected by the Employer in Option 8(c) of the
Adoption Agreement in the case of the regular vesting schedule(s) of
subparagraph 6.3(a) and with the provisions selected by the Employer in Option
9(c) of the Adoption Agreement in the case of the top heavy vesting schedule of
subparagraph 6.3(b).
6.5(b) If the vesting computation period of the Plan (which under this
Plan is the Plan Year) is changed by reason of the adoption of this Plan as a
Restated Plan or of any amendment to the Adoption Agreement of this Plan, each
Participant's Years of Vesting Service under the old vesting computation period
prior to such Restatement or amendment of the Plan shall be determined at the
end of the old vesting computation period containing the effective date of such
Restatement or amendment of the Plan, and thereafter such Participant's Years of
Vesting Service shall be determined on the basis of the new vesting computation
period, the first of which shall begin during the last old vesting computation
period.
6.6 Forfeiture and Restoration of Employer Active Account.
6.6(a) The balance of a Participant's Employer Active Account in excess
of his non-forfeitable interest therein shall be forfeited at the earlier of the
following dates (his "forfeiture date"):
(i) At the end of any five (5) consecutive Years of Broken
Service,
(ii) At the date of his death, in the event of his death (to
the extent not vested by reason of his death under paragraph 6.2), or
(iii) At the end of the Plan Year in which the distribution of
his entire non-forfeitable Accrued Benefit is completed (a "cash-out").
If a Participant incurs a forfeiture due to a cash-out and again becomes an
Employee (the date which is referred to herein as the "Re-Employment Date"), an
amount equal to such forfeited account balance (without increase or decrease for
gain or loss in the Fund after the forfeiture) shall be restored to his Employer
Active Account through a Supplemental Contribution made by the Employer for such
Plan Year in which both:
(iv) While he is an Employee, he repays to the Fund the
amount of the distribution from his Employer Account, and
(v) Such repayment is made before the earlier of (I) the
date he incurs five (5) consecutive Years of Broken Service after the
date of his forfeiture or (II) the date which is five (5) years after
his Re-Employment Date (at which earlier dates his restoration right
expires).
For purposes of this subparagraph, a Participant who has no non-forfeitable
interest in his Accrued Benefit (other than his Voluntary Deductible Account),
shall be deemed to have been cashed-out pursuant to the provisions of this
paragraph upon his ceasing to be an Employee and shall be deemed to have repaid
such cashed-out benefit upon his Re-Employment Date provided that such
Re-Employment Date occurs before his restoration right expires. In the event of
a forfeiture due to a cash-out, after a Participant's restoration right expires,
or in the event of a forfeiture due to other reasons, after a Participant's
forfeiture date, his remaining non-forfeitable Employer Active Account shall be
designated as or added to his Employer Non-Forfeitable Account and no further
allocations of contributions or forfeitures shall be made to such account.
6.6(b) If a Participant has incurred a forfeiture date or an expiration
of his restoration right with respect to his Employer Active Account and if he
later becomes entitled to an allocation of Employer Base, Matching (to the
extent allocated to the Employer Active Account) or Top Heavy Contributions or
forfeitures, a new Employer Active Account shall be established for such
Participant. Years of Vesting Service after such forfeiture shall not be taken
into consideration in determining the amount of such Participant's previously
established Employer Active or Non-forfeitable Accounts.
ARTICLE VII
Death Benefits
7.1 Death after Annuity Starting Date. If a Participant dies after his
Annuity Starting Date, the only benefits payable under the Plan after his death
shall be those, if any, provided under the form of payment being made to him at
his death.
7.2 Death before Annuity Starting Date. If a Participant dies before
his Annuity Starting Date, his benefit under the Plan shall be paid as described
under this ARTICLE VII and in paragraph 8.3.
7.3 Beneficiary Designation.
7.3(a) Subject to the rights of his Spouse to receive a survivor life
annuity under paragraph 8.2 or a Pre- Retirement Spouse's Death Benefit under
paragraphs 7.4 and 8.3 (for which purposes the Participant's Spouse shall be
considered a Beneficiary) and the right of his Spouse to consent to specific
non-spouse Beneficiaries, if any, under paragraph 7.6 and subparagraph 8.7(c),
each Participant shall have the right to notify the Administrator in writing of
any designation of a Beneficiary to receive, if alive, benefits under the Plan
in the event of his death. Such designation may be changed from time to time by
notice in writing to the Administrator, subject where specifically required to
consent by his Spouse.
7.3(b) If a Participant dies without having designated a Beneficiary,
or if the Beneficiary so designated has predeceased the Participant or, except
when his Beneficiary is his Spouse entitled to a survivor life annuity or
Pre-Retirement Spouse's Death Benefit, cannot be located by the Administrator
within one (1) year after the date when the Administrator commenced making a
reasonable effort to locate such Beneficiary, then the executor or the
administrator of his estate shall be deemed to be his Beneficiary.
7.3(c) Subject to the minimum distribution requirements described in
paragraph 8.12, any Beneficiary designation may include multiple, contingent or
successive Beneficiaries and may specify the proportionate distribution to each
Beneficiary. If a Beneficiary shall survive the Participant, but shall die
before the entire benefit payable to such Beneficiary has been distributed, then
absent any other provision by the Participant, the unpaid amount of such benefit
shall be distributed to the estate of the deceased Beneficiary. If multiple
Beneficiaries are designated, absent provisions by the Participant, those named
or the survivors of them shall share equally any benefits payable under the
Plan. Any Beneficiary, including the Participant's spouse, shall be entitled to
disclaim any benefit otherwise payable to him under the Plan.
7.4 Pre-Retirement Spouse's Death Benefit. In the event that the Plan
is the direct or indirect transferee of a pension plan (where the transfer
occurred in a Plan Year beginning after December 31, 1984) and a Participant has
a Spouse who has not elected to waive the Death Benefit and such Participant
dies before his Annuity Starting Date at a time when he has a non-forfeitable
interest in his Accrued Benefit, then the Spouse of such Participant shall be
entitled to receive as a Death Benefit under the Plan (referred to as the
"Pre-Retirement Spouse's Death Benefit") the Participant's non-forfeitable
Accrued Benefit normally payable as a survivor annuity, expressed in the form of
a single life annuity payable monthly for the life of such Spouse commencing
immediately after the Participant's death; provided, however, the Spouse may
elect to have such annuity distributed within a reasonable period after the
Participant's death.
7.5 Election Procedure for Waiver of Pre-Retirement Spouse's Death
Benefit.
7.5(a) Any election to waive the Pre-Retirement Spouse's Death Benefit
shall be in writing, shall clearly indicate the election being made, shall
include the appropriate consent to Beneficiary designation described in
paragraph 7.6, and shall be filed with the Administrator within the time and in
accordance with the procedures provided in the following subparagraphs to this
paragraph.
7.5(b) The Administrator shall, where applicable, by mail, personal
delivery or other means permitted under Section 417 of the Code and during the
Applicable Notice Period, provide the Participant with a written explanation of:
(i) The terms and conditions of the Pre-Retirement Spouse's
Death Benefit under paragraph 7.4,
(ii) The Participant's right to make, and the effect of, an
election to waive such Death Benefit,
(iii) The rights of the Participant's Spouse regarding any
such election as provided in subparagraph 7.6(e), and
(iv) The Participant's right to make, and the effect of, a
revocation of an election to waive such Death Benefit.
7.5(c) For purposes hereof, the "Applicable Notice Period" with respect
to a Participant is whichever of the following periods ends last:
(i) The period beginning on the first day of the Plan Year,
and ending on the last day of the second Plan Year following the Plan
Year, in which occurs the Participant's attainment of the age of
thirty-two (32).
(ii) The period beginning one year before and ending one year
after the Participant becomes a Participant.
(iii) The period beginning one year before and ending one year
after the earlier of the date a charge for the Pre-Retirement Spouse's
Death Benefit would first commence to be applicable to the Participant
(assuming for this purpose that a Participant who is the Employee
always has a Spouse and a non-forfeitable Accrued Benefit) or the date
the Participant may waive the Pre-Retirement Spouse's Death Benefit or
select a Beneficiary for all or part of the value of such Death Benefit
who is not his Spouse.
(iv) The period beginning one year before and ending one year
after the Participant's separation from the service of the Employer in
the case of a Participant who separates before attainment of age
thirty-five (35); provided, however, if such Participant again becomes
an Employee, the Applicable Notice Period for such Participant shall be
redetermined.
7.5(d) A Participant's election authorized by paragraph 7.4:
(i) May be filed with the Administrator at any time
commencing on the first day of the Plan Year in which the Participant
attains the age of thirty-five (35), or, if earlier, on the date he
ceases to be an Employee (but only with respect to his non-forfeitable
Accrued Benefit at such date) and ending on the date of his death; and
(ii) May, in the case of a Participant who will not attain
age thirty-five (35) prior to the end of a Plan Year, be filed with the
Administrator at any time; provided that such election shall be
effective only during the period beginning on the date of such election
and ending on the first day of the Plan Year in which the Participant
will attain age thirty-five (35).
(iii) May be revoked in writing during the applicable election
period, and another election may be made during such election period,
at any time and any number of times.
7.6 Spousal Consent. The Spouse of a Participant must consent to any
election by a Participant to waive the Pre- Retirement Spouse's Death Benefit in
the event the Plan is the direct or indirect transferee of a pension plan (where
the transfer occurred in a Plan Year beginning as of December 31, 1984) and, in
the case of all Plans, to a specific non-spouse Beneficiary designation by the
Participant for purposes of paragraphs 7.3 and 7.4 and such consent shall be
subject to the following rules:
(i) Such election and Beneficiary designation shall not be
given effect unless either:
(A) The Participant's Spouse consents in writing to
the election and the Spouse's consent acknowledges the
effect of the election and is witnessed by a
representative of the Plan or a notary public (or the
equivalent), or
(B) It is established to the satisfaction of the
Administrator that such consent may not be attained
because there is no Spouse, because the Spouse cannot be
located, because the Participant has been abandoned by the
Spouse (which fact shall be determined under applicable
law and evidenced by a court order so specifying), or
because of such other circumstances as may be provided
under Section 417(a)(2)(B) of the Code.
For purposes hereof, a representative of the Plan is any officer of the
Employer, the Administrator or any other person designated as such in
writing by any of the foregoing.
(ii) If a Spouse consents to a Participant's election and
Beneficiary designation, such consent shall either be in the form of:
(A) A limited consent which acknowledges any
specific non-spouse Beneficiary or class of non-spouse
Beneficiaries (including any multiple, contingent or
successive Beneficiary or class of Beneficiaries), if any,
or
(B) A general consent which acknowledges the
Spouse's right (and awareness thereof) to limit consent
only to a specific Beneficiary or class of Beneficiaries
and in which the Spouse voluntarily elects to relinquish
such right.
(iii) If a Spouse consents to a Participant's election and
Beneficiary designation, any change of the Beneficiary thereunder
(other than a revocation altogether of the election) by the Participant
shall require the further consent of his Spouse in accordance with the
applicable provisions of this subparagraph (unless the consent of the
Spouse expressly permits such change by the Participant without any
requirement of further consent by the Spouse).
(iv) Any such consent by a Spouse, or the establishment that
the consent of a Spouse may not be obtained, shall be effective only
with respect to such Spouse.
(v) Any such consent by a Spouse shall continue to be
effective for so long as the Participant's election remains in force
and may not be revoked by the Spouse.
ARTICLE VIII
Payment of Benefits
8.1 Time of Payment.
8.1(a) Except as provided in clause (iii) below, the non-forfeitable
Accrued Benefit of a Participant shall become payable to the Participant, if
then alive, no earlier than the cessation of employment with the Employer and at
such time as the Participant shall determine by written notice filed with the
Administrator at least thirty (30) days (or such shorter notice period as the
Administrator may permit on a uniform and non-discriminatory basis) before the
designated payment date, provided, however, that:
(i) If the entire non-forfeitable Accrued Benefit of a
Participant does not, and did not at the time of any prior payment,
exceed $3,500, such Accrued Benefit shall be paid to the Participant as
soon as possible after his termination of employment with the Employer.
(ii) The non-forfeitable Accrued Benefit of a Participant
shall not commence to be paid later than the sixtieth (60th) day after
the end of the Plan Year in which occurs the later of:
(A) The date on which the Participant attains the
earlier of (I) his Normal Retirement Age or (II) the age
of sixty-five (65), or
(B) The date he ceases to be employed by the
Employer.
(iii) The Required Beginning Date as determined under clause
(v) of subparagraph 8.12(g).
(iv) Notwithstanding the foregoing, payment shall not
commence to be made to a Participant whose non- forfeitable Accrued
Benefit exceeds, or at the time of any prior distribution exceeded,
$3,500 before he attains the later of his Normal Retirement Age or the
age of sixty-two (62) without his first having filed a written consent
to payment with the Administrator.
(v) In the case of a Plan which is intended to be a cash or
deferred arrangement within the meaning of Section 401(k) of the Code,
notwithstanding the foregoing, the non-forfeitable Accrued Benefit of a
Participant shall not commence to be paid before the earlier of:
(A) The date such Participant ceases to be employed
by the Employer by reason of death, disability,
retirement or other separation from service,
(B) The date of transfer of such Participant to the
employment of an employer which is not an Affiliate
acquiring by sale or other disposition of substantially
all the assets used in a trade or business conducted by
the selling Affiliate which employed the Participant,
(C) The date of sale or other disposition of an
Affiliate's interest in a subsidiary to an entity or
person which is not an Affiliate when such Participant
continues employment with such subsidiary, or
(D) The date of termination of the Plan without the
establishment of a successor plan as determined for
purposes of Section 401(k) of the Code (which term
generally means any other defined contribution (other than
an employee stock ownership plan as defined in Section
4975(e)(7) of the Code) maintained by the Employer which
is in existence at the date of termination of the Plan or
established within the 12-month period after all benefits
under the Plan are distributed, provided that such a
defined contribution plan maintained by an employer which
is not but becomes an Affiliate after the date of
termination of the Plan shall be disregarded for this
purpose unless the Plan Sponsor knew or had reason to know
that such unrelated employer would become an Affiliate.)
Clauses (v)(B), (C) and (D) of this subparagraph shall not apply unless
the distribution occurring by reason of an event described therein is a
Lump Sum Payment (as defined in paragraph 8.4). Clauses (v)(B) and (C)
of this subparagraph shall not apply unless the Plan continues to be
maintained after the sale or other disposition referred to therein.
8.1(b) The non-forfeitable Accrued Benefit of a Participant who is
deceased before such Accrued Benefit commences to be paid to him shall become
payable to his Beneficiary at such time as the Beneficiary shall determine by
written notice filed with the Administrator at least thirty (30) days (or such
other date as the Administrator may permit on a uniform and non-discriminatory
basis) before the designated payment date; provided, however, that:
(i) If the entire non-forfeitable Accrued Benefit of the
Participant does not and did not at the time of any prior distribution
exceed $3,500, such Accrued Benefit shall be paid to the Beneficiary as
soon as practical after the date of the Participant's death.
(ii) If the entire non-forfeitable Accrued Benefit of the
Participant is payable to the Participant's Spouse in the form of a
Pre-Retirement Spouse's Death Benefit, such Accrued Benefit shall
commence to be paid immediately after the date of the Participant's
death.
(iii) If the non-forfeitable Accrued Benefit of the
Participant is payable to a Beneficiary who is the Participant's Spouse
(other than a Spouse described in clause (ii) above), such Accrued
Benefit shall not commence to be paid later than the later of:
(A) The end of the fifth (5th) calendar year
following the calendar year in which the Participant's
death occurs, or
(B) The end of the calendar year in which the
Participant would have attained the age of seventy and
one-half (70-1/2); and
(iv) If the Accrued Benefit of the Participant is payable to
a Beneficiary who is not the Participant's Spouse, the Accrued Benefit
shall not commence to be paid later than the end of the fifth (5th)
calendar year following the calendar year in which the Participant's
death occurs.
8.1(c) Notwithstanding the foregoing provisions of this paragraph,
payment may be delayed for a reasonable period in the event the recipient cannot
be located or is not competent to receive the benefit payment, there is a
dispute as to the proper recipient of such benefit payment, additional time is
needed to complete the Plan valuation adjustments and allocations, or additional
time is necessary to properly explain the recipient's options.
8.2 Form of Payment When Participant Is the Initial Recipient. Subject
to the withdrawal rights of ARTICLE IX, the non-forfeitable Accrued Benefit of a
Participant payable to him pursuant to paragraph 8.1 shall be paid to him in the
applicable manner described in this paragraph. Payments continuing after a
Participant's death shall be made to his Beneficiary.
8.2(a) If such non-forfeitable Accrued Benefit (currently and at the
time of all prior distributions) is $3,500 or less, such Accrued Benefit shall
be paid in the form of a Lump Sum Payment (as defined in paragraph 8.4).
8.2(b) Where payment is not made pursuant to subparagraph 8.2(a) and
the Plan is a direct or indirect transferee of a pension plan (where the
transfer occurred in a Plan Year beginning after December 31, 1984), Accrued
Benefit payments to a Participant who has a Spouse shall be in the form of a
joint and survivor annuity which provides for the payment to the Participant
entitled thereto of equal monthly amounts on the first day of each calendar
month during his lifetime and continuing thereafter for the lifetime of his
Spouse at the rate of fifty percent (50%) of such monthly amounts payable to the
Participant as determined pursuant to subparagraph 8.8(c). This annuity is
sometimes referred to herein as a "Joint and 50% Spouse Survivor Annuity" and is
the automatic form of repayment applicable to a Participant who has a spouse.
8.2(c) Where payment is not made pursuant to subparagraph 8.2(a) and
the Plan is a direct or indirect transferee of a pension plan (where the
transfer occurred in a Plan Year beginning after December 31, 1984), Accrued
Benefit payments to a Participant who does not have a Spouse shall be in the
form of a single annuity for the life of the Participant, payable in equal
monthly amounts on the first day of each calendar month during the lifetime of
such Participant as determined pursuant to subparagraph 8.8(c). This annuity is
sometimes referred to herein as a "Single Life Annuity" and is the automatic
form of payment applicable to a Participant who does not have a spouse.
8.2(d) Where payment is not made pursuant to subparagraph 8.2(a), each
Participant shall have the right to elect in accordance with the provisions of
paragraph 8.7, with the consent of his Spouse in the event the Plan is a direct
or indirect transferee of a pension plan (where the transfer occurred in a Plan
Year beginning after December 31, 1984), in lieu of the automatic form of
benefit provided in subparagraph 8.2(b) or (c), if applicable to the Plan, to
receive his non-forfeitable Accrued Benefit in one of the following optional
forms:
(i) In a Lump Sum Payment (as defined in paragraph 8.4).
(ii) In Periodic Installments (as defined in paragraph 8.5)
over a term of the lesser of ten (10) years or:
(A) The life expectancy of the Participant, or
(B) If the Participant's Beneficiary is his Spouse,
the joint life and last survivor expectancy of the
Participant and his Spouse.
(iii) In a combination of a Lump Sum Payment (as defined in
paragraph 8.4) and such applicable Periodic Installments (as defined in
paragraph 8.5).
(iv) In the case of a Plan which is a direct or indirect
transferee of a pension plan (where the transfer occurred in a Plan
Year beginning after December 31, 1984), in a Single Life Annuity.
For purposes hereof, life expectancies shall be determined at the time
such Accrued Benefit becomes payable on the basis of the applicable
expected return multiples under Section 72 of the Code, and life
expectancies and the applicable term certain for periodic installments
shall not be redetermined.
8.2(e) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this subparagraph, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. For purposes of this subparagraph, the following terms shall have the
meaning set forth below:
(i) "Eligible Rollover Distribution": An Eligible Rollover
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or
the joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(ii) "Eligible Retirement Plan": An Eligible Retirement Plan
is an individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(iii) "Distributee": A Distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are
Distributees with regard to the interest of the spouse or former
spouse.
(iv) "Direct Rollover": A Direct Rollover is a payment by the
Plan to the Eligible Retirement Plan specified by the Distributee.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
8.3 Form of Payment When Beneficiary Is the Initial Recipient. Subject
to the withdrawal rights of ARTICLE IX, in the event of a Participant's death
before his Accrued Benefit commences to be paid to him, the Participant's
non-forfeitable Accrued Benefit payable pursuant to paragraph 8.1 shall be paid
to his Beneficiary in the applicable manner described in this paragraph.
Payments continuing after a Beneficiary's death shall be made to the successor
Beneficiary.
8.3(a) If such non-forfeitable Accrued Benefit (currently and at the
time of all prior distributions) is $3,500 or less, such Accrued Benefit shall
be paid in the form of a Lump Sum Payment (as defined in paragraph 8.4).
8.3(b) Where payment is not made pursuant to subparagraph 8.3(a) and
the Plan is a direct or indirect transferee of a pension plan (where the
transfer occurred in a Plan Year beginning after December 31, 1984), the
non-forfeitable Accrued Benefit of a Participant who has a Spouse shall be paid
in the form of a single annuity for the life of the Spouse, payable in equal
monthly amounts on the first day of each calendar month during the lifetime of
the Spouse as determined pursuant to subparagraph 8.8(c), unless the Participant
elects pursuant to the applicable provisions of paragraph 7.5, with the consent
of his Spouse, to waive the Pre-Retirement Spouse's Death Benefit or unless such
Spouse who is entitled to receive a Pre-Retirement Spouse's Death Benefit elects
to receive payment under subparagraph 8.3(c). This annuity is sometimes referred
to as a "Pre- Retirement Spouse's Annuity".
8.3(c) Where payment is not made pursuant to subparagraph
8.3(a), the Spouse or Beneficiary shall by written designation filed with
the Administrator determine the form in which such non-forfeitable Accrued
Benefit is to be paid. Such Accrued Benefit shall be paid in cash and/or in
assets either:
(i) In a Lump Sum Payment (as defined in paragraph 8.4).
(ii) In Periodic Installments (as defined in paragraph 8.5)
over a term certain not extending beyond the end of the fifth (5th)
calendar year following the calendar year in which the Participant's
death occurs unless:
(A) Such term certain is the lesser of ten
(10) years or the life expectancy of the Beneficiary
and the Beneficiary is an individual, and
(B) Such installments commence not later than (I)
the end of the first (1st) calendar year following the
calendar year in which the Participant's death occurs in
the case such individual Beneficiary is not the
Participant's Spouse or (II) the later of the end of the
calendar year in which the Participant would have attained
the age of seventy and one-half (70-1/2) or the end of the
first (1st) calendar year following the calendar year in
which the Participant's death occurs in the case such
individual Beneficiary is the Participant's Spouse.
For purposes hereof, if the individual is the Participant's surviving
Spouse and if such surviving Spouse dies before such installments
commence, this clause shall be further applied as though such Spouse
were the Participant except with respect to the surviving spouse of the
surviving Spouse of the Participant.
(iii) In a combination of a Lump Sum Payment (as defined in
paragraph 8.4) and such applicable Periodic Installments (as defined in
paragraph 8.5).
For purposes hereof, life expectancies shall be determined at the time such
Accrued Benefit becomes payable on the basis of the applicable expected return
multiples under Section 72 of the Code, and life expectancies and the applicable
term certain for Periodic Installments shall not be redetermined.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
8.4 Lump Sum Payments. The term "Lump Sum Payment" generally means a
single payment of the entire non- forfeitable Accrued Benefit or, when combined
with another form of payment, the designated portion of the entire
non-forfeitable Accrued Benefit. A non-forfeitable Accrued Benefit of a
Participant payable in the form of a Lump Sum Payment shall be determined as of
the Valuation Date (or other time of valuation hereunder) immediately preceding
the date of payment to which shall be added any contributions or other
adjustments allocated after such Valuation Date (or other time of valuation
hereunder) and from which shall be subtracted any distributions or other
adjustments since such Valuation Date (or other time of valuation hereunder). In
the event an Accrued Benefit is to be paid in a Lump Sum Payment and the amount
thereof has not been determined, the Administrator is authorized to make one or
more interim payments prior to the time the amount of such Lump Sum Payment is
finally determined.
8.5 Periodic Installments.
8.5(a) The term "Periodic Installments" means periodic payments in
amounts determined by the Administrator and paid monthly. Each installment paid
to a Participant or to a Beneficiary shall be determined pursuant to a
fractional method under which the amount of each installment is equal to the
lesser of:
(i) The quotient obtained by dividing (A) the amount of such
Participant's non-forfeitable Accrued Benefit determined as though a
Lump sum Payment were being made as of the last Valuation Date (or
other time of valuation hereunder) immediately preceding the date of
payment of such installment adjusted in the case of the first such
payment for contributions or other adjustments allocated after such
Valuation Date (or other time of valuation hereunder) and for any
distributions therefrom since such Valuation Date, by (B) the number of
installment payments then remaining to be made; or
(ii) The amount of such non-forfeitable Accrued Benefit at
such time.
8.5(b) In the event an Accrued Benefit is to be paid in the form of
Periodic Installments and the amount of any installment has not been determined,
the Administrator is authorized to make one or more interim payments prior to
the time the amount of such installment is finally determined.
8.5(c) Upon the death of a Participant after his non-forfeitable
Accrued Benefit becomes payable in Periodic Installments, the amounts of any
Periodic Installments remaining unpaid shall be paid to his Beneficiary over the
remaining term certain for such installments subject to such reduction of the
remaining term certain (including commutation by a single sum payment) as may be
requested by the Beneficiary.
8.5(d) Notwithstanding the foregoing, if a Participant dies before
April 1 following the calendar in which he reaches or would reach the age of
seventy and one-half (70-1/2) and is receiving Periodic Installments at the time
of his death, the amount of any Periodic Installments shall be redetermined to
the extent required to satisfy the minimum distribution requirements of Section
401(a)(9) of the Code.
8.6 Advance on or Acceleration of Deferred Payment or Periodic
Installments. If distribution of a Participant's non-forfeitable Accrued Benefit
has been deferred by election of the Participant or his Beneficiary or is being
made from the Fund in the form of Periodic Installments, payment of all or part
of any such remaining Accrued Benefit may be made to the Participant or to the
Beneficiary entitled to benefits prior to the scheduled time for payment upon
written application delivered to the Administrator. Only one such request shall
be permitted in any Plan Year.
8.7 Notice, Election and Consent Procedures Regarding Accrued
Benefit Payment.
8.7(a) Any election authorized by subparagraph 8.2(d) and 8.3(c) and
any designation or consent to a date for payment by a Participant or Beneficiary
shall be in writing, shall clearly indicate the election or designation being
made or the consent being given, and shall be filed with the Administrator
within the time and in accordance with the procedures provided in the following
subparagraphs to this paragraph.
8.7(b) Within a reasonable time (generally not more than ninety (90)
nor less than thirty (30) days) before a Participant's Annuity Starting Date,
the Administrator shall by mail or personal delivery provide the Participant or
his Beneficiary, as the case may be, with a written explanation of:
(i) The terms and conditions of the applicable forms of
payment, including his normal form of payment under subparagraph 8.2(b)
or (c) if applicable and/or 8.3(b), if applicable, and including the
relative financial effects of the applicable forms of payment,
(ii) The Participant's or the Beneficiary's right to make,
and the effect of, an election to waive his normal form of payment
under subparagraph 8.2(b) or (c) and/or 8.3(b), if applicable, by
electing another form of payment,
(iii) The rights of the Participant's Spouse regarding any
such election as provided in subparagraph 8.7(c), and
(iv) The Participant's right to make, and the effect of, a
revocation of an election to waive his normal form of payment under
subparagraph 8.2(b) or (c), as the case may be.
(v) The Participant's right to delay receipt of his
non-forfeitable Accrued Benefit until such later date allowed under
paragraph 8.1, including the right to modify or revoke any election
thereunder.
8.7(c) In the event the Plan is the direct or indirect transferee of a
pension plan (where the transferee occurred in a Plan Year beginning after
December 31, 1984), any election by a Participant regarding the form of his
benefit payment shall require the consent of his Spouse and shall be subject to
the following rules:
(i) The election shall not be given effect unless either:
(A) The Participant's Spouse consents in writing
thereto and the Spouse's consent acknowledges the effect
of such election and is witnessed by a representative of
the Plan or a notary public (or the equivalent), or
(B) It is established to the satisfaction of the
Administrator that such consent may not be obtained
because there is no Spouse or because the Spouse cannot be
located.
For purposes hereof, a representative of the Plan is any officer of the
Employer, the Administrator or any other person designated as such in
writing by any of the foregoing.
(ii) If a Spouse consents to a Participant's election, such
consent regarding a form of payment under which benefits could be paid
to the Participant's Beneficiary shall either be in the form of:
(A) A limited consent which acknowledges the
specific non-spouse Beneficiary or class of
non-spouse Beneficiaries (including any multiple,
contingent or successive Beneficiary or class of
Beneficiaries), if any, and the applicable form(s) of
payment under the Plan (including the form of
payment to the Beneficiary), or
(B) A general consent which acknowledges the
Spouse's right (and awareness thereof) to limit consent
only to a specific Beneficiary or class of Beneficiaries
or a specific form of payment (if there is more than one)
and in which the Spouse voluntarily elects to relinquish
one or both of such rights.
(iii) If a Spouse consents to a Participant's election, any
change (other than a timely revocation by the Participant of an
election regarding the form of payment of his Accrued Benefit or a
change to a form of payment that does not require a spousal consent) by
the Participant to his Beneficiary designation or the form of payment
to his Beneficiary shall require the further consent of his Spouse in
accordance with the applicable provisions of this subparagraph (unless
the Spouse has given a general consent which expressly permits changes
therein by the Participant without any requirement of further consent
by the Spouse).
(iv) Any such consent by a Spouse may not be revoked by such
Spouse but shall be automatically revoked in connection with a
revocation or election or consent change by the Participant.
(v) Any such consent by a Spouse, or the establishment that
the consent of a Spouse need not be obtained, shall be effective only
with respect to such Spouse.
8.7(d) A Participant's designation of, consent to or election of
payment before his Normal Retirement Date under paragraph 8.1 and his election
authorized by subparagraph 8.2(d) (together with any necessary consent by his
Spouse) must be filed with the Administrator during the ninety (90) day period
ending on his Annuity Starting Date. If the written explanation required by
subparagraph 8.7(b) is not provided to the Participant at least thirty (30) days
before the scheduled Annuity Starting Date, the Annuity Starting Date may be
deferred by the Administrator until at least thirty (30) days after the written
explanation is provided. Such election may be revoked in writing during such
election period, and another election may be made during such election period,
at any time and any number of times.
8.7(e) If a Participant elects an optional form of payment under
subparagraph 8.2(d) which provides for a life annuity to a contingent annuitant
after his death and if the contingent annuitant dies before the Participant's
Annuity Starting Date, such optional form of payment shall not be given effect
and such Participant's Accrued Benefit shall be paid in the form otherwise
applicable to or subsequently elected by him.
8.7(f) If a distribution is one to which Sections 401(a)(11) and 417 of
the Code do not apply, such distribution may commence to be made less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(i) The Administrator clearly informs the Participant that,
where applicable, the Participant has a right to a period of at least
30 days after receiving the notice to consider the decision of whether
or not to elect to a distribution (and, if applicable, a particular
distribution option), and
(ii) The Participant, after receiving the notice,
affirmatively elects a distribution.
8.8 Benefit Determination and Payment Procedure.
8.8(a) The Administrator shall make all determinations concerning
eligibility for benefits under the Plan, the time or terms of payment, and the
forms or manner of payment to the Participant or the Participant's Beneficiary,
in the event of the death of a Participant. The Administrator shall promptly
notify the Trustee of each such determination that benefit payments are due or
should cease to be made and provide to the Trustee all other information
necessary to allow the Trustee to carry out said determination, whereupon the
Trustee shall pay or cease to pay such benefits from the Fund in accordance with
the Administrator's determination.
8.8(b) In making the determinations described in subparagraph 8.8(a),
the Administrator shall take into account the terms of any QDRO received with
respect to the non-forfeitable Accrued Benefit of the Participant or any Death
Benefit with respect to the Participant. The time and form of payment with
respect to the QDRO and the time and form of payment chosen by the Participant
or his Beneficiary or required by the Plan shall not be altered by the terms of
the QDRO (except as permitted under Section 414(p)(4) of the Code). The
Administrator shall make all determinations regarding benefit payments to be
made pursuant to a QDRO. Any benefit payment which may be subject to the terms
of a domestic relations order reviewed by the Administrator shall be suspended,
segregated and separately accounted for during the period the Administrator is
considering whether the order is a QDRO. In the event that benefits are in pay
status at the time that a domestic relations order is received, the
Administrator shall promptly notify the Trustee of the amount, if any, of the
benefit payments that must be suspended for the period required by the
Administrator to determine the status of the order. Upon the completion of the
Administrator's review or other determination of the status of the order, the
Administrator shall promptly notify the Trustee of the time benefit payments are
to commence or resume, and of the identity of, and the amount and form of
benefits to be paid to, the person or persons to whom payment is to be made.
8.8(c) The amount of monthly payments to be made under the annuity
forms of payment provided hereunder shall be determined by transferring the
entire amount of the Participant's non-forfeitable Accrued Benefit to a
segregated account as though a Lump Sum Payment were being made, by using such
transferred amount to purchase a non-variable, unisex priced annuity Contract
issued by the Insurer and by holding such contract in such segregated account
until distributed to the Participant or his Spouse entitled thereto. No assets
of the Fund shall be applied to the payment of any such annuity except as
provided in this subparagraph.
8.8(d) In the event that the benefit payments are to be made under the
annuity forms of payment provided hereunder, the Administrator shall have the
right to direct the Trustee to purchase from an Insurer and either hold in the
Fund or distribute to any Participant or his Beneficiary entitled thereto a
Policy which will provide the annuity or other benefits under the Plan to which
such Participant or his Beneficiary is entitled or elects to receive, provided
proper application therefor is delivered to the Trustee. Such Policy shall
provide annuity or other benefits at the time and in the form required under the
Plan, and in the event such Policy is distributed to a Participant or his
Beneficiary, it shall provide for an election as to each time and form of
payment provided in the Plan which election shall be subject where applicable to
the requirement of spousal consent described in subparagraph 8.7(c) and shall be
consistent with the other applicable requirements of the Plan, determined as of
the annuity starting date under the Policy. Each such Policy shall be owned by
and transferable only by the Trustee and, if distributed, shall become
non-transferable and shall provide that the Participant or his Beneficiary
entitled thereto is the retirement payee and death beneficiary thereunder.
8.9 Claims Procedure.
8.9(a) A Participant or Beneficiary (the "claimant") shall have the
right to request any benefit under the Plan by filing a written claim for any
such benefit with the Administrator on a form provided by the Administrator for
such purpose. The Administrator shall give such claim due consideration and
shall either approve or deny it in whole or in part. Within ninety (90) days
following receipt of such claim by the Administrator, notice of any approval or
denial thereof, in whole or in part, shall be delivered to the claimant or his
duly authorized representative or such notice of denial shall be sent by mail to
the claimant or his duly authorized representative at the address shown on the
claim form or such individual's last known address. The aforesaid ninety (90)
day response period may be extended to one hundred eighty (180) days after
receipt of the claimant's claim if special circumstances exist and if written
notice of the extension to one hundred eighty (180) days indicating the special
circumstances involved and the date by which a decision is expected to be made
is furnished to the claimant within ninety (90) days after receipt of the
claimant's claim. Any notice of denial shall be written in a manner calculated
to be understood by the claimant and shall:
(i) Set forth a specific reason or reasons for the denial,
(ii) Make specific reference to the pertinent provisions of
the Plan on which any denial of benefits is based,
(iii) Describe any additional material or information
necessary for the claimant to perfect the claim and explain why such
material or information is necessary, and
(iv) Explain the claim review procedure of subparagraph
8.9(b).
If a notice of approval or denial is not provided to the claimant within the
applicable ninety (90) day or one hundred eighty (180) day period, the
claimant's claim shall be considered denied for purposes of the claim review
procedure of subparagraph 8.9(b).
