EXHIBIT 10.4
CAPE COD BANK AND TRUST COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
Effective January 1, 1989
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS 2
1.01 Account........................................................... 2
1.02 Affiliated Employer............................................... 2
1.03 Annual Compensation............................................... 2
1.04 Beneficiary....................................................... 3
1.05 Board of Directors................................................ 3
1.06 Break in Service.................................................. 3
1.07 Committee......................................................... 3
1.08 Company........................................................... 3
1.09 Effective Date.................................................... 3
1.10 Employee.......................................................... 3
1.11 Entry Date........................................................ 4
1.12 Fiscal Year....................................................... 4
1.13 Limitation Year................................................... 4
1.14 Member............................................................ 4
1.15 Normal Retirement Age............................................. 4
1.16 Plan.............................................................. 4
1.17 Plan Year......................................................... 4
1.18 Stock............................................................. 4
1.19 Termination of Employment......................................... 5
1.20 Trustees.......................................................... 5
1.21 Trust Fund........................................................ 5
1.22 Year of Service................................................... 5
1.23 Valuation Date.................................................... 5
ARTICLE 2 ELIGIBILITY FOR PARTICIPATION..................................... 6
2.01 Eligibility of Participant........................................ 6
2.02 Eligibility Service............................................... 6
2.03 Hours of Service.................................................. 6
2.04 Reemployment of Former Members and Employees...................... 8
ARTICLE 3 CONTRIBUTIONS..................................................... 9
3.01 Initial Contribution.............................................. 9
3.02 Future Contribution............................................... 9
3.03 Limitation on Contributions....................................... 9
3.04 Timing of Contributions........................................... 10
3.05 Company's Contribution Irrevocable................................ 10
3.06 No Employee Contributions......................................... 10
(i)
ARTICLE 4 ALLOCATION OF CONTRIBUTIONS AMONG MEMBERS......................... 11
4.01 Method of Allocating Initial...................................... 11
4.02 Amount and Method of Subsequent Allocations....................... 12
4.03 Annual Additions Defined.......................................... 12
4.04 Limitation for this Plan.......................................... 12
4.05 Limitations Applicable to Members Covered by Defined Benefit Plan. 14
4.06 Combining of Plans and Companies.................................. 15
4.07 Participation in Another Defined Contribution Plan................ 16
4.08 Fractional Shares................................................. 16
ARTICLE 5 MEMBERS' ACCOUNTS................................................. 17
5.01 Separate Accounts................................................. 17
5.02 Value of Accounts................................................. 17
5.03 Value to be Used for Distributions................................ 17
5.04 Payment of Dividends.............................................. 17
5.05 Diversification................................................... 18
ARTICLE 6 ELIGIBILITY FOR DISTRIBUTION OF SHARES............................ 20
6.01 Termination of Employment......................................... 20
6.02 Death............................................................. 20
6.03 Designation of Beneficiary........................................ 20
6.04 Time for Payment.................................................. 21
6.05 Required Distribution............................................. 22
ARTICLE 7 PAYMENT OF BENEFITS............................................... 23
7.01 Method of Payment................................................. 23
7.02 Form of Payment................................................... 23
7.03 Limitations on Payments........................................... 23
7.04 Put Option........................................................ 24
7.05 Offer to Purchase................................................. 27
7.06 Restrictions on Shares of Company Stock........................... 27
ARTICLE 8 WITHDRAWALS....................................................... 29
8.01 No Withdrawal of Company Contributions............................ 29
ARTICLE 9 RIGHTS AND DUTIES OF TRUSTEES..................................... 30
9.01 Appointment of Trustees........................................... 30
9.02 Action by Majority of the Trustees................................ 30
9.03 Powers of Trustees................................................ 30
9.04 Investments....................................................... 30
9.05 Exercise of Voting Rights......................................... 31
9.06 Reliance on Trustees as Owner..................................... 34
9.07 Liquidation of Assets............................................. 34