8.9(b) A Participant or Beneficiary whose claim filed pursuant to
subparagraph 8.9(a) has been denied, in whole or in part, may, within sixty (60)
days following receipt of notice of such denial, or following the expiration of
the applicable period provided for in subparagraph 8.9(a) for notifying the
claimant of the decision on the claim if no notice of denial is provided, make
written application to the Administrator for a review of such claim, which
application shall be filed with the Administrator. For purposes of such review,
the claimant or his duly authorized representative may review Plan documents
pertinent to such claim and may submit to the Administrator written issues and
comments respecting such claim. The Administrator may schedule and hold a
hearing. The Administrator shall make a full and fair review of any denial of a
claim for benefits and issue its decision thereon promptly, but no later than
sixty (60) days after receipt by the Administrator of the claimant's request for
review, or one hundred twenty (120) days after such receipt if a hearing is to
be held or if other special circumstances exist and if written notice of the
extension to one hundred twenty (120) days is furnished to the claimant within
sixty (60) days after the receipt of the claimant's request for a review. Such
decision shall be in writing, shall be delivered or mailed by the Administrator
to the claimant or his duly authorized representative in the manner prescribed
in subparagraph 8.9(a) for notices of approval or denial of claims, and shall:
(i) Include specific reasons for the decision,
(ii) Be written in a manner calculated to be understood by
the claimant, and
(iii) Contain specific references to the pertinent Plan
provisions on which the decision is based.
8.10 Payments to Minors and Incompetents. If a Participant or
Beneficiary entitled to receive any benefits hereunder is a minor or is adjudged
to be legally incapable of giving valid receipt and discharge for such benefits,
or is deemed so by the Administrator, benefits will be paid to such person as is
authorized under state law to receive payment for the benefit of such
Participant or Beneficiary. Such payments shall be considered a payment to such
Participant or Beneficiary and shall, to the extent made, be deemed a complete
discharge of any liability for such payments under the Plan.
8.11 Distribution of Benefit When Distributee Cannot Be Located. The
Administrator shall make all reasonable attempts to determine the identity
and/or whereabouts of a Participant, a Participant's Spouse entitled to a
survivor life annuity or Pre-Retirement Spouse's Annuity, under the Plan, or a
Participant's Beneficiary entitled to any other benefit under the Plan,
including the mailing by certified mail of a notice to the last known address
shown on the Employer's, the Administrator's or the Trustee's records. If the
Administrator, or the Trustee with the assistance of the Administrator, is
unable to identify and/or locate such a person entitled to benefits hereunder,
or if there has been no claim made for such benefits, within seven (7) years
after such amount becomes payable, the Administrator, at the end of such seven
(7) year period, will direct that all unpaid amounts which would have been
payable to such Participant, Participant's Spouse or Beneficiary shall be
forfeited. Any such amounts shall be reinstated should the Participant,
Participant's Spouse or Beneficiary submit a claim to the Administrator which
establishes to its satisfaction the entitlement of such person to those
benefits.
8.12 Minimum Distribution Requirements.
8.12(a) The provisions of this paragraph 8.12 provide a description of
the minimum distribution requirements of Section 401(a)(9) of the Code and shall
take precedence and apply only if payments made under the otherwise applicable
provisions of this ARTICLE VIII do not meet such minimum distribution
requirements.
8.12(b) All distributions required under this paragraph shall be
determined and made in accordance with the proposed regulations under section
401(a)(9) of the Code, including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations.
8.12(c) The entire interest of a Participant must be distributed or
begin to be distributed no later than the Participant's Required Beginning Date.
8.12(d) As of the first Distribution Calendar Year, distributions, if
not made in a single-sum, may only be made over one of the following periods (or
a combination thereof):
(i) The life of the Participant,
(ii) The life of the Participant and a Designated
Beneficiary,
(iii) A period certain not extending beyond the Life
Expectancy of the Participant, or
(iv) A period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Designated Beneficiary.
8.12(e) The amount to be distributed each year shall be determined as
follows:
(i) If the Participant's Benefit is to be paid in a form
other than a single-sum, the following minimum distribution rules shall
apply on or after the Required Beginning Date:
(A) If a Participant's benefit is to be
distributed over (I) a period not extending beyond the
Life Expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the
Participant's Designated Beneficiary or (II) a period
not extending beyond the Life Expectancy of the
Designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the first Distribution Calendar Year,
must at least equal the quotient obtained by dividing the
Participant's Benefit by the Applicable Life Expectancy.
(B) For calendar years beginning before January 1,
1989, if the Participant's Spouse is not the Designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the Life
Expectancy of the Participant.
(C) For calendar years beginning after December 31,
1988, the amount to be distributed each year, beginning
with distributions for the first distribution calendar
year shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of (I)
the Applicable Life Expectancy or (II) if the
Participant's Spouse is not the Designated Beneficiary,
the applicable divisor determined from the table set forth
in Q&A-4 of Section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the
Participant shall be distributed using the applicable Life
Expectancy in Section 4.1(a) above as the relevant divisor
without regard to Proposed Regulations Section
1.401(a)(9)-2.
(D) The minimum distribution required for the
Participant's first Distribution calendar year must be
made on or before the Participant's Required Beginning
Date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution
calendar year in which the employee's Required Beginning
Date occurs, must be made on or before December 31 of that
Distribution Calendar Year.
(ii) If the Participant's benefit is distributed in the form
of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the proposed regulations thereunder.
8.12(f) If the Participant dies before distribution of his or her
interest begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death except to the extent that an election is made to
receive distributions in accordance with (i) or (ii) below:
(i) If any portion of the Participant's interest is payable
to a Designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the Life Expectancy of the
Designated Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
participant died;
(ii) If the Designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required to begin in
accordance with clause (i) above shall not be earlier than the later of
(1) December 31 of the calendar year immediately following the calendar
year in which the Participant died and (2) December 31 of the calendar
year in which the participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this subparagraph by the
time of his or her death, the Participant's Designated Beneficiary must elect
the method of distribution no later than the earlier of (1) December 31 of the
calendar year in which distributions would be required to begin under this
section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
Designated Beneficiary, or if the Designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death. For purposes of this subparagraph, if the surviving
spouse dies after the Participant, but before payments to such spouse begin, the
provisions of this subparagraph, with the exception of clause (ii) shall be
applied as if the surviving spouse were the Participant. Further, any amount
paid to a child of the Participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the surviving spouse when the
child reaches the age of majority. In addition, distribution of a Participant's
interest is considered to begin on the Participant's Required Beginning Date
(or, if the surviving spouse dies after the Participant but before payments to
such spouse begin, the date distribution is required to begin to such surviving
spouse pursuant to this subparagraph). If distribution in the form of an annuity
irrevocably commences to the Participant before the Required Beginning Date, the
date distribution is considered to begin is the date distribution actually
commences.
8.12(g) For purposes of the paragraph, the following terms shall have
the meaning set forth below:
(i) "Applicable Life Expectancy" shall mean the Life
Expectancy (or joint and last survivor expectancy) calculated using the
attained age of the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the applicable
calendar year reduced by one for each calendar year which has elapsed
since the date life expectancy was first calculated.
(ii) "Designated Beneficiary" shall mean the individual who
is designated as the Beneficiary under the plan in accordance with
section 401(a)(9) of the Code and the proposed regulations thereunder.
(iii) "Distribution Calendar Year" shall mean a calendar year
for which a minimum distribution is required. For distributions
beginning before the Participant's death, the first distribution
calendar year is the calendar year immediately preceding the calendar
year which contains the Participant's required beginning date. For
distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions
are required to begin pursuant to subparagraph 8.12(f).
(iv) "Life Expectancy" shall mean the life expectancy (or
joint and last survivor expectancy) calculated using the attained age
of the Participant (or Designated Beneficiary's) birthday in the
applicable calendar year. The applicable calendar year shall be the
first distribution calendar year. If annuity payments commence before
the required beginning date, the applicable calendar year is the year
such payments commence. Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Income Tax Regulations.
(v) "Participant's Benefit" shall mean:
(A) The account balance as of the last Valuation
Date in the calendar year immediately preceding the
Distribution Calendar Year ("valuation calendar year")
increased by the amount of any contributions or
forfeitures allocated to the account balance as of
dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation
calendar year after the valuation date.
(B) For purposes of paragraph (A) above, if any
portion of the minimum distribution for the first
Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution
made in the second Distribution Calendar Year shall be
treated as if it had been made in the immediately
preceding Distribution Calendar Year.
(vi) "Required Beginning Date" shall mean in the case of a
Participant, the first day of April of the calendar year following the
calendar year in which the participant attains age 70 1/2; provided,
however, the required beginning date of a Participant who attains age
70 1/2 before January 1, 1988, shall be determined in accordance with
(A) or (B) below:
(A) The Required Beginning Date of a Participant
who is not a "5-Percent Owner" is the first day of April
of the calendar year following the calendar year in
which the later of retirement or attainment of age 70 1/2
occurs.
(B) The Required Beginning Date of a Participant
who is a 5-Percent Owner during any year beginning after
December 31, 1979, is the first day of April following the
later of:
(I) The calendar year in which the
Participant attains age 70 1/2, or
(II) The earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes 5-Percent Owner, or the
calendar year in which the Participant retires.
Once distributions have begun to a 5-Percent Owner under this section, they
must continue to be distributed, even if the Participant ceases to be a
5-Percent Owner in a subsequent year. Further, provided, the Required
Beginning Date of a Participant who is not a 5-Percent Owner who attains age
70 1/2 during 1988 and who has not retired as of January 1, 1989, is April
1, 1990.
(vii) "5-Percent Owner" means a Participant is a 5-Percent
Owner as defined in section 416(i) of the Code (determined in
accordance with section 416 but without regard to whether the plan is
top-heavy) at any time during the plan year ending with or within the
calendar year in which such owner attains age 66 1/2 or any subsequent
Plan Year.
8.12(i) Notwithstanding the other requirements of this paragraph and
subject to the Joint and Survivor requirements and the requirements of Article
VIII distribution on behalf of any employee, including a 5-Percent Owner, may be
made in accordance with all of the following requirements (regardless of when
such distribution commences):
(i) The distribution by the trust is one which would not
have disqualified such trust under section 401(a)(9) of the Internal
Revenue Code as in effect prior to amendment by the Deficit Reduction
Act of 1984.
(ii) The distribution is in accordance with a method of
distribution designated by the employee whose interest in the trust is
being distributed or, if the employee is deceased, by a beneficiary of
such employee.
(iii) Such designation was in writing, was signed by the
employee or the beneficiary, and was made before January 1, 1984.
(iv) The employee had accrued a benefit under the plan as of
December 31, 1983.
(v) The method of distribution designated by the employee or
the beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the employee's death, the beneficiaries of the
employee listed in order of priority.
8.12(j) A distribution upon death will not be covered by subparagraph
8.12(i) unless the information in the designation contains the required
information described above with respect to the distributions to be made upon
the death of the employee.
8.12(k) For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the employee, or the beneficiary, to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in clauses (i) and (v) of subparagraph 8.12(i).
8.12(l) If a designation is revoked any subsequent distribution must
satisfy the requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the trust must distribute by the end of the
calendar year following the calendar year in which the revocation occurs the
total amount not yet distributed which would have been required to have been
distributed to satisfy section 401(a)(9) of the Code and the proposed
regulations thereunder, but for the section 242(B)(2) election. For calendar
years beginning after December 31, 1988, such distributions must meet the
minimum distribution incidental benefit requirements in section 1.401(a)(9)- 2
of the proposed regulations. Any changes in the designation will be considered
to be a revocation of the designation. However, the mere substitution or
addition of another beneficiary (one not named in the designation) under the
designation, so long as such substitution or addition does not alter the period
over which distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring life). In the case
in which an amount is transferred or rolled over from one plan to another plan,
the rules in Q&A J-2 and Q&A J-3 of section 1.4-01(a)(9)-1 of the proposed
regulations shall apply.
ARTICLE IX
In-Service Withdrawals and Loans
9.1 Non-Hardship Withdrawals from After-tax Account, Voluntary
Deductible Account and/or Rollover Account. If permitted by the Employer as
indicated in Option 10 of the Adoption Agreement, a Participant who is employed
by the Employer may make non-hardship withdrawals in whole or in part from his
After-tax Matched Account, his After-tax Unmatched Account, his Voluntary
Deductible Account and/or his Rollover Account.
9.2 Non-Hardship Withdrawals from Pre-tax Account and/or Employer
Thrift Account. If permitted by the Employer as indicated in Option 10 of the
Adoption Agreement, a Participant who is employed by the Employer and who has
attained the age of fifty-nine and one-half (59-1/2) may make non-hardship
withdrawals in whole or in part from his Pre-tax Matched Account, his Pre-tax
Unmatched Account and/or his Employer Thrift Account.
9.3 Suspension and Recommencement of Active Participation in Case of
Certain Non-Hardship Withdrawals from After- tax Matched Account and/or Pre-tax
Matched Account.
9.3(a) If a Participant makes a non-hardship withdrawal which consists
in whole or in part of his Pre-tax Matched Contributions or his After-tax
Matched Contributions, he shall be suspended from making such contributions to
the Plan for a period following the date of withdrawal determined as follows on
the basis of the percentage of the aggregate of such contributions withdrawn:
Percentage of Contributions
Withdrawn Period of Suspension
--------------------------- --------------------
Not over 25% 3 months
More than 25%, but
not over 50% 6 months
More than 50%, but
not over 75% 9 months
More than 75% 12 months
For purposes hereof, separate periods of suspension shall run consecutively.
9.3(b) A Participant who is an Eligible Employee may recommence his
contributions to the Plan after his applicable period of suspension has expired
on the first day of any calendar month thereafter by his delivering a new
payroll deposit election form to the Administrator at least thirty (30) days (or
such shorter period as the Administrator on a uniform and non-discriminatory
basis may determine) prior to the date it is to become effective, designating
the date, type and rate of such recommencement of contributions.
9.4 Non-Hardship Withdrawals from Employer Account.
9.4(a) If permitted by the Employer as indicated in Option 10 of the
Adoption Agreement, a Participant who is employed by the Employer and who has a
100% non-forfeitable interest in his Accrued Benefit may make non-hardship
withdrawals in whole or in part from his Employer Account and who either or
both, as indicated in Option 10 of such Adoption Agreement, has attained the age
of fifty-nine and one-half (59-1/2) and/or has been an "active" Participant in
the Plan for at least sixty (60) full calendar months (whether or not
consecutive) may make withdrawals in whole or in part from his Employer Active
Account and/or his Employer Non-forfeitable Account.
9.4(b) For purposes of determining active participation with respect to
any period, an "active" Participant in a non- contributory plan is a Participant
satisfying the requirements, if any, of such Plan to share in the contribution
by the Employer to such plan for such period, and an "active" Participant in a
contributory plan is a Participant eligible to make contributions (whether
after-tax or pre-tax) to such Plan for such period.
9.5 Hardship Withdrawals from Accounts Other Than Pre-tax Account
and Employer Thrift Account.
9.5(a) If permitted by the Employer as indicated in Option 10 of the
Adoption Agreement, a Participant who is employed by the Employer and who
suffers a Hardship may, upon written request approved by the Administrator, make
a hardship withdrawal of all or that portion of the balance of his vested
Accrued Benefit (other than his Pre-tax Matched Account, Pre-tax Unmatched
Account and Employer Thrift Account) which the Administrator deems appropriate
to relieve such hardship.
9.5(b) "Hardship" of a Participant for purposes of this paragraph shall
be determined by the Administrator upon review of each situation and in
accordance with the following objective standards and shall mean an immediate
need for financial assistance in meeting obligations incurred or to be incurred
by a Participant. A Hardship shall be considered present in connection with any
obligation to pay expenses or costs resulting from education expenses, a
principal home purchase or major improvement or repairs thereto, a major medical
expense to the extent not reimbursed by any plan, program or insurance, or
losses of a catastrophic nature to the extent uninsured, of the Participant or
his dependents.
9.6 Hardship Withdrawals from Pre-tax Account and/or Employer Thrift
Account.
9.6(a) If permitted by the Employer as indicated in Option 10 of the
Adoption Agreement, a Participant who is employed by the Employer and who
suffers a Severe Hardship may, upon written request approved by the
Administrator, make a hardship withdrawal of all or that portion of:
(i) In the case of withdrawals in Plan Years beginning
before January 1, 1989, the balance of his Pre-tax Matched Account, his
Pre-tax Unmatched Account and/or his Employer Thrift Account, or
(ii) In the case of withdrawals in Plan Years beginning after
December 31, 1988, the balance of his Pre-tax Matched Account and his
Pre-tax Unmatched Account and/or his Employer Thrift Account as of the
end of the last Plan Year beginning before January 1, 1989 plus his
Pre-tax Matched Contributions and/or his Pre-tax Unmatched
Contributions made for Plan Years beginning after December 31, 1988
(without regard to earnings thereon) then considered held in his Pre-
tax Matched Account and his Pre-tax Unmatched Account, respectively,
which the Administrator deems appropriate to relieve such hardship.
9.6(b) "Severe Hardship" of a Participant for purposes of this
paragraph shall be determined by the Administrator upon review of each situation
and in accordance with the following objective standard and shall mean an
immediate and heavy need for financial assistance in meeting obligations
incurred or to be incurred by the Participant, taking into account the
Participant's other reasonably available resources, as provided below. A Severe
Hardship shall be considered to exist only where the conditions of both of the
following clauses (i) and (ii) are satisfied:
(i) The immediate and heavy need requirement shall be
considered satisfied only where the need is on account of any of the
following:
(A) Medical expenses (to the extent not
reimbursable or compensable by any plan, program,
insurance or otherwise) described in Section 213(d)
of the Code of the Participant, the Participant's
spouse or any of the Participant's dependents (as
defined in Section 152 of the Code) or expenses
necessary for such persons to obtain medical care as
described in Section 213(d) of the Code.
<PAGE<
(B) Acquisition (excluding mortgage payments) of a
dwelling unit which within a reasonable time is to be used
(determined at the time the withdrawal is made) as the
principal residence of the Participant.
(C) Payment of tuition and related educational fees
for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, the Participant's
children or any of the Participant's dependents (as
defined in Section 152 of the Code).
(D) Prevention of eviction of the Participant from
his principal residence or the foreclosure on the mortgage
of the Participant's principal residence.
(ii) The other reasonably available resources requirement
shall be considered satisfied only when all of the following occur:
(A) The distribution from the Plan does not exceed
the amount of the immediate and heavy need plus the
projected federal, state or local income tax liability or
penalties reasonably anticipated to be levied with respect
to the amount to be withdrawn (taking into account the
following described currently available funds).
(B) The Participant has obtained all currently
available distributions, other than Severe Hardship under
this Plan and comparable hardship distributions under
other qualified plans, under this Plan and all other
qualified plans maintained by the Employer.
(C) The Participant either (I) has obtained all
currently available non-taxable loans under this Plan and
all other qualified plans maintained by the Employer or
(II) in the case where the Participant is also borrowing
from a commercial lender to satisfy part of the immediate
and heavy need, the lender refuses to lend where the
Participant borrows from this Plan or such other qualified
plan.
(D) The Participant agrees to a suspension of his
Elective Deferrals (as defined in clause (ii)(B) of
subparagraph 3.4(b)) and his After-tax Contributions to
this Plan and all his employee contributions (other than
mandatory employee contributions to a defined benefit plan
and rollover contributions to any plan) to all other
qualified plans and non-qualified plans of deferred
compensation (other than health or welfare benefit plans)
maintained by the Employer, including, but not limited to
stock option, stock purchase and similar plans, for a
period of one year after receipt of the Severe Hardship
distribution and all applicable plans so provide.
(E) The Participant agrees that his Elective
Deferrals (as defined in clause (ii)(B) of subparagraph
3.4(b)) to this Plan and all other qualified plans
maintained by the Employer for the calendar year
immediately following the calendar year in which the
Severe Hardship distribution is made shall be limited to
the excess of (I) the Elective Deferral Dollar Limitation
(as defined in clause (ii)(A) of subparagraph 3.4(b)) for
such next calendar year over (II) the amount of such
Participant's Elective Deferrals to this Plan and such
other qualified plans maintained by the Employer for the
calendar year in which the Severe Hardship distribution is
made.
The Participant contribution suspension and limitation requirements of clauses
(ii)(D) and (E) are hereby imposed on any Severe Hardship withdrawal or
similar hardship authorized in any other qualified plan maintained by the
Employer and shall be deemed agreed to by any Participant requesting a
Severe Hardship withdrawal or such other similar hardship withdrawal.
9.6(c) The one year Participant contribution suspension referred to in
clause (ii)(D) of subparagraph 9.6(b) shall be imposed for twelve (12) months
beginning on the first day of the payroll period next following the date of
withdrawal. For purposes hereof, separate periods of suspension under this
paragraph shall run concurrently, provided that suspensions due to a
non-hardship withdrawal under paragraph 9.3 shall run consecutively.
9.6(d) A Participant who is an Eligible Employee may recommence his
contributions to the Plan after his applicable period of suspension has expired
on the first day of any calendar quarter thereafter by his delivering a new
payroll deposit election form to the Administrator at least thirty (30) days (or
such shorter period as the Administrator on a uniform and non-discriminatory
basis may determine) prior to the date it is to become effective, designating
the date, rate and type or types of such recommencement of contributions.
9.6(e) For purposes hereof, unless otherwise provided in the applicable
asset transfer, plan merger or consolidation or adoption agreement, the
remaining period of any suspension from participation under any plan which is
merged into this Plan at the time of such merger shall be considered a period of
suspension under this paragraph during which Participants may not contribute to
the Plan.
9.7 Withdrawal Restrictions and Procedure.
9.7(a) A Participant shall not make more than two (2) non-hardship
withdrawals in any Plan Year. Withdrawals from more than one account made at the
same time shall only count as one withdrawal.
9.7(b) The amount of any withdrawal from any such account shall not be
less than $100, unless the Participant's account balance is less than $100 in
which case the then balance in the account may only be withdrawn or unless such
withdrawal would require a suspension from active participation in which case
the amount which would not cause a suspension may be withdrawn.
9.7(c) All withdrawals shall be made only by filing a written
withdrawal request form with the Administrator in which the amount of withdrawal
and the account(s) and, if desired and permitted by the Administrator, the
division(s) of the Fund from which the withdrawal is to be made and, if
applicable, the Hardship or Severe Hardship and such other information
(including but not limited to certifications regarding no other cash resources
and/or no other resources for purposes of determining the existence of a
Hardship and/or Severe Hardship) pertaining thereto as the Administrator may
deem appropriate are stated.
9.7(d) Notwithstanding anything to the contrary in the foregoing, in
the case of a Plan which is a direct or indirect transferee of a pension plan
(where the transfer occurred in a Plan Year beginning after December 31, 1984),
no withdrawal may be made by a Participant without the consent of his Spouse
filed with Administrator within the ninety (90) day period ending on the date
such withdrawal is made and given in the manner described in subparagraph
8.7(c).
9.7(e) Notwithstanding any of the other provisions of this ARTICLE IX,
the Administrator may on a uniform and non-discriminatory basis at any time and
from time to time suspend or limit the withdrawal rights under this ARTICLE IX
(except to the extent prohibited by Section 411(d)(6) of the Code).
9.8 Payment of Withdrawals.
9.8(a) All non-hardship withdrawals shall be made within a reasonable
time and at such time or times as are determined by the Administrator after the
Participant's non-hardship withdrawal request is delivered to the Administrator
or his hardship withdrawal request is approved by the Administrator, as the case
may be, and shall be made in cash.
9.8(b) The amount of any withdrawal shall be determined on the basis of
the value of the Participant's accounts from which the withdrawal is made as of
the most recent Valuation Date prior to the date of payment of the withdrawal,
decreased by any withdrawals or other distributions since such Valuation Date
and increased, by the amount of contributions allocated to his accounts (and not
withdrawn or distributed) since such Valuation Date.
9.8(c) If permitted by the Administrator, a Participant may designate
his accounts and/or the divisions of the Fund from which his withdrawal shall be
made. Unless otherwise determined by the Administrator from time to time on a
uniform and non-discriminatory basis applied prospectively or, to the extent
otherwise permitted by the Administrator, as specifically designated by the
Participant in his withdrawal request, each withdrawal by a Participant shall be
prorated based upon the values of the respective divisions of the Fund (other
than the Loan Fund or the Transfer Fund) in the Participant's accounts from
which withdrawn, and the withdrawal shall be considered made from the
Participant's available accounts to the extent permitted hereinabove, with
availability being determined on the basis of the circumstances (such as
hardship, severe hardship, non-hardship, the age of the Participant, the time
contributions have been in the Plan, the length of the Participant's active
participation in the Plan as provided herein) surrounding the withdrawal, in the
following order:
(i) First, his Voluntary Deductible Account;
(ii) Then, his After-tax Unmatched Account;
(iii) Then, his After-tax Matched Account, less that amount
therein of his After-tax Matched Contributions made in the twenty-four
(24) calendar month period preceding the month of withdrawal in the
case of a non-hardship withdrawal;
(iii) Then, his Rollover Account;
(iv) Then, his Employer Non-forfeitable Account;
(v) Then his Employer Active Account;
(vi) Then, his Pre-tax Unmatched Account;
(vii) Then, his Pre-tax Matched Account, less that amount
therein of his Pre-tax Matched Contributions made in the twenty-four
(24) calendar month period preceding the month of withdrawal in the
case of a non-hardship withdrawal;
(viii) Then, his After-tax Matched Account to the extent of his
After-tax Matched Contributions therein made in the twenty-four (24)
calendar month period preceding the month of withdrawal in the case of
a non-hardship withdrawal; and
(ix) Then, his Pre-tax Matched Account to the extent of his
Pre-tax Matched Contributions therein made in the twenty-four (24)
calendar month period preceding the month of withdrawal in the case of
a non-hardship withdrawal.
Any such different scheme or designation rights shall be communicated to
Participants as part of the withdrawal application materials provided to
Participants on request or in any other manner determined by the Administrator.
9.8(d) Solely for purposes of determining amounts available for
withdrawal and for suspension from participation:
(i) In the discretion of the Administrator, amounts required
to be aged by months may be aged by quarters or years if monthly
records are not readily available without additional cost.
(ii) Except as may otherwise be expressly provided herein,
withdrawals from an account shall be considered made first from
earnings (except where prohibited under clause (ii) of subparagraph
9.6(a)) and then, on a first-in, first-out basis, from contributions.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
9.9 No Withdrawal Restoration. No restoration of amounts withdrawn
shall be permitted.
9.10 Loans.
9.10(a) As indicated by the Employer in Option 11 of the Adoption
Agreement, loans from the Fund may be made to Participants (which term for
purposes of this paragraph is intended to include Beneficiaries of deceased
Participants) on written application therefor delivered to the Administrator,
subject to the following rules:
(i) Loans must be adequately secured, which may include or
consist of use of a Participant's non- forfeitable Accrued Benefit
(other than by his Voluntary Deductible Account) as security, provided
however that:
(A) Not more than fifty percent (50%) of a
Participant's non-forfeitable Accrued Benefit (exclusive
of his Voluntary Deductible Account) may be considered
adequate security for such purpose, and
(B) Any pledge and assignment of a Participant's
non-forfeitable Accrued Benefit shall be ineffective and
void for any period of time during which the loan fails to
comply with the provisions of Section 4975(d)(1) of the
Code and Section 408(b)(1) of the Act.
(ii) Loans must be approved by the Administrator in
accordance with a uniform, non-discriminatory policy established, and
which thereafter may be modified or suspended from time to time, by the
Administrator. The Administrator's loan policy shall be considered a
part of the Plan and shall, at a minimum, contain:
(A) A procedure for applying for loans,
(B) The basis on which loans will be approved or
denied,
(C) Limitations, if any, on the types and amounts
of loans available,
(D) The procedure for determining a reasonable
interest rate,
(E) The types of collateral which may secure a
loan,
(F) The events constituting a default and the steps
that will be taken to preserve the Plan assets in the
event of a default.
(iii) Loans must be available to all Participants on a
reasonably equivalent basis.
(iv) Loans must not be made available to Highly Compensated
Employees in an amount of and/or percentage of their non-forfeitable
Accrued Benefits (exclusive of Voluntary Deductible Accounts) or some
combination thereof greater than that made available to other
Participants.
(v) Loans must not exceed with respect to any Participant
(when added to the outstanding balance of all loans to the Participant
from the Plan and all other qualified employer plans of the Employer
and of each Affiliate) the lesser of:
(A) $50,000, reduced by the excess of (I) the
Participant's highest aggregate outstanding balance in the
preceding twelve (12) months under this Plan and such
other plans over (II) his aggregate outstanding balance
under this Plan and such other plans on the date on which
the loan in question is made, or
(B) One-half of the sum of the Participant's
non-forfeitable Accrued Benefit (exclusive of his
Voluntary Deductible Account) under this Plan.
(vi) Loans must bear a commercially reasonable rate of
interest which may be fixed or variable and which may vary between
Participants based on the term of the loan, the security provided and
such other considerations deemed desirable by the Administrator.
(vii) Notwithstanding anything to the contrary in the
foregoing, in the case of a Plan which is a direct or indirect
transferee of a pension plan (where the transferee occurred in a Plan
Year beginning after December 31, 1984), no loan may be made to a
Participant without the consent of his Spouse filed with the
Administrator within the ninety (90) day period ending on the date the
loan is made and given in the manner described in subparagraph 8.7(c),
that is, it must be in writing, acknowledge the effect of the consent
and be witnessed by a plan representative or notary public. Such
consent shall include consent to any possible setoff or payment of
benefits in the form of the promissory note evidencing the loan. The
consent shall thereafter be binding with respect to the consenting
Spouse or any subsequent Spouse. A new consent shall be required if the
account balance is used for renegotiation, extension, renewal or other
revision of the loan.
(viii) Notwithstanding the foregoing, unless the Secretary of
Labor or his delegate grants an administrative exemption from the
prohibited transaction rules with respect to such loan, no loan shall
be made to any Participant who is a shareholder-employee or
Owner-Employee. For purposes of this paragraph a shareholder-employee
means an employee or officer of an electing small business (Subchapter
S) corporation who owns (or is considered as owning within the meaning
of 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.
9.10(b) The loan policy of the Administrator shall include
considerations such as creditworthiness or financial need and any other
considerations deemed desirable by the Administrator.
9.10(c) All loans shall require repayment by substantially level
amortization with payments not less frequently than quarterly and shall
otherwise be repaid in the manner and within a specified period of time as
determined by the Administrator, but in no event to exceed thirty (30) years for
"home loans" or five (5) years for all other loans. For purposes hereof a "home
loan" is any loan used to acquire any dwelling unit which within a reasonable
time is to be used (determined at the time the loan is made) as a principal
residence of the Participant.
9.10(d) The Employer shall cooperate with the Administrator and the
Trustee in enforcing prompt repayment of all such loans and installments
thereon. The entire balance of principal and interest then due on all such loans
upon which a Participant is then liable shall be deducted from any distributions
or benefits paid to or with respect to such Participant and shall be applied to
the payment of such balance, provided that no such deduction shall be made
unless the Participant and, where applicable as provided in clause (vii) of
subparagraph 9.10(a), his Spouse have consented to the loan.
9.10(e) Every loan applicant shall receive a clear statement of the
charges involved in each loan transaction. This statement shall include the
dollar amount and annual interest rate of the finance charge.
9.10(f) Notwithstanding the foregoing, the Administrator may on a
non-discriminatory basis, among other things, set minimum loan amounts (not to
exceed $1,000), minimum repayment amounts, more restrictive loan limits, and/or
a maximum number of outstanding loans for any Participant at any one time, may
impose a loan processing and/or administrative charge, may limit loans to
Participants who are employed by the Employer or otherwise are "parties in
interest" as described in Section 3(14) of the Act, may restrict accounts from
which loans are made, may require repayment by payroll deduction, and may
suspend loan rights from time to time.
9.10(g) Any loan made to a Participant pursuant to this paragraph
shall, to the extent of the lesser of the amount of the loan or the
Participant's Accrued Benefit at such time, be treated as a directed investment
under paragraph 12.2 hereof by the Participant.
9.11 Instructions to Trustee. The Administrator, upon determination
that a requested withdrawal or loan is permissible under the Plan, shall
immediately notify the Trustee, who shall pay from the Fund the amount of the
withdrawal or loan in accordance with the Administrator's instructions and, in
the case of a withdrawal, shall deduct the amount thereof from the Participant's
account in the Fund designated by the Administrator.
ARTICLE X
The Fund
10.1 Trust Fund and Exclusive Benefit. The Trustee shall receive all
contributions under and all assets transferred to the Plan and shall invest and
administer them as a trust fund (the "Fund") for the exclusive benefit of the
Participants and Beneficiaries hereunder in accordance with the Plan. Except as
otherwise expressly provided herein, no part of the corpus or income of the Fund
shall revert to or be used or enjoyed by the Employer or be used for, or
diverted to, purposes other than the exclusive benefit of the Participants or
their Beneficiaries and the defrayal of reasonable expenses of the Plan and
Fund.
The rights of all persons hereunder are subject to the terms of the Plan.
10.2 Plan and Fund Expenses. Unless or to the extent not paid by the
Employer without being advanced subject to reimbursement (which shall make such
payments as directed by the Benefits Corporation) or unless prohibited by the
Act or the Code, all expenses of the Plan and the Fund, including reasonable
legal, accounting, custodial, brokerage, consulting and other fees and expenses
incurred in the establishment, amendment, administration, termination of the
Plan or the Fund and termination of the Employer's participation in this master
plan known as the Virginia Bankers Association Master Defined Contribution Plan
and Trust and/or the compensation of the Trustee and other fiduciaries of the
Plan to the extent provided under the Plan, and all taxes of any nature
whatsoever, including interest and penalties, assessed against or imposed upon
the Fund or the income thereof shall be paid out of the Fund and shall
constitute a charge upon the Fund upon such basis as the Trustee may determine;
provided, however, that if not paid by the Employer as directed by the Benefits
Corporation, the Trustee shall not be required to seek reimbursement. The
Benefits Corporation may cause the Employer to advance any or all such expenses
and/or taxes on behalf of the fund, subject to the Employer's right of
reimbursement from the Fund if so directed by the Benefits Corporation and to
the applicable prohibited transaction provisions of the Act and the Code.
10.3 Reversions to the Employer.
10.3(a) If a contribution by the Employer is made under a mistake of
fact, upon written direction by the Benefits Corporation, the Trustee shall
return to the Employer an amount equal to such mistaken contribution, less any
losses attributable to such mistaken contribution, within one year after payment
of such contribution. If a contribution by the Employer is made conditioned upon
its deductibility for federal income tax purposes and there is a final
determination by the Internal Revenue Service or a court of competent
jurisdiction on review of the Internal Revenue Service's determination of the
disallowance of a deduction under Section 404 of the Code for such contribution
or portion thereof, upon written direction by the Employer, the Trustee shall
return to the Employer an amount equal to the amount of such contribution or
portion thereof so disallowed, less any losses attributable to such
contribution, within one year after such final determination.
10.3(b) If it is finally determined by the Internal Revenue Service or
a court of competent jurisdiction on review of the Internal Revenue Service's
determination that the Plan as initially adopted (if an application for a
determination is timely filed with the Internal Revenue Service by the date,
including extensions thereof, on which the Employer's federal income tax return
for its taxable year in which the Plan or such amendment was adopted is due to
be filed) does not qualify under Section 401 of the Code, the Trustee shall
return to the Employer within one year after the date of notice of such
disqualification all assets attributable to its contributions to the Plan
received by the Trustee and made since the date the Plan or such amendment was
adopted, except to the extent otherwise directed by the Employer.
10.3(c) After the termination of the Plan as a whole and after all
fixed and contingent liabilities of the Fund to Participants and their
Beneficiaries have been satisfied, any remaining assets of the Fund held
pursuant to paragraph 4.5 shall be distributed to the Employer.
10.4 No Interest Other Than Plan Benefit. Nothing contained herein
shall be deemed to give any Participant or Beneficiary any interest in any
specific part of the Fund or any interest other than his right to receive
benefits in accordance with the provisions of the Plan.
10.5 Provisions Relating to Insurer.
10.5(a) No Insurer shall be deemed a party to the Plan or responsible
for the validity thereof.
10.5(b) No Insurer shall be required to determine either:
(i) That a person for whom the Trustee applies for a Policy
is, in fact, eligible for participation or entitled to benefits under
the Plan,
(ii) Any fact necessary for the proper issuance of any Policy
or Contract, or
(iii) The proper distributions or further application of any
moneys paid by it to the Trustee in accordance with the written
direction of the Trustee;
and with respect to each of the foregoing, the Insurer shall be fully
indemnified and protected in relying upon the advice and direction of the
Trustee.
10.5(c) Any notice, direction, application or other communication
whatsoever shall be accepted by the Insurer as duly authorized and executed if
signed by the Trustee. The Insurer shall be fully protected in assuming that the
Trustee is as shown in the latest notification received by it at its home
office.
10.5(d) Except as may be otherwise provided in any binding receipt
issued by the Insurer, there shall be no coverage and no annuity or death
benefit payable under any Policy to be purchased from any Insurer until such
Policy shall have been issued and the premium therefor shall have been paid.
10.5(e) In the event of any conflict between the terms of the Plan and
the terms of the Policy or Contract, the provisions of the Plan will control.
10.6 Payments from the Fund.
10.6(a) The Trustee shall make all payments from the Fund which become
due hereunder in accordance with the written instructions or directions of the
Administrator. In directing the Trustee to make any payments or deliveries out
of the Fund, the Administrator shall follow the provisions of the Plan. The
Trustee acting in accordance with such instructions or directions shall be fully
protected and indemnified by the Employer in relying upon any such written
instruction or direction which the Trustee reasonably and in good faith believes
to be proper.
10.6(b) Any notice, direction, application or other communication
whatsoever shall be accepted by the Insurer as duly authorized and executed if
signed by the Trustee. The Insurer shall be fully protected in assuming that the
Trustee is as shown in the latest notification received by it at its home
office.
10.6(c) Except as may be otherwise provided in any binding receipt
issued by the Insurer, there shall be no coverage and no annuity or death
benefit payable under any Policy to be purchased from any Insurer until such
Policy shall have been issued and the premium therefor shall have been paid.
ARTICLE XI
Fiduciaries
11.1 Named Fiduciaries and Duties and Responsibilities. Authority to
control and manage the operation and administration of the Plan shall be vested
in the following, who, together with their membership, if any, shall be the
Named Fiduciaries under the Plan with those powers, duties, and responsibilities
specifically allocated to them by the Plan:
11.1(a) Trustee - The Trustee in connection with its fiduciary
obligations relating to the Plan and the Fund.
11.1(b) Employer - The Employer in connection with its fiduciary
obligations and rights relating to the Plan and the
Fund.
11.1(c) Plan Administrator - The Administrator in connection with
its fiduciary obligations and rights relating to the Plan and the Fund.
11.2 Limitation of Duties and Responsibilities of Named Fiduciaries.
The duties and responsibilities, and any liability therefor, of the Named
Fiduciaries provided for in paragraph 11.1 shall be severally limited to the
duties and responsibilities specifically allocated to each such Named Fiduciary
in accordance with the terms of the Plan, and there shall be no joint duty,
responsibility, or liability among any such groups of Named Fiduciaries in the
control and management of the operation and administration of the Plan.
11.3 Service by Named Fiduciaries in More Than One Capacity. Any person
or group of persons may serve in more than one Named Fiduciary capacity with
respect to the Plan (including both service as Trustee and Plan Administrator).
11.4 Allocation or Delegation of Duties and Responsibilities by Named
Fiduciaries. By written agreement filed with the Benefits Corporation (which
shall be made available to Employers and Plan Administrators on request), the
duties and responsibilities of the Trustee with respect to the management and
control of the assets of the Fund may, with the written consent of the Benefits
Corporation, be allocated among the Trustees (if there are two or more persons
so serving) and any other duties and responsibilities of any Named Fiduciary may
be allocated among Named Fiduciaries or may, with the consent of the Benefits
Corporation, be delegated to persons other than Named Fiduciaries. Any written
agreement shall specifically set forth the duties and responsibilities so
allocated or delegated, shall contain reasonable provisions for termination, and
shall be executed by the parties thereto.
11.5 Investment Manager. The Trustee shall appoint one or more
Investment Managers to manage all of the assets of the Fund other than those
held under Contracts issued by the Insurer. Such appointment(s) may be made
separately with respect to one or more divisions of the Fund. The appointment of
any such Investment Manager shall be by written agreement, which shall specify
the scope of the powers and duties of such Investment Manager, shall contain
reasonable provisions for the termination of such appointment, and shall be
executed by the parties thereto and acknowledged by the Custodian. An Investment
Manager appointed pursuant to any such agreement shall acknowledge therein its
status as a fiduciary with respect to the Plan.
11.6 Custodian. The Trustee shall appoint one or more banks (including
any Trustee, Investment Manager or Employer) with trust powers to serve as
Custodian for the custody of all assets of the Fund other than those held under
Contracts issued by the Insurer and enter into a written custodial agreement
with such bank and thereafter deliver such assets of the Fund to such bank for
custody in accordance with such agreement Such appointment(s) may be made
separately with respect to one or more divisions of the Fund. Any such
appointment of a custodian may be terminated by the Trustee at any time.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
11.7 Instruments Allocating Duties and Responsibilities or Appointing
Investment Manager or Custodian as Part of Plan. Any written instrument required
by paragraph 11.4, 11.5 or 11.6 above shall be made a part of this Agreement and
shall be available to each Employer upon request delivered to the Trustee.
11.8 Assistance and Consultation. A Named Fiduciary, and any delegate
named pursuant to paragraph 11.4, may engage agents to assist in its duties and
may consult with counsel, who may be counsel for the Employer or the Benefits
Corporation, with respect to any matter affecting the Plan or its obligations
and responsibilities hereunder, or with respect to any action or proceeding
affecting the Plan. All compensation and expenses of such agents and counsel
shall be paid or reimbursed from the Fund, except to the extent prohibited by
the Act or the Code and except to the extent paid or reimbursed by the Employer
or the Benefits Corporation.
11.9 Indemnification. The Employer shall indemnify and hold harmless
any individual who is a Named Fiduciary or a member of a Named Fiduciary under
the Plan and any other individual to whom duties of a Named Fiduciary are
delegated pursuant to paragraph 11.4, to the extent permitted by law, from and
against any liability, loss, cost or expense arising from their good faith
action or inaction in connection with their responsibilities under the Plan.
11.10 Bond. Except as may be required under Section 412 of the Act
(which generally requires a bond to provide protection to the Plan against loss
by reason of acts of fraud or dishonesty), no fiduciary of the Plan (whether
Trustee or other fiduciary) shall be required to give any bond or other security
for the faithful performance of its duties hereunder.
ARTICLE XII
Powers and Duties of Trustee
12.1 Trustee Powers and Duties. Subject to the following provisions of
this ARTICLE XII, the Trustee shall commingle and jointly invest, or where
specifically provided herein shall segregate and separately invest, the assets
of the Fund, without distinction between corpus and income. The Trustee shall
have responsibility for the control and management of the Fund of this Plan and
of all other plans which are adopted and maintained in the form of the Virginia
Bankers Association Master Defined Contribution Plan and Trust in one trust as
hereinafter provided through the appointment of one or more Investment Managers
and Custodians for the Fund as provided in paragraphs 11.5 and 11.6. The assets
of this Fund and all other funds of such other plans shall be held in the
divisions of the Fund described in subparagraphs 12.1(c), (d), (e), (f), (f)A,
(g) and (h) hereof as provided in paragraph 12.2. No assets of the Fund shall be
used to acquire or carry life insurance.
12.1(a) In addition to any other powers expressly granted in the Plan
or provided by law, the following general investment powers granted in this
subparagraph and in subparagraph 12.1(b) shall be applicable to the Fund,
subject to the limitations imposed hereafter with respect to the respective
divisions of the Fund and the other restrictions or prohibitions imposed
hereunder. Except as otherwise specifically provided herein, the Trustee,
Investment Manager and Custodian shall have exclusive authority and discretion
in management and control of the Fund.
(i) The Fund shall be invested and reinvested in such
stocks, stock options (whether or not covered), warrants and rights,
puts, calls, stock-index futures, bonds, securities, commodities,
commodity futures and options, real estate mortgages, real estate
investment trusts or funds, real estate, partnership interests, mutual
funds, closed- end investment companies, regulated investment companies
or trusts, common, collective or group trust funds (except as otherwise
limited hereunder) and other investments, and in such proportion, as
may be deemed suitable for the purposes and the funding policy hereof.
(ii) Such investments shall not be restricted to property and
securities of the character authorized for investment by trustees under
any present or future laws, with the exception of the Act.
(iii) To the extent permitted by law, it is expressly
authorized for the Fund to be invested and reinvested and the Trustee
or Custodian is expressly authorized to execute any joinder or similar
agreement therefor on behalf of the Plan:
(A) In any general common trust fund qualifying
under Section 584 of the Code and maintained by the
Trustee, Investment Manager, Custodian or Employer or
any affiliate thereof in the same bank holding system
affiliated group, as defined in Section 1504 of the
Code, as the Trustee, Investment Manager, Custodian or
Employer (if the Trustee, Investment Manager, Custodian,
Employer or any such affiliate are banks or trust
companies supervised by a state or federal agency);
(B) In any other collective or group trust fund
maintained by a bank or trust company (if the Trustee,
Investment Manager, Custodian or Employer is not such a
bank or trust company) or in a collective or group trust
fund with trusts which are a part collective or group
trust fund with trusts which are a part of employee
benefit plans established by employer members of the
Association and meeting the requirements of Section 401(a)
of the Code, provided any such collective or group trust
consists solely of assets of qualified retirement trusts
and/or individual retirement accounts exempt from federal
income taxation under the Code, as the Trustee or, where
applicable, the Investment Manager in its discretion may
determine (whether or not the Trustee or, where
applicable, the Investment Manager, Custodian or Employer
is such a bank or trust company), provided such collective
or group trust is so qualified and exempt under the Code;
(C) In Contracts or Policies (not containing or
providing life insurance) issued to provide or fund
benefits under the Plan, (whether or not the Insurer is
the Employer or any affiliate of the Employer, or the
Investment Manager or any affiliate of the Investment
Manager, if an insurance company); or
(D) In whole or in part in deposits with any bank
or similar financial institution supervised by the United
States or a State, regardless of whether such bank or
other institution is a Trustee, Investment Manager,
Custodian, Employer or other fiduciary hereunder, provided
such deposits shall bear a reasonable rate of interest,
except that funds may be deposited in non-interest bearing
accounts to such extent and for such time as may be
reasonably required for the orderly administration of the
Plan.
(iv) If an investment is made in a common, collective or
group trust, the Trustee or Custodian is expressly authorized to
incorporate the terms thereof as an investment medium under and as a
part of the Plan, and the terms of such trust shall govern the
investment, disposition and distribution of the assets of such trust.
12.1(b) Subject to the requirements imposed by law, and in furtherance
and not in limitation of the investment authority for the Fund, there shall be
granted full power and authority necessary or advisable to carry out the
provisions of the Plan, and all inherent, implied and statutory powers now or
subsequently provided by law, including specifically the power to do any of the
following:
(i) To deal with all or any part of the Fund, including,
without limitation, to invest, reinvest and change investment;
(ii) To acquire any property by purchase, subscription, lease
or other means;
(iii) To sell for cash or on credit, convey, lease for long or
short terms, or convert, redeem or exchange all or any part of the
Fund;
(iv) To borrow money for the purpose of the Fund, and for any
sum so borrowed to issue its promissory note as Trustee and to secure
the repayment thereof by pledging all or any part of the Fund;
(v) To enforce by suit or otherwise, or to waive its rights
on behalf of the Fund, and to defend claims asserted against him or the
Fund;
(vi) To compromise, adjust and settle any and all claims
against or in favor of it or the Fund;
(vii) To renew, extend or foreclose any mortgage or other
security;
(viii) To bid in property on foreclosure;
(ix) To take deeds in lieu of foreclosure, with or without
paying a consideration therefor;
(x) To vote, or give proxies to vote, any stock or other
security, and to oppose, participate in and consent to the
reorganization, merger, consolidation or readjustment of the finances
of any enterprise, to pay assessments and expenses in connection
therewith, and to deposit securities under deposit agreements;
(xi) To hold securities unregistered (including in bearer
form), or to register them in its own name, in street name or in the
names of nominees who are within the jurisdiction of the district
courts of the United States and are either banks or trust companies
that are subject to supervision by the United States or a state
thereof, brokers or dealers registered under the Securities Exchange
Act of 1934, clearing agencies as defined in Section 3(a)(23) of the
Securities Exchange Act of 1934, permissible nominees of any of the
foregoing, or any other persons or entities permitted to act as nominee
for the Trustee under Section 403 of the Act, provided the books and
records of the Fund shall at all times reflect that the Fund is the
beneficial owner of such securities;
(xii) To make, execute, acknowledge and deliver any and all
instruments that it shall deem necessary or appropriate to carry out
the powers herein granted; and generally to exercise any of the powers
of an owner with respect to all or any part of the Fund; and
(xiii) Generally to exercise any of the powers of an owner with
respect to all or any portion of the Fund.
Except as provided in the Act, no person dealing with the Trustee shall be bound
to see to the application of any money or property paid or delivered to the
Trustee or the Custodian at the direction of the Trustee or to inquire into the
validity or propriety of any transaction.
12.1(c) In the management of the Current Income Fund, there are hereby
granted all powers granted under subparagraphs 12.1(a) and 12.1(b), except that
the Current Income Fund shall generally be invested primarily in short-term and
intermediate-term bond funds that the Investment Manager considers appropriate
from time to time. This investment fund will generally earn higher income than
money market instruments or certificates of deposit. While this fund division is
designed to emphasize safety and stability, its value may in fact decrease.
12.1(d) In the management of the Capital Preservation Fund, there are
hereby granted all the powers under subparagraphs 12.1(a) and 12.1(b), except
that the Capital Preservation Fund shall generally be invested primarily in
short-term and intermediate-term bond funds that the Investment Manager
considers appropriate from time to time. This investment fund will generally
earn higher income that money market instruments or certificates of deposit.
While this fund division is designed to emphasis safety and stability, its value
may in fact decrease.
12.1(e) In the management of the Moderate Growth Fund, there are hereby
granted all the powers granted under subparagraphs 12.1(a) and 12.1(b), except
that the Moderate Growth Fund shall generally be invested in bond and stock
funds that the Investment Manager considers appropriate from time to time.
Generally, the fund will maintain a strong commitment to bond funds to provide
current income and help stabilize the portfolio for inordinate swings in value.
The value of this investment fund generally will fluctuate up and down based on
market conditions.
12.1(f) In the management of the Wealth Building Fund, there are hereby
granted all the powers granted under subparagraphs 12.1(a) and 12.1(b), except
that the Wealth Building Fund shall generally be invested in a diversified mix
of stock and bond funds that the Investment Manager considers appropriate from
time to time. Generally, the fund is designed to build assets and protect
against inflation over the long run. The value of this investment fund generally
will fluctuate up and down based on market conditions.
12.1(f)A In the management of the Aggressive Appreciation Fund, there
are hereby granted all the powers granted under subparagraphs 12.1(a) and
12.1(b), except that the Aggressive Appreciation Fund shall generally be
invested exclusively in stock funds that the Investment Manager considers
appropriate from time to time. The fund is designed to provide the highest
growth potential.
12.1(g) In the management of the Loan Fund, there are hereby granted
all the powers under subparagraph 12.1(a) and 12.1(b), except that the Loan Fund
shall be invested solely in loans to Participants and where applicable
Beneficiaries pursuant to ARTICLE IX and of temporary investments thereof.
12.1(h) Notwithstanding the Fund divisions described above, the Trustee
shall establish a Transfer Fund which shall consist of assets, if any,
transferred from a plan of an employer not maintained as a part of the Virginia
Bankers Association Master Defined Contribution Plan and Trust to the Virginia
Bankers Association Master Defined Contribution Plan and Trust for which special
provisions are not otherwise made and which are viewed by the Trustee in its
discretion as not suitable for investment in the other Fund divisions of the
Plan to which the same may be transferred. Assets held in the Transfer Fund
shall be converted to cash as soon as practicable taking into consideration the
effect of such liquidation on their value. Following such conversion to cash,
the assets shall be transferred as of any valuation date to another Fund
division in accordance with the investment directions of the Employer.
12.1(i) The Trustee may designate in writing such other divisions of
the Fund into which directed investments pursuant to paragraph 12.2 may be made.
Such other divisions shall be professionally managed common, collective or group
trust funds, mutual funds or closed-end fixed investment companies or shall be
deposit administration contracts, pension investment contracts, guaranteed
investment contracts, immediate participation guarantee contracts or other
investment contracts or policies (other than those providing life insurance)
issued by insurance companies selected by the Trustee. The Trustee in its sole
discretion may terminate any or all of the divisions of the Fund designated by
it pursuant to this subparagraph 12.1(i), in which case all assets held in any
such terminated divisions shall be transferred back to the Current Income Fund.
For periods prior to July 1, 1996, the funds available are described in Basic
Document No. 03 dated October, 1995.
12.1(j) Notwithstanding the foregoing and in addition to other
investments of the Fund, by agreement in writing between the Trustee and the
Employer, the Trustee may hold any deposit administration contracts, pension
investment contracts, guaranteed investment contracts, immediate participation
guarantee contracts or other investment contracts or policies issued by
insurance companies as a segregated investment of the Plan to the extent that
such contracts or policies were held as assets of the Plan at the time the
Employer adopts this Plan.
12.1(k) The Trustee shall not have the power or duty to inquire into
the correctness of the amount tendered to it as required by the Plan nor to
enforce the payment of contributions thereunder by the Employer. The Trustee
shall be responsible only for such sums and assets that it actually receives as
Trustee.
12.1(l) In the exercise of its authority under this paragraph 12.1, the
Trustee, Investment Manager and Custodian shall take cognizance of and be
inhibited by those limitations and prohibitions contained in Section 406 of the
Act and the prohibited transaction provisions of Section 4975 of the Code, for
which no exemption is applicable.
Refer to the additional provisions and special rules contained in ARTICLE XVII
relating to Employer Stock Investments.
12.2 Participant Directed Investment among Fund Divisions.
12.2(a) If and to the extent selected by the Employer in Option 12(a)
of the Adoption Agreement, each Participant (or if deceased, his Beneficiary)
shall have the right to direct that all or a part of his "directable accounts"
(as specified in Option 12(a)(2) of the Adoption Agreement) be invested and held
in the "available investment funds" (as specified in Option 12(b) of the
Adoption Agreement) in increments provided in Option 12(c) of the Adoption
Agreement and at the time(s) permitted in Option 12(d) of the Adoption
Agreement. Such directions shall be in writing, on a form approved by the
Benefits Corporation, and shall be delivered to the Administrator on or before
the dates hereinafter stated. Any such investment direction shall apply to the
balance(s) in his directable accounts at such time and thereafter to his and the
Employer's future contributions and transfers added thereto. Any such direction
shall be delivered to the Administrator at least by the fifteenth (15th) day of
the calendar month (or such other period as the Administrator may from time to
time authorize) immediately preceding its effective date and shall then be
effective upon the individual's becoming a Participant and thereafter on the
date(s) as selected by the Employer in Option 12(d) of the Adoption Agreement
and shall continue in force until amended or rescinded by a new direction made
and becoming effective in the same manner as provided above.
12.2(b) Upon the effective date of any such direction by the
Participant (or if deceased, his Beneficiary), the Administrator shall
immediately deliver to the Trustee written notice of the direction, whereupon it
shall be the duty of the Trustee to direct the Custodian and Investment Manager
to effect the Participant's direction. The Trustee shall divide the
Participant's directable accounts in the Fund between available divisions of the
Fund designated in accordance with such direction within a reasonable period of
time. Notwithstanding the above investment direction provisions of the Plan,
accounts held in the Transfer Fund or the Loan Fund shall remain invested in
such Fund division and shall not be subject to investment direction except as
provided in subparagraph 12.1(h) or 12.2(c), respectively.
12.2(c) Notwithstanding the foregoing any loan made to a Participant or
a Beneficiary shall automatically be treated as a directed investment by such
Participant in the Loan Fund.
(i) As provided in paragraph 9.10, an amount equal to the
principal amount of a loan to a Participant shall be segregated from
such Participant's account or accounts within the other divisions of
the Fund.
(ii) Payments of the principal of and payments of interest on
a loan to a Participant shall be held by the Trustee in the
Participant's segregated account in the Loan Fund and deposited in a
temporary interest bearing account until the last day of the month in
which received by the Trustee, whereupon the principal and interest and
any earnings (less any losses) thereon shall be transferred pro rata:
(A) To the Participant's unsegregated accounts in
the Fund in the same proportions as funds were transferred
from these accounts to the Participant's segregated
account in the Loan Fund for purposes of making such loan,
and
(B) To the divisions of the Fund determined on the
basis of the Participant's contribution investment
direction then in effect under paragraph 12.2.
12.2(d) To the extent no investment direction is in force and absent
the adoption of different rules by the Employer, a Participant's directable
accounts shall be held in the investment fund designated in or pursuant to
Option 12(e) of the Adoption Agreement.
12.2(e) Notwithstanding the foregoing, the Trustee, Employer or
Administrator may from time to time suspend investment directions in or the
maintaining of any one or more divisions of the Fund in its sole discretion.
12.3 Accounts.
12.3(a) The Trustee shall keep true and accurate accounts of all
investments, receipts, and disbursements and other transactions hereunder, and
all accounts, books and records relating thereto shall be open to inspection and
audit at all reasonable times by any person or persons designated by the
Employer. Within sixty (60) days after the removal or resignation of a Trustee,
as provided for in paragraph 12.9, and annually as provided in the Plan, the
Trustee shall file with the Employer a valuation of the assets of the Fund, and
an account of its transactions since the last previous such accounting. In
addition, the Employer may require an account from the Trustee at any other
reasonable time, provided the costs of any such additional accounting are borne
by the Employer. No employee and no person other than those designated by the
Employer shall have the right to demand or be entitled to any accounting by the
Trustee except as otherwise provided by law.
12.3(b) If within forty-five (45) days after any such account has been
mailed to the Employer, the Employer shall not have filed with the Trustee
written notice of approval of such account or any objection which the Employer
may have to any act or transaction of the Trustee referred to in such account,
such account shall be deemed approved. Upon approval of any account as
hereinabove provided, the Trustee shall be fully released and discharged as to
all matters set forth in such account to the same extent as though such account
had been approved by a court of competent jurisdiction in an action or
proceeding in which the Trustee, the Employer and all persons having or claiming
any interest in the Fund or under the plan were parties.
12.4 Judicial Settlement of Accounts. The Trustee shall have the right
to apply at any time to a court of competent jurisdiction for the judicial
settlement of its accounts. In any such judicial action or proceeding it shall
be necessary to join as parties thereto only the Trustee and the Employer; and
any judgment or decree which may be entered therein shall be conclusive upon all
persons having or claiming any interest in the Fund or under the Plan.
12.5 Enforcement of Trust-Legal Proceedings. Each Employer shall have
authority to enforce the trust hereby created on behalf of all persons having or
claiming any interest in the Fund or under the Plan. In any action or proceeding
affecting the Fund and the rights and interest of Participants and their
Beneficiaries therein, the only necessary parties shall be the Employer and the
Trustee and no other person shall be entitled to any notice or process. Any
judgment that may be entered in any such action or proceeding shall be binding
and conclusive on all persons having or claiming any interest in the Fund or
under the Plan.
12.6 Two or More Trustees. In the event two or more persons are at any
time serving as Trustee hereunder, such Trustees shall jointly manage and
control the Fund; provided, however, that pursuant to paragraph 11.4 such
Trustees may enter into an agreement in writing with respect to the allocation
of specific responsibilities, obligations or duties among themselves.
12.7 Trustee Compensation and Expenses. The Trustee shall be paid only
such reasonable compensation, if any, as the Benefits Corporation shall from
time to time determine. All expenses of the Plan and Fund, including the
Trustee's compensation, legal, accounting and actuarial fees and all expenses
incurred by the Trustee or the Fund in connection with the termination of the
Plan or the termination of the Employer's participation in this master plan
known as the Virginia Bankers Association Master Defined Contribution Plan and
Trust, to the extent not paid by the Employer as directed by the Benefits
Corporation, and all taxes of any nature whatsoever, including interest and
penalties, assessed against or imposed upon the fund or the income thereof,
shall constitute a charge upon and be paid out of the Fund upon such basis as
the Trustee may determine; provided, however, that if not paid by the Employer
as directed by the Benefits Corporation, the Trustee shall not be required to
seek reimbursement from the Employer. Notwithstanding the foregoing, no
compensation from the Fund shall be paid to any Trustee appointed pursuant to
paragraph 12.9 as representing employers maintaining an employee pension benefit
plan in the form of a group, master or prototype plan sponsored by the Benefits
Corporation.
12.8 Trustee Designation, Resignation, Removal or Death and
Appointment of Successor or Additional Trustee.
12.8(a) The Trustee shall be such person(s) as the Benefits Corporation
may appoint or cause to be appointed to such capacity. Each Trustee shall accept
his status as a Trustee hereunder in writing. Upon leaving any designated office
in the Benefits Corporation or Association by which a person automatically is
designated to serve as a Trustee, such Trustee shall at once cease to be a
Trustee and shall be discharged from all further duties and responsibilities as
a Trustee. Upon acceptance in writing of his status as Trustee hereunder by the
successor in office of any Trustee who is designated to serve as a Trustee by
reason of holding a designated office, such successor shall become a Trustee
hereunder.
12.8(b) Any Trustee may resign at any time upon delivering to the
Benefits Corporation and all Co-Trustees a written notice of such resignation to
take effect not less than fifteen (15) days after the delivery thereof to the
Benefits Corporation and all Co-Trustees unless the Benefits Corporation shall
accept as adequate a shorter notice. The Trustee may be removed by the President
or by the Board of Directors of the Benefits Corporation by mailing notice by
registered mail addressed to the Trustee at his last known address, or by
delivery of same to the Trustee to take effect not less than thirty (30) days
after mailing or delivery of such notification unless notice of a shorter
duration shall be accepted as adequate.
12.8(c) In case of the resignation or removal of a Trustee, such
Trustee shall transfer, assign, convey and deliver to the successor or other
Trustee the trust estate as it may then be constituted and shall execute all
documents necessary for transferring the trust estate.
12.8(d) The President of the Benefits Corporation shall forthwith
appoint a successor Trustee in case of resignation, removal or death of all
Trustees appointed and then serving. Any successor Trustee shall qualify as such
by executing, acknowledging, and delivering to the Benefits Corporation an
instrument accepting such appointment hereunder in such form as may be
satisfactory to the Benefits Corporation, which form shall become a part of this
Agreement, and thereupon such successor Trustee shall become vested with the
rights, powers, discretion, duties and obligation of its predecessor Trustee.
12.8(e) In the event of the resignation, removal or death of a Trustee,
the surviving Trustee shall continue to be a Trustee hereunder.
12.8(f) The Benefits Corporation may at any time and from time to time
appoint one or more additional Trustees.
12.8(g) The Trustee may, with the written consent of the Benefits
Corporation, or shall, at the written direction of the Benefits Corporation, or
the Benefits Corporation directly may, appoint a bank with trust powers or a
trust company (including any Trustee) as a Co-Trustee for the custody and/or
investment of all or a portion of the assets of the Plan and enter into a trust
agreement with such bank and thereafter deliver assets of the Plan to such bank
or trust company for such custody and/or investment in accordance with such
trust agreement and any written directions of the Benefits Corporation. Any such
trust agreement shall be attached to this Agreement. For purposes hereof:
(i) The duties and responsibilities under the Plan with
respect to the assets of the Plan held by any Co- Trustee appointed
pursuant to this subparagraph shall be allocated solely to such
Co-Trustee, and such Co-Trustee shall have no duties or
responsibilities with respect to the other assets of the Plan by reason
of its appointment pursuant to this subparagraph; and
(ii) Conversely, any Trustee which is not appointed as such
Co-Trustee for such assets of the Plan shall have no duties and
responsibilities with respect to the assets of the Plan held by such
Co-Trustee pursuant to this subparagraph.
Any appointment of a Co-Trustee pursuant to this subparagraph shall
automatically be considered an allocation of duties and responsibilities under
paragraph 11.4 without further action being required.
12.8(h) If any corporate Trustee at any time shall be merged, or
consolidated with, or shall sell or transfer substantially all of its assets and
business to another corporation, domestic or foreign, or shall be in any manner
reorganized or reincorporated, then the resulting or acquiring corporation shall
be substituted ipso facto for such corporate Trustee without the execution of
any instrument and without any action upon the part of the Benefits Corporation,
any Participant or Beneficiary, or any other person having or claiming to have
an interest in the Fund or under the Plan.
ARTICLE XIII
Plan Administration
13.1 Appointment of Plan Administrator.
13.1(a) In the case of a Plan that is intended to be a cash or deferred
arrangement within the meaning of Section 401(k) of the Code, the Benefits
Corporation shall be Plan Administrator.
13.1(b) In the case of a Plan not described in subparagraph 13.1(a),
the Employer may appoint one or more persons to serve as the Plan Administrator
(the "Administrator") for the purpose of carrying out the duties specifically
imposed on the Administrator by the Plan, the Act and the Code.
13.1(c) In the event more than one person is appointed, the persons
shall form an administrative committee for the Plan. The person or committeemen
serving as Administrator shall serve for indefinite terms at the pleasure of the
Plan Sponsor, and may, by thirty (30) days prior written notice to the Employer
and the Trustee, terminate such appointment. The Trustee may assume that any
person appointed continues in office until notified of any change.
13.2 Employer as Plan Administrator. In the event that no Administrator
is appointed or in office pursuant to subparagraph 13.1, the Employer named in
Option 1(a) of the Adoption Agreement shall be the Administrator.
13.3 Compensation and Expenses. Unless otherwise determined and paid by
the Employer the person or committeemen serving as the Administrator shall serve
without compensation for service as such. All expenses of the Administrator
shall be paid as provided in paragraph 10.2, provided no compensation shall be
paid the Administrator from the Fund to the extent prohibited by the Code or the
Act.
13.4 Procedure if a Committee. If the Administrator is a committee, it
shall appoint from its members a Chairman and a Secretary. The Secretary shall
keep records as may be necessary of the acts and resolutions of such committee
and be prepared to furnish reports thereof to the Trustee. Except as otherwise
provided, all instruments executed on behalf of such committee may be executed
by its Chairman or Secretary and the Trustee may assume that such committee, its
Chairman or Secretary are the persons who were last designated as such to the
Trustee in writing by the Employer.
13.5 Action by Majority Vote if a Committee. If the Administrator is a
committee, its action in all matters, questions and decisions shall be
determined by a majority vote of its members qualified to act thereon. They may
meet informally or take any action without the necessity of meeting as a group.
13.6 Appointment of Successors. Upon the death, resignation or removal
of a person serving as, or on a committee which is, the Administrator, the
Employer may, but need not, appoint a successor.
13.7 Additional Duties and Responsibilities. The Administrator shall
have the following duties and responsibilities in addition to those expressly
provided elsewhere in the Plan:
13.7(a) The Administrator shall be responsible for the fulfillment of
all relevant reporting and disclosure requirements set forth in the Act and the
Code, including but not limited to the preparation of necessary plan
descriptions, summary plan descriptions, annual reports, summary annual reports,
employee benefit statements, notice of forfeitability of benefits, notice of
special tax treatment (rollover, five-year or ten-year averaging and capital
gains) for distributions, and other statements or reports, the distribution
thereof to Participants and their Beneficiaries and the filing thereof with the
appropriate governmental officials and agencies.
13.7(b) The Administrator shall maintain and retain necessary records
respecting administration of the Plan and matters upon which disclosure is
required under the Act and the Code.
13.7(c) The Administrator shall make any elections for the Plan under
the Act or the Code.
13.7(d) The Administrator shall provide to Participants and
Beneficiaries such notices, including but not limited to the notice to
interested parties, and information as are required by the Plan, the Act and the
Code.
13.7(e) The Administrator shall make all determinations regarding
eligibility for participation in and benefits under the Plan.
13.7(f) The Administrator shall establish and communicate to the
Trustee a funding policy consistent with the current and long-term financial
needs of the Plan with respect to the ages of the Participants in the Plan and
other such relevant information; provided, however, that nothing in this
subparagraph shall be construed as granting to the Plan Administrator any power
or authority with respect to the control and management of the Fund.
13.7(g) The Administrator shall have the right to settle claims against
the Plan and to make such equitable adjustments in a Participant's or
Beneficiary's rights or entitlements under the Plan as it deems appropriate in
the event an error or omission is discovered or claimed in the operation or
administration of the Plan.
13.8 Power and Authority. The Administrator is hereby vested with all
the power and authority necessary in order to carry out its duties and
responsibilities in connection with the administration of the Plan, including
the power to interpret the provisions of the Plan. For such purpose, the
Administrator shall have the power to adopt rules and regulations consistent
with the terms of the Plan.
13.9 Availability of Records. The Employer and the Trustee shall, at
the request of the Administrator, make available necessary records or other
information they possess which may be required by the Administrator in order to
carry out its duties hereunder.
13.10 No Action with Respect to Own Benefit. No Administrator who is a
Participant shall take any part as the Administrator in any discretionary action
in connection with his participation as an individual. Such action shall be
taken by the remaining Administrator, if any, or otherwise by the Employer.
13.11 Limitation on Powers and Authority. The Administrator shall have
no power in any way to modify, alter, add to or subtract from any provisions of
the Plan.
ARTICLE XIV
Amendment and Termination of Plan
14.1 Amendment.
14.1(a) The Plan may be amended in whole or in part at any time by
action of the Board of the Employer; provided, however, that:
(i) Except to the extent permitted or required by the Act or
the Code, neither the Accrued Benefit (nor any subsidy, early
retirement benefit, optional form of payment or any other benefit
considered to be an accrued benefit for purposes of Section
411(d)(6)(B) of the Code) of a Participant, nor the percentage thereof
which is non-forfeitable, at the time of any such amendment shall be
adversely affected thereby.
(ii) Except to the extent permitted or required by the Act or
the Code, no such amendment shall have the effect of revesting in the
Employers any part of the Fund prior to the termination of the Plan and
the satisfaction of all fixed and contingent liabilities thereunder
with respect to Participants and their Beneficiaries.
(iii) The duties and obligations of the Trustee hereunder
shall not be increased nor its compensation decreased without its
written consent.
(iv) In the event of (A) any such modification, alteration or
amendment, other than by the addition, elimination or substitution of
any of the optional provisions contained in the Adoption Agreement
(except to the extent necessary to satisfy the requirements of Section
415 of the Code or to avoid duplicating minimum benefits under Section
416 of the Code) or (B) the addition of certain model amendments
published by the Internal Revenue Service which specifically provide
that their adoption will not cause the Plan to be treated as
individually designed, this Plan shall be considered an individually
designed Plan and the Employer may no longer be eligible to participate
in this master plan. Written notice of any such modification,
alteration or amendment of the Plan shall thereupon be given to the
Benefits Corporation.
14.1(b) The Employer delegates to the Board of Directors of the
Benefits Corporation the power to modify, alter or amend the Plan, in whole or
in part, on behalf of the Employer, provided that no such amendment shall
violate the provisions of clauses (i), (ii) and (iii) of subparagraph 14.1(a),
nor shall any such amendment have the effect of retroactively altering any
optional provision of the Adoption Agreement selected by the Employer except as
may be required under the Act or by the Internal Revenue Service as a condition
to the qualification of this Plan under Section 401 of the Code. The Employer is
hereby deemed to consent to any modification, alteration or amendment of the
Plan by the Benefits Corporation pursuant to this subparagraph 14.1(b).
Written notice shall thereupon be given to the Employer.
14.2 Merger, Consolidation or Transfer of Assets. The merger or
consolidation of or transfer of assets or liabilities between this Plan and any
other plan shall be permitted upon action by the Board and approved by the
Benefits Corporation or as expressly provided elsewhere in the Plan so long as,
immediately after such merger, consolidation or transfer of assets or
liabilities, each Participant who is or may become eligible to receive a benefit
of any type from this Plan (or whose Beneficiaries may be eligible to receive
any such benefit) would, if such surviving or transferee plan was then
terminated, be entitled to receive a benefit at least equal to the benefit to
which such Participant (and each such Beneficiary) would have been entitled had
this Plan, as adopted by the Employer, terminated immediately prior to such
merger, consolidation or transfer of assets or liabilities.