9.08 Evidence on Which Trustees May Act................................ 34
(ii)
9.09 Discretionary Action.............................................. 35
9.10 Records and Accounting............................................ 35
9.11 Payment of Taxes.................................................. 36
9.12 Compensation and Expenses of Trustees............................. 36
9.13 Legal Action...................................................... 37
9.14 Liability of Trustees............................................. 37
ARTICLE 10 ADMINISTRATION OF THE PLAN........................................ 39
10.01 Retirement and Administrative Committee........................... 39
10.02 Chairman, Secretary, Records...................................... 39
10.03 Majority Vote, Execution of Certificates.......................... 39
10.04 Powers............................................................ 40
10.05 Rules and Regulations............................................. 41
10.06 Other Fiduciary Capacity.......................................... 41
10.07 Employment of Professional Assistance............................. 41
10.08 Reliance.......................................................... 41
10.09 Expenses of Administration........................................ 41
10.10 Allocation of Fiduciary Responsibility............................ 42
10.11 No Joint Fiduciary Responsibilities............................... 43
10.12 Claims Procedure.................................................. 43
10.13 Notice to Employee................................................ 44
10.14 Government Reports................................................ 45
ARTICLE 11 NON-ALIENATION OF BENEFITS........................................ 46
11.01 Spendthrift Provision............................................. 46
11.02 Qualified Domestic Relations Orders............................... 46
ARTICLE 12 AMENDMENT AND TERMINATION......................................... 47
12.01 Right to Amend or Terminate....................................... 47
12.02 Liquidation of Trust Fund......................................... 47
ARTICLE 13 GENERAL PROVISIONS................................................ 48
13.01 Rights Against the Company........................................ 48
13.02 Records........................................................... 48
13.03 Payments to Incompetents.......................................... 48
13.04 Mailing of Benefits............................................... 48
13.05 Return of Contributions........................................... 49
13.06 Merger or Consolidation........................................... 50
13.07 Construction...................................................... 50
13.08 Liability of Company.............................................. 50
13.09 Impossibility of Performance...................................... 50
13.10 Headings.......................................................... 51
13.11 Execution of Agreement............................................ 51
(iii)
ARTICLE 14 TOP-HEAVY PROVISIONS.............................................. 52
14.01 Article Controls.................................................. 52
14.02 Definitions....................................................... 52
14.03 Top-Heavy Status.................................................. 57
14.04 Termination of Top-Heavy Status 59
(iv)
This AGREEMENT OF TRUST made this 24th day of August, 1989 by and between
Cape Cod Bank and Trust Company, in its capacity as an employer, (hereinafter
referred to as the "Company") and Cape Cod Bank and Trust Company, in their
capacity as trustee (hereinafter referred to as the "Trustees").
W I T N E S S E T H
WHEREAS the Company desires to afford eligible employees the opportunity of
sharing in the ownership of the Company; and
WHEREAS the Company believes this purpose can be accomplished by the
establishment of an employees' stock ownership plan and trust for the exclusive
benefit of its eligible employees as provided for under Sections 401 and 4975 of
the Internal Revenue Code of 1986 as now in effect or as hereafter amended
(hereinafter called the "Internal Revenue Code");
NOW, THEREFORE, the Company hereby establishes with the Trustees a trust
comprising a transfer of excess assets from the Retirement Plan for Employees of
the Cape Cod Bank and Trust Company which shall be considered the Company's
first year's contribution, such funds (including shares of the Company's stock)
as may be hereafter deposited with the Trustees by the Company, and any
increment thereto and income therefrom, all such property to be held by the
Trustee in trust as herein provided. The Trustee hereby accepts the Trust
created hereunder, and agrees to perform the duties imposed on it by the
provisions of this Agreement of Trust as set forth hereafter.
ARTICLE 1
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DEFINITIONS
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The following words and phrases as used herein shall have the following
meanings unless a different meaning is plainly required by the context:
1.01 "Account" means the separate account established for each Member of
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the Plan.
1.02 "Affiliated Employer" means any corporation, trade, business,
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partnership or proprietorship (other than the Company) which is a Member of the
controlled group which includes the Company pursuant to Code Sections 414(b) and
414(c) or which is a member of an affiliated service group (other than the
Company) which includes the Company pursuant to Code Section 414(m).