14.2(a) With the consent of the Benefits Corporation, the Trustee may
accept a direct transfer of cash or other property to the Fund on behalf of a
Participant from a plan qualified under Section 401 or 403(a) of the Code.
14.2(b) In the event property is received by the Trustee pursuant to
this paragraph, such property shall be valued at its fair market value on the
date of receipt by the Trustee in accordance with the method of valuation used
for purposes of paragraph 4.6 or as otherwise provided in the merger,
consolidation or asset transfer agreement.
14.2(c) Assets becoming part of the Fund by reason of any such merger,
consolidation or transfer of assets or liabilities shall be allocated to the
accounts in the Plan as provided in the merger, consolidation or asset transfer
agreement or as otherwise provided in the Plan.
14.3 Plan Permanence and Termination. The Employer has established the
Plan with the intention and expectation that they will be able to make their
contributions indefinitely, but the Employer is not and shall not be under any
obligation or liability to any Participant or Employee to continue its
contributions or to maintain the Plan for any given length the time, and each
may in its sole and absolute discretion discontinue its contributions or
otherwise terminate its participation in the Plan at any time without any such
liability for such discontinuance or termination.
14.4 Lapse in Contributions. Failure by the Employer to make
contributions to the Fund in any year or years, unless the same shall be
constitute a complete discontinuance of contributions, or shall be coupled with
any other event causing a termination of its participation in the Plan, shall
not terminate the Plan or operate to vest the rights of any Participants or to
accelerate any payments or distributions to or for the benefit of any
Participants or their Beneficiaries.
14.5 Termination Events.
14.5(a) The Plan shall terminate in whole or in part as the case may
be upon the happening of any of the following events:
(i) Action by the Board terminating the Plan as to it and
specifying the date of such termination. Notice of such termination
shall be delivered to the Trustee and the Administrator.
(ii) Adjudication of the Employer as a bankrupt or its
general assignment by the Employer to or for the benefit of its
creditors or dissolution of the Employer, unless within sixty (60) days
after such event a successor employer shall assume the terms and
conditions hereof in writing.
(iii) Complete discontinuance of contributions by the
Employer.
(iv) Termination or partial termination of the Plan within
the meaning of Section 411(d)(3) of the Code, provided, however, that
in the case of a partial termination, paragraphs 14.5 through 14.8
shall only apply to that part of the Plan which is partially
terminated.
(v) With respect to an Employer, upon its ceasing to be an
Affiliate with respect to other Employers adopting the Plan through the
same Adoption Agreement.
(vi) Action by the Board of the Benefits Corporation
terminating the Plan as a whole and specifying the date of such
termination. Notice of such termination shall be delivered to the
Trustee, the Administrator and all Employers.
14.5(b) For purposes of paragraphs 14.6 through 14.8 hereof, any action
by the Board terminating the Plan shall also specify whether the Plan is
thereafter to be operated as a "terminated plan" or a "frozen plan". Such terms
are defined as follows:
(i) A "terminated plan" is one that has been formally
terminated, has ceased crediting service for benefit accrual purposes
and vesting, and has been or is distributing Plan assets to
Participants and Beneficiaries entitled thereto as soon as
administratively possible. For purposes hereof, a Plan will be
considered a terminated plan when Plan assets are required to be
distributed pursuant to paragraph 14.9 hereof.
(ii) A "frozen plan" is one in which benefit accruals have
ceased but all Plan assets are not being distributed to Participants or
Beneficiaries entitled thereto as soon as administratively possible.
For purposes hereof, a Plan will be considered a frozen plan when Plan
assets are not required to be distributed pursuant to paragraph 14.9
hereof.
14.5(c) Termination of the Plan shall mean that:
(i) Contributions shall cease to be made to the Plan
for periods after the effective date of the termination, and
(ii) Unless otherwise determined by the Board or prohibited
by the Act or the Code, any withdrawal, investment direction, or other
rights shall cease in the case of a "terminated plan" or shall continue
in the case of a "frozen plan", and
(iii) In the case of a "frozen plan", benefit payments shall
be made as provided in ARTICLE VIII and withdrawals shall be permitted
as provided in ARTICLE IX prior to its becoming a "terminated plan".
14.6 Termination Allocations and Separate Accounts.
14.6(a) Upon the effective date of the termination or partial
termination of the Plan, or upon the effective date of the discontinuance of
contributions by the Employer if the Plan is a profit sharing plan, the affected
Accrued Benefit of each affected Participant shall become fully vested and
nonforfeitable.
14.6(b) Upon the effective date of the termination of the Plan with
respect to any Employer, or upon the discontinuance of contributions by it, that
portion of each Participant's account which is attributable to its (or its
predecessor's) contributions shall be fully vested as hereinafter provided. In
addition:
(i) To the extent a Participant's Employer Active Account
becomes fully vested pursuant to this subparagraph, it shall be
transferred to his Employer Non-forfeitable Account.
(ii) As of the effective date of the termination of the Plan
with respect to such Employer or the complete discontinuance of
contributions, the Trustee shall pay out of the Fund or provide for all
accrued expenses not otherwise paid, shall value the assets held by the
Fund, and shall adjust such accounts, both in the same manner as at the
end of the Plan Year.
(iii) The Trustee shall then hold as separate accounts the
portions of each account which have been fully vested under the
provisions of this subparagraph.
14.6(c) Upon the effective date of the termination of the Plan as a
whole, the Trustee shall, subject to the Dollar/25% Limitation of paragraph 4.3,
allocate the then unallocated contributions and forfeitures to the accounts of
Participants and adjust such accounts in the same manner as at the end of the
Plan Year and shall thereafter hold such accounts of all Participants as
separate accounts hereunder. Thereafter, and after all fixed and contingent
liabilities of the Fund to Participants and their Beneficiaries have been
satisfied, any remaining assets of the Fund held in such account pursuant to
paragraph 4.5 hereof shall be distributed to the Employer.
14.7 Holding of Separate Accounts.
14.7(a) Upon termination of the Plan with respect to any Employer
caused solely by a complete discontinuance of its contributions, by a partial
termination of the Plan and/or by action of its Board or the Board, the Trustee
shall continue to administer any separate accounts established in accordance
with paragraph 14.6 as a part of the Fund or as a separate trust in accordance
with the provisions of the Plan for the sole benefit of the then Participants
and Beneficiaries then receiving benefits, and any future Beneficiaries entitled
to receive benefits hereunder with respect to such separate accounts.
14.7(b) In administering such separate accounts the Trustee shall have
the powers and duties imposed upon it under the Plan provided that under no
circumstances shall all or any portion of the separate accounts of any
Participant held under this paragraph, as from time to time adjusted to reflect
the profits, losses and expenses of the separate trust, be subject to any
forfeiture or inure to the benefit of any person other than such Participant or
his Beneficiary.
14.8 Distribution of Separate Accounts after Termination.
Notwithstanding the provisions of this ARTICLE XIV, but subject to the
applicable provisions of clause (iv) of subparagraph 8.1(a) in the event that
the Employer maintains another defined contribution plan other than an employee
stock ownership plan (as defined in Section 4975(e)(7) of the Code), the Trustee
shall forthwith distribute or pay the respective separate accounts in the Fund
to the Participants or their Beneficiaries entitled thereto, in cash or in
assets valued as hereinbefore provided, in a Lump Sum Payment upon the happening
of any of the following events which occur on or after or result in the
termination of the Plan:
(i) Delivery to the Trustee of a notice executed on behalf
of the Employer by authority of its Board of Directors directing that
such distribution or payment be made.
(ii) Adjudication of the Employer as a bankrupt or general
assignment by the Employer to or for the benefit of creditors or
dissolution of the Plan Sponsor, unless, within sixty (60) days after
such event, either a successor or other employer shall assume the terms
and conditions hereof in writing, or the Trustee (or a successor
Trustee appointed within such sixty (60) day period) shall agree to
continue to hold and administer the Fund as provided herein and
additionally, unless otherwise agreed with or directed by the Employer,
to assume all the powers and duties imposed upon the Named Fiduciaries
under the Plan. In assuming such powers and duties, the Trustee (or any
successor Trustee) shall be vested with all authority granted by the
Plan without any limitation imposed upon such authority by the Plan
except the requirement that its actions shall be governed by the other
provisions of the Plan and by the Act and the Code. If the Trustee (or
any successor Trustee) shall so agree to continue the trust, all
expenses of the Plan and the Fund and reasonable compensation to the
Trustee (or any successor Trustee) and any successor shall be paid from
the Fund. In the event of the death, resignation or removal of the
Trustee (or any successor Trustee) who shall have so agreed to continue
the trust, a court of competent jurisdiction over the Fund shall
appoint a successor or the respective account balances in the Fund
shall forthwith be distributed as hereinabove provided at the direction
of such court.
14.9 Effects of Employer Merger, Consolidation or Liquidation.
Notwithstanding the foregoing provisions of the ARTICLE XIV, the merger or
liquidation of any Employer into any other Employer or the consolidation of two
(2) or more of the Employers shall not cause the Plan to terminate with respect
to the merging, liquidating or consolidating Employers, provided that the Plan
has been adopted or is continued by and has not terminated with respect to the
surviving or continuing Employer.
14.10 Trustee Indemnification on Asset Transfer. In the event of the
amendment of this Plan by the Employer and a transfer at the direction of the
Employer of all or any part of the Fund by the Trustee to any successor trustee
or trustees, the Employer shall indemnify the Trustee against any claims,
liabilities and expenses of any nature whatsoever (including reasonable
attorney's fees) asserted against, imposed upon or incurred by the Trustee by
virtue of any such amendment and/or transfer, whether such claims, liabilities
or expenses result from claims of Employees, Participants, Beneficiaries or any
other person, entity or governmental agency or body.
ARTICLE XV
Miscellaneous
15.1 Headings. The headings in the Plan have been inserted for
convenience of reference only and are to be ignored in any construction of the
provisions hereof.
15.2 Gender and Number. In the construction of the Plan, the masculine
shall include the feminine or neuter and the singular shall include the plural
and vice-versa in all cases where such meanings would be appropriate.
15.3 Governing Law. The Plan and the Fund created hereunder shall be
construed, enforced and administered in accordance with the laws of the
Commonwealth of Virginia, and any federal law pre-empting the same. Unless
federal law specifically addresses the issue, federal law shall not pre-empt
applicable state law preventing an individual or person claiming through him
from acquiring property or receiving benefits as a result of the death of a
decedent where such individual caused the death.
15.4 Employment Rights. Participation in the Plan shall not give any
employee the right to be retained in the Employer's employ nor, upon dismissal
or upon his voluntary termination of employment, to have any right or interest
in the Fund other than as herein provided.
15.5 Conclusiveness of Employer Records. The records of the Employer
with respect to age, service, employment history, compensation, absences,
illnesses and all other relevant matters shall be conclusive for purposes of the
administration of the Plan.
15.6 Right to Require Information and Reliance Thereon. The Employer,
Administrator and Trustee shall have the right to require any Participant,
Beneficiary or other person receiving benefit payments to provide it with such
information, in writing, and in such form as it may deem necessary to the
administration of the Plan and may rely thereon in carrying out its duties
hereunder. Any payment to or on behalf of a Participant or Beneficiary in
accordance with the provisions of the Plan in good faith reliance upon any such
written information provided by a Participant or any other person to whom such
payment is made shall be in full satisfaction of all claims by such Participant
and his Beneficiary; and any payment to or on behalf of a Beneficiary in
accordance with the provisions of the Plan in good faith reliance upon any such
written information provided by such Beneficiary or any other person to whom
such payment is made shall be in full satisfaction of all claims by such
Beneficiary.
15.7 Alienation and Assignment. No benefit hereunder shall be subject
in any manner to alienation, sale, anticipation, transfer, assignment, pledge,
encumbrance, garnishment, attachment, execution or levy of any kind, whether
voluntary or involuntary. As provided in the Act and the Code, this prohibition
shall not apply to any QDRO entered on or after January 1, 1985, and the
Administrator shall have all rights granted thereunder in determining the
existence of such an order, in establishing and following procedures therefor
and in complying with any such order. The Administrator shall treat any domestic
relations order entered before January 1, 1985 as a QDRO entered on January 1,
1985 if the Plan is paying benefits pursuant to such order on January 1, 1985 or
if the Administrator in its discretion deems such treatment warranted.
15.8 Notices and Elections. All notices required to be given in writing
and all elections required to be made in writing, under any provision of the
Plan, shall be invalid unless made on such forms as may be provided or approved
by the Administrator and, in the case of a notice or election by a Participant
or Beneficiary, unless executed by the Participant or Beneficiary giving such
notice or making such election.
15.9 Delegation of Authority. Whenever the Benefits Corporation or any
Employer is permitted or required to perform any act, such act may be performed
by any of its officers or any other person duly authorized by its Chief
Executive Officer, its President or its Board of Directors.
15.10 Service of Process. The Administrator, as well as the Trustee,
shall be the agent for service of process on the Plan.
15.11 Construction. This Plan is created for the exclusive benefit of
Employees of the Employer and their Beneficiaries and shall be interpreted and
administered in a non-discriminatory manner consistent with its being an
employees' profit sharing plan and trust and a cash or deferred arrangement if
the Adoption Agreement so indicates, as defined in Sections 401 and 414 of the
Code. This paragraph cannot be altered or amended.
ARTICLE XVI
Adoption of the Plan
16.1 Initial Adoption and Failure to Obtain Qualification.
16.1(a) The Plan shall be adopted by completion and execution of an
Adoption Agreement which must be approved by the Board of each Employer adopting
the Plan.
16.1(b) If it is finally determined by the Internal Revenue Service or
by a court of competent jurisdiction on review of the Internal Revenue Service's
determination that the Plan with respect to any Employer after its initial
adoption by the Employer does not qualify initially under Section 401 of the
Code, the Plan shall have no force or effect and the Trustee shall return to
such Employer all assets attributable to its contribution received by the
Trustee from such Employer as provided in ARTICLE III. Upon return of such
contributions, the Plan shall cease to exist and the Trustee shall be discharged
from all obligations under the Plan as to such Employer.
16.2 Restated Adoption and Failure to Obtain Qualification. In the case
of a Restated Plan, if the Internal Revenue Service determines that a
Restatement of the Plan does not qualify initially under Section 401 of the Code
with respect to such Employer and its Participants, the Plan as restated herein
shall have no force and effect, unless the same shall be further amended in
order to so qualify.
16.3 Failure to Attain or Retain Qualification. In the event that the
Employer fails to attain or retain qualification of this Plan under Section 401
of the Code, the Employer shall no longer be eligible to participate in this
master plan known as the Virginia Bankers Association Master Defined
Contribution Plan and Trust, the Plan shall be considered an individually
designed plan, and as soon as administratively feasible, all assets of the Fund
attributable to the Plan of the Employer shall be removed from any common trust
fund composed of asset attributable to other employers adopting this master
plan.
16.4 Adoption by Additional Employer. Any eligible corporation which
with the consent of the Benefits Corporation, and the Trustee desires to adopt
the Plan, may do so by executing an Adoption Agreement in a form authorized and
approved by such corporation's Board of Directors, the Board and the Trustee. In
the event that such corporation has established and has been maintaining a
defined benefit plan for the benefit of its employees which qualifies under
Section 401 or 404(a)(2) of the Code, the Adoption Agreement may provide,
subject to the requirements of paragraph 16.2, that such plan is amended and
restated by the provisions of this Plan (such prior plan being deemed a
predecessor plan to this Plan) or that such plan is to be merged or consolidated
with this Plan; and, in such event, the assets of such plan shall be paid over
to the Trustee to be administered as a part of the Fund pursuant to the
provisions of this Plan.
ARTICLE XVII
Special Rules for Plans with Employer Stock Investment
17.1 Special Definitions. For purposes of this ARTICLE XVII, the
following terms shall have the meanings set forth below:
17.1(a) "Custodian": The entity named in the Option 15(a) of the
Adoption Agreement to be custodian of the Employer Stock Fund. Such entity may
be the Employer so long as satisfactory reporting and accountability
arrangements are made with the Trustee and the Custodian for the remainder of
the Fund.
17.1(b) "Named Fiduciary with respect to Stock": The Named Fiduciary
with respect to any decision regarding the investment of plan assets in Stock
shall be the individual(s), entity or committee described in Option 15(b) of the
Adoption Agreement. In the event that no Named Fiduciary with respect to Stock
is appointed or in office pursuant to an allocation of fiduciary duties
agreement under paragraph 11.4, the Employer named in Option 1(a) of the
Adoption Agreement shall be the Named Fiduciary with respect to Stock.
17.1(c) "Stock": The stock of the Employer or Affiliate (determined
pursuant to Section 414(b) of the Code) as described in Option 15(c) of the
Adoption Agreement, which shall be employer securities within the meaning of
Sections 409(l) and 4975(e)(8) of the Code. Any Stock so described must be a
security which is readily tradeable on an established securities market.
17.2 Employer Contributions. The contributions made by the Employer for
any Plan Year may be made in cash, Stock or some combination thereof, as
determined by the Employer. If a contribution is made by the Employer in cash,
the Employer may direct the Trustee to treat the cash contribution as a
contribution made for the purpose of acquiring Stock by directing that it be
allocated to the Employer Stock Fund; and such cash contributions shall be
considered to be Stock contributions for purposes of allocations under the Plan.
It is the intent that Stock contributions (and cash contributions treated as
Stock contributions) shall be allocated to the Employer Stock Fund without
regard to any Participant contribution investment direction otherwise then in
effect. Notwithstanding any Participant Investment Direction that might
otherwise be permitted under the Plan, the Employer may direct that a percentage
of contributions be invested in the Employer Stock Fund, as described in Option
15(d) of the Adoption Agreement.
17.3 Additional Allocation Rules. If a contribution by the Employer is
made in cash and Stock, the contribution shall be allocated to each Participant
as though received all in cash. However, for administrative purposes, the Plan
Administrator may follow the rules described in subparagraph 17.5(c).
17.4 Additional Valuation Rules.
17.4(a) In performing the valuation adjustments described in paragraph
4.6, the Trustee shall determine the value of the Stock based on the following
rules.
17.4(b) In the case of a security for which there is a generally
recognized market, either (i) the price of the security prevailing on a national
securities exchange which is registered under Section 6 of the Securities
Exchange Act of 1934 or (ii) if the security is not traded on a national
securities exchange, a price not less favorable to the Plan or the distributee,
as the case may be, than the offering price for the security as established by
the current bid and asked price quoted by persons independent of the issuer and
of any party in interest (as defined in Section 3(14) of the Act).
17.4(c) In the case of an asset other than a security for which there
is a generally recognized market, the fair market value of the asset as
determined in good faith by the Named Fiduciary with respect to Stock pursuant
to the terms of the Plan and in accordance with Section 3(18) of the Act.
17.5 Determination of Account Balances Held in Employer Stock Fund.
17.5(a) In determining the account balances in the Employer Stock Fund,
the rules of paragraphs 4.6 and 4.7 shall apply for both determining the account
balance of a Participant. The number of shares allocated to the Participant's
account for distribution and voting purposes, shall be determined by multiplying
Participant's account balance in the Employer Stock Fund by the percentage of
the Employer Stock Fund invested in Stock (as opposed to the cash reserve),
divided by the fair market value of the Stock on the most recent Valuation Date.
17.5(b) A record of the basis of the shares of Stock and fractions
thereof shall be maintained as follows unless the Employee or Administrator
determines to utilize another method permitted under Section 402 of the Code:
(i) The basis of Stock purchased by the Trustee shall be the
actual cost of the Stock to the Trustee. The basis of all other Stock
acquired by the Trustee (including Stock contributed by the Employer to
the Fund) shall be the fair market value of the Stock on the date of
the acquisition.
(ii) All shares of Stock that are held unallocated in the
special account maintained pursuant to paragraph 4.5 shall retain their
original basis, without regard to when the shares are allocated to the
accounts of the Participants.
(iii) As of each Valuation Date, the basis of all Stock that
is made available for allocation to the accounts of the Participants
shall be calculated by averaging the basis of all Stock to be allocated
as of that date, as determined pursuant to clauses (i) and (ii) above.
(iv) The basis of all Stock allocated to an account of a
Participant shall be calculated by averaging the basis of all Stock
allocated to such account as of that date, determined as hereinabove
provided.
17.5(c) Unless otherwise directed by the Administrator, for Plan
administrative purposes such as making benefit payments or causing substantially
the same proportions of each account balance in the Employer Stock Fund to be
held in cash and in Stock, acquisitions and dispositions of Stock by
Participants' accounts shall generally be effected pro rata based on account
balances held in the Employer Stock Fund and available for the period used.
17.6 Additional Payment Rules.
17.6(a) All payments of amounts held in the Employer Stock Fund shall
be made in the manner elected by the Employer in Option 15(e) of Adoption
Agreement.
17.6(b) If Option 15(e)(1) is selected by the Employer all payments
shall be made in cash, and no shares shall be distributed.
17.6(c) If Option 15(e)(2) is selected by the Employer, all payments
shall be made in whole shares and cash in lieu of fractional shares, provided,
however, this Option may not be used where more than 90% of all of a
Participant's accounts in the Plan can, under any circumstances, be invested in
the Employer Stock Fund. This limitation is intended to prevent the Plan as
adopted by an Employer from being classified as a stock bonus plan.
17.6(c) If Option 15(e)(3) is selected by the Employer, all payments
shall be made in cash and whole shares and cash in lieu of fractional shares in
proportion to the cash and Stock considered under subparagraph 17.5(c) to be
allocated to the recipient's account in the Employer Stock Fund, provided,
however, this Option may not be used where more than 90% of all of a
Participant's accounts in the Plan can, under any circumstances, be invested in
the Employer Stock Fund. This limitation is intended to prevent the Plan as
adopted by an Employer from being classified as a stock bonus plan.
17.6(d) If Option 15(e)(4) is selected by the Employer, the recipient
shall be entitled to elect either method of payment described in the preceding
subparagraphs of this paragraph. Such election shall be filed with the
Administrator at least thirty (30) days (or such shorter period as the
Administrator may permit on a uniform and non-discriminatory basis) before the
benefit payment date. Any election may be revoked and another election made any
number of times.
17.6(f) Notwithstanding the foregoing, if the Plan is a direct or
indirect transferee of a pension plan since the first Plan Year beginning after
December 31, 1984, as indicated in Option 3(e) of the Adoption Agreement, and
the Participant elects to receive a life annuity as provided in subparagraph
8.2(d), then the portion of his nonforfeitable Accrued Benefit held in the
Employer Stock Fund shall be liquidated and included in the life annuity payment
and shall not be paid pursuant to the foregoing subparagraphs of this paragraph.
17.7 Withdrawals from Employer Stock Fund. All withdrawals from the
Employer Stock Fund shall be made pursuant to the payment rules of paragraph
17.6.
17.8 Employer Stock Fund.
17.8(a) The Employer Stock Fund shall consist of and be invested in
Stock and such short-term temporary investments and such cash balances as the
Named Fiduciary with respect to Stock deems appropriate. It is generally
expected that the Stock will represent approximately the range of total assets,
selected by the Employer in Option 15(f) of the Adoption Agreement and the
remainder of the Employer Stock Fund will consist of cash reserves and temporary
investments. The Named Fiduciary with respect to Stock may from time to time as
to the percentage (or percentage range) of total assets of the Employer Stock
Fund which are invested in Stock.
17.8(b) If the Stock ceases to be readily tradeable on an established
securities market, the Stock shall be converted to cash as soon as practicable
taking into consideration the effect of such liquidation on its value. Following
such conversion to cash, the assets shall be transferred as of any valuation
date to another Fund division in accordance with the investment directions of
the Employer.
17.8(c) If an Employer adopting the Plan through the Adoption
Agreement, is restating an existing plan that permitted investments in employer
stock or other securities any special grandfathered provisions and any
applicable transitional rules required in order to prevent an impermissible
cut-back of accrued benefits pursuant to Sections 411(a)(10) or (d)(6) of the
Code are set forth in Option 15(g) of the Adoption Agreement.
17.9 Directions Regarding Stock Transactions. Purchases of Stock for
the Employer Stock Fund shall be made on the open market or from the Employer,
as determined by the Named Fiduciary with respect to Stock from time to time.
The Employer agrees to indemnify the Trustee and the Custodian (if the Custodian
is not the Employer) for any liability for loss of any kind which may result by
reason of action taken by it in accordance with any investment direction of the
Named Fiduciary with respect to Stock or by reason of any inaction on its part
to the extent its investment powers have been limited by any such direction. The
Employer and the Named Fiduciary with respect to Stock shall be governed by the
powers and restrictions imposed on the Trustee in its exercising its investment
direction rights hereunder.
17.10 Limitation of Trustee Responsibility. The Trustee shall not be
liable for following the written directions of the Employer pursuant to the Plan
regarding the proration of Fund investments between the Employer Stock Fund and
other available Fund divisions, the acquisition or sale of Stock, the voting of
Stock, and the allocation of amounts or expenses to accounts under the Plan or
from taking or refraining from taking any other action as directed by the Named
Fiduciary with respect to Stock pursuant to the Plan, except such as may be due
to its own wilful misconduct or failure to act in good faith or except as
otherwise required by the Act.
17.11 Voting Directions.
17.11(a) Voting rights with respect to Stock held in the Employer Stock
Fund shall be passed through to Participants (or if deceased, to their
Beneficiaries) when and to the extent required or permitted by clause (i), (ii)
or (iii) of this subparagraph. When passed through, such rights which are not
exercised shall not be exercised.
(i) If selected by the Employer in Option 16(a) of the
Adoption Agreement, no voting rights with respect to Stock shall be
passed through to Participants (or, if deceased to their
Beneficiaries).
(ii) If selected by the Employer in Option 16(b) of the
Adoption Agreement, each Participant (or if deceased, his Beneficiary)
shall have the right to direct the Named Fiduciary with respect to
Stock as to the manner in which the voting rights of Stock which are
entitled to vote and which is allocated to the accounts of such
Participant is to be exercised.
(iii) If selected by the Employer in Option 16(c) of the
Adoption Agreement, then each Participant (or if deceased, his
Beneficiary) shall have the right to direct the Named Fiduciary with
respect to Stock as to the manner in which the voting rights of Stock
which is entitled to vote and which is allocated to the accounts of
such Participant are to be exercised in connection with any corporate
matter which involves the voting of securities with respect to the
approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all the assets of a trade or business, or such similar
transaction.
17.11(b) In addition to the required pass-through of
voting rights under subparagraph 17.11(a), when and then to the extent
and in the manner directed by the Named Fiduciary with respect to
Stock:
(i) Any voting rights with respect to Stock held in the
Employer Stock Fund which is not otherwise passed through may be passed
through to Participants (or if deceased, to their Beneficiaries),
and/or
(ii) Any decision by a holder of Stock to accept or reject a
tender offer for Stock may be treated as voting rights with respect to
Stock and passed through to Participants (or if deceased, to their
Beneficiaries) to the extent not otherwise passed through pursuant to
Option 16 of the Adoption Agreement.
For purposes hereof, a "tender offer" is intended to include any acquisition
proposal which does not require voting rights with respect to Stock to be
exercised.
17.11(c) Whenever voting rights of Stock are passed through to
Participants under subparagraph 17.11(a) or (b), each Participant (or if
deceased, his Beneficiary) shall have the right to direct the manner in which
such Stock is to be voted pursuant to clause (i) hereof or to actually or by
attorney vote such Stock pursuant to clause (ii) hereof as determined by the
Named Fiduciary with respect to Stock. Within a reasonable time before such
voting rights are to be exercised, the Named Fiduciary with respect to Stock
shall notify each Participant (or if deceased, his Beneficiary) of the occasion
for the exercise of such rights and shall cause to be sent to each such
Participant (or if deceased, his Beneficiary entitled to benefits hereunder) all
information that the Employer or tender offeror, as the case may be, distributes
to shareholders regarding the exercise of such rights.
(i) Unless otherwise determined pursuant to clause (ii) of
this subparagraph, any direction made pursuant to this paragraph shall
be made in writing on a form provided by the Named Fiduciary with
respect to Stock, executed by the Participant (or if deceased, his
Beneficiary), and delivered to the Named Fiduciary with respect to
Stock by 5:00 p.m. of the second day preceding (or such other period as
the Named Fiduciary with respect to Stock may establish) the date such
voting rights are to be exercised. The Named Fiduciary with respect to
Stock shall then forthwith deliver such direction to the Custodian. To
the extent permitted by law, the Custodian shall exercise such rights
as directed and, except in the case of voting rights or a tender offer
described in subparagraph 17.11(b) unless also directed by the Named
Fiduciary with respect to Stock, shall not exercise such rights which
are not so directed.
(ii) Notwithstanding the foregoing, the Named Fiduciary with
respect to Stock may alternatively direct the Custodian to execute and
give each Participant (or if deceased, his Beneficiary) a power of
attorney with respect to such Stock, and the Participant (or if
deceased, his Beneficiary) may then vote such Stock directly or through
his attorney. If the Named Fiduciary with respect to Stock determines
to pass through voting rights pursuant to this clause (ii), such Stock
which is not voted by Participants (or if deceased, their
Beneficiaries) shall not be voted.
17.11(d) To the extent that the voting rights of Stock or the decision
to accept or reject a tender offer for Stock (or other securities of the
Employer) held in the Employer Stock Fund are not passed through to Participants
and are not prohibited from being voted under subparagraph 17.11(a), either:
(i) The Named Fiduciary with respect to Stock shall direct
the Custodian in writing as to the manner, if any, in which such voting
rights shall be exercised and as to the acceptance or rejection of such
tender offer in whole or in part, provided such direction is delivered
to the Custodian prior to the time such voting rights are to be
exercised or such tender offer is to be accepted or rejected, and the
Custodian shall exercise such rights as directed, or
(ii) The Named Fiduciary with respect to Stock's duly
authorized representative may exercise such rights in person or by
proxy.
Such direction may include, but shall not be limited to, an instruction
to vote such Stock or to accept or reject such tender offer based on
the manner in which such rights with respect to a majority (or some
other specified percentage or fraction) of shares of Stock with respect
to which such voting or tender acceptance or rejection rights are
passed through to Participants are exercised.
17.11(e) If the Custodian or Named Fiduciary with respect to Stock is
prevented by law from, or does or may have a conflict of interest in, exercising
any voting rights of Stock in accordance with the applicable provisions of the
Plan or making directions or other determinations pursuant to this paragraph, or
if the Employer deems it appropriate for any reason, the Named Fiduciary with
respect to Stock shall appoint a Co-Fiduciary (sometimes referred to as the
"Voting Co-Fiduciary") in lieu of the Named Fiduciary with respect to Stock for
the purpose of exercising such voting rights in accordance herewith or making
directions or other determinations pursuant to this paragraph and such
appointment shall be terminable at will by the Employer.
17.12 Sales Prohibited if Registration or Qualification Required. In no
event shall any acquisition or sale of Stock pursuant to the Plan be consummated
if in the opinion of counsel for the Employer such acquisition or sale could
result in the loss by the Employer or the Plan of its exemption from applicable
registration and/or qualification requirements of federal or state securities
laws. The foregoing sentence shall, however, be inapplicable if and to the
extent such acquisition or sale is required to preserve the qualification of the
Plan under Section 401 of the Code or to the extent such acquisition or sale is
directed in writing by the Employer. In the event an acquisition or disposition
of Stock is made as provided in this paragraph under circumstances which require
the registration and/or qualification of the Stock under applicable federal or
state securities laws, then the Employer, at its own expense, shall take or
cause to be taken any and all actions as may be necessary or appropriate to
effect such registration or qualification.
17.13 Limitation on Insiders' Interests in Stock. Notwithstanding
anything in the Plan to the contrary, but subject to any applicable
qualification requirements under Section 401 and, to the extent applicable,
409(l) of the Code, the Employer shall have authority to adopt and implement
administrative rules and regulations relating to the investment of the assets
held in the accounts of Participants who are insiders (within the meaning of
Section 16 of the Securities Exchange Act of 1934 (the "1934 Act") and the rules
thereunder), including, without limitation, such rules and regulations as may
the Employer deems necessary or appropriate in order for insiders' participation
in the Plan to satisfy the conditions of Rule 16b-3, as amended, (or any
successor or similar rule) under the 1934 Act.
17.14 No Guarantee of Values. Neither the Employer nor the Named
Fiduciaries guarantee that the fair market value of the Stock when it is
distributed will be equal to its purchase price or that the total amount
distributable under the Plan will be equal to or greater than the amount of
contributions and direct transfers allocated to any Participant. Each
Participant assumes all risk of any decrease in the market value of the Stock
and other assets allocated to his accounts in accordance with the provisions of
the Plan.
17.15 Legend Regarding Securities Laws Restriction on Sale or Transfer.
Each certificate for shares of Stock distributed from the Plan which is subject
to a restriction on sale or transfer by reason of any applicable federal or
state securities laws shall bear an appropriate legend giving notice of such
restrictions.
17.16 Confidentiality of Participant Directions regarding and Holdings
of Stock.
17.16(a) The Named Fiduciary with respect to Stock shall maintain
confidentially with respect to Participant directions to invest or cease
investment in the Employer Stock Fund, Participants' interests in the Employer
Stock Fund and Participant directions regarding the exercise of voting, tender
and similar rights for Stock as is intended under Section 404(c) of the Act. The
Named Fiduciary with respect to Stock's procedures for confidentiality shall
include the collection of investment direction information by the Named
Fiduciary with respect to Stock (or its delegate) and the collection of voting
instructions by the Named Fiduciary with respect to Stock (or its delegate),
followed, if applicable, by delivery of voting instructions to the Custodian.
Information regarding investment directions and voting instructions shall be
retained by the Named Fiduciary with respect to Stock, as required by the Act
and other applicable laws, but will not be disclosed to management of the Named
Fiduciary with respect to Stock or any other Named Fiduciary except to the
extent required by securities or other applicable laws which are not pre-empted
by the Act.
17.16(b) The Plan fiduciary responsible for monitoring compliance with
the confidentiality procedures of this paragraph is the Named Fiduciary with
respect to Stock.
17.16(c) The Plan fiduciary responsible for monitoring compliance with
the confidentiality procedures of this paragraph shall appoint an independent
fiduciary for the Plan to carry out certain activities with respect to Stock for
any matters (such as tender offers, exchange offers and contested Board
elections) for which he believes appropriate in order to ensure confidentially.
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
Appendix A
Determination of Hours of Service
A-1.1 Introduction. Hours of Service shall be credited to Employees for
purposes of the Plan as provided in this Appendix as the same may be modified by
the method selected in Option 13 of the Adoption Agreement. The Hours of Service
described in this Appendix are considered "actual Hours of Service".
A-1.2 Paid Hours for the Performance of Duties. An Employee shall be
credited with one (1) Hour of Service for each hour for which he is directly or
indirectly paid by the Employer, or entitled to such payment, for the
performance of duties for the Employer as an Employee. Such Hours of Service
shall be credited to the Employee for the year in which the duties are
performed.
A-1.3 Paid Hours Where No Performance of Duties Required. An Employee
shall also be credited with one (1) Hour of Service for each hour for which he
is directly or indirectly paid, or entitled to payment, by the Employer as an
Employee on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) for the
Employer due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence; provided, however, that no
more than five hundred one (501) Hours of Service shall be credited under this
paragraph for any single continuous period (whether or not such period occurs in
a single year); and further provided that no credit shall be given on account of
payments under a plan maintained solely for the purpose of complying with
applicable workmen's compensation or unemployment compensation or disability
insurance laws or for amounts paid solely as reimbursement for medical or
medically related expenses incurred by the individual. Hours of Service in the
employment of the Employer described in this paragraph shall be calculated and
credited pursuant to ss. 2530.200b-2 of the U.S. Department of Labor Regulations
which are incorporated herein by this reference.
A-1.4 Hours for Backpay and Damages. An Employee shall be credited with
one (1) Hour of Service for each hour for which backpay as an Employee,
irrespective of mitigation of damages, is either awarded or agreed to by the
Employer; provided, however, that the same Hours of Service shall not be
credited under both paragraph A-1.2 or A-1.3, as the case may be, and under this
paragraph. Hours of Service described in this paragraph shall be credited to the
individual for the year or years to which the award or agreement pertains rather
than to the year or years in which the award, agreement or payment is made.
A-1.5 Service with Affiliates, Predecessor Employers and as Leased
Employees. For purposes of determining Hours of Service, service as an Employee
for any predecessor employer which maintained this Plan, service as an Employee
with any Affiliate, and service as a Leased Employee of the Employer shall also
be considered service with the Employer.
A-1.6 Absences Due to Pregnancy, Childbirth, Adoption and Related Child
Care. Solely for purposes of determining whether an Employee is credited with a
Year of Broken Service for purposes of determining his eligibility to
participate in the Plan or his vested interest in his Accrued Benefit, if the
Employee is absent from work with the Employer for any period beginning on or
after the first day of the first Plan Year commencing after December 31, 1984:
(i) By reason of the pregnancy of the Employee,
(ii) By reason of the birth of a child of the Employee,
(iii) By reason of the placement of a child with the Employee
in connection with the adoption of such child by the Employee, or
(iv) For purposes of caring for such child for a period
beginning immediately after such birth or placement,
then the Employee shall be credited with that number of Hours of Service which
would normally have been credited to the Employee during such absence but for
such absence or, if the Employee's otherwise credited Hours of Service cannot be
readily determined, with eight (8) Hours of Service per day of such absence,
except that the total number of Hours of Service so credited shall not exceed
that number needed to avoid incurring a Year of Broken Service. Such Hours of
Service shall be credited either for the applicable year in which the absence
from work begins, if the Employee would be prevented from receiving a Year of
Broken Service for such year solely because such periods of absence are treated
as Hours of Service as provided in this subparagraph, or in the immediately
following year, in any other case. Notwithstanding the foregoing, no credit for
Hours of Service shall be given under this subparagraph unless the Employee
furnishes to the Administrator such timely information as the Administrator may
reasonably require to establish that the absence from work is for one of the
foregoing reasons or purpose and the number of days for which there was such an
absence.
A-1.7 No Duplication of Hours Credited or Conflict with Federal Law.
Nothing contained in this Appendix shall be construed to require or permit any
duplication in the crediting of Hours of Service or to alter, amend, modify,
invalidate, impair or supersede any law of the United States or any valid rule
or regulation issued under any such law so as to deny an Employee credit for an
Hour of Service where such credit is required by federal law other than the Act.
In the case of a Restated Plan Hours of Service before any year commencing after
December 31, 1975 may be determined or reasonably estimated with such records as
are available to the Employer.
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
Appendix B
Determination of Top Heavy Plan Status
B-1.1 Introduction. The Plan will be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983 if any of the following conditions exist:
(i) If the top-heavy ratio for this Plan exceeds sixty
percent (60%) and this Plan is not part of any required aggregation
group or permissive aggregation group of plans.
(ii) If this Plan is a part of a required aggregation group
of plans but not part of a permissive aggregation group and the
top-heavy ratio for the group of plan exceeds sixty percent (60%).
(iii) If this Plan is a part of a required aggregation group
and part of a permissive aggregation group of plans and the top-heavy
ratio for the permissive aggregation group exceeds sixty percent (60%).
B-1.2 Special Rules and Definitions. For purposes hereof:
B-1.2(a) The term "top-heavy ratio" has the following meaning:
(i) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and
the Employer has not maintained any defined benefit plans which during
the 5-year period ending on the determination date(s) has or has had
accrued benefits, the top-heavy ratio for this Plan alone or for the
required or permissive aggregation group as appropriate is a fraction,
the numerator of which is the sum of the account balances of all Key
Employees as of the determination date(s) (including any part of any
account balance distributed in the 5-year period ending on the
determination date(s)), and the denominator of which is the sum of the
account balances (including any part of any account balance distributed
in the 5-year period ending on the determination date(s)), determined
in accordance with Section 416 of the Code. Both the numerator and the
denominator of the top-heavy ratio are increased to reflect any
contribution not actually made as of the determination date, but which
is required to be taken into account on that date under Section 416 of
the Code.
(ii) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and
the Employer maintains or has maintained one or more defined benefit
plans which during the 5-year period ending on the determination
date(s) has or has had any accrued benefits, the top-heavy ratio for
any required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of the account balances
under the aggregate defined contribution plan or plans for all Key
Employees, determined in accordance with clause (i) above, and the sum
of present values of accrued benefits under the aggregate defined
benefit plan or plans for all Key Employees as of the determination
date(s), and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for
all participants determined in accordance with clause (i) above, and
the present values of accrued benefits under the aggregated defined
benefit plans or plans, determined in accordance with clause (i) above,
for all participants as of the determination date(s), all determined in
accordance with Section 416 of the Code. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the
top-heavy ratio are increased for any distribution of an accrued
benefit made in the 5-year period ending on the determination date.
(iii) For purposes of clauses (i) and (ii) above, the value of
account balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls within or
ends with the 12-month period ending on the determination date, except
as provided in Section 416 of the Code for the first and second plan
years of a defined benefit plan. The account balances and accrued
benefits of a participant (A) who is not a Key Employee but who was a
Key Employee in a prior year, or (B) who has not be credited with at
least one hour of service with any Employer maintaining the plan at any
time during the 5-year period ending on the determination date will be
disregarded. The calculation of the top-heavy ratio, and the extent to
which distributions, rollovers, and transfers are taken into account
will be made in accordance with Section 416 of the Code. Deductible
employee contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans, the value of
account balances and accrued benefits will be calculated with reference
to the determination dates that fall within the same calendar year.
(iv) The accrued benefit of a Participant other than a Key
Employee shall be determined under (A) the method, if any, that
uniformly applies for accrual purposes under all defined benefit plans
maintained by the Employer, or (B) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Section 411(b)(1)(C) of the
Code.
B-1.2(b) The term "permissive aggregation group" shall mean the
required aggregation group of plans plus any other plan or plans of the
Employer which, when considered as a group with the required aggregation
group, would continue to satisfy the requirements of Section 401(a)(4) and 410
of the Code.
B-1.2(c) The term "required aggregation group" shall mean:
(i) Each qualified plan of the Employer in which at least
one Key Employee participates or participated at any time during the
determination period (regardless of whether the plan terminated), and
(ii) Any other qualified plan of the Employer which enables a
plan described in clause (i) of this subparagraph to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
B-1.2(d) The term "determination date" for any Plan Year subsequent to
the first Plan Year means the last day of the preceding Plan Year. For the first
Plan Year, "determination date" means the last day of that Plan Year.
B-1.2(e) The term "valuation date", for purposes of computing the
top-heavy ratio under this Plan shall mean the last day of the Plan Year. For
purposes of computing the top-heavy ratio under any other plan maintained by the
Employer shall be the date determined under such other plan which falls within
the same calendar year.
B-1.2(f) For purposes hereof, the present value of benefits in a
defined benefit plan shall be based only on the interest and mortality rates
specified in Option 9(e) of the Adoption Agreement.
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
Appendix C
Rules Pertaining to Limitations on Contributions and Benefits
C-1.1 Introduction and Incorporation by Reference of Provisions of
Section 415 of the Code.
C-1.1(a) This Appendix contains definitions and adjustments pertaining
to the limitation of contributions and benefits under the Plan under Section 415
of the Code. To the extent a Death Benefit with respect to a Participant is
determined on the basis of his Accrued Benefit, or a projection thereof, such
Death Benefit shall be determined on a basis which appropriately reflects the
limitations imposed hereunder. The rules and provisions of this Appendix shall
apply to the extent not inconsistent with the applicable provisions of Section
415, and Section 416 as applicable to Section 415, of the Code.
C-1.1(b) To the extent not otherwise provided herein or to the extent
inconsistent with the provisions hereof and except as prohibited by applicable
regulations under the Code, the applicable limitations on contributions and
benefits under Section 415, as modified where applicable by Section 416 of the
Code, are incorporated by reference and shall control over any contrary or
omitted provisions in the Plan.
C-1.2 Limitations on Contributions and Benefits. This paragraph applies
if the Participant does not participate in, and has never participated in
another qualified plan maintained by the Employer or a welfare benefit fund, as
defined in Section 419(e) of the Code, maintained by the Employer, or an
individual medical account, as defined in Section 415(1)(2) of the Code,
maintained by the Employer, which provides an Annual Addition as defined in
subparagraph 1.4(a) of this Appendix. In such case, the amount of Annual
Additions which may be credited to the Participant's account for any Limitation
Year will not exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the Employer contribution that would
otherwise be contributed or allocated to the Participant's account would cause
the Annual Additions for the Limitation Year to exceed the Maximum Permissible
Amount, the amount contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum Permissible Amount.
C-1.2(a) Prior to determining the Participant's Total Compensation for
the Limitation Year, the Employer may determine the Maximum Permissible Amount
for a Participant on the basis of a reasonable estimation of the Participant's
Total Compensation for the Limitation Year, uniformly determined for all
Participants similarly situated.
C-1.2(b) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's Total Compensation for the
Limitation Year.
C-1.2(c) Any amount in excess of the Maximum Permissible Amount will be
disposed of in the manner described in paragraph 4.5 of the Plan.
C-1.3 Additional Limitations Where Employer Maintains More Than
One Plan.
C-1.3(a) This paragraph applies if, in addition to this Plan, the
Participant is covered under another Master or Prototype Plan which is a
qualified defined contribution plan maintained by the Employer, a welfare
benefit fund (as defined in Section 419(e) of the Code) maintained by the
Employer, a welfare benefit fund (as defined in Section 419(a) of the Code)
maintained by the Employer, or an individual medical account (as defined in
Section 415(1)(2) of the Code) maintained by the Employer, which provides an
Annual Addition as defined in subparagraph 1.4(a) of this Appendix, during any
Limitation Year. The Annual Additions which may be credited to a Participant's
account under this Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a Participant's
account under the other plans and welfare benefit funds for the same Limitation
Year. If the Annual Additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained by the Employer
are less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the Participant's account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If the Annual Additions with respect to
the Participant under such other defined contribution plans and welfare benefit
funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant's account
under this Plan for the Limitation Year.
C-1.3(b) Prior to determining the Participant's Total Compensation for
the Limitation Year, the Employer may determine the Maximum Permissible Amount
for a Participant in the manner described in subparagraph 1.2(a) of this
Appendix.
C-1.3(c) As soon as is administratively feasible after the end of the
Limitation year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's Total Compensation for the
Limitation Year.
C-1.3(d) If, pursuant to subparagraph 1.3(a) of this Appendix or as a
result of the allocation of forfeitures, a Participant's Annual Additions under
this Plan and such other plans would result in an excess amount for a Limitation
Year, the excess amount will be deemed to consist of the Annual Additions last
allocated, except that Annual Additions attributable to a welfare benefit fund
or individual medical account will be deemed to have been allocated first
regardless of the actual allocation date.
C-1.3(e) If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of another
plan, the excess amount attributed to this Plan will be the product of,
(a) The total excess amount allocated as of such date,
times
(b) The ratio of (i) the Annual Additions allocated to
the Participant for the Limitation Year as of such date under this Plan
to (ii) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other qualified
master or prototype defined contribution plans.
C-1.3(f) Any excess amount attributed to this Plan will be
disposed in the manner described in paragraph 4.5 of the Plan.
C-1.3(g) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Master or Prototype
Plan, Annual Additions which may be credited to the Participant's account under
this Plan for any Limitation Year will be limited in accordance with paragraph
1.3 of this Appendix as though the other plan were a Master or Prototype Plan
unless the Employer provides other limitations in Option 14(b) of the Adoption
Agreement.
C-1.3(h) If the Employer maintains, or at any time maintained, one or
more qualified defined benefit plans covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Fraction and Defined Contribution
Fraction will not exceed 1.0 in any Limitation Year, and the Annual Additions
which may be credited to the Participant's accounts under this Plan will be
limited in accordance with Option 14(c) of the Adoption Agreement.
C-1.4 Special Limitation Definitions. The following words and
terms shall have the meaning set forth below in this paragraph 1.4.
C-1.4(a) "Annual Additions": The sum of the following amounts
credited to a Participant's account for the Limitation Year:
(i) Employer contributions (including any Participant
elective cash or deferred salary reduction or similar contributions
made by the Employer under Section 401(k), 403(b) or 408(k) of the Code
unless such contributions are returned to the Participant pursuant to
any other limitation requirements of the Plan.)
(ii) Employee contributions,
(iii) Forfeitures, and
(iv) Amounts allocated, after March 31, 1984 to an individual
medical account, as defined in Section 415(1)(2) of the Code, which is
part of a pension or annuity plan maintained by the Employer are
treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate account
of a Key Employee, as defined in Section 419A(d)(3) of the Code, under
a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, are treated as Annual Additions to a
defined contribution plan.
For this purpose, any excess amount applied under paragraph 4.5 of the Plan and
subparagraphs 1.2(c) and 1.3(f) of this Appendix in the Limitation Year to
reduce Employer contributions will be considered Annual Additions for such
Limitation Year.
C-1.4(b) "Defined Benefit Fraction": A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent (125%) of the dollar
limitation determined for the Limitation Year under Sections 415(b) and (d) of
the Code or 140 percent (140%) of the Highest Average Compensation, including
any adjustments under Section 415(b) of the Code. Notwithstanding the above, if
the Participant was a Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined benefit plans
maintained by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent (125%) of the sum
of the annual benefits under such plans which the Participant had accrued as of
the close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987.
C-1.4(c) "Defined Contribution Dollar Limitation": $30,000 or,
if greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in effect for the Limitation Year.
C-1.4(d) "Defined Contribution Fraction": A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under all
the defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years, (including the Annual
Additions attributable to the Participant's nondeductible employee contributions
to all other defined benefit plans (whether or not terminated) maintained by the
Employer, and the Annual Additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code or individual medical accounts, as defined
in Section 415(l)(2) of the Code, maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for the current
and all prior Years of Limitation Service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent (125%) of
the dollar limitation determined under Sections 415(b) and (d) of the Code in
effect under Section 415(c)(1)(A) of the Code or 35 percent (35%) of the
Participant's Total Compensation for such year. If the Employee was a
Participant as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the adjustment, a
amount equal to the product of (1) the excess of the sum of the fractions over
1.0 times (2) the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in the terms and
conditions of the plans made after May 5, 1986, but using the Section 415
limitation applicable to the first Limitation Year beginning on or after January
1, 1987. The Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as Annual
Additions.
C-1.4(e) "Employer": For purposes of this Appendix, Employer shall mean
the Employer that adopts this Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Internal Revenue Code, as
modified by Section 415(h)), all commonly controlled trades or businesses (as
defined in Section 414(c) as modified by Section 415(h)), or affiliated service
groups (as defined in Section 414(m)) of which the adopting employer is a part,
and any other entity required to be aggregated with the employer pursuant to
regulations under Section 414(o) of the Code.
C-1.4(f) "Excess Amount": The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
C-1.4(g) "Highest Average Compensation": The average of Total
Compensation for the three consecutive Years of Limitation Service with the
Employer that produces the highest average.
C-1.4(h) "Limitation Year": A calendar year, or the 12-consecutive
month period elected by the Employer in Option 14(e) of the Adoption Agreement.
All qualified plans maintained by the employer must use the same Limitation
Year. If the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
C-1.4(i) "Master or Prototype Plan": A plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
C-1.4(j) "Maximum Permissible Amount": The maximum Annual Addition that
may be contributed or allocated to a Participant's account under the Plan for
any Limitation Year shall not exceed the lesser of:
(i) The Defined Contribution Dollar Limitation, or
(ii) Twenty-five percent (25%) of the Participant's Total
Compensation for the Limitation Year.
The compensation limitation referred to in clause (ii) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition
under Section 415(l)(1) or 419A (d)(2) of the Code. If a short Limitation Year
is created because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
12
C-1.4(k) "Projected Annual Benefit": The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be entitled under the terms of
the Plan assuming:
(i) The Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
(ii) The Participant's Total Compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under the plan will remain constant for all future Limitation
Years.
C-1.4(l) "Year of Limitation Service": A Year of Service credited on
the basis of a computation period which is the Limitation Year. Partial Years of
Limitation Service shall be determined on the basis of calendar months of
service, with one-twelfth (1/12) of the number of Hours of Service (where
counted for purposes of determining Years of Service or otherwise by aggregating
partial periods of service) required for completing a Year of Service, rounded
to the next lowest whole hour.
FIRST AMENDMENT TO
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
(June, 1996)
Basic Plan Document No. 03
Pursuant to subparagraph 14.1(b) of the Plan, the Board of Directors of
the Virginia Bankers Association Benefits Corporation hereby adopts the
following amendments to the Basic Plan Document 03 effective July 1, 1996:
1. Option 4(a) of the Adoption Agreement is revised by substituting "402(e)(3)"
for "402(a)(8)" where it appears in the last sentence thereof.
2. The flush language at the end of subparagraph 1.32(b) is amended to read as
follows:
For purposes hereof "compensation" means compensation as defined in Section
415(c)(3) of the Code but including amounts contributed by the leasing
organization pursuant to a salary reduction agreement which are excludable from
the leased employee's gross income under Section 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
3. Paragraph 1.45 is amended to read as follows:
1.45 "Statutory Compensation": An Employee's Total Compensation plus
employee elective salary reduction or similar contributions excluded from Total
Compensation by reason of Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code
and employer contributions made pursuant to salary reduction agreements under
Section 403(b) of the Code. Statutory Compensation for a Plan Year (or other
applicable computation period) shall be limited by the Compensation Limit for
all purposes other than determining Family Members, Highly Compensated Employees
and Key Employees.
4. Clause (i) of paragraph 1.48 is amended to read as follows:
(i) "Wages, Tips and Other Compensation Box on Form W-2".
Wages as defined in Section 3401(a) and all other payments of
compensation to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to
furnish the Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code. Such compensation must be determined
without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
5. Clause (iii) of subparagraph 2.2(a) is amended by adding the following
sentence at the end thereof:
An Employee who is credited with 1000 Hours of service in both the
Initial Year and the first Plan Year commencing prior to the end of the Initial
Year will be credited with Two years of Eligibility Service.
6. Subparagraph 3.1(d) is amended to add the following sentence at the end
thereof:
The minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made even
though, under other plan provisions, the Participant would not otherwise
have received an allocation or would have received a lesser allocation
for the year. The minimum allocation (to the extent required to be
non-forfeitable under Section 416(b) of the Code) may not be forfeited
under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
7. Clause (ii)(C) of subparagraph 3.4(b) is amended to read as follows:
(C) The term "Excess Elective Deferrals" means a
Participant's Elective Deferrals for a calendar year in excess of
the Elective Deferral Dollar Limitation for such calendar year.
Excess Elective Deferrals shall be treated as Annual Additions
under the Plan, unless such amounts are distributed no later than
the first April 15 following the close of the Participant's taxable
year.
8. Clause (v) of subparagraph 3.4(b) is amended to read as follows:
(v) Any Excess Elective Deferrals allocated to the Plan or
deemed allocated to the Plan shall then be distributed to the
Participant (together with income thereon as determined pursuant to
Section 402(g) of the Code) no later than April 15.
9. Clause (v)(B) of subparagraph 4.10(b) is amended to add the following
sentence at the end thereof:
Aggregate Contributions shall not include Employer Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are
Excess Contributions or Excess Aggregate Contributions.
10. Subparagraph 4.6(g) is deleted from the Plan and the balance of
paragraph 4.6 is renumbered.
11. Paragraph 4.8 amended to read as follows:
4.8 Unallocated Accounts.
4.8(a) If any distribution of an Accrued Benefit is made to a
Participant from his Employer Active Account before such Participant has a
non-forfeitable right to his entire Accrued Benefit and before such Participant
has incurred five (5) consecutive Years of Broken Service (referred to herein as
the "requisite break in service") and before such Participant has forfeited the
non-vested portion of his Employer Active Account due to his death or the
distribution of his entire non-forfeitable Accrued Benefit as provided in clause
(i)(C) of subparagraph 6.6(a) (referred to herein as the "requisite
forfeiture"), the balance of such Employer Active Account after each such
distribution shall be maintained as an unallocated portion of his Employer
Active Account until either:
(i) Such Participant has incurred the requisite break in
service or requisite forfeiture, in which event his non-forfeitable
interest in each such unallocated portion shall be designated as or
added to his Employer Non-forfeitable Account pursuant to subparagraph
6.3(c), or
(ii) Such Participant has become entitled to a non-forfeitable
interest in his entire Accrued Benefit, in which event such portion
shall no longer be unallocated.
In no event shall any contributions or forfeitures be allocated to that part of
a Participant's Employer Active Account which has been so suspended, but such
unallocated portion shall nevertheless be adjusted to reflect the increases or
decreases in the value of the Fund pursuant to paragraph 4.6.
4.8(b) A Participant's non-forfeitable interest at any relevant time in
any unallocated portion of his Employer Active Account shall be determined by
first determining:
(i) A "factor", which is the ratio of the value of such
suspended portion at such relevant time to the value of the balance in
such unallocated portion immediately after such distribution, and
(ii) The "adjusted distribution", which is the product obtained
by multiplying such factor by the sum of the last adjusted distribution,
if any, plus the amount of the distribution which caused the such
unallocated portion of his Employer Active Account to exist.
The Participant's non-forfeitable interest in any unallocated portion of his
Employer Active Account at any relevant time shall equal the excess of:
(iii) The product obtained by multiplying such Participant's
non-forfeitable percentage, determined under subparagraph 6.3(a) or (b), as the
case may be, at such relevant time, by the sum obtained by adding the adjusted
distribution to the value of the unallocated portion at such relevant time, over
(iv) The adjusted distribution.
12. Paragraph 4.13 is deleted from the Plan.
13. A new subparagraph 6.6(c) is added to the plan to read as follows:
6.6(c) No forfeiture will occur solely as a result of an Employee's
withdrawal of his Participant Pre-tax or After-tax Contributions.
14. Subparagraph 8.12(f) is amended by adding the following sentence at the end
thereof:
If a Participant dies after distribution of his interest has begun, the
remaining portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Participant's death.
15. A new subparagraph 9.10(h) is added to the plan to read as follows:
9.10(h) In the event of a default, foreclosure on the note and
attachment of the security will not occur until a distribution event occurs in
the Plan.
16. A new subparagraph B-1.2(g) is added to Appendix B to the Plan to read as
follows:
B-1.2(g) All determinations under this Appendix shall be made in
accordance with the regulations under Section 416 of the Code.
17. Appendix C to the Plan is amended to read in the form attached hereto.
This First Amendment is adopted by Board of Director of the Benefits
Corporation on this 20th day ofJune , 1998. Employers adopting the Plan shall be
notified of this amendment in writing, and a copy of this amendment shall be
provided to each.
VIRGINIA BANKERS ASSOCIATION
BENEFITS CORPORATION
By /s/ Roxanne H. Sheppard
-------------------------------------
Its Chief Administrative Office
---------------------------------
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
Appendix C
Rules Pertaining to Limitations on Contributions and Benefits
C-1.1 Introduction and Incorporation by Reference of Provisions of
Section 415 of the Code.
C-1.1(a) This Appendix contains definitions and adjustments pertaining
to the limitation of contributions and benefits under the Plan under Section 415
of the Code. To the extent a Death Benefit with respect to a Participant is
determined on the basis of his Accrued Benefit, or a projection thereof, such
Death Benefit shall be determined on a basis which appropriately reflects the
limitations imposed hereunder. The rules and provisions of this Appendix shall
apply to the extent not inconsistent with the applicable provisions of Section
415, and Section 416 as applicable to Section 415, of the Code.
C-1.1(b) To the extent not otherwise provided herein or to the extent
inconsistent with the provisions hereof and except as prohibited by applicable
regulations under the Code, the applicable limitations on contributions and
benefits under Section 415, as modified where applicable by Section 416 of the
Code, are incorporated by reference and shall control over any contrary or
omitted provisions in the Plan.
C-1.1(c) Solely for purposes of applying the limitations described in
this Appendix, Total Compensation of a Participant who is both a Non-Highly
Compensated Employee and who is permanently and totally disabled (as defined in
Section 22(e) of the Code) is the compensation such Participant would have
received for the Limitation Year if the Participant had been paid at the rate of
compensation paid immediately before becoming permanently and totally disabled;
such imputed compensation may be taken into account only if the contribution
made on behalf of such Participant is non-forfeitable when made.
C-1.2 Limitations on Contributions and Benefits. This paragraph applies
if the Participant does not participate in, and has never participated in
another qualified plan maintained by the Employer or a welfare benefit fund, as
defined in Section 419(e) of the Code, maintained by the Employer, an individual
medical account, as defined in Section 415(1)(2) of the Code, maintained by the
Employer, or a simplified employee pension plan, as defined in Section 408(k) of
the Code, which provides an Annual Addition as defined in subparagraph 1.4(a) of
this Appendix. In such case, the amount of Annual Additions which may be
credited to the Participant's account for any Limitation Year will not exceed
the lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be contributed
or allocated to the Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount.
C-1.2(a) Prior to determining the Participant's Total Compensation for
the Limitation Year, the Employer may determine the Maximum Permissible Amount
for a Participant on the basis of a reasonable estimation of the Participant's
Total Compensation for the Limitation Year, uniformly determined for all
Participants similarly situated.
C-1.2(b) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's Total Compensation for the
Limitation Year.
C-1.2(c) Any amount in excess of the Maximum Permissible Amount will be
disposed of in the manner described in paragraph 4.5 of the Plan.
C-1.3 Additional Limitations Where Employer Maintains More Than One
Plan.
C-1.3(a) This paragraph applies if, in addition to this Plan, the
Participant is covered under another Master or Prototype Plan which is a
qualified defined contribution plan maintained by the Employer, a welfare
benefit fund (as defined in Section 419(e) of the Code) maintained by the
Employer, a welfare benefit fund (as defined in Section 419(a) of the Code)
maintained by the Employer, an individual medical account (as defined in Section
415(1)(2) of the Code) maintained by the Employer, or a simplified employee
pension plan maintained by the Employer, which provides an Annual Addition as
defined in subparagraph 1.4(a) of this Appendix, during any Limitation Year. The
Annual Additions which may be credited to a Participant's account under this
Plan for any such Limitation Year will not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's account under the
other plans, welfare benefit funds, individual medical accounts and simplified
employee pensions for the same Limitation Year. If the Annual Additions with
respect to the Participant under other defined contribution plans, welfare
benefit funds, individual medical accounts and simplified employee pensions
maintained by the Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or allocated to the
Participant's account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such plans and funds for
the Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other defined contribution
plans, welfare benefit funds, individual medical accounts and simplified
employee pensions in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to the
Participant's account under this Plan for the Limitation Year.
C-1.3(b) Prior to determining the Participant's Total Compensation for
the Limitation Year, the Employer may determine the Maximum Permissible Amount
for a Participant in the manner described in subparagraph 1.2(a) of this
Appendix.
C-1.3(c) As soon as is administratively feasible after the end of the
Limitation year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's Total Compensation for the
Limitation Year.
C-1.3(d) If, pursuant to subparagraph 1.3(a) of this Appendix or as a
result of the allocation of forfeitures, a Participant's Annual Additions under
this Plan and such other plans would result in an excess amount for a Limitation
Year, the excess amount will be deemed to consist of the Annual Additions last
allocated, except that Annual Additions attributable to a simplified employee
pension will be deemed to have been allocated first, followed by Annual
Additions to a welfare benefit fund or individual medical account, regardless of
the actual allocation date.
C-1.3(e) If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of another
plan, the excess amount attributed to this Plan will be the product of,
(a) The total excess amount allocated as of such date,
times
(b) The ratio of (i) the Annual Additions allocated to
the Participant for the Limitation Year as of such date under this Plan
to (ii) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other qualified
master or prototype defined contribution plans.
C-1.3(f) Any excess amount attributed to this Plan will be disposed
in the manner described in paragraph 4.5 of the Plan.
C-1.3(g) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Master or Prototype
Plan, Annual Additions which may be credited to the Participant's account under
this Plan for any Limitation Year will be limited in accordance with paragraph
1.3 of this Appendix as though the other plan were a Master or Prototype Plan
unless the Employer provides other limitations in Option 14(b) of the Adoption
Agreement.
C-1.3(h) If the Employer maintains, or at any time maintained, one or
more qualified defined benefit plans covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Fraction and Defined Contribution
Fraction will not exceed 1.0 in any Limitation Year, and the Annual Additions
which may be credited to the Participant's accounts under this Plan will be
limited in accordance with Option 14(c) of the Adoption Agreement.
C-1.4 Special Limitation Definitions. The following words and
terms shall have the meaning set forth below in this paragraph 1.4.
C-1.4(a) "Annual Additions": The sum of the following amounts credited
to a Participant's account for the Limitation Year:
(i) Employer contributions (including any Participant
elective cash or deferred salary reduction or similar contributions
made by the Employer under Section 401(k), 403(b) or 408(k) of the Code
unless such contributions are returned to the Participant pursuant to
any other limitation requirements of the Plan.)
(ii) Employee contributions,
(iii) Forfeitures,
(iv) Amounts allocated, after March 31, 1984 to an individual
medical account, as defined in Section 415(1)(2) of the Code, which is
part of a pension or annuity plan maintained by the Employer are
treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate account
of a Key Employee, as defined in Section 419A(d)(3) of the Code, under
a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, are treated as Annual Additions to a
defined contribution plan,
(v) Allocations under a simplified employee pension.
For this purpose, any excess amount applied under paragraph 4.5 of the Plan and
subparagraphs 1.2(c) and 1.3(f) of this Appendix in the Limitation Year to
reduce Employer contributions will be considered Annual Additions for such
Limitation Year.
C-1.4(b) "Defined Benefit Fraction": A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent (125%) of the dollar
limitation determined for the Limitation Year under Sections 415(b) and (d) of
the Code or 140 percent (140%) of the Highest Average Compensation, including
any adjustments under Section 415(b) of the Code. Notwithstanding the above, if
the Participant was a Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined benefit plans
maintained by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent (125%) of the sum
of the annual benefits under such plans which the Participant had accrued as of
the close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987.
C-1.4(c) "Defined Contribution Dollar Limitation": $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in effect for the Limitation Year.
C-1.4(d) "Defined Contribution Fraction": A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under all
the defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years, (including the Annual
Additions attributable to the Participant's nondeductible employee contributions
to all other defined benefit plans (whether or not terminated) maintained by the
Employer, and the Annual Additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, individual medical accounts, as defined
in Section 415(l)(2) of the Code, maintained by the Employer or simplified
employee pensions maintained by the Employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior Years of
Limitation Service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum aggregate amount
in any Limitation Year is the lesser of 125 percent (125%) of the dollar
limitation determined under Sections 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code or 35 percent (35%) of the Participant's Total
Compensation for such year. If the Employee was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning before January
1, 1987, and disregarding any changes in the terms and conditions of the plans
made after May 5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987. The Annual Addition
for any Limitation Year beginning before January 1, 1987, shall not be
recomputed to treat all employee contributions as Annual Additions.
C-1.4(e) "Employer": For purposes of this Appendix, Employer shall mean
the Employer that adopts this Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Internal Revenue Code, as
modified by Section 415(h)), all commonly controlled trades or businesses (as
defined in Section 414(c) as modified by Section 415(h)), or affiliated service
groups (as defined in Section 414(m)) of which the adopting employer is a part,
and any other entity required to be aggregated with the employer pursuant to
regulations under Section 414(o) of the Code.
C-1.4(f) "Excess Amount": The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
C-1.4(g) "Highest Average Compensation": The average of Total
Compensation for the three consecutive Years of Limitation Service with the
Employer that produces the highest average.
C-1.4(h) "Limitation Year": A calendar year, or the 12-consecutive
month period elected by the Employer in Option 14(e) of the Adoption Agreement.
All qualified plans maintained by the employer must use the same Limitation
Year. If the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
C-1.4(i) "Master or Prototype Plan": A plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
C-1.4(j) "Maximum Permissible Amount": The maximum Annual Addition that
may be contributed or allocated to a Participant's account under the Plan for
any Limitation Year shall not exceed the lesser of:
(i) The Defined Contribution Dollar Limitation, or
(ii) Twenty-five percent (25%) of the Participant's Total
Compensation for the Limitation Year.
The compensation limitation referred to in clause (ii) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition
under Section 415(l)(1) or 419A (d)(2) of the Code. If a short Limitation Year
is created because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
12
C-1.4(k) "Projected Annual Benefit": The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be entitled under the terms of
the Plan assuming:
(i) The Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
(ii) The Participant's Total Compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under the plan will remain constant for all future Limitation
Years.
C-1.4(l) "Year of Limitation Service": A Year of Service credited on
the basis of a computation period which is the Limitation Year. Partial Years of
Limitation Service shall be determined on the basis of calendar months of
service, with one-twelfth (1/12) of the number of Hours of Service (where
counted for purposes of determining Years of Service or otherwise by aggregating
partial periods of service) required for completing a Year of Service, rounded
to the next lowest whole hour.
SECOND AMENDMENT TO
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
(June, 1996)
Basic Plan Document No. 03
Pursuant to subparagraph 14.1(b) of the Plan, the Board of Directors of
the Virginia Bankers Association Benefits Corporation hereby adopts the
following amendments to the Basic Plan Document 03, effective January 1, 1997 or
as otherwise expressly provided herein:
1. The following new subparagraph 1.15(e) is added to the Plan at
the end of paragraph 1.15 of the Plan:
1.15(e) Notwithstanding anything to the contrary in this paragraph, the
family aggregation rules in this paragraph (providing for the aggregation of
Highly Compensated Employees and Family Members for purposes of applying the
Compensation Limit) shall cease to apply with respect to Plan Years beginning on
or after January 1, 1997.
2. Paragraph 1.19 of the Plan is amended, effective for Plan Years
beginning on or after January 1, 1998, to read as follows:
1.19 "Earned Income": The net earnings from self-employment with the
Employer, for which personal services of the individual is a material income
producing factor. Net earnings shall be determined without regard to items not
included in gross income and the deductions allocable to such items. For Plan
Years beginning before January 1, 1998, net earnings shall be reduced by
contributions by the Employer to a qualified plan to the extent deductible under
Section 404 of the Code and the extent not attributable to salary reduction or
similar contributions under Section 401(k) of the Code. Net earnings shall be
determined with regard to the deduction allowed to the taxpayer by Section
164(f) of the Code for taxable years beginning after December 31, 1989. For Plan
Years (or Limitation Years, as applicable) beginning on or after January 1,
1998, net earnings shall not be reduced by employee elective salary reduction or
similar deferral contributions otherwise excluded from compensation by reason of
Section 402(g)(3) or 457(b) of the Code (and elective deferrals or contributions
under any other sections of the Code covered by Section 415(c)(3)(D) of the
Code).
3. Paragraph 1.26 of the Plan is amended to read as follows:
1.26 "Highly Compensated Employee":
1.26(a) For Plan Years beginning before January 1, 1997, an individual
who is considered a "highly compensated employee" with respect to the Employer
within the meaning of Section 414(q) of the Code; and, to the extent not
inconsistent therewith, any Employee who is considered a Highly Compensated
Active Employee or a Highly Compensated Former Employee for the Determination
Year ending with or within such Plan Year, defined as follows:
(i) The term "Highly Compensated Active Employee" means, with
respect to a Determination Year, an Employee who is an Active
Employee during the Determination Year and who during the
Determination Year or the Look-Back Year either:
(A) Was at any time a more than five percent (5%) owner
of the Employer (as defined for purposes of determining Key
Employees);
(B) Received Statutory Compensation in excess of $75,000
(as adjusted by the Adjustment Factor);
(C) Received Statutory Compensation in excess of $50,000
(as adjusted by the Adjustment Factor), and was a member of
the twenty percent (20%) top-paid group of Employees; or
(D) Was one of the fifty (50) (or if less, the greater
of three (3) or ten percent (10%) of total Employees) officers
of the Employer having the largest annual Statutory
Compensation and having Statutory Compensation in excess of
$45,000 (or fifty percent (50%) of any other amount, as
adjusted by the Adjustment Factor, in effect under Section
415(b)(1)(A) of the Code), provided, however, that if no
officers received Statutory Compensation for either such Plan
Year in excess of such dollar amount, then the officer
receiving the largest annual Statutory Compensation shall be a
Highly Compensated Active Employee.