1.03 "Annual Compensation" means the basic compensation paid to an
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Employee by the Company while a Member during each Plan Year and including any
elective deferrals made under a plan maintained by the Company which qualifies
under Section 401(k) or Section 125 of the Code, but excluding bonus payments,
overtime, commissions and any expense allowance payments or any group life
insurance contributions includable in income. "Annual Compensation" to be taken
into account under the Plan shall not exceed Two Hundred Thousand Dollars
($200,000), or such other amount as may be provided pursuant to applicable law
or regulations; provided, however, that in determining the Annual Compensation
of a 5 percent owner (as defined in Section 416 of the Internal Revenue Code) or
one of the top 10 Employees by total earnings from the Company, the Annual
Compensation of a spouse and of
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a lineal descendant under the age of 19 before the end of the Plan Year shall be
aggregated with such Employee's Annual Compensation.
1.04 "Beneficiary" means the person or persons designated by the Member to
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receive any amounts payable under the Plan after the death of the Member.
1.05 "Board of Directors" means the Board of Directors of the Company.
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1.06 "Break in Service" means the twelve (12) month period commencing on
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his date of employment and each anniversary thereafter during which the Employee
is credited with less than 501 Hours of Service.
1.07 "Committee" means the Retirement and Administrative Committee
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provided for in Section 10.01.
1.08 "Company" means Cape Cod Bank and Trust Company, and any successor
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corporation thereto, or any entity now or hereafter affiliated with Cape Cod
Bank and Trust Company which adopts this Plan by vote of its board of directors
and with the consent of the Company. The term "Company" also includes all of
the foregoing as the context may require.
1.09 "Effective Date" means January 1, 1989.
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1.10 "Employee" means any person who is in the employ of the Company on or
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after January 1, 1989 and any person who is on a leave of absence which has been
approved by the Company and who was an Employee within the meaning of this
Section 1.10 on the day before the first day of the leave of absence (but only
for the period of the approved leave of absence); but excluding (i) any Employee
covered by a collective bargaining unit unless the collective bargaining
agreement specifically provides for such Employee's inclusion in the Plan, (ii)
any Employee who is not residing in the United States of America, (iii) any
person employed on a
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retainer basis (as with the performance of services for the Company of a legal,
accounting or consulting nature), or under circumstances as are not included
within the common law definition of "Employee", and (iv) any person who is
director of the Company unless such person is also a salaried Employee.
1.11 "Entry Date" means the January 1 or July 1 of each Plan Year.
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1.12 "Fiscal Year" means a twelve-month period beginning on January I and
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ending on December 31.
1.13 "Limitation Year" means a twelve-month period coinciding with the
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Plan Year.
1.14 "Member" means an Employee who has met the eligibility requirements
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and is included in the Plan.
1.15 "Normal Retirement Age" means the date on which a Member reaches his
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sixty-fifth (65th) birthday.
1.16 "Plan" means the Cape Cod Bank and Trust Company Employee Stock
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Ownership Plan as described herein and as it may be amended from time to time.
1.17 "Plan Year" means a twelve-month period beginning on January 1 and
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ending on December 31.
1.18 "Stock" means shares of common stock issued by the Company (or a
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member of the controlled group which includes the Company) which are readily
tradeable on an established securities market or, if such stock is not readily
tradeable, shares of common stock issued by the Company which meet the
requirements of Section 409(1)(2).
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1.19 "Termination of Employment" means separation from the employment of
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the Company for any reason, including, but not limited to, Retirement, death,
disability, resignation or dismissal from the Company.
1.20 "Trustees" means the party or parties, individual or corporate, named
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and duly appointed by this instrument, and a successor Trustee or Trustees
acting hereunder.
1.21 "Trust Fund" means the Stock of the Company, cash, and other property
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held by the Trustees for purposes of the Plan.
1.22 "Year of-Service" means a Plan year during which the Employee earns
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1,000 Hours of Service.
1.23 "Valuation Date" means December 31 of each year, and such other dates
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as the Trustees may use from time to time for periodic valuation of the Trust
Fund.
Wherever used in this Plan the masculine shall include the feminine and the
singular shall include the plural, unless the context indicates otherwise.