Notwithstanding the foregoing, an Employee shall not be considered
described in clauses (i)(B), (C) and (D) of this subparagraph for a
Determination Year (although he may for a Look-Back Year) unless he also is one
of the one hundred (100) Active Employees who receive the greatest
Statutory Compensation for the Determination Year.
(ii) The term "Highly Compensated Former Employee" means:
(A) With respect to a Determination Year, a Former
Employee who has had a Separation Year prior to the
Determination Year and who was a Highly Compensated Active
Employee for either such Separation Year or any Determination
Year ending on or after his attainment of the age of
fifty-five (55).
(B) Notwithstanding the foregoing, an Employee shall not
be treated as a Highly Compensated Former Employee by reason
of having a Deemed Separation Year after such Employee
actually separates from service with the Employer if, after
such Deemed Separation Year and before his Actual Separation
Year, his services for the Employer and Statutory Compensation
for a Determination Year increase significantly so that the
Employee is treated as having a Deemed Resumption of
Employment.
1.26(b) For Plan Years beginning on or after January 1, 1997, an
individual who is considered a "highly compensated employee" with respect to the
Employer within the meaning of Section 414(q) of the Code; and, to the extent
not inconsistent therewith, any Employee who is considered a Highly Compensated
Active Employee or a Highly Compensated Former Employee for the Determination
Year ending with or within such Plan Year, defined as follows:
(i) The term "Highly Compensated Active Employee" means, with
respect to a Determination Year, an Employee who is an Active Employee
during the Determination Year and who either:
(A) Was at any time a more than five percent (5%) owner
of the Employer (as defined for purposes of determining Key
Employees) for the Determination Year or the Look-Back Year,
or
(B) Received Statutory Compensation in excess of $80,000
(as adjusted by the Adjustment Factor, but with the base
period being the calendar quarter ending September 30, 1996)
and, at the election (the "top-paid group election") of the
Employer in accordance with Section 414(q) of the Code, was a
member of the twenty percent (20%) top-paid group of Employees
for the Look-Back Year.
The Plan Sponsor hereby declines to make the top-paid group election.
(ii) The term "Highly Compensated Former Employee" means:
(A) With respect to a Determination Year, a Former
Employee who has had a Separation Year prior to the
Determination Year and who was a Highly Compensated Active
Employee for either such Separation Year or any Determination
Year ending on or after his attainment of the age of
fifty-five (55) (based on the rules under Section 414(q) in
effect for the applicable Separation Year or Determination
Year).
(B) Notwithstanding the foregoing, an Employee shall not
be treated as a Highly Compensated Former Employee by reason
of having a Deemed Separation Year after such Employee
actually separates from service with the Employer if, after
such Deemed Separation Year and before his Actual Separation
Year, his services for the Employer and Statutory Compensation
for a Determination Year increase significantly so that the
Employee is treated as having a Deemed Resumption of
Employment.
1.26(c) For purposes hereof:
(i) The term "Active Employee" means, with respect to a
Determination Year, a current Employee who performs services for the
Employer as an Employee at any time during the Determination Year.
(ii) The term "Deemed Resumption of Employment" means an
increase in both services performed for the Employer as an Employee and
Statutory Compensation, based on the facts and circumstances, and at a
minimum shall include an increase in Statutory Compensation to the
extent that such increased Statutory Compensation would not result in a
Deemed Separation Year.
(iii) The term "Determination Year" means the Plan Year.
(iv) The term "Former Employee" means, with respect to a
Determination Year, a current or former Employee who performs no
services for the Employer as an Employee during the Determination Year.
(v) The term "Look-Back Year" means:
(A) With respect to a Determination Year beginning
before January 1, 1997, the year immediately preceding the
Determination Year in question, provided, however, that if the
Determination Year is the calendar year and the Administrator
elects in accordance with Section 414(q) of the Code to
determine the status of individuals as Highly Compensated
Employees on the basis of a Look-Back Year and Determination
Year which are the same year, then the Look-Back Year shall be
the Determination Year.
(B) With respect to a Determination Year beginning on or
after January 1, 1997, (I) the year immediately preceding the
Determination Year in question for purposes of determining
more than five percent (5%) owners of the Employer and (II)
the calendar year beginning immediately before the
Determination Year in question for purposes of determining
Employees who received Statutory Compensation in excess of
$80,000 (as adjusted by the Adjustment Factor), provided,
however, that for any Determination Year beginning in a
calendar year beginning on or after January 1, 1998 and before
January 1, 2000, the Look-Back Year shall be the year
immediately preceding the Determination Year in question for
all purposes unless the Employer elects to use the calendar
year beginning immediately before the determination years
beginning in such calendar year as the look-back year with
respect to all determination years beginning in such calendar
year for all of the retirement plans (which for this purpose
are plans qualified under Section 401(a) or 403(a) of the Code
or described in Section 403(b) or 408(k) of the Code)
sponsored by the Employer, and provided, further, that for any
Determination Year beginning in a calendar year beginning on
or after January 1, 2000, the Look-Back Year shall be the year
immediately preceding the Determination Year in question for
all purposes unless the Employer elects to use the calendar
year beginning immediately before the determination years
beginning in such calendar year as the look-back year with
respect to all determination years beginning in such calendar
year for all of the retirement plans and nonretirement plans
(which for this purpose are employee benefit arrangements to
which the definition of highly compensated employees under
Section 414(q) of the Code is applicable and which are not
plans qualified under Section 401(a) or 403(a) of the Code or
described in Section 403(b) or 408(k) of the Code) sponsored
by the Employer.
(vi) The term "Separation Year" means:
(A) An "Actual Separation Year" which is a Determination
Year in which a Former Employee last performed services for
the Employer as an Employee prior to becoming a Highly
Compensated Former Employee; or
(B) A "Deemed Separation Year" which is a Determination
Year prior to the Employee's attainment of the age of
fifty-five (55) in which he is an Active Employee and in which
his Statutory Compensation is less than fifty percent (50%) of
his average annual Statutory Compensation for the three (3)
consecutive calendar years preceding the Determination Year
during which his Statutory Compensation was the highest (or
the total period of the Employee's service with the Employer
if less). A Deemed Separation Year is relevant for purposes of
determining whether an Employee is a Highly Compensated Former
Employee after he has an Actual Separation Year, but is not
relevant for purposes of identifying him as an Active or
Former Employee.
1.26(d) For purposes hereof:
(i) The Adjustment Factor for a Determination Year or a
Look-Back Year shall be applied on the basis of the calendar year in
which such Determination Year or Look-Back Year begins.
(ii) The Administrator may adopt any rounding or tie-breaking
rules it desires in making relevant determinations so long as such rules
are reasonable, non-discriminatory and uniformly and consistently
applied.
(iii) An Employee is a member of the twenty percent (20%)
top-paid group for a year if he is one of the top twenty percent (20%)
of Active Employees for the year when ranked on the basis of descending
Statutory Compensation for such year (whether or not the Employee in
question is excluded in determining the number of Employees in the
twenty percent (20%) top-paid group). For this purpose, if bargaining
unit Employees are not taken into account in determining the number of
Employees in the twenty percent (20%) top-paid group pursuant to clause
(iv)(E) of this subparagraph, they also shall not be taken into account
in determining other Employees who are in twenty percent (20%) top-paid
group.
(iv) For purposes of determining the number of persons in the
twenty percent (20%) top-paid group and the number of persons who may be
considered officers for a year, the following rules shall apply:
(A) The number of Employees who are in the twenty
percent (20%) top-paid group for a year is twenty percent
(20%), rounded to the nearest integer, of the total number of
Active Employees who are not excluded Employees for such year.
(B) The number of Employees equal to ten percent (10%)
of total Employees for a year is ten percent (10%), rounded to
the nearest integer, of the total number of Active Employees
who are not excluded Employees for such year.
(C) All Former Employees for the year are excluded.
(D) Employees who are non-resident aliens and who
receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer that constitutes
income from sources within the United States for the year are
excluded.
(E) Employees who are in a unit of employees covered by
a collective bargaining agreement between the Employer and
employee representatives for the year are excluded if and only
if ninety percent (90%) or more of the total Employees for the
year are covered by a collective bargaining agreement with the
Employer and the Active Participants in the Plan do not
include any such bargaining unit Employees.
(F) Employees shall not be excluded on the basis of age
or length of prior service.
(v) If any Plan Year is a period of less than twelve (12)
months, then any dollar amount referred to in this paragraph shall be
prorated by multiplying the otherwise applicable dollar amount for such
Plan Year by a fraction, the numerator of which is the number of months
in such Plan Year and the denominator of which is twelve (12).
4. Paragraph 1.32 of the Plan is amended to read as follows:
1.32 "Leased Employee":
1.32(a) An individual who is considered a leased employee of the
Employer within the meaning of Section 414(n)(2) of the Code and, to the extent
not inconsistent therewith, any person:
(i) Who, pursuant to an agreement between the recipient
Employer and any other person (the "leasing organization"), has
performed services for the recipient Employer or for the recipient
Employer and related persons (determined in accordance with Section
414(n)(6) of the Code),
(ii) Whose services are performed on a substantially full-time
basis for a period of at least one year, and
(iii) For years beginning before January 1, 1997, whose services
are of a type historically performed by employees in the business field
of the recipient Employer; and for years beginning after December 31,
1996, whose services are performed under the primary control or
direction of the recipient Employer.
1.32(b) Notwithstanding the foregoing, if such leased employees
constitute less than twenty percent (20%) of the Employer's non-highly
compensated work force within the meaning of Section 414(n)(1)(C)(ii) of the
Code, individuals otherwise considered to be Leased Employees shall not include
those leased employees covered by a plan described in Section 414(n)(5) of the
Code (unless otherwise provided by the terms of the Plan) and, to the extent not
inconsistent therewith, which:
(i) Is maintained by the leasing organization,
(ii) Is a money purchase pension plan with a non-integrated
employer contribution rate of at least seven and one-half percent
(7-1/2%) of compensation in the case of services performed before
January 1, 1987 or ten percent (10%) of compensation in the case of
services performed after December 31, 1986,
(iii) Provides full and immediate vesting, and
(iv) Provides for immediate participation by each employee of
the leasing organization (other than employees who perform substantially
all their services for the leasing organization or whose compensation
from the leasing organization in each of the four (4) Plan Years ending
with the Plan Year in question is less than $1,000).
For purposes hereof, "compensation" means compensation as defined in Section
415(c)(3) of the Code, but determined for Plan Years beginning before January 1,
1998, without regard to Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code and
without regard to employer contributions made pursuant to salary reduction
agreements under Section 403(b) of the Code.
1.32(c) Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to service performed for the
recipient Employer or related persons (determined in accordance with Section
414(n)(6) of the Code) shall be treated as provided by the recipient Employer.
5. Paragraph 1.45 of the Plan is amended, effective for Plan Years
beginning on or after January 1, 1998, to read as follows:
1.45 "Statutory Compensation":
1.45(a) For Plan Years beginning before January 1, 1998, an Employee's
Total Compensation plus employee elective salary reduction or similar
contributions excluded from Total Compensation by reason of Sections 125,
402(e)(3) and 402(h)(1)(B) of the Code and employer contributions made pursuant
to salary reduction agreements under Section 403(b) of the Code. Statutory
Compensation for a Plan Year (or other applicable computation period) shall be
limited by the Compensation Limit for all purposes other than determining Family
Members, Highly Compensated Employees and Key Employees.
1.45(b) For Plan Years beginning on or after January 1, 1998, an
Employee's Total Compensation. Statutory Compensation for a Plan Year (or other
applicable computation period) shall be limited by the Compensation Limit for
all purposes other than determining Highly Compensated Employees and Key
Employees.
6. Paragraph 1.48 of the Plan is amended, effective for Plan Years
beginning on or after January 1, 1998, to read as follows:
1.48 "Total Compensation":
1.48(a) For Plan Years (or Limitation Years, as applicable) beginning
before January 1, 1998, with respect to a Self-Employed Individual, such
individual's Earned Income. Otherwise, the total compensation from the Employer
received by or made available to an Employee determined as selected in Option
4(e) of the Adoption Agreement to be either (i), (ii) or (iii):
(i) "Wages, Tips and Other Compensation Box on Form W-2". Wages
as defined in Section 3401(a) and all other payments of compensation to
an Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code. Such compensation must be determined without regard to any rules
under Section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Section
3401(a)(2)).
(ii) "Section 3401(a) Wages". Wages as defined in Section
3401(a) of the Code for the purposes of income tax withholding at the
source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code).
(iii) "415 Safe Harbor Compensation". Wages, salaries, and fees
for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer to the extent
that the amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits and reimbursements, or expense allowances
under a nonaccountable plan (as described in Treas. Reg. 1.62-2(c)), and
excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not includible in the employee's gross
income for the taxable year in which contributed, or employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the employee, or
any distributions from a plan of deferred compensation;
(B) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by the employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(D) Other amounts which received special tax benefits,
or contributions made by the employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract described in section 403(b) of the Code (whether or
not the contributions are actually excludable from the gross
income of the Employee).
1.48(b) For Plan Years (or Limitation Years, as applicable) beginning on
or after January 1, 1998, with respect to a Self-Employed Individual, such
individual's Earned Income. Otherwise, the total compensation from the Employer
received by or made available to an Employee determined as selected in Option
4(e) of the Adoption Agreement to be either (i), (ii) or (iii):
(i) "Wages, Tips and Other Compensation Box on Form W-2". Wages
as defined in Section 3401(a) and all other payments of compensation to
an Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the
Code. Such compensation must be determined without regard to any rules
under Section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Section
3401(a)(2)) but including employee elective salary reduction or similar
deferral contributions excluded from W-2 compensation by reason of
Section 125, 402(g)(3) or 457(b) of the Code (and elective deferrals or
contributions under any other sections of the Code covered by Section
415(c)(3)(D) of the Code).
(ii) "Section 3401(a) Wages". Wages as defined in Section
3401(a) of the Code for the purposes of income tax withholding at the
source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code) but including
employee elective salary reduction or similar deferral contributions
excluded from W-2 compensation by reason of Section 125, 402(g)(3) or
457(b) of the Code (and elective deferrals or contributions under any
other sections of the Code covered by Section 415(c)(3)(D) of the Code).
(iii) "415 Safe Harbor Compensation". Wages, salaries, and fees
for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer to the extent
that the amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits and reimbursements, or expense allowances
under a nonaccountable plan (as described in Treas. Reg. 1.62-2(c)), but
including employee elective salary reduction or similar deferral
contributions excluded from W-2 compensation by reason of Section 125,
402(g)(3) or 457(b) of the Code (and elective deferrals or contributions
under any other sections of the Code covered by Section 415(c)(3)(D) of
the Code), and excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not includible in the employee's gross
income for the taxable year in which contributed, or employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the employee, or
any distributions from a plan of deferred compensation;
(B) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by the employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(D) Other amounts which received special tax benefits,
or contributions made by the employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract described in section 403(b) of the Code (whether or
not the contributions are actually excludable from the gross
income of the Employee).
7. Subparagraph 4.9(a) of the Plan is amended to read as follows:
4.9(a) Except where the alternative method under Section 401(k)(12) of
the Code of meeting the nondiscrimination requirements of Section 401(k) of the
Code is satisfied with respect to the Plan for a Plan Year beginning on or after
January 1, 1999, the Pre-Tax Contributions otherwise permitted to be made
pursuant to the Plan shall be limited as hereafter provided so that the Average
Deferral Percentage for Eligible Participants who are Highly Compensated
Employees for a Plan Year (that is, the Tested Plan Year) does not exceed the
greater of (i) or (ii) as follows :
(i) The "regular limitation" percentage which is equal to one
hundred twenty-five percent (125%) of the Average Deferral Percentage
for the Eligible Participants who are Non-Highly Compensated Employees
for the Applicable Plan Year, or
(ii) The "alternative limitation" percentage which is equal to
the lesser of:
(A) Two hundred percent (200%) of the Average Deferral
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year, or
(B) Two (2) percentage points over the Average Deferral
Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year.
For purposes hereof:
(iii) The term "Tested Plan Year" means the Plan Year for which
the limitation is being applied to the contributions of Eligible
Participants who are Highly Compensated Employees.
(iv) The term "Applicable Plan Year" means:
(A) For Plan Years beginning before January 1, 1997, the
Tested Plan Year.
(B) For Plan Years beginning on or after January 1,
1997, the Plan Year immediately preceding the Tested Plan
Year, unless the Plan Sponsor or the Administrator elects in
accordance with Section 401(k)(3)(A) of the Code, to use the
Tested Plan Year.
Notwithstanding the foregoing, for Plan Years beginning on or after January 1,
1997, if the Tested Plan Year is the first Plan Year of the Plan, then the
Average Deferral Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year shall be deemed to be three
percent (3%) unless the Plan Sponsor or the Administrator elects in accordance
with Section 401(k)(3)(E) of the Code, to use the actual Average Deferral
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the first Plan Year.
8. Clause (viii) of subparagraph 4.9(c) of the Plan is redesignated as
clause (ix) and the following new clause (viii) of subparagraph 4.9(c) is
added as follows:
(viii) If the Plan Sponsor or the Administrator elects to apply
Section 410(b)(4)(B) of the Code in determining whether the Plan meets
the requirements of Section 410(b) of the Code for a Plan Year, the Plan
may exclude altogether the participation of Non-Highly Compensated
Employees (but not the participation of Highly Compensated Employees)
who have not met the minimum age and service requirements of Section
410(a)(1)(A) of the Code in determining the satisfaction of requirements
of subparagraph 4.9(a) and subparagraph 4.11(a).
9. Clause (ii) of subparagraph 4.9(d) of the Plan is amended to read as
follows:
(ii) Among such Participants, the reduction shall be effected by
reducing contributions (A) for Plan Years beginning before January 1,
1997, in the order of the highest Deferral Percentages and (B) for Plan
Years beginning on or after January 1, 1997, in the order of the highest
dollar amounts of Deferral Contributions by or on behalf of each of the
Highly Compensated Employees, such that the applicable restrictions of
subparagraph 4.9(a) are satisfied; provided, however, that any required
reduction for any Eligible Participant will be reduced by his Excess
Elective Deferrals returned pursuant to subparagraph 3.4(b). In
effecting the needed reduction, if the Deferral Percentage of a Highly
Compensated Employee is determined by aggregating his Deferral
Contributions with those of his Family Members, then as between the
members of the Family Group, the reduction shall be effected pro rata on
the basis of the Deferral Contributions made by each member of the
Family Group compared to the total Deferral Contributions of all members
of the Family Group that are being reduced.
10. The following new subparagraph 4.9(f) is added to the Plan at
the end of paragraph 4.9 of the Plan:
4.9(f) Notwithstanding anything to the contrary in this paragraph, the
family aggregation rules in this paragraph (providing for the aggregation of
Highly Compensated Employees and Family Members for specified purposes) shall
cease to apply with respect to Plan Years beginning on or after January 1, 1997.
11. Subparagraph 4.10(a) of the Plan is amended to read as follows:
4.10(a) Except where the alternative method under Section 401(m)(11) of
the Code of meeting the nondiscrimination requirements of Section 401(m) of the
Code is satisfied with respect to the Plan for a Plan Year beginning on or after
January 1, 1999, the After-Tax Contributions otherwise permitted to be made
under the Plan and the Employer Matching Contributions otherwise allocated to
the account of a Participant under the Plan shall be limited as hereafter
provided so that the Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for a Plan Year (that is, the Tested Plan
Year) does not exceed the greater of (i) or (ii) as follows:
(i) The "regular limitation" percentage which is equal to one
hundred twenty-five percent (125%) of the Average Contribution
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the Applicable Plan Year, or
(ii) The "alternative limitation" percentage which is equal to
the lesser of:
(A) Two hundred percent (200%) of the Average
Contribution Percentage for the Eligible Participants who are
Non-Highly Compensated Employees for the Applicable Plan Year,
or
(B) Two (2) percentage points over the Average
Contribution Percentage for the Eligible Participants who are
Non-Highly Compensated Employees for the Applicable Plan Year.
For purposes hereof:
(iii) The term "Tested Plan Year" means the Plan Year for which
the limitation is being applied to the contributions by or for Eligible
Participants who are Highly Compensated Employees.
(iv) The term "Applicable Plan Year" means:
(A) For Plan Years beginning before January 1, 1997, the
Tested Plan Year.
(B) For Plan Years beginning on or after January 1,
1997, the Plan Year immediately preceding the Tested Plan
Year, unless the Plan Sponsor or the Administrator elects in
accordance with Section 401(m)(2)(A) of the Code, to use the
Tested Plan Year.
Notwithstanding the foregoing, for Plan Years beginning on or after January 1,
1997, if the Tested Plan Year is the first Plan Year of the Plan, then the
Average Contribution Percentage for the Eligible Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year shall be deemed to be three
percent (3%) unless the Plan Sponsor or the Administrator elects in accordance
with Section 401(m)(2)(E) of the Code, to use the actual Average Contribution
Percentage for the Eligible Participants who are Non-Highly Compensated
Employees for the first Plan Year.
12. Clause (viii) of subparagraph 4.10(c) of the Plan is redesignated
as clause (ix) and the following new clause (viii) of subparagraph 4.10(c)
is added as follows:
(viii) If the Plan Sponsor or the Administrator elects to apply
Section 410(b)(4)(B) of the Code in determining whether the Plan meets
the requirements of Section 410(b) of the Code for a Plan Year, the Plan
may exclude altogether the participation of Non-Highly Compensated
Employees (but not the participation of Highly Compensated Employees)
who have not met the minimum age and service requirements of Section
410(a)(1)(A) of the Code in determining the satisfaction of requirements
of subparagraph 4.10(a) and subparagraph 4.11(a).
13. Clause (ii) of subparagraph 4.10(d) of the Plan is amended to read as
follows:
(ii) Among such Participants, the reduction shall be effected by
reducing contributions (A) for Plan Years beginning before January 1,
1997, in the order of the highest Contribution Percentages and (B) for
Plan Years beginning on or after January 1, 1997, in the order of the
highest dollar amounts of Aggregate Contributions by or on behalf of
each of the Highly Compensated Employees, such that the applicable
restrictions of subparagraph 4.10(a) are satisfied. In effecting the
needed reduction, if the Contribution Percentage of a Highly Compensated
Employee is determined by aggregating his Aggregate Contributions with
those of his Family Members, then as between the members of the Family
Group, the reduction shall be effected pro rata on the basis of the
Aggregate Contributions made by each member of the Family Group compared
to the total Aggregate Contributions of all members of the Family Group
that are being reduced.
14. The following new subparagraph 4.10(f) is added to the Plan at
the end of paragraph 4.10 of the Plan:
4.10(f) Notwithstanding anything to the contrary in this paragraph, the
family aggregation rules in this paragraph (providing for the aggregation of
Highly Compensated Employees and Family Members for specified purposes) shall
cease to apply with respect to Plan Years beginning on or after January 1, 1997.
15. Subparagraph 4.11(a) of the Plan is amended to read as follows:
4.11(a) Multiple use of the alternative limitations under clause (ii) of
subparagraphs 4.9(a) and 4.10(a) of this Appendix is prohibited and is
considered to occur if all of the following occur for a Tested Plan Year:
(i) One or more Highly Compensated Employees are Eligible
Participants for purposes of both paragraph 4.9 and 4.10, and
(ii) The sum of the Average Deferral Percentages and
Average Contribution Percentages of the Highly Compensated
Employees who are Eligible Participants exceeds the Multiple Use
Limitation Percentage, and
(iii) Both:
(A) The Average Deferral Percentage of the Highly
Compensated Employees who are Eligible Participants for the
Tested Plan Year exceeds one hundred twenty-five percent
(125%) of the Average Deferral Percentage of the Non-Highly
Compensated Employees who are Eligible Participants for the
Applicable Plan Year, and
(B) The Average Contribution Percentage of the Highly
Compensated Employees who are Eligible Participants for the
Tested Plan Year exceeds one hundred twenty-five percent
(125%) of the Average Contribution Percentage of the
Non-Highly Compensated Employees who are Eligible Participants
for the Applicable Plan Year.
Notwithstanding anything to the contrary herein, the prohibition on
multiple use of the alternative limitations under clause (ii) of
subparagraphs 4.9(a) and 4.10(a) shall apply separately to contributions
under an employee stock ownership plan described in Section 409 or
4975(e)(7) of the Code (an "ESOP") (or the portion of a plan which is an
ESOP) and contributions under a non-ESOP (or the portion of a plan which
is not an ESOP) except as permitted under Section 401(k), 401(m), 409 or
4975 of the Code.
16. The following new paragraph 4.14 is added at the end to the Plan,
effective December 12, 1994:
4.14 Special Rules for Reemployed Veterans.
4.14(a) Effective December 12, 1994, notwithstanding any other provision
of the Plan, the following special rules shall apply in order to provide Make-up
Contributions to the Plan on behalf of Reemployed Veterans:
(i) Make-up Contributions shall be made to the Plan by the
Employer on behalf of a Reemployed Veteran, and allocated to the
appropriate account of the affected Participant's Accrued Benefit, in
such amount and at such time or times as is required by the USERRA.
(ii) Make-up Contributions with respect to a Reemployed Veteran
shall not be subject to any otherwise applicable contribution limits
under Sections 402(g), 402(h), 403(b), 408, 415, or 457 of the Code or
any otherwise limit on deductible contributions under Sections 404(a) or
404(h) of the Code as applied with respect to the Plan Year or taxable
year, as applicable to the relevant section of the Code, in which the
contribution is made. A Make-up Contribution shall not be taken into
account in applying the contribution or deductible contribution limits
to any other contribution made during the Plan Year or taxable year, as
applicable to the relevant section of the Code. Make-up Contributions
shall not exceed the aggregate amount of contributions that would have
been permitted under the Plan contribution and deductible contribution
limits for the Plan Year or taxable year, as applicable to the relevant
section of the Code, to which the contribution relates had the
Reemployed Veteran continued to be employed by the Employer during the
period of his Qualified Military Service.
(iii) Make-up Contributions shall not be treated as contributions
for purposes of determining Top Heavy Contributions required to be made
by the Employer for either the Plan Year in which they are made or for
the Plan Year to which they relate.
(iv) Compensation to be used for purposes of determining Make-up
Contributions with respect to a period of Qualified Military Service
shall mean the Compensation (as otherwise defined in the Plan but based
on rate of pay) which the Reemployed Veteran would have received but for
his Qualified Military Service. If a Reemployed Veteran's pay is not
readily determinable, the Reemployed Veteran's Compensation shall then
be his average Compensation for the 12-month period (or actual shorter
period of employment) immediately preceding his Qualified Military
Service.
(v) The following service counting rules shall apply:
(A) A Reemployed Veteran shall not be considered to have
incurred a Year of Broken Service by reason of his Qualified
Military Service.
(B) Qualified Military Service of a Reemployed Veteran
shall be counted as service for vesting and benefit accrual
under the Plan.
(vi) A Reemployed Veteran shall be entitled to Matching
Contributions that are contingent on elective deferrals or employee
contributions for the period of his Qualified Military Service only if
he timely makes those contributions following his return to the
Employer's service as provided in this paragraph.
4.14(b) Notwithstanding any other provision of the Plan, a Reemployed
Veteran shall be entitled to make Pre-Tax Contributions and After-Tax
Contributions for the period of his Qualified Military Service following his
return to the Employer's service as follows:
(i) Such contributions must be made during the period which
begins on the date of reemployment with the Employer following such
Qualified Military Service and is equal to the lesser of (A) three times
the Reemployed Veteran's period of Qualified Military Service or (B)
five (5) years.
(ii) The amount of such contributions shall be determined by the
Reemployed Veteran but shall not exceed the maximum amount which the
Reemployed Veteran could have made during the period of his Qualified
Military Service in accordance with the applicable limitations and rules
of the Plan as though the Reemployed Veteran had continued to be
employed by the Employer and received the Compensation during such
period in the amount determined pursuant to this paragraph.
(iii) The maximum amount of such contributions determined in
clause (ii) above shall be reduced by the amount of any such
contributions actually made for during the Reemployed Veteran's period
of Qualified Military Service.
4.14(c) For purposes of this paragraph, the following terms have the
following meanings:
(i) "Make-up Contributions" means the contributions which are
required to be made to the Plan for a Reemployed Veteran pursuant to the
USERRA and Section 414(u) of the Code. These contributions generally are
the contributions by the Employer that would have accrued to the
Reemployed Veteran under the Plan, but for his absence due to his
Qualified Military Service. Neither the Make-up Contribution obligation
nor this paragraph requires that (A) any earnings be credited to the
account of a Reemployed Veteran with respect to any Make-up Contribution
before such contribution is actually made or (B) the Plan provide for
any make-up allocation of any forfeitures that occurred during the
period of a Reemployed Veteran's Qualified Military Service.
(ii) "Qualified Military Service" means any service in the
uniformed services (as defined in chapter 43 of title 38, United States
Code) by any individual if such individual is entitled to reemployment
rights under such chapter with respect to such service and to the
Employer.
(iii) "Reemployed Veteran" means a person who is or, but for his
Qualified Military Service, would have been a Participant at some time
during his Qualified Military Service and who is entitled to the
restoration benefits and protections of the USERRA with respect to his
Qualified Military Service and the Plan.
(iv) "USERRA" means the Uniformed Services Employment and
Reemployment Rights Act of 1994.
17. Clause (i) of subparagraph 8.1(a) of the Plan is amended, effective
for Plan Years beginning on or after January 1, 1998, to read as follows:
(i) If the entire non-forfeitable Accrued Benefit of a
Participant does not, and did not at the time of any prior payment,
exceed $3,500 (or $5,000 for Plan Years beginning after December 31,
1997), such Accrued Benefit shall be paid to the Participant as soon as
possible after his termination of employment with the Employer.
18. Clause (iv) of subparagraph 8.1(a) of the Plan is amended, effective
for Plan Years beginning on or after January 1, 1998, to read as follows:
(iv) Notwithstanding the foregoing, payment shall not commence
to be made to a Participant whose non-forfeitable Accrued Benefit
exceeds, or at the time of any prior distribution exceeded, $3,500 (or
$5,000 for Plan Years beginning after December 31, 1997) before he
attains the later of (A) his Normal Retirement Age or (B) the age of
sixty-two (62) without his first having filed a written consent to
payment with the Administrator.
19. Clause (i) of subparagraph 8.1(b) of the Plan is amended, effective
for Plan Years beginning on or after January 1, 1998, to read as follows:
(i) If the entire non-forfeitable Accrued Benefit of the
Participant does not and did not at the time of any prior distribution
exceed $3,500 (or $5,000 for Plan Years beginning after December 31,
1997), such Accrued Benefit shall be paid to the Beneficiary as soon as
practical after the date of the Participant's death.
20. Subparagraph 8.2(a) of the Plan is amended, effective for Plan Years
beginning on or after January 1, 1998, to read as follows:
8.2(a) If such non-forfeitable Accrued Benefit (currently and at the
time of all prior distributions) is $3,500 (or $5,000 for Plan Years beginning
after December 31, 1997) or less, such Accrued Benefit shall be paid in the form
of a Lump Sum Payment (as defined in paragraph 8.4).
21. Subparagraph 8.3(a) of the Plan is amended, effective for Plan Years
beginning on or after January 1, 1998, to read as follows:
8.3(a) If such non-forfeitable Accrued Benefit (currently and at the
time of all prior distributions) is $3,500 (or $5,000 for Plan Years beginning
after December 31, 1997) or less, such Accrued Benefit shall be paid in the form
of a Lump Sum Payment (as defined in paragraph 8.4).
22. Subparagraph 8.5(d) of the Plan is amended to read as follows:
8.5(d) Notwithstanding the foregoing, if a Participant dies before the
April 1 following the calendar year in which he reaches or would reach his
Required Beginning Date (as defined in clause (vi) of subparagraph 8.12(g)) and
is receiving at the time of his death, Periodic Installments, the amount of any
Periodic Installment shall be redetermined to the extent required to satisfy the
minimum distribution requirement of Section 401(a)(9) of the Code.
23. Subparagraph 8.7(f) of the Plan is amended to read as follows:
8.7(f) Notwithstanding the other distribution timing rules herein, such
benefit payments may commence less than thirty (30) days after any notice or
explanation required by subparagraph 8.7(b) is given, provided that:
(i) The Administrator clearly informs the recipient that, where
applicable, the recipient has a right to a period of at least thirty
(30) days after receiving the notice or explanation to consider the
decision of whether or not to elect or consent to a distribution (and,
if applicable, a particular distribution option),
(ii) The recipient, after receiving the notice or explanation,
affirmatively elects a distribution, and
(iii) If the distribution is one to which Section 417 of the Code
applies, the distribution commences more than seven (7) days after the
notice or explanation is given.
24. Clause (vi) of subparagraph 8.12(g) of the Plan is amended to read as
follows:
(vi) "Required Beginning Date" shall mean in the case of a
Participant, the first day of April of the calendar year following the
calendar year in which occurs the later of the following applicable
event (the "Required Beginning Event"):
(A) The date the Participant attains the age seventy
and one-half (70-1/2), or
(B) Effective January 1, 1997 if the Participant's
non-forfeitable Accrued Benefit is not in pay status on
December 31, 1996 and the Participant is not a 5-Percent
Owner, the date the Participant retires from the service of
the Employer or otherwise ceases to be employed by the
Employer.
As an alternative to the foregoing, a Participant who is not a 5-Percent
Owner and who reaches age seventy and one-half (70-1/2) while employed
by the Employer and on or before December 31, 1998 may elect to begin to
receive his non-forfeitable Accrued Benefit at any time after he attains
the age of seventy and one-half (70-1/2) and at or before the April 1 of
the calendar year following the calendar year in which he attains the
age of seventy and one-half (70-1/2). The non-forfeitable Accrued
Benefit of a Participant for each Plan Year after his Accrued Benefit
commences pursuant to this clause shall commence to be paid as soon as
possible after each such Plan Year.
Once distributions have begun to a 5-Percent Owner under this section,
they must continue to be distributed, even if the Participant ceases to
be a 5-Percent Owner in a subsequent year. Further, provided, the
Required Beginning Date of a Participant who is not a 5-Percent Owner
who attains age 70 1/2 during 1988 and who has not retired as of January
1, 1989, is April 1, 1990.
25. The following new paragraph 9.12 is added to the Plan at the end of
ARTICLE IX, effective December 12, 1994:
9.12 Effective, December 12, 1994, notwithstanding any other provision
of the Plan, if a loan repayment obligation is suspended for any part of a
Participant's service in the uniformed services of the United States (as defined
in chapter 43 of title 38, United States Code), whether or not Qualified
Military Service (as defined in paragraph 4.14), such suspension shall not be
taken into account for purposes of Sections 72(p), 401(a) or 4975(d)(1) of the
Code and, if the Administrator permits, for purposes of the loan term and
similar rules of the Plan.
26. Paragraph A-1.6 of Appendix A to the Plan is redesignated as paragraph
A-1.8 and the following paragraphs A-1.6 and A-1.7 are added, effective August
4, 1993 in the case of paragraph A-1.6 and December 12, 1994 in the case of
paragraph A-1.7:
A-1.6 Absences for Leave under the Family and Medical Leave Act. Solely
for purposes of determining whether an Employee is credited with a Year of
Broken Service (but only when Years of Broken Service are determined on the
basis of Hours of Service) for purposes of determining his eligibility to
participate in the Plan or his vested interest in his Accrued Benefit, if the
Employee is absent from work with the Employer for any period after August 4,
1993 for family or medical leave required to be granted under the Family and
Medical Leave Act, then the Employee shall be credited with that number of Hours
of Service which would normally have been credited to the Employee during such
absence but for such absence or, if the Employee's otherwise credited Hours of
Service cannot be readily determined, with eight (8) Hours of Service per day of
such absence, except that the total number of Hours of Service so credited shall
not exceed that number needed to avoid incurring a Year of Broken Service. Such
Hours of Service shall be credited for the applicable year(s) in which the
absence from work occurs. Notwithstanding the foregoing, no credit for Hours of
Service shall be given under this subparagraph unless the Employee complies with
the leave procedures required under the Employer's leave policies and the Family
and Medical Leave Act.
A-1.7 Qualified Military Service. Effective December 12, 1994, service
shall be granted for periods of Qualified Military Service as provided in
paragraph 4.14 of the Plan. Unless otherwise required under Section 414(u) of
the Code or USERRA, the affected Employee shall be credited with that number of
Hours of Service which would normally have been credited to the Employee during
such absence but for such absence or, if the Employee's otherwise credited Hours
of Service cannot be readily determined, with eight (8) Hours of Service per day
of such absence. Such Hours of Service shall be credited for the applicable
year(s) in which the Qualified Military Service occurs. Notwithstanding the
foregoing, no credit for Hours of Service shall be given under this subparagraph
unless the Employee complies with the any notice and restoration right
procedures required, or permitted to be required and adopted by the Employer,
under Section 414(u) of the Code or USERRA.
27. The following sentence is added at the end of subparagraph C-1.3(h) of
Appendix C to the Plan, effective January 1, 2000:
Notwithstanding anything to the contrary in this paragraph, the limitations
provision of this subparagraph shall not apply with respect to Plan Years
beginning on or after January 1, 2000.
28. Subparagraph C-1.4(c) of Appendix C to the Plan is amended to read as
follows:
C-1.4(c) "Defined Contribution Dollar Limitation": The dollar limitation
set forth in Section 415(c)(1)(A) of the Code, which as of January 1, 1995 is
$30,000, as adjusted from time to time by the Adjustment Factor as provided in
clause (i) of subparagraph 4.3(b) of the Plan
This Second Amendment is adopted by the Board of Directors of the
Benefits Corporation on this 20th day of June , 1998. Employers adopting the
Plan shall be notified of this amendment in writing, and a copy of this
amendment shall be provided to each.
VIRGINIA BANKERS ASSOCIATION
BENEFITS CORPORATION
By:/s/ Roxanne H. Sheppard (SEAL)
-----------------------------------
Its Chief Administrative Officer
VIRGINIA BANKERS ASSOCIATION
MASTER DEFINED CONTRIBUTION PLAN AND TRUST
(June, 1996)
PROFIT SHARING THRIFT PLAN
WITH EMPLOYER STOCK INVESTMENT
ADOPTION AGREEMENT
(Number 001)
If the Employer completing this document has any questions
about the adoption of the Plan, the provisions of the Plan or the effect of an
Internal Revenue Service opinion letter, he should contact Bette J. Albert,
C.L.U. at the Virginia Bankers Association Benefits Corporation, 700 East Main
Street, Suite 1411, Post Office Box 462, Richmond, Virginia 23203, telephone
number (804) 643-7469 during business hours. Failure to properly complete the
Adoption Agreement may cause the Plan to be disqualified under the Act or the
Code. If the Virginia Bankers Association and the Virginia Bankers Association
Benefits Corporation make any amendments to the Plan or decide to discontinue or
abandon their sponsorship of the Plan, each Employer that has adopted the Plan
will be informed.
Each Employer named below hereby adopts the Virginia Bankers
Association Master Defined Contribution Plan and Trust (Basic Plan Document No.
03) (the "Plan") through this Profit Sharing Thrift Plan with Employer Stock
Investment Adoption Agreement (number 001) (the "Adoption Agreement"), to be
effective as of the date(s) specified below, and elects the following
specifications and provides the following information relating thereto:
In completing this Adoption Agreement, if additional space is required insert
additional sheets.
Adoption Agreement Contents
Page
----
Option 1 Employer(s) Adopting Plan Named in Paragraph 1.23 of the Plan................................ 1
Option 2 General Plan Information..................................................................... 2
Option 3 Status of Plan and Effective Date(s)......................................................... 3
Option 4 Definitions.................................................................................. 4
Option 5 Eligibility and Participation................................................................ 6
Option 6 Retirement Dates............................................................................. 8
Option 7 Contributions and Allocations................................................................ 8
Option 8 Vesting .................................................................................... 13
Option 9 Top Heavy Rules.............................................................................. 15
Option 10 In-Service Withdrawals....................................................................... 19
Option 11 Loans ...................................................................................... 20
Option 12 Participant Investment Direction............................................................. 21
Option 13 Hours of Service............................................................................. 22
Option 14 Limitations on Benefits...................................................................... 23
Option 15 Matters Relating to Stock.................................................................... 24
Option 16 Voting Rights Pass Through................................................................... 26
1. EMPLOYER(S) ADOPTING PLAN NAMED IN PARAGRAPH 1.23 OF THE PLAN.
(a) Name of Employer: (b) Employer's telephone Number:
Resource Bank (757) 463-2265
(c) Address of Employer: (d) Employer's EIN:
54-1414459
3720 Virginia Beach Boulevard
P.O. Box 61009 ......... (e) Employer's Tax Year End:
Virginia Beach, VA 23466-1009
......... 12-31
(f) Name, Address and Identifying Information of Other
Participating Employers Adopting the Plan:
Resource Bankshares Corporation
3720 Virginia Beach Boulevard
P.O. Box 61009
Virginia Beach, VA 23466-1009
Are all of the Employers under common control adopting the Plan? [x] Yes [ ] No
(g) Service Credit with Non-Participating Controlled or Affiliated
Group Members for Benefit Accrual Purposes. Pursuant to
subparagraph 1.23(c) of the Plan, service credit for purposes
of benefit accrual under paragraphs 4.1 and 4.2 of the Plan
[Check one]:
[x] (1) Shall
[ ] (2) Shall not
be given for service with controlled or affiliated service
group members under Section 414(b), (c), (m) or (o) of the
Code who are not participating Employers.
(h) Service and Earnings Credit with Predecessors. Pursuant to
subparagraph 1.23(c) of the Plan, the following service and/or
earnings with the following predecessors to the Employer shall
be treated as service and/or earnings with the Employer [Enter
name of predecessor(s) and purpose(s) for which credit is
given -- "All" means all service and earnings are counted;
"All Earnings" means all earnings are counted; "All Service"
means all service is counted; otherwise specify one or more of
Compensation, Years of Vesting Service, Years of Benefit
Service, Years of Broken Service and/or service for other
purposes]:
Name of Purpose(s) for
Predecessor which Counted
----------- -------------
-------------- --------------
-------------- --------------
-------------- --------------
2. GENERAL PLAN INFORMATION.
(a) Name of Plan: (b) Plan Number:
Virginia Bankers Association
Master Defined Contribution Plan 001
for Resource Bank
(c) Name, Address and EIN of Plan Administrator(s): [If other
than Plan Sponsor, appointment must be by resolution]
If Option 2(d) is marked "yes", the Virginia Bankers
Association Benefits Corporation is automatically appointed as Plan
Administrator pursuant to subparagraph 13.1(a) of the Plan.
(d) Is this Plan intended to be a cash or deferred
arrangement within the meaning of Section 401(k) of the
Code? [x] Yes [ ] No
3. STATUS OF PLAN AND EFFECTIVE DATE(S)
(a) Effective Date of Plan: The Effective Date of the Plan is
January 1, 1993.
Effective Date of Cash or Deferred Arrangement. If applicable,
the Effective Date of the cash or deferred arrangement is
August 1, 1993 . [The date entered may not be prior to the
date the initial instrument adopting the arrangement was first
executed].
(b) Plan Status. The adoption of the Plan through this Adoption Agreement is:
[ ] (1) Initial Establishment. The initial adoption and establishment of the Plan.
[x] (2) Restated Plan. An amendment and restatement of the Plan (a Restated Plan).
(A) Effective Date of this Restatement. The Effective Date of this Restatement of the
Plan is July 1 , 1998.
(B) Prior Plan. The Plan was last maintained under document dated January 1, 1994
and was known as the Virginia Bankers Association Defined Contribution Plan
for Resource Bank _____________________________
-------------------------------------------
-------------------------------------------
-------------------------------------------
(C) No Increase in Benefits for Non-Employees Generally. Notwithstanding any
provision of the Plan to the contrary, the Accrued Benefit, or
non-forfeitable percentage thereof, of any person (or the beneficiary
of any person) who is not an Employee or credited with an Hour of Service on or after
the Effective Date of this Restatement of the Plan shall not be increased by virtue of
this Restatement of the Plan and benefits in pay status as of the Effective Date of this
Restatement of the Plan shall not be affected, except as follows:
[Enter any exceptions]:_______________________________
--------------------------------------------
--------------------------------------------
(D) Transitional or Special Provisions: [Enter any transitional or special provisions
relating to the Plan as restated]
(c) Adoption of Plan by Additional Employers after Effective Date of
Plan. The Effective Date(s) of the Plan with respect to_________
-----------------------------------------------------------------
[Enter name(s) of additional Employer(s) adopting Plan] is (are)
-----------------------------------------------------------------
[Enter date(s) Plan is first effective as to additional
Employer(s)].____________________________________________________
(d) Restatement of Existing Plan which Was in Existence on January 1,
1974. The Effective Date(s) of the 1976 Restatement of
the Plan with respect to_________________________________________
[Enter name(s) of Employer(s)] is (are)__________________________
[Enter the effective date as of which the Plan was first amended
to comply with the non-fiduciary provisions of the Employee
Retirement Income Security Act of 1974].
(e) Is the Plan a direct or indirect transferee of a pension plan
since the first Plan Year beginning after December 31, 1984? [ ]
Yes [x] No
===============================================================================
4. DEFINITIONS.
(a) Compensation Subject to the application of the Compensation Limit,
Paragraph 1.14 Compensation of a Participant with respect to a
Plan Year shall mean Total Compensation for the
[Check one]:
[x] (1) Calendar year ending with or within such Plan Year.
[ ] (2) Plan Year.
Provided, however, that such Compensation shall include [Check one]:
[x] (3) Compensation from the participating Employer(s) only.
[ ] (4) Compensation from all Employers (whether or not participating
Employers).
and further provided that Compensation [Check one]:
[ ] (5) Shall
[x] (6) Shall not
include remuneration paid for periods while the Participant is not an
Eligible Employee,
and further provided that Compensation [Check one]:
[ ] (7) Shall
[x] (8) Shall not
include remuneration paid for periods before the Participant became a
Participant,
and further provided that remuneration for such purposes shall exclude
[Check the desired provisions, if any]:
[ ] (9) Overtime.
[ ] (10) Bonuses.
[ ] (11) Commissions.
[ ] (12) Other extraordinary remuneration:___________________
____________________________________________________
__________________________________________[Specify].
Notwithstanding the foregoing definition of Compensation selected by the
Employer, a Participant's Compensation [Check one]
[x] (13) Shall include
[ ] (14) Shall not include
employee elective salary reduction or similar
contributions excluded from the Participant's gross
income for federal tax purposes by reason of
Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code and
employer contributions made pursuant to salary
reduction agreements under Section 403(b) of the Code.
(b) Eligible Employee Eligible Employee shall mean any Employee (other than
Paragraph 1.21 Self-Employed Employed Individual or Owner- Employee)
except [Check any applicable exclusion(s) below, if
desired]:
[ ] (1) Any such individual whose regular compensation
is computed on the basisof a stated amount for
each hour worked.
[ ] (2) ____________________________________________________
____________________________________________________
[Enter any other employee classification, or name of
employee(s), to be excluded from plan coverage].
[x] (3) Any Leased Employee or other Employee who is not a
common-law employee of the participating Employer.
(c) Normal Retirement Age Normal Retirement Age shall mean age 65 [Insert age not over 65].
Paragraph 1.35
(d) Plan Year In the case of Restated Plan which prior to the Effective
Paragraph 1.39 Date of this Restatement was maintained on the basis of a Plan
Year beginning on the date other than January 1 shall begin
on , 19 and ending on , 19 with the
short Plan Year beginning on , 19 and
ending on December 31, 19 . Thereafter, the Plan Year
shall be the 12 month period beginning each January 1.
(e) Total Compensation Total Compensation shall mean [Check One]
Paragraph 1.48
[x] (1) A Participant's earnings as reportable in the
Wages, Tips and Other Compensation Box currently
Box 10) on the IRS Form W-2 pursuant to
Sections 6041, 6051 and 6052 of the Code.
[ ] (2) A Participant's earnings which are subject to
income tax withholding under Section 3401(a)
of the Code.
[ ] (3) A Participant's Section 415 safe-harbor compensation.
5. ELIGIBILITY AND PARTICIPATION.
(a) Age Requirement The age requirement for participation is [Check one]:
Subparagraph 2.1(a)
[x] (1) None. No age requirement is imposed.
[ ] (2) Age Requirement. Age________
[Enter any age up to 21 years; and if any age over
20-1/2 is selected, Option 5(c)(1) may not be selected].
(b) Service Requirement The service requirement for participation is [Check one]:
Subparagraph 2.1(a)
[x] (1) None. No service sequirement is imposed.
[ ] (2) Year or Less. The Employee's Employment Commencement Date
must have occurred at least months [Enter
"None" or any period up to 12 months] prior to
the Entry Date on which he becomes eligible
to participate in the Plan.
[Note: The Employee need not complete any
specified number of hours of service during the
period designated above; and if more than 6
months is selected, Option 5(c)(1) may not be
selected]
[ ] (3) Year or Less - Hour of Service Standard. The
Employee must, prior to the Entry Date on which he
became eligible to participate in the Plan, have
completed one (1) Year of Eligibility
Service.
[Note: If the option is selected, Option 5(c)(1)
may not be selected]
For this purpose a Year of Eligibility Service
shall be considered completed by an Employee at
the following applicable time [Select one of the
following]:
[ ] (A) as of the last day of the applicable computation
period, regardless of whether the Employee was
credited with the requisite Hours of Service
before the end of such computation period.
[ ] (B) at any time when the Employee is credited with the
requisite Hours of Service, regardless of whether
such time occurs before the end of the
applicable computation period.
[ ] (4) Greater than Year - Hour of Service Standard.
The Employee must, prior to the Entry Date on which
he becomes eligible to participate in the Plan,
have completed 2 Years of Eligibility Service,
without any intervening Year of Broken
Service.
For this purpose or Year of Eligibility Service
shall be considered completed by an Employee as
of the last day of the applicable computation
period regardless of whether the Employee was
credited with the requisite Hours of Service before
the end of such computation period.
[Note: If this Option is selected, Option
8(a)(5) must also be selected and Option 5(c)(1)
may not be selected. If this is a cash or
deferred arrangement, this Option may not be
selected.]
[ ] (5) Greater than Year. The Employee's Employment Commencement
Date must have occurred at least months [Enter
any period from 13 months up to 24 months]
prior to the Entry Date on which he becomes
eligible to participate in the Plan.
[Note: The Employee need not complete any
specified number of hours of service during the
period designated above; and if this Option
is selected, Option 8(a)(5) must also be
selected, and Option 5(c)(1) may not be selected.
If this is a cash or deferred arrangement, this
Option may not be selected.]
(c) Entry Date The Entry Date(s) on which participation shall normally commence shall be
Subparagraph 2.2(a) [Check one]:
[ ] (1) Annual. The first day of each Plan Year.
[ ] (2) Monthly. The first day of each calendar month.
[ ] (3) Quarterly. The first day of each Plan Year and of the
fourth, seventh, and tenth month of each Plan Year.
[ ] (4) Semi-Annual. The first day of each Plan Year and the
first day of the seventh month of each Plan Year.
[x] (5) Immediate. The date the individual is an
Eligible Employee after he satisfies the age
and service eligibility requirements for
participation in the Plan.
6. RETIREMENT DATES.
(a) Early Retirement Date [Select and complete applicable provision(s)]
Paragraph 5.3
[x] (1) None.
[ ] (2) No age requirement.
[ ] (3) Age requirement of________years.
[ ] (4) No service requirement.
[ ] (5) Service requirement of_________ Years of Vesting Service.
(b) Disability Retirement Date [Select and complete applicable provision(s)]
Paragraph 5.4
[x] (1) None.
[ ] (2) No age requirement.
[ ] (3) Age requirement of________________years.
[ ] (4) No service requirement.
[ ] (5) Service requirement of____________Years of Vesting Service.
7. CONTRIBUTIONS AND ALLOCATIONS.
(a) Employer Contributions The following contributions by the Employer (other than Top Heavy
Paragraph 3.1 and Supplemental Contributions) are elected:
(1) Employer Base Contribution. Each Employer shall
make an Employer Base Contribution for each
Plan Year, subject to the limitations
provided in the Plan, in such amount, if
any, which the Employer shall determine.
[x] (A) Flexible Formula - Such amount, if any,
which the Board of Directors of the
Employer shall determine by resolution.
[ ] (B) Reported Net Operating Earnings Formula
- An amount equal to % [Insert
percentage not over 25%] of the
consolidated net income of the Employer
for the fiscal year of the Employer
ending with or within such Plan Year,
provided, however, that the amount of
such contribution shall be reduced to the
extent necessary so that consolidated
net income for such fiscal year will not
be reduced below an amount equal to %
[Insert percentage] of stockholders'
equity in the Employer at the
beginning of such fiscal year or shall
be zero if such return on stockholders'
equity is not achieved; plus any
additional amount that the Board of
Directors of the Employer shall
determine by resolution. For purposes
hereof, consolidated net income means
[Check one]:
[ ] (i) Consolidated net income as
determined under generally
accepted accounting principles
after 1982 [Check one]:
[ ](a) Including the after-tax
effect of securities
transactions.
[ ](b) Excluding the after-tax
effect of securities
transactions.
[ ](ii)______________________________
______________________________
______________________________
_________ [Insert Definition].
[ ](C) Compensation Formula - % [Insert
percentage] of the Compensation of all
Participants for such Plan Year eligible to
receive an allocation of the Employer Base
Contribution for such Plan Year, plus any
additional amount that the Board of
Directors of the Employer shall determine
by resolution.
[ ](D) Fixed Amount - $ [Insert amount], plus any
additional amount that the Board of
Directors of the Employer shall determine
by resolution.
(2) Employer Thrift Contribution. The Employer
shall make an Employer Thrift Contribution for
each Plan Year in an amount, subject to
the limitations provided in the Plan,
equal to % [insert percentage not over 15%
or "0" if no required contribution] of each
Participant's Compensation for such Plan Year,
plus any additional amount the Board of
Directors of the Employer shall determine by
resolution.
(3) Employer Matching Contributions.
(A) Amount - The Employer shall make an
Employer Matching Contribution for each
Plan Year in an amount, subject to the
limitations provided in the Plan, equal
to the sum of the following
percentage(s) of each Participant's
After-tax Matched Contributions and
Pre-tax Matched Contributions for such
Plan Year [Check one]:
[x] (i) Straight Percentage - 50% [Insert
percentage] of such contributions.
[ ] (ii)Contribution Weighted Percentages - %
[Insert percentage] of the first ____%
[Insert percentage] of his
Compensation contributed each payroll
period as such contribution(s) and____ %
[Insert percentage] of the balance of
such contributions made each payroll
period.
(B) Time for Making and Allocating
Employer Matching Contribution. The
Employer Matching Contribution [Check
one]:
[x] (i) Monthly - For a calendar month of a
Plan Year shall be made to the Plan
within a reasonable time after the end
of such month and shall be allocated to
Participants' accounts as of the last
day of such month
[ ] (ii)Quarterly - For a calendar quarter of a
Plan Year shall be made to the Plan
within a reasonable time after the end
of such quarter and shall be allocated
to Participants' accounts as of the
last day of such quarter.
[ ](iii)Annually - For a Plan Year shall be
made to the Plan at such time(s) as the
Employer shall determine and shall be
allocated to Participants' accounts as
of the last day of such Plan Year.
(C) Account to which Allocated. The Employer
Matching Contribution shall be allocated
to the: [Check one]
[x] (i) Employer Active Account.
[ ] (ii)Employer Non-forfeitable Account.
[ ](iii)Employer Thrift Account.
(b) Allocation of Employer The Employer and Base Contribution forfeitures shall
Subparagraph 4.2(a) be allocated on the Base Contribution basis of the following rules:
(1) Covered Participants Entitled to a Share of
the Employer Base Contribution and Forfeitures.
If the Employer has elected to make Employer
Base Contributions in Option 7(a), each
Covered Participant shall be eligible to
receive an allocation of the Employer Base
Contribution and forfeitures with respect to
each Plan Year. A Participant shall be a
Covered Participant for the Plan Year [Check
any one or more]:
[x] (A) If he is credited with a Year of Benefit
Service for such Plan Year.
[ ] (B) If he is an Eligible Employee at any
time during such Plan Year.
[x] (C) If he is an Eligible Employee on the last
day of such Plan Year.
[ ] (D) If he has not reached his Normal
Retirement Date before the beginning of such
Plan Year and the allocation is made for a
Plan Year beginning before January 1, 1988.
[x] (E) If he died while an Eligible Employee or
retired on his Disability, Early, Normal or
Delayed Retirement Date while an Eligible
Employee during such Plan Year [Check one]:
[ ] (i) But only if he is credited with Year of
Benefit Service for such Plan Year.
[ ] (ii) But only if he was credited with Hours
of Service during the portion of such
Plan Year he was an Eligible Employee
at a rate which would have caused him
to be credited with a Year of Benefit
Service for such Plan Year had he been
so employed for the whole Plan Year.
[x](iii) Regardless of whether he was credited
with a Year of Benefit Service for such
Plan Year.
(2) Allocation Formula for Employer Base
Contributions. The Employer Base Contribution
to the Plan and forfeitures for each Plan
Year shall, subject to the limitations
provided in the Plan, be allocated under
subparagraph 4.2(a) of the Plan as of the
last day of such Plan Year to the Employer
Active Account of Covered Participants for
such Plan Year [Check one]:
[x] (A) Matching Formula - In proportion to the
sum of their After- tax Matched
Contributions and Pre-tax Matched
Contributions for such Plan Year.
[ ] (B) Matching Compensation Formula - In
proportion to the sum of the
Compensation with respect to which they
made After-tax Matched Contributions and/or
Pre-tax Matched Contributions for such
Plan Year.
[ ] (C) Compensation Formula - In proportion to
their Compensation for such Plan Year
If Option 7(b)(2)(A) or (B) is selected, the
Employer Base Contribution must be treated as
"matching contribution" for purposes of the Top
Heavy Contribution requirement of subparagraph
3.1(d) of the Plan and for purposes of the
after-tax and matching contributions tests under
paragraph 4.10 and 4.11 of the Plan.
(c) Employee Contributions Employee contributions are permitted as follows
Paragraphs 3.3, 3.5 [Select none or any one or more of the following]:
[ ] (1) None. Employee contributions are not permitted.
[ ] (2) After-tax Matched Contributions. After-tax
Matched Contributions are permitted by
payroll deduction in any [ ] whole dollar
amount or [ ] whole percentage chosen by
the Participant not to exceed % [Enter
percentage] of his Compensation for such
payroll period.
[ ] (3) After-tax Unmatched Contributions.
After-tax Unmatched Contributions are
permitted [Check one or both]:
[ ] (A) By lump sum deposit.
[ ] (B) By payroll deduction in any [ ]
whole dollar amount or [ ] whole
percentage chosen by the Participant
not to exceed % [Enter amount]
of his Compensation from the
Employer for such payroll period.
[x] (4) Pre-tax Matched Contributions. Pre-tax
Matched Contributions are permitted by
payroll deduction in any [ ] whole dollar
amount or [x] whole percentage chosen by
the Participant not to exceed 6 % [Enter
percentage] of his Compensation for such
payroll period.
[x] (5) Pre-tax Unmatched Contributions. Pre-tax
Unmatched Contributions are permitted by
payroll deduction in [ ] any whole dollar
amount or [x] whole percentage
chosen by the Participant not to exceed 9 %
[Enter percentage] of his
Compensation in such payroll
period.
[x] (6) Rollover Contributions. Rollover
Contributions (other than "accumulated
deductible employee contributions" within
the remaining of Section 72(o)(5)(B) of the
Code in the case of a Plan which has
never permitted Voluntary Deductible
Contributions) are permitted.
[x] (7) Payroll Deduction Modifications. Payroll
deduction contributions may be terminated,
changed or recommenced [Check one if any of
the provisions of this Option 7(c)
permitting payroll deduction contributions
is checked]:
[ ] (A) On the first day of each payroll
period.
[ ] (B) Monthly on the first day of any
month.
[x] (C) Quarterly on the first day of any
quarter of a Plan Year.
[ ] (D) Annually on the first day of any
Plan Year.
8. VESTING.
(a) Post-1988 Regular Vesting The following "post-1988 regular vesting schedule" shall
Schedule apply to the Employer Active Account of [Check one] [ ] all
Subparagraph 6.3(a) Participants effective commencing at the beginning of the
first Plan Year beginning after December 31, 1988 or[ ]
any Participant who is credited with an Hour of
Service in a Plan Year beginning after December 31, 1988
[Check one, and complete where applicable]:
[ ] (1) 100% after 5 years of Vesting Service.
[ ] (2) 20% after 3 Years of Vesting Service and
increased by 20% for each of the next 4 Years of
Vesting Service.
[x] (3) 33-1/3 % for each of the first 1 Years of Vesting
Service, increased by 33-1/3% for each of
the next 2 Years of Vesting Service, and
increased by ___% for each of the next
Years of Vesting Service.
[Must be at least as favorable after each Year as
Option 8(a) (1) or (2) above]
[ ] (4) _____ % after_______ Year(s) of Vesting Service,
increased by ______% for each of the next ____Years
of of Vesting Service.
[Must be at least as favorable after Year as
Option 8 (a)(1) or (2) above]
[ ] (5) A Participant shall always have a
non-forfeitable right to one hundred percent
(100%) of his Accrued Benefit.
[This option must be selected in Option 5(b)(4) or
(5) is selected]
(b) Pre-1988 Regular Vesting The following "pre-1989 regular vesting schedule" shall
Schedule apply to the Employer Active Account of all Participants
Subparagraph 6.3(a) effective until the first Year beginning Plan after
December 31, 1998 and thereafter shall apply to the
Employer Active Account of any Participant who is not
credited with an Hour of Service in a N/A Plan Year
beginning after December 31, 1988 unless Option 8(a)
provides that the post-1988 regular vesting schedule will
apply to the Employer Active Account of all
Participants (including those not credited with an Hour of
Service in a Plan Year beginning after December 31,
1988). [Check one, and complete where applicable]:
[ ] (1) 100% after 10 Years of Vesting Service.
[ ] (2) 25% after 5 Years of Vesting Service and
increased by 5% for each of the next 5 Years of
Vesting Service and further increased by 10% for
each of the next 5 Years of Vesting Service.
[ ] (3) % for each of the first Years of Vesting
Service, increased by % for each of the next Years
of Vesting Service, and increased by % for each
of the next Years of Vesting Service.
[Must be at least as favorable after each Year as
Option 8(b)(1) or (2) above]
[ ] (4) ______% after _____Year(s) of Vesting Service,
increased by % for each of the next ______ Years of
Vesting Service.
[Must be at least as favorable after each Year as
Option 8(b)(1) or (2) above]
[ ] (5) A Participant shall always have a
non-forfeitable right to one hundred percent
(100%) of his Accrued Benefit.
(c) Years of Vesting Service The following Years of Vesting Service shall be disregarded
Disregarded for Regular for purposes of the regular vesting schedule of the Plan.
Vesting Schedule [Check any of the following, if desired]:
Paragraph 6.5
[ ] (1) Years Prior to Age 18. Any Year of Vesting Service
of an Employee completed before the Employee has
reached age eighteen (18) in all other cases
shall be disregarded.
[ ] (2) Years Required after Break in Service. Any Year of
Vesting Service of an Employee prior to One Year
of his Broken Service shall be disregarded until
he has completed a Year of Vesting Service during
a Plan Year following his Year of Broken Service.
[ ] (3) Rule of Parity. Any Year of Vesting Service of an
Employee prior to one Year of his Broken Service
shall be disregarded unless such Employee either:
(A) possesses a non-forfeitable right to benefits
under the Plan derived from the Employer's
contributions or
(B) has consecutive Year(s) of Broken Service which are
less than the greater of (i) for application of
this subparagraph in Plan Years commencing after
December 31, 1984, five (5) or (ii) the number of
his aggregate Year(s) of Vesting Service before the
commencement of such Year(s) of Broken Service.
For purposes of this Option, an Employee's aggregate Years
of Vesting Service shall not include Years of Vesting
Service which are at any time excluded by the
application of the provisions of this option.
[ ] (4) Years Prior to Plan Establishment. Any Year of Vesting
Service with the Employer for which the Employer did not
maintain the Plan or a predecessor plan within the
meaning of Section 411(a)(4)(C) of the Code shall be
disregarded.
[ ] (5) Year Prior to 1971. Any year of Vesting Service before
January 1, 1971 shall be disregarded unless the
Participant has at least three (3) Plan Years of Service
after December 31, 1970.
9. TOP HEAVY RULES. If the Plan is or becomes a Top Heavy Plan, the provisions of the Plan
and the Adoption Agreement containing top heavy rules required
by Section 416 of the Code shall supersede any conflicting
provisions of the Plan or the Adoption Agreement.
(a) Top Heavy Compensation Subject to the application of the Compensation Limit, Top
Subparagraph 3.1(d) Heavy Compensation of a Participant with respect to a Plan
Year shall mean Total Compensation for the [Check one]:
[x] (1) Calendar year ending with or within such Plan Year
[ ] (2) Plan Year
which are subject to tax under Section 310(a) of the Code
without the dollar limitation of Section 3121(a) of the
Code.
Notwithstanding the foregoing definition of Compensation
selected by the Employer, a Participant's Compensation [Check
one]
[x] (3) Shall include
[ ] (4) Shall not include
employee elective salary reduction or similar contributions
excluded from the Participant's gross income for federal tax
purposes by reason of Sections 125, 402(a)(8) and 402(h)(1)(B)
of the Code and employer contributions made pursuant to salary
reduction agreements under Section 403(b) of the Code.
(b) Top Heavy Vesting The following "top heaving vesting schedule" shall apply
Schedule whenever the Plan is a Top Heavy Plan [Check one, complete
Subparagraph 6.3(b) where applicable]:
[ ] (1) 100% after___________ (not to exceed 3) Years of
Vesting Service.
[ ] (2) 20% after 2 Years of Vesting Service, increased 20%
for each of the next 4 Years of Vesting Service.
[x] (3) 33-1/3% after 1 Year(s) of Vesting Service
66-2/3% after 2 Years of Vesting Service
100% after 3 Years of Vesting Service
_________% after_______________Years of Vesting Service
_________% after_______________Years of Vesting Service
_________% after_______________Years of Vesting Service
[Must be at least as favorable after each Year as
Option 9(b)(1) or (2) above]
(c) Years Disregarded for The following Years of Vesting Service shall be disregarded for purposes
Purposes of Top Heavy of the top heavy vesting schedule [Check any of the following, if desired]:
Vesting Schedule
Paragraph 6.5
[ ] (1) Apply Regular Rules. All Years of Vesting Service
regarded under Option 8(c) above shall be
disregarded.
[ ] (2) Years Prior to Age 18. Any Year of Vesting Service of
an Employee completed before the Employee has reached
age eighteen (18) in all other cases shall be disregarded.
[ ] (3) Year Required After Break in Service. Any
Year of Vesting Service of an Employee prior to one
Year of his Broken Service shall be disregarded
until he has completed a Year of Vesting Service
during a Plan Year following his Year of Broken
Service.
[ ] (4) Rule of Parity. Any Year of Vesting Service of an
Employee prior to one Year of his broken Service
shall be disregarded unless such Employee either:
(A) possesses a non-forfeitable right to benefits under
the Plan derived from the Employer's contributions
or
(B) has consecutive Year(s) of Broken Service which are
less than the greater of (I) for application of this
subparagraph in Plan Years commencing after December
31, 1984, five (5) or (ii) the number of his
aggregate Year(s) of Vesting Service before the
commencement of such Year(s) of Broken Service).
For purposes of this option, an Employee's aggregate
Years of Vesting Service shall not include Years
of Vesting Service which are at any time excluded by
the application of this provisions of this option.
[ ] (5) Years Prior to Plan Establishment. Any Year of Vesting
Service with the Employer for which the Employer did
not maintain the Plan or a predecessor plan within
the meaning of Section 411(a)(4)(c) of the Code shall
be disregarded.
[ ] (6) Years Prior to 1971. Any Year of Vesting Service
before January 1, 1971 shall be disregarded unless
the Participant has at least three (3) Years of
Vesting Service after December 31, 1970.
(d) Top Heavy Contribution The Employer shall make an Employer Top Heavy Contribution
Subparagraph 3.1(d) for each Plan Year the Plan is a Top Heavy Plan in an amount,
subject to the limitations provided in the Plan, determined
as follows [Check the applicable choice and complete
where applicable]:
[x] (1) Minimum Allocation Percentage. Any required allocation under
this Plan shall be [Check one]
[ ] (A) Specified Rate. At the rate of_______% [Insert
percentage not under 3%]
[x] (B) Determined per Plan. Determined pursuant to the
applicable rules in clauses (i), (ii) and (iii)
of subparagraph 3.1(d) of the Plan.
[x] (2) Plan under which Top Heavy Contribution or Benefit to Be
Provided Check one]:
[x] (A) No Other Plan. Since the Employer maintains no
other qualified plan, any applicable Employer
Top Heavy Contribution described in subparagraph
3.1(d) of the Plan shall be provided by
this Plan.
[ ] (B) Contribution under this Plan Where Other Plan
Maintained. The Employer maintains another
qualified plan or plans which is (are)
[Check applicable one(s)] a [ ] defined
contribution plan and/or [ ] defined benefit plan,
and the Employer elects that any applicable
Employer Top Heavy Contribution described in
subparagraph 3.1(d) of this Plan shall be
provided to Participants in this Plan by
this Plan.
[ ] (C) Contribution or Benefit Under Other Plan for
Participants in this Plan and Other Plan, and
Contribution under this Plan for Participants
Only in this Plan. The Employer maintains
another qualified plan or plans which is (are)
[Check applicable one(s)] a [ ] defined
contribution plan and/or [ ] defined benefit
plan, and the Employer elects that contributions
required under Section 416 of the Code be provided
under such other plan(s) for Employees who are
both Participants in this Plan and
participants in such other plan(s) and that
any applicable Employer Top Heavy Plan shall
be provided by this Plan to Employees who are
Participants of this Plan only.
[ ] (D) Alternate or Additional Provisions [Insert desired
provision]:_________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
(e) Present Value Factors for The interest and mortality factors shall be:
Top Heavy Plan Status
Appendix B (1) Interest Rate: 7 1/2% [Insert percentage].
(2) Mortality Table: The Unisex Pension 1984 Table.
10. IN-SERVICE WITHDRAWALS.
(a) After-tax Account, [Select one or both, if desired]
Voluntary Deductible
Account and/or [ ] (1) Non-hardship. Non-hardship withdrawals are permitted under
Rollover Account paragraph 9.1 of the Plan from the [Check one(s) desired]:
Paragraphs 9.1, 9.5
[ ] (A) After-tax Unmatched Account.
[ ] (B) After-tax Matched Account.
[ ] (C) Voluntary Deductible Account.
[ ] (D) Rollover Account.
[x] (2) Hardship. Hardship withdrawals are permitted under
paragraph 9.5 of the Plan from the [Check one(s)
desired]:
[ ] (A) After-tax Unmatched Account.
[ ] (B) After-tax Matched Account.
[ ] (C) Voluntary Deductible Account.
[x] (D) Rollover Account
(b) Pre-tax Account and/or [Select one or both, if desired]
Employer Thrift Account
Paragraphs 9.2, 9.6 [ ] (1) Non-hardship. Non-hardship withdrawals are permitted under
paragraph 9.2 of the Plan by Participants from the
[Check one(s) desired]:
[ ] (A) Pre-tax Unmatched Account.
[ ] (B) Pre-tax Matched Account.
[ ] (C) Employer Thrift Account.
[x] (2) Severe Hardship. Severe Hardship withdrawals are
permitted under paragraph 9.6 of the Plan by
Participants from the [Check one(s) desired]:
[x] (A) Pre-tax Unmatched Account.
[x] (B) Pre-tax Matched Account.
[ ] (C) Employer Thrift Account.
(c) Employer Account [Select one or both, if desired]
Paragraphs 9.4, 9.5
[ ] (1) Non-Hardship. Non-hardship withdrawals are permitted under
paragraph 9.4 of the Plan by [Check one or more]:
[ ] (A) Participants who have reached age fifty-nine and
one-half (59-1/2) from the [Check one(s) desired]:
[ ] (i) Employer Active Account.
[ ] (ii) Employer Non-forfeitable Account.