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ARTICLE 2
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DEFINITIONS
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2.01 Eligibility to Participate. An Employee shall be eligible to become a
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Member of the Plan on the Entry Date coincident with or next following his
completion of two (2) years of Eligibility Service.
2.02 Eligibility Service. An Employee shall be credited with one year of
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"Eligibility Service" for each computation period in which he is credited with
1,000 Hours of Service, including periods of service prior to the Effective Date
of the Plan. The initial computation period shall be the twelve-month period
commencing on the Employee's date of employment. Subsequent computation periods
shall be the consecutive twelve-month periods commencing on the anniversary date
of the Employee's date of employment.
2.03 Hours of Service. An Employee shall be credited with an "Hour of
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Service" on the following basis:
(a) each hour for which an Employee is paid or entitled to payment
for the performance of duties for the Company;
(b) each hour for which an Employee is paid, or entitled to payment,
by the Company on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. Hours under this paragraph shall be
calculated and credited pursuant to Section
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2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by this reference;
(c) Unless otherwise credited under subsections (a) or (b), each hour
for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Company;
(d) each hour for which an Employee is neither paid nor entitled to
payment by the Company for a period when no duties are performed
due to illness or authorized leave of absence so long as the
Employee returns to the service of the Company upon the
expiration of his illness or upon the expiration of the period
for which the authorized leave of absence was granted and
provided further, that no more than 501 hours shall be credited
under this subsection (d) and then only to prevent a one-year
Break in Service, and
(e) unless otherwise credited under a preceding paragraph and only to
prevent Break in Service, each hour during a Maternity or
Paternity Leave of Absence for which an Employee would have been
compensated if he had continued to work his regular schedule as
in effect immediately prior to the date such leave began,
provided that no more than 501 hours shall be credited under this
paragraph (e) and that hours shall be credited to the Plan Year
in which the leave began, if necessary to prevent a one-year
Break in Service during such Plan Year, or to the following Plan
Year. "Maternity or Paternity Leave of Absence" means any leave
of
7
absence of an Employee commencing on or after January 1, 1985,
due to:
(a) the pregnancy of the Employee,
(b) the birth of a child of the Employee,
(c) the adoption of a child by the Employee, or
(d) the caring for such child during the period immediately
following such birth or adoption.
Hours of Service granted under paragraph (c) shall be credited to the Employee
for the Plan Year to which the back pay award is applicable. An Employee shall
receive credit under this Section 2.03 for Hours of Service earned while
employed by an Affiliated Company, but only during the period of affiliation.
2.04 Reemployment of Former Members and Employees. A Former Member or a
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former Employee who has completed two years of Eligibility Service (but has not
yet become a Member) who is rehired by the Company after a Break in Service
shall be eligible to become a Member on his date of reemployment. Any other
Employee who is rehired by the Company shall be eligible to become a Member on
the Entry Date following his satisfaction of the requirements of Section 2.01
and based on the following computation periods: (1) if such Employee is rehired
before a Break in Service his original computation period determined under
Section 2.02 shall apply; (2) if such Employee is rehired after a Break in
Service a new computation period, commencing on his date of rehire shall apply.
An Employee's prior years of Eligibility Service shall be counted in determining
if the Employee has satisfied the eligibility requirements under Section 2.01.
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ARTICLE 3
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CONTRIBUTIONS
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3.01 Initial Contribution. The Company's initial contribution shall be
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made in the form of a direct trust to trust transfer from the Retirement Plan
for Employees of Cape Cod Bank and Trust Company and in an amount equal to the
value of any excess assets in such plan determined after the satisfaction of all
liabilities for benefits, costs, and expenses pursuant to the termination of
such plan as of December 31, 1988; it being the Company's intent that such
transfer be in accordance with any conditions or requirements of Section 4980 of
the Internal Revenue Code. The initial contribution shall be used to purchase
Stock issued by the Company no later than ninety (90) days after the transfer to
the Plan (or such longer period as may be permitted, by the Secretary of the
Treasury); such Stock to have the characteristics necessary to qualify as
employer securities under Section 409(1) of the Code.