[ ] (B) Participants who have 60 or more months of
participation from the [Check one(s) desired]:
[ ] (i) Employer Active Account.
[ ](ii) Employer Non-forfeitable Account.
[ ] (C) Participants who either have reached age
fifty-nine and one-half (59-1/2) or have 60 or
more months of participation from the [Check
one(s) desired]:
[ ] (i) Employer Active Account.
[ ](ii) Employer Non-forfeitable Account.
[ ] (2) Hardship. Hardship withdrawals are permitted under
paragraph 9.5 of the Plan from the [Check one(s)
desired]:
[ ] (i) Employer Active Account.
[ ](ii) Employer Non-forfeitable Account.
11. LOANS.
(a) Availability A Participant [Check one]:
Paragraph 9.10
[ ] (1) Permitted. May borrow from the Plan in accordance
with the terms of the Employer's Loan Policy.
[If this Option is selected the Employer must
complete and attach to this Adoption Agreement an
Employer's Loan Policy describing the terms and
conditions on which loans will be made.]
[x] (2) Not Permitted. May not borrow from the Plan.
12. PARTICIPANT INVESTMENT DIRECTION.
Paragraph 12.2
(a) Availability Generally A Participant [Check one]:
[ ] (1) Not Permitted. May not make investment directions.
[x] (2) Permitted. May make investment directions for
the following accounts (the "directable account")
[Check one or more]:
[x] (A) Employer Account.
[ ] (B) Employer Thrift Account.
[x] (C) Pre-tax Account
[ ] (D) After-tax Account.
[x] (E) Rollover Account
[ ] (F) Voluntary Deductible Account.
(b) Available Investment Participants may make investment directions among the following
Funds investment funds (the "available investment funds")
to the extent permitted [Check one or more if Option 12(a)(2) is
selected and complete percentage limitation, if desired. If no
percentage is indicated, no limitation applies]:
[x] (1) Current Income Fund.
[x] (2) Capital Preservation Fund.
[x] (3) Moderate Growth Fund.
[x] (4) Wealth Building Fund.
[x] (5) Aggressive Appreciation Fund.
[x] (6) Employer Stock Fund - investment shall be limited to
90% of account balance.
[ ] (7) Such other investment funds as the Administrator may
from time to time permit (a written description of
which must be attached to this Adoption Agreement.)
(c) Investment Direction Participants may make investment directions in the following
Increments Increments [Check one if Option 12(a)(2) is selected]:
[x] (1) In the regular 5% increments provided in the Plan.
[ ] (2) In ___% [Insert percentage of less than 5%] increments
[ ] (3) In increments of the lesser of 5% or such percentage as
the Administrator shall from time to time authorize.
(d) Frequency and Participants may make their investment directions as of
Effective Date of [Check one if Option 12(a)(2) is selected]:
Investment Directions
[ ] (1) Annually effective as of the first day of each Plan Year,
[ ] (2) Periodically effective as of the beginning of each
Valuation Period,
[x] (3) Quarterly effective as of the first day of each
quarter of the Plan Year,
[ ] (4) [Insert time(s)],
and (if any of the above options are selected) at such other
date(s) as the Administrator may from time to time
authorize.
(e) Default Investment As provided in subparagraph 12.2(d) of the Plan, where no
Fund Participant investment direction is in force, a Participant's
accounts shall be invested in the following default investment
fund, provided that any initial designation here may be
changed from time to time by the Employer [Check one if
Option 12(a)(2) is selected]:
[x] (1) Current Income Fund.
[ ] (2) [Describe]
[ ] (3) Such investment fund as the Employer may from time to
time designate (a written description of which must
be attached to this Adoption Agreement).
Hours of Service for purposes of the Plan shall be credited
13. HOURS OF SERVICE. in accordance with one of the alternative methods stated below
Appendix A [Check one]:
[x] (a) Actual Hours Counted. An Employee shall be credited
with Hours of Service for those actual Hours of Service
credited under Appendix A of the Plan.
[ ] (b) Ten Hour Per Day Equivalency. An Employee shall be
credited with ten (10) Hours of Service for any day he
would be credited with at least one (1) actual Hour of
Service.
[ ] (c) Forty-five Hour Per Week Equivalency. An
Employee shall be credited with at least
forty-five (45) Hours of Service for any week he
would be credited with at least one (1) actual
Hour of Service.
[ ] (d) Ninety-five Hour Per Semi-monthly Payroll Equivalency.
An Employee shall be credited with ninety-five
(95) Hours of Service for any semi-monthly payroll
period he would be credited with at least one
(1) actual Hour or Service.
[ ] (e) One Hundred Ninety Hour Per Month Equivalency. An
Employee shall be credited with one hundred ninety
(190) Hours of Service for any month he would be
credited with at east one (1) actual Hour of Service.
14. LIMITATION OF BENEFITS. [Check the applicable box(es) and/or add limitations
Under Section 415 of the Code. language as desired.] .
Paragraphs 4.3 and 4.4
Appendix C NOTE: Failure to complete this Option 14
may adversely effect qualification of the
plan(s) maintained by an Employer.
[x] (a) No Other Plan Employer maintains no other qualified plan in addition to this
Plan in which event paragraph 4.3 of this Plan and paragraph
C-1.2 of Appendix C shall apply.
[ ] (b) Coordinate with Other Defined The Employer maintains, in addition to this Plan, one or more
Contribution Plan (Other than a plans which are qualified defined contribution plans, welfare
Master or Prototype Plan) benefit funds (as defined in Section 419(a) of the Code) or
individual medical accounts, (as defined in Section 415(l)(2) of
the Code) (other than Master or Prototype Plans) in which
event paragraph 4.4 of this Plan and subparagraph C-1.3
of Appendix C shall apply. In which event [Check (1), (2),
or (3) and (4) if desired]:
[ ] (1) Subparagraph C-1.3(g) of Appendix C shall apply
[ ] (2) Reduce Contribution under this Plan. Annual Additions
under this Plan shall be reduced before Annual
Additions under such other Plans and funds so that the
Maximum Permissible Account is not exceeded.
[ ] (3) Reduce Contribution under other Plan. Annual Additions
under such other plans and funds shall be reduced before
Annual Additions under this Plan so that the Maximum
Permissible Amount is not exceeded.
[ ] (4) Subject to subparagraph C-1.3(g), Option 14(b)(2) or (3)
above shall apply, but Annual Additions under welfare
benefit plans shall be reduced last.
[ ] (c) Coordinate with which The Employer maintains, in addition to this Plan, one or more
Defined Benefit Plan plans in are qualified benefit plans in which event paragraph
of this Plan shall apply. In such event the Defined
Contribution Plan Fraction shall not exceed one (1) and
[Check one of the following]
[ ] (1) Reduce Annual Additions Before Annual Benefits.
Annual Additions under all qualified defined
contribution plans and welfare benefit funds
maintained by the Employer shall be reduced before
Annual Benefits are reduced so that the sum of the
Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction will not exceed one (1) as provided in
subparagraph C-1.3(f) of Appendix C.
[ ] (2) Reduce Annual Benefits Before Annual Additions. Annual
Benefits payable under all qualified defined benefit
plans maintained by the Employer shall be reduced
before Annual Additions are reduced so that the sum of
the Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed one (1) as
provided in subparagraph C-1.3(f) of Appendix C.
[ ] (d) Alternate Provision Annual Additions and Annual Benefits of a Participant shall
be limited as follows [Insert provisions as desired]:
-------------------------------------------
-------------------------------------------
-------------------------------------------
(e) Limitation Year The Limitation Year is the following 12-consecutive month period:
[ ] (1) The calendar year.
[ ] (2) The Plan Year.
[ ] (3) The year beginning on__________________[Insert month and day].
15. MATTERS RELATING TO STOCK.
(a) Custodian The Custodian of the Employer Stock Fund shall be:
Paragraph 17.1(a) Resource Bank
(b) Named Fiduciary with The Named Fiduciary with respect to Stock shall be:
Respect to Stock
Paragraph 17.1(b) Board of Directors - Resource Bank
-----------------------------------
(c) Stock Stock shall mean the following described stock [Complete]:
Paragraph 17.1(c)
Description: Common Stock of Resource Bank
Bankshares Corporation
-------------------------------------------
[Insert description of Stock, including class, issuer, etc.].
(d) Employer Investment Notwithstanding the Participant investment direction provisions of
Direction paragraph 12.2, the Employer requires that the following account
Paragraph 17.2 balances under the Plan be invested in the Employer Stock Fund
to the extent set described below:
[x] (1) No Investment Requirement. The Employer imposes no Stock investment
requirement.
[ ] (2) Employer Stock Investment Required. The Employer
requires that the following percentage of each of the
following accounts be and remain invested in the
Employer Stock Fund [Check and complete only for
accounts desired]:
[ ](A) ______% of the Employer Account.
[ ](B) ______% of the Employer Thrift Account.
[ ](C) ______% of the Pre-Tax Account.
[ ](D) ______% of the After-Tax Account.
If this is a Restated Plan, this investment direction
applies to contributions allocated to the account after
the Effective Date of the Restatement of the Plan in
the form of this Adoption Agreement.
(e) Form of Payment The non-forfeitable Accrued Benefits of Participants
Paragraph 17.6 invested in the Employer Fund at the time of distribution shall
be distributed in the following manner:
[ ] (1) Account balances invested in the Employer Stock Fund
shall be distributed in cash.
[ ] (2) Account balances invested in the Employer Stock Fund
shall be distributed in whole shares of Stock and
cash in lieu of fractional shares. [This option may
not be selected, if under any circumstances, more
than 90% of the Participant's Accrued Benefit in the
Fund may be invested in the Employer Stock Fund.]
[ ] (3) Account balances invested in the Employer Stock
Fund shall be distributed in cash and Stock in
proportion to the cash and Stock considered pursuant
to subparagraph 17.5(c) to be allocated to the
Participant's account in t he Employer Stock Fund.
[This option may not be selected if, under any
circumstances, more than 90% of the Participant's
Accrued Benefit in the Fund may be invested in the
Employer Stock Fund.]
[x] (4) The Participant may elect to receive his non-forfeitable
Accrued Benefit invested in the Employer Stock Fund
at the time of distribution under any one of the
methods described above.
(f) Composition of Employer The Named Fiduciary with Respect to Stock shall establish a cash
of Stock Fund reserve as a part of the Employer Stock Fund. Generally, however,
Paragraph 17.8 the assets of the Employer Stock Fund invested in Stock are expected
to remain in the following range:
Range of Stock Investment: 50 % to 100 %.
The Named Fiduciary with Respect to Stock may change the
percentage of the total assets of the Employer Stock Fund
invested in Stock from time to time.
(g) Special Grandfathered In the case of a Restated Plan which allowed investment in
and Transitional Rules employer securities prior to its restatement, certain
for Restated Plans provisions may need to be grandfathered in order to preserve
Paragraphs 17.8 the benefits required under Sections 411(a)(10) or (d)(6) of
the Code. Such special grandfathered provisions and any
applicable transitional rules should be described below.
[Attach a separate sheet if necessary.]
16. VOTING RIGHTS PASS THROUGH Voting rights with respect to Stock which is allocated to the
Paragraph 17.11 accounts of Participants shall be passed through under paragraph
17.11 as follows [Check one of (a) through (c) and (d) if
desired]:
[ ] (a) No Voting Rights No voting rights shall be passed through as provided in clause
Pass-through (I) ofsubparagraph 17.11(a) of Plan.
Clause (i)
Subparagraph 17.11(a)
[x] (b) Pass-through for Voting rights shall be passed through for all matters subject to a vote
All Matters provided in clause (ii) of subparagraph 17.11(a) of the Plan.
Clause (ii) of
Subparagraph 17.11(a)
[ ] (c) Pass-through on Voting rights shall be passed through only on major corporate transactions
Major Corporate as provided in clause (iii) of subparagraph 17.11(a) of the Plan.
Transactions
Clause (iii) of
Subparagraph 17.11(a)
[ ] (d) Pass-through As permitted in clause (ii) subparagraph 17.11(b) of the Plan, voting
of Voting on Tender rights on "tender offers" are required to be passed through to Participants.
Offers
Clause ii) of
Subparagraph 17.11(b)
The Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the Plan is
qualified under Section 401 of the Code. In order to obtain reliance with
respect to plan qualification, the Employer must apply to the appropriate key
district office of the Internal Revenue Service for a determination letter. This
Adoption Agreement may be used only in conjunction with the Virginia Bankers
Association basic plan document number 03.
IN WITNESS WHEREOF, each Employer, by its duly authorized
representatives, has executed this instrument this day of _______, 1998.
Resource Bank
------------------------------
[Enter Name of Employer]
By /s/ Lawrence N. Smith
-----------------------------
Its President
[SEAL]
ATTEST:
/s/
- -----------------------------
Its
Resource Bankshares Corporation
------------------- [Enter Name of Employer]
By /s/ Lawrence N. Smith
------------------------------
Its President
[SEAL]
ATTEST:
/s/
- ------------------------------
Its
[Enter Name of Employer]
By
Its
[SEAL]
ATTEST:
- -----------------------
Its
[Enter Name of Employer]
By
Its
[SEAL]
ATTEST:
- -----------------------
Its
[Enter Name of Employer]
By
Its
[SEAL]
ATTEST:
- -----------------------
Its
By execution hereof by their duly authorized Administrative
Trustee, the Trustees of the Virginia Bankers Association Master Defined
Contribution Plan and Trust hereby accept the Trust created herein according to
the terms and conditions of the Plan.
Dated: 6/28/98 /s/ Bette J. Albert
----------------------
Administrative Trustee
Allocation of Duties of Named Fiduciaries and
Appointment Acknowledgment Agreement
Investment in Employer Securities
under the
Virginia Bankers Association
Master Defined Contribution Plan and Trust
THIS AGREEMENT, made as of the 6th day of October, 1995, and effective
October 1, 1995, by and between Bette J. Albert, Administrative Trustee, for the
trustees (the "Trustees") of the VIRGINIA BANKERS ASSOCIATION MASTER DEFINED
CONTRIBUTION PLAN AND TRUST for Resource Bank (the "Plan"), and Resource Bank
(herein the "Employer). and Board of Directors - Resource Bank (herein the
"Named Fiduciary with respect to Stock");
W I T N E S S E T H :
WHEREAS, the Employer desires to direct the investment of all or a
portion of the Fund attributable to the Plan into stock or securities issued by
the Employer, or alternatively, to permit Participants in the Plan to direct the
investment of accounts permitted by the Employer into such investments through
the Profit Sharing Thrift Plan with Employer Stock Investment Adoption Agreement
(006); and
WHEREAS, the Trustees are willing to establish a division of the Fund to
be invested in the stock or securities issued by the Employer on the condition
that the Employer indemnify the Trustees for any violations of the fiduciary
duties imposed under ERISA as a result of such investment (which indemnification
shall be pursuant to a separate written agreement);
WHEREAS, the Employer must appoint a Named Fiduciary with respect to
Stock in order to maintain the Plan through the Profit Sharing Thrift Plan with
Employer Stock Investment Adoption Agreement (006);
WHEREAS, the Trustees have delivered a copy of the Plan to the Named
Fiduciary with respect to Stock;
WHEREAS, the Named Fiduciary with respect to Stock acknowledges herein
its status as a fiduciary with respect to the Plan.
NOW, THEREFORE, it is agreed between the Trustees, the Employer and the
Named Fiduciary with respect to Stock as follows:
Section 1. In accordance with the provisions of paragraph 11.4 of the
Plan, fiduciary duties and responsibilities under the Plan are hereby allocated
and delegated to the Named Fiduciary with respect to Stock to the extent those
duties and responsibilities are described in Article XVII of the Plan.
Section 2. In accordance with and subject to the terms hereof, the Named
Fiduciary with respect to Stock (subject to the parameters provided under the
Plan regarding the composition of the Employer Stock Fund) shall have the
exclusive power to manage (including the power to direct the acquisition and
disposition for investment purposes of) any and all assets of the Plan
comprising the Employer Stock Fund (as described in the Plan) which are
delivered to the Custodian by the Trustees pursuant to the Custodial Agreement
(including any such assets which are hereafter from time to time placed under
its management in accordance with the terms hereof). The Trustees shall promptly
give the Named Fiduciary with respect to Stock notice of each and any such
delivery of assets of the Plan to the Custodian.
Section 3. In its management of such assets, the Named Fiduciary with
respect to Stock shall have all investment and asset management powers, duties
and responsibilities of the Trustees as contained in the Plan, limited as
provided therein and as applicable to the said Employer Stock Fund, including
the power to vote securities (subject to the provisions of the Plan relating to
pass-through of such rights to Participants), but excluding the power to hold
the assets of the Plan, which assets are held by the Custodian. The Named
Fiduciary with respect to Stock shall exercise its powers regarding the
management of such assets by directing the Custodian in writing or in the manner
the Named Fiduciary with respect to Stock and the Custodian may otherwise
mutually agree as to the investment and reinvestment of such assets pursuant to
the Custodial Agreement.
Section 4. The Named Fiduciary with respect to Stock covenants and
agrees that it shall defend and hold the Trustees and the Custodian, including
the present and former employees, officers and directors of each of them,
harmless from and indemnify the Trustees and the Custodian against any and all
liability, loss, damage or expense (including attorney's fees) which either of
them may incur or suffer under ERISA or other applicable laws resulting from,
arising out of, relating to or in connection with the breach by the Named
Fiduciary with respect to Stock of the terms of this Agreement or any
representations or warranties of the Named Fiduciary with respect to Stock
contained herein.
Section 5. This Agreement may from time to time be amended by the
parties hereto as they may mutually agree, provided any such amendment shall be
in writing and signed by the parties hereto. The Trustees (either on their own
initiative or at the direction of the Employer) may terminate this Agreement at
any time effective upon receipt by the Named Fiduciary with respect to Stock of
written notice or such later date as may be specified in the notice. The Named
Fiduciary with respect to Stock may terminate this Agreement by notifying the
Trustees and the Employer in writing at least sixty (60) days in advance of the
effective date of termination, unless an earlier or later date is agreed upon.
Any written notice shall specify a business day. Upon the termination of this
Agreement, and from time to time as agreed upon by the parties hereto, the Named
Fiduciary with respect to Stock shall render to the Trustees an accounting of
all investments and other transactions with respect to the assets placed under
its management hereunder.
Section 6. Unless otherwise prohibited by the prohibited transaction
provisions of the Code and ERISA for its services hereunder, the Named Fiduciary
with respect to Stock shall be entitled to such reasonable compensation and
charges as shall from time to time be agreed upon in writing by the Trustees
(with the knowledge and consent of the Employer) and the Named Fiduciary with
respect to Stock. Any such compensation and charges shall be billed to the
Trustees but may be deemed a charge upon the assets of the Plan if directed by
the Trustees or Employer. Any such compensation and charges which are not paid
within sixty (60) days of the date billed may be collected from the assets of
the Plan held by the Custodian.
Section 7. The Named Fiduciary with respect to Stock hereby recognizes
and acknowledges its status as a "fiduciary" as defined in Section 3(21) of
ERISA with respect to the Plan and that it has complete and sole discretionary
authority regarding the management of any or all of the assets of the Plan which
are placed under its management by the Trustees and held by it in accordance
with the terms hereof.
Section 8. Nothing contained herein or in any other document or
communication between the parties shall be deemed to give the Trustees
investment control over the management of or responsibility for the assets
placed under the management of the Named Fiduciary with respect to Stock
hereunder during the term of this Agreement.
Section 9. This Agreement shall be governed, construed, regulated and
administered under the laws of the Commonwealth of Virginia to the extent not
otherwise required by federal law.
Section 10. The term "Trustees" and the terms "party hereto" or "parties
hereto" as they relate to the Trustees shall include all successors to the
Trustees from time to time appointed by the Association or otherwise holding
office pursuant to the Plan.
Section 11. Neither the rights nor the obligations of the Trustees or
the Named Fiduciary with respect to Stock hereunder may be assigned or delegated
without the consent of the other and of the Employer; provided, however, that
unless the Named Fiduciary with respect to Stock is otherwise directed in
writing by the Virginia Bankers Association Benefits Corporation as sponsor of
the Plan (the "Benefits Corporation"), the Named Fiduciary with respect to Stock
shall accept any direction or notice hereunder by the person serving as
"Administrative Trustee" of the Plan as a direction or notice by and on behalf
of the Trustees; and provided, further, that by notice in writing to the Named
Fiduciary with respect to Stock, the Benefits Corporation may assign its rights
and obligations hereunder to any subsidiary or related entity which is formed to
offer and administer the qualified retirement plans currently offered and
administered by the Association.
Section 12. This Agreement supersedes all prior fiduciary allocation
agreements relating to the Employer Stock Fund of the Plan between the Named
Fiduciary with respect to Stock and the Trustees, effective as of .
Section 13. This Agreement may be executed in more than one counterpart
and each shall be considered an original.
Section 15. The provisions of Section 4 shall survive the termination,
amendment or restatement of this Agreement or the resignation or removal of the
Named Fiduciary with respect to Stock.
IN WITNESS WHEREOF, the Administrative Trustee of the Plan on behalf of
and with the consent of all the Trustees, the Named Fiduciary with respect to
Stock and an authorized officer of the Employer have executed this Agreement
indicating agreement to the obligations hereby imposed upon it as of the date
first above written.
By /s/ Bette J. Albert
----------------------
BETTE J. ALBERT,
Administrative Trustee
Board of Directors - Resource Bank
Named Fiduciary with respect to Stock
By /s/ Debra C. Dyckman
--------------------------
Its Secretary
Attest:
By /s/ Charles D. Robison, III
------------------------------
Its Senior Vice President
Resource Bank
Employer
By /s/ Lawrence N. Smith
--------------------------
Its President
Attest:
By /s/ Charles D. Robison, III
----------------------------
Its Senior Vice President
Custodial Agreement
Investment in Employer Securities
under the
Virginia Bankers Association
Master Defined Contribution Plan and Trust
THIS AGREEMENT, made as of the 6th day of October, 1995, and effective
October 1, 1995, by and between Bette J. Albert, Administrative Trustee, for the
trustees (the "Trustees") of the VIRGINIA BANKERS ASSOCIATION MASTER DEFINED
CONTRIBUTION PLAN AND TRUST for Resource Bank (the "Plan"), and Resource Bank
(herein the "Employer"), and Resource Bank (herein the "Custodian");
W I T N E S S E T H :
WHEREAS, the Employer desires to direct the investment of all or a
portion of the Fund attributable to the Plan into stock or securities issued by
the Employer, or alternatively, to permit Participants in the Plan to direct the
investment of accounts permitted by the Employer into such investments through
the Profit Sharing Thrift Plan with Employer Stock Investment Adoption Agreement
(006);
WHEREAS, the Trustees are willing to establish a division of the Fund to
be invested in the stock or securities issued by the Employer on the condition
that the Employer indemnify the Trustees for any violations of the fiduciary
duties imposed under ERISA as a result of such investment (which indemnification
shall be pursuant to a separate written agreement);
WHEREAS, the Trustees are employing the Custodian at the direction of
the Employer to hold the assets of the Plan comprising the Employer Stock Fund
and render certain services with respect thereto;
WHEREAS, the Trustees have delivered a copy of the Plan to the
Custodian; and
WHEREAS, the Custodian acknowledges herein its status as a fiduciary
with respect to the Plan.
NOW, THEREFORE, it is agreed between the Trustees, the Employer and the
Custodian as follows:
Section 1. The Trustees shall from time to time transfer to the
Custodian cash and other property acceptable to the Custodian. All cash and
property so transferred, and all investments and reinvestments thereof, together
with the income therefrom and any other increments thereon (the "Custodial
Fund") shall be held and administered by the Custodian pursuant to the terms of
this Agreement without distinction between principal and income. The records and
accounts of the Custodial Fund shall reflect the Employer Stock Fund, a
subdivision of the trust fund under the Plan and referred to herein as the
divisions of the Custodial Fund. The Custodian shall be responsible only for the
funds and property actually received by it hereunder and shall not be
responsible for the collection of contributions to the Plan or for the
collection of other payments of principal, interest or dividend proceeds.
Section 2. The Custodian shall receive and hold as a part of the
Custodial Fund all dividends, interest and other income from the Custodial Fund.
The Custodian shall make such payments and dispositions of assets from the
Custodial Fund as may be directed in writing by the Named Fiduciary with respect
to Stock or by the Trustees (or by the Employer, plan administrator or any
member of the administrative committee, if any, to the extent such right of
direction has been granted to same by the Trustees or the Plan). The Custodian
shall have no duty or responsibility to inquire into the propriety of any
direction for payment of disposition of assets so given. The duties and
responsibilities of the Custodian are specifically limited to those provided
herein.
Section 3. The Custodial Fund shall be invested and reinvested in Stock
of the Employer as defined in the Plan and short-term temporary investments and
cash balances as the Named Fiduciary with Respect to Stock may from time to time
direct in writing, provided, however, that while awaiting such directions, the
Custodian is authorized to temporarily invest any assets in the Custodial Fund
in savings accounts, certificates of deposit, repurchase agreements, and money
market investments, trusts and funds chosen by it including those which are
maintained by it or its affiliates. The Custodian and the Named Fiduciary with
respect to Stock are hereby authorized as they may jointly agree in their
discretion to permit such directions to be given orally, by telephone,
telegraph, cable or radio and the Custodian is authorized to accept such
instructions so given which it believes to be genuine.
Section 4. When the Custodian is directed to make changes in the
investments of the Custodial Fund, such changes shall be made with reasonable
promptness.
Section 5. The Employer joins herein for the purpose of requesting the
Custodian to act hereunder and agrees to indemnify the Custodian and save it
harmless from any liability, damages, claims, costs and expenses which do not
arise or are not incurred by reason of its negligence, willful misconduct or
lack of good faith and which it may sustain or incur or which may be asserted
against it arising out of or resulting from its having invested the Custodial
Fund with reasonable promptness or having made payments or disposed of assets or
having otherwise acted with respect to the Custodial Fund in accordance with the
terms of this Agreement. The Custodian covenants and agrees that it shall defend
and hold the Trustee, the Employer and the Named Fiduciary with respect to
Stock, including the present and former employees, officers and directors of
each of them, harmless from and indemnify the Trustee, the Employer and the
Named Fiduciary with respect to Stock against any and all liability, loss,
damage or expense (including attorney's fees) which either of them may incur or
suffer under ERISA or other applicable laws resulting from, arising out of or
relating to the Custodian's negligence, willful misconduct, lack of good faith
or the Custodian's breach of the terms of this Agreement.
Section 6. The recital by the Custodian that any assignment, transfer,
conveyance or other instrument executed by it is made pursuant to due authority
vested in it when relied upon by any person dealing with the Custodian shall be
conclusive and binding, and no person, firm or corporation dealing with the
Custodian shall be required to inquire further as to the authority of the
Custodian.
Section 7. When directed to do so by the Named Fiduciary with respect to
Stock, the Custodian shall have the power to sell, mortgage, pledge, lease,
assign, transfer, convey or otherwise dispose of and to grant options with
respect to any and all of the assets of the Custodial Fund, whether real or
personal, tangible or intangible, any and all interest therein, and to execute,
acknowledge and deliver any and all assignments, deeds and other instruments
which may be required to carry the foregoing powers into effect, provided
however, where warrants, options, tenders or other rights have fixed expiration
dates, in order for the Custodian to act with respect to the Custodial Fund, the
Custodian shall receive instructions from the Named Fiduciary with respect to
Stock at the Custodian's offices and addressed as the Custodian may from time to
time request for this specific purpose, by no later than noon (New York City
time) at least one bank business day prior to the last scheduled date to act
with respect thereto (or such earlier date or time as the Custodian may
specify). There shall be no obligation upon the purchaser, lessee, lender,
assignee or transferee or anyone to whom the property may in any way be conveyed
to see to the application of the purchase money, money loaned or property
exchanged, transferred, assigned or conveyed.
Section 8. The Custodian shall mail (or otherwise deliver) to the Named
Fiduciary with respect to Stock any documents received, including proxy
material, warrants, tender offers and offering circulars with respect to the
securities and other assets held in the Custodial Fund which, if required, shall
be signed where appropriate by the Custodian without indication of voting or
other preference, so as to enable the Named Fiduciary with respect to Stock to
make all decisions with respect thereto and to take all actions required to pass
through to Participants any voting rights required or permitted under the Plan.
Section 9. The Custodian shall have the right to have any securities and
other property in the Custodial Fund registered in the name of the Custodian's
nominee, but the assets so registered shall at all times remain in the
possession, or under the control of, the Custodian, and the Custodian shall be
responsible for the assets so registered as if such assets were registered in
the name of the Custodian. The Custodian will, promptly upon request by the
Trustee, cause any security held hereunder to be reissued in its own name as
Custodian for the Custodial Fund or in the name of the Custodial Fund or the
Trustee, but the costs and taxes, (if any) associated with the foregoing shall
be charged to the Custodial Fund.
Section 10. The Custodian may rely, and shall be fully protected in
relying upon, any written certificate, notice or direction purporting to have
been signed by the Trustees (or by the plan administrator or any member of the
administrative committee, if any, who has been granted the right of direction
pursuant to Section 2) or signed or given by the Named Fiduciary with respect to
Stock (or an officer thereof, who shall certify that he is duly authorized to
sign or give same), which the Custodian reasonably believes to be genuine and to
have been so signed or given. The Custodian shall be under no duty to make any
investigation or inquiry as to any statement contained in such writing, but may
accept same as conclusive evidence of the truth and accuracy of the statement
therein contained. The Trustees shall furnish the Custodian with the documents
evidencing their appointment and a specimen of their signatures and of the
signatures of such persons other than the Trustees, if any, who have been
granted the right of direction pursuant to Section 2. The Trustees shall furnish
the Custodian with the documents evidencing the appointment and termination of
the Named Fiduciary with respect to Stock (including any such Named Fiduciary
with Respect to Stock which may hereafter be appointed). The Custodian shall not
recognize the authority of any new fiduciary for the Plan or Employer Stock Fund
thereunder until there is delivered to the Custodian written notice, signed by
the Trustees, of the new fiduciary's appointment, together with specimen
signatures of the officers with authority to act for same. The Custodian may
thereafter rely thereon as if such fiduciary had been initially referred to
herein as the Named Fiduciary with respect to Stock and such Named Fiduciary
with respect to Stock shall thereafter, until such status is terminated with
proper notice being given to the Custodian, be considered the Named Fiduciary
with respect to Stock for all purposes hereof.
Section 11. Communications to the Custodian shall be addressed to its
principal office, currently, and communications to the Trustees and the Named
Fiduciary with respect to Stock shall be addressed to them respectively at their
addresses last designated in writing to the Custodian. No communication shall be
binding upon the Trustees, the Named Fiduciary with respect to Stock and the
Custodian until received by them.
Section 12. The Custodian shall not be responsible for the proper
application of any part of the Custodial Fund if disbursements are made by it in
accordance with the written directions of the Trustees (or of the plan
administrator or any member of the administrative committee, if any, who has
been granted the right of direction pursuant to Section 2) or the Named
Fiduciary with respect to Stock as herein provided, nor shall the Custodian be
responsible for any appreciation or depreciation in the value of the Custodial
Fund, for the administration of the Plan, or for the adequacy of the Custodian
Fund to meet and discharge any and all liabilities under the Plan.
Section 13. This Agreement may from time to time be amended by the
parties hereto as they may mutually agree, provided any such amendment shall be
in writing and signed by the parties hereto. The Custodian may be removed by the
Trustees (either on their own initiative or at the direction of the Employer) or
may resign as Custodian, such action in either case to be pursuant to written
notice to that effect delivered to the other. Such removal or resignation shall
become effective as of the last day of the month which coincides with or next
follows the expiration of thirty (30) days from the date of the delivery of such
written notice, unless an earlier or later date is agreed upon. At such time,
the Custodian shall deliver and pay over to the Trustees, or to a successor
custodian designated by the Trustees at the direction of the Employer, all of
the assets in its possession less only its proper charges as specified in
Section 14 accrued to the date of its resignation or removal.
Section 14. Unless otherwise prohibited by the prohibited transaction
provisions of the Code and ERISA for its services hereunder, the Custodian shall
be paid such reasonable compensation and charges as shall from time to time be
agreed upon in writing by the Trustees (with the knowledge and consent of the
Employer) and the Custodian. Any such compensation and charges shall be billed
to the Trustees but may be deemed a charge on the Custodial Fund if directed by
the Employer or Trustees. Any compensation and charges of the Custodian or the
Named Fiduciary with respect to Stock which are not paid within sixty (60) days
of the date billed shall be deemed uncollectable and shall be charged to the
Custodial Fund.
Section 15. The Custodian shall, within sixty (60) days following the
end of each reporting period established by agreement between the Custodian and
the Trustee, render to the Trustees, the Employer and the Named Fiduciary with
respect to Stock a statement of account showing all receipts, disbursements and
transactions with respect to the income and principal of the Custodial Fund,
and, in addition, shall render to such parties and at such times as is
contractually agreed to by the Trustees and the Custodian, a list of the assets
of the Custodial Fund which shall include the market value and carrying value
thereof. Unless objected to in writing by the Trustees within one hundred twenty
(120) days from the rendition thereof, each such statement and list shall be
deemed to have been correctly stated and accepted as such by the Trustees. The
Custodian agrees that during its regular banking hours, any officer, employee or
representative of the Trustee or any independent accountant(s) selected by the
Trustee shall be entitled to examine the Custodian's records of the Custodial
Fund and all transactions in and for the Custodial Fund, upon furnishing the
Custodian with written authorization from the Trustee upon reasonable prior
notice.
Section 16. If a Trustee ceases to act as such, the remaining Trustees
shall furnish or shall cause to be furnished promptly to the Custodian a
certificate stating such fact, signed by a representative of the remaining
Trustees (who shall certify that he is duly authorized to sign same). Until such
a certificate is received by the Custodian, it shall be fully protected in
continuing to rely upon the authority of the former Trustee. The Custodian shall
not recognize the authority of any new Trustees until it has received a
certificate of his appointment, signed by a representative of the remaining
Trustees (who shall certify that he is duly authorized to sign same) and
containing a specimen signature of such new Trustees.
Section 17. This Agreement shall be governed, construed, regulated and
administered under the laws of the Commonwealth of Virginia to the extent not
otherwise required by federal law.
Section 18. The term "Trustees" and the terms "party hereto" or "parties
hereto" as they relate to the Trustees shall include all successors to the
Trustees from time to time appointed under the terms of the Plan or otherwise
holding office pursuant to the Plan.
Section 19. Neither the rights nor the obligations of the Trustees or
the Custodian hereunder may be assigned or delegated without the consent of the
other and of the Employer; provided, however, that unless the Custodian is
otherwise directed in writing by the Virginia Bankers Association Benefits
Corporation as sponsor of the Plan (the "Benefits Corporation"), the Custodian
shall accept any direction or notice hereunder by the person serving as
"Administrative Trustee" of the Plan as a direction or notice by and on behalf
of the Trustees; and provided, further, that by notice in writing to the
Custodian, the Benefits Corporation may assign its rights and obligations
hereunder to any subsidiary or related entity which is formed to offer and
administer the qualified retirement plans currently offered and administered by
the Virginia Bankers Association.
Section 20. This Agreement supersedes all prior custodial agreements
relating to the Employer Stock Fund of the Plan between the Custodian and the
Trustees, effective________________ .
Section 21. This Agreement may be executed in more than one counterpart
and each shall be considered an original.
Section 22. The provisions of Sections 5, 14 and 15 shall survive the
termination, amendment or restatement of this Agreement or the resignation or
removal of the Custodian.
IN WITNESS WHEREOF, the Administrative Trustee of the Plan on behalf of
and with the consent of all the Trustees, the Custodian and an authorized
officer of the Employer have executed this Agreement indicating agreement to the
obligations hereby imposed upon it as of the date first above written.
By /s/ Bette J. Albert
-----------------------
BETTE J. ALBERT,
Administrative Trustee
Resource Bank
Custodian
By /s/ Lawrence N. Smith
---------------------
Its President
Attest:
By /s/ Charles W. Robison, III
-----------------------------
Its Senior Vice President
Resource Bank
Employer
By /s/ Lawrence N. Smith
------------------------
Its President
Attest:
By /s/ Charles W. Robison, III
---------------------------
Its Senior Vice President