3.02 Future Contributions. After the initial contribution under Section
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3.01 has been fully allocated to the Accounts of Employees pursuant to Section
4.01, the Company's contributions under the Plan for each Fiscal Year shall be
in cash or that number of shares of Stock having a fair market value on the last
day of the Fiscal Year equal to such amount as shall be determined by the
Company in its sole discretion.
3.03 Limitation on Contributions. Except with regard to the initial
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contribution under Section 3.01, the determination of the contribution shall be
made in such manner and within such time as required under applicable law,
regulation, or ruling to permit the Company to deduct such amount for the Fiscal
Year; provided, however, that such annual contribution, in conjunction with any
other plan sponsored by the Company and qualified under Section
9
401(a) of the Internal Revenue Code, shall not exceed the maximum amount
deductible in arriving at the Company's taxable income for such year under the
provisions of Section 404 of the Internal Revenue Code, or any statute of
similar import. Notwithstanding the foregoing, the Company shall not make a
contribution under Section 3.02 until the initial contribution under Section
3.01 is fully allocated in accordance with Section 4.01.
3.04 Timing of Contributions. The contribution for which provision is made
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in Section 3.02 shall be paid over to the Trustees by the Company prior to or
coincident with the date for filing its Federal income tax return (including the
period of any extensions thereof) for the Fiscal Year to which the contribution
relates.
3.05 Company's Contributions Irrevocable. Except as provided in Section
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13.05, any and all contributions made to the Trust by the Company shall be
irrevocable and shall be applied in accordance with the provisions of the Plan
to provide benefits of the Plan; and neither such contributions nor any income
therefrom shall be used for, or diverted to, purposes other than for the
exclusive benefit of Members under the Plan.
3.06 No Employee Contributions. No Employee shall be required or permitted
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to make any contributions under the Plan.
ARTICLE 4
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ALLOCATION OF CONTRIBUTION AMONG MEMBERS
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4.01 Method of Allocating Initial Contribution. The initial contribution
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to the Plan pursuant to Section 3.01 shall be allocated in accordance with the
following procedures:
(a) For the Plan Year in which the initial contribution occurs, one-
eighth (1/8) of the Stock purchased (or such higher proportion as
the Board of Directors may determine each year), but in no event
in excess of the limitation under Code Section 415, shall be
allocated as of the last day of the Plan Year to the Accounts of
Members who are then employed by the Company and who earned a
Year of Service during the Plan Year in the proportion that such
Member's Annual Compensation bears to the total Annual
Compensation of all Members; and
(b) Any excess Stock not allocated in accordance with subsection (a)
above shall be placed in a suspense account, and one-seventh
(1/7) of such Stock (or such higher proportion as the Board of
Directors may determine each year), but not in excess of the
amounts permitted in the limitation under Code Section 415, shall
be released and allocated as of the last day of each of the
following Plan Years until all such Stock has been allocated to
the Accounts of Members who are then employed by the Company in
the proportion that such Member's Annual Compensation bears to
the total Annual Compensation of all Members.
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4.02 Amount and Method of Subsequent Allocations. Except as provided in
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Section 4.01, the Company's contributions to the Plan each Plan Year shall be
allocated as of the last day of each Plan Year among the Members under the Plan
who are then employed by the Company and who earned a Year of Service during the
Plan Year. The allocation for each Member shall be based on the proportion that
such Member's Annual Compensation bears to the total Annual Compensation of all
Members. Such allocations shall be made after the Valuation Date coinciding with
the end of the Plan Year and after the first making adjustment of the Member
Accounts in accordance with Section 5.02.
4.03 Annual Additions Defined. The term "Annual Additions" for any
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Limitation Year means the amount of contributions made by the Company under the
Plan and allocated to the Member's Account for such Limitation Year. For
purposes of determining Annual Additions the allocation of Stock to a Member's
Account from the suspense account under Section 4.01(b) shall be valued at the
price of the Stock at the time such Stock was initially credited to the suspense
account.
4.04 Limitation for this Plan. The Annual Additions to a Member's Account
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under the Plan for any Limitation Year shall not exceed the lesser of (i)
twenty-five percent (25%) of the Member's total compensation for such Limitation
year, or (ii) $30,000 (or, if greater, one-quarter of the dollar limitation in
effect under Section 415(b)(1)(A) of the Internal Revenue Code).
4.041 In any Limitation Year in which no more than one-third of the
Company's contributions are allocated to highly compensated employees (within
the meaning of Section 414(q) of the Internal Revenue Code), the amount
otherwise described in 4.04(ii) shall be
12
increased by the lesser of the amount otherwise described in 4-04(ii) or the
value of Company Stock contributed, purchased with cash contributed, or
allocated from the suspense account.
4.042 If it is determined that the Annual Additions to the Account of a
Member for any Limitation Year are in excess of the limitations contained in
Sections 4.04 and 4.041 due to the allocation of forfeitures, if any, as a
result of a reasonable error in estimating a Member's compensation, or under
other limited facts and circumstances, the Committee shall reduce the amount
allocated with respect to such Limitation Year, unless the terms of any other
qualified defined contribution plan maintained by the Employer provides for a
reduction in the Member's Annual Addition under such other plan. In accordance
with the provisions of Section 1.415-(6)(b)(6)(iii) of the Regulations issued
under the Internal Revenue Code, if any excess contribution is determined to
exist under this Plan, such amounts shall be held in a suspense account for the
Limitation Year and all amounts in such suspense account shall be reallocated at
the end of the next Limitation Year to the Accounts of all Members as part or
all, as the case may be, of the Employer's contribution for such Limitation
Year, or, if necessary, any subsequent Limitation Year, or, if necessary, any
subsequent Limitation Year.
4.043 For purposes of this Section 4.04, "compensation" means all earned
income, wages, salary and other amounts received for personal services rendered
in the course of employment with the Company but shall not include contributions
that qualify under Internal Revenue Code Sections 401(k) or 125 or other
contributions to plans of deferred compensation that are not includible in a
Member's gross income for the taxable year in which contributed, amounts
realized in connection with stock option or stock purchase plans, or other
amounts that receive special tax benefits.
13
4.05 Limitations Applicable to Members Covered by Defined Benefit Plan. If
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a Member is or has ever been covered by a defined benefit plan maintained by the
Company, the maximum Annual Additions to a Member's Account for any Limitation
Year shall be limited to the amount determined as follows:
(a) First, there shall be computed under this Plan at the close of
each Limitation Year a fraction in which the numerator is the sum of the Annual
Additions to the Member's Account as of the end of the Limitation Year and the
denominator is the sum for all years of an Employee's service of the lesser of:
(i) one-hundred twenty-five percent (125%) of the maximum dollar
limit pursuant to Section 415(c)(1)(A) of the Internal
Revenue Code for the applicable year but determined without
regard to the special dollar limitation under Section 4.041;
or
(ii) one-hundred forty percent (140%) of twenty-five (25%) of the
Member's total compensation as defined in Section 4.043 for
the applicable year;
(b) Second, there shall be computed under the defined benefit plan as
of the close of each Limitation Year a fraction in which the
numerator is the Member's projected benefit at Normal Retirement
Date under such plan in which the Member participates (assuming
continued employment and level compensation) and the denominator
is the lesser of:
14
(i) one-hundred twenty-five percent (125%) of the maximum limit
pursuant to Section 415(b)(1)(A) of the Internal Revenue
Code for that year; or
(ii) one-hundred forty percent (140%) of the Member's average
compensation for the three consecutive calendar years while
a Member of the Plan in which his compensation as defined in
Section 4.043 was highest;
(c) Third, the sum of the fractions determined under (a) and (b) above
shall not exceed 1.0. If it is determined that such limitation for
any Limitation Year has been or will be exceeded and if the
fraction determined under (b) above is not adjusted to avoid
exceeding such limitation, then the Annual Additions to the
Member's Account for such Limitation Year shall be reduced as
necessary in order to avoid exceeding such limitation.
4.06 Combining of Plans and Companies. For purposes of determining the
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limitations contained in this Article 4,
(a) all defined contribution plans (whether or not terminated) of the
Company or an Affiliated Employer shall be treated as one defined
contribution plan and the Member's various individual accounts
under such plans shall be aggregated;
(b) all defined benefit plans (whether or not terminated) of the
Company or an Affiliated Employer shall be treated as one defined
benefit plan.
15
4.07 Participation in Another Defined Contribution Plan. If a Member is a
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participant in another defined contribution plan in addition to this Plan, and
as a result of the limitation in Section 4.05 the Member has or will have an
excess Annual Addition in a Limitation Year, then the allocations to the
Member's Account under this Plan will first be reduced in order to satisfy such
limitation.
4.08 Fractional Shares. Shares shall be allocated to the Members' accounts
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under Sections 4.01 and 4.02 to the nearest one-thousandth of a share.
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ARTICLE 5
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MEMBERS' ACCOUNTS
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5.01 Separate Accounts. The Company (or their agent) shall maintain
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individual Accounts of the interest of Members. Each such Account shall show in
dollars and/or in shares of Stock the Member's share of the Trust Fund. A
Member shall be fully vested in the value of his Account at all times.
5.02 Value of Accounts. As of each Valuation Date the Trustees shall
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determine the total net worth of-the Trust Fund by valuing all the assets of
such Trust Fund exclusive of the Company's contributions for the respective Plan
Year. The valuation of all such assets shall be at their fair market value as
of such Valuation Date. Each Member's Account shall then be credited with the
Member's allocable share of Stock for the Plan Year and any Stock received in
the form of stock splits. In addition, a Member's Account shall be adjusted to
reflect the Member's proportionate share of any earnings or losses in the Trust
Fund due to investments in other than Company Stock or the dividends on Company
Stock distributed to Members in accordance with Section 5.04.
5.03 Value to be Used for Distributions. The value of a Member's share in
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the Trust Fund for purposes of a distribution due to a Termination of Employment
shall be the value of the Member's Account as of the date of distribution and
based on the number of shares (and fractional shares) of Stock in his Account as
of the Valuation Date immediately following such Termination of Employment.
5.04 Payment of Dividends. Dividends received by the Trust on Stock
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allocated to a Member's Account shall be paid to such Member in cash as soon as
practicable after receipt by
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the Trustee, but not later than ninety (90) days after the end of the Plan Year
in which the dividends were received. Dividends received by the Trust on Stock
held in the Suspense Account shall be paid to Members in cash in the same
proportion that the number of shares of Stock allocated to a Member's Account
bears to the total number of shares of Stock allocated to the Accounts of all
Members; such dividends to be paid as soon as practicable after receipt of the
dividend by the Trustee, but no later than ninety (90) days after the end of the
Plan Year in which the dividends were received.
5.041 Notwithstanding Section 5.04, the Company may provide that the
dividends allocable to each Member under Section 5.04 shall be paid directly to
the Member (or the Member's Beneficiary) without first being paid into the
Trust. The Company shall instruct the Trustee to provide to the Company's
dividend paying agent any necessary information to pay and process such dividend
amounts, provided the Trustee is given reasonable notification by the Company.
5.05 Diversification. A Member who has attained age fifty-five (55) and
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has completed ten (10) years of participation in the Plan may elect, within
ninety (90) days after the close of each Plan Year in the six (6) Plan Year
period beginning with the Plan Year he attains age fifty-five (55) (or he
completes ten (10) years of Eligibility Service, if later) to receive a
distribution of twenty-five percent (25%) of his Account in the Plan (to the
extent such portion exceeds the amount of any prior distribution under this
Section). The Member may elect to receive a distribution of up to fifty percent
(50%) of his Account (to the extent such portion exceeds the amount of any prior
distribution under this Section) for the last Plan Year such election is
available to him. The distribution of a portion of the Member's Account
18
covered
by this election shall be made within ninety (90) days after the period during
which the election may be made.
19
ARTICLE 6
---------
ELIGIBILITY FOR DISTRIBUTION OF SHARES
--------------------------------------
6.01 Termination of Employment. Subject to the provisions of Section 6.05,
-------------------------
a Member shall be eligible to receive the value of his Account within a
reasonable period of time (not to exceed 180 days) following the end of the Plan
Year in which occurs his Termination of Employment.
6.02 Death. In the event that any Member shall die while in the service of
-----
the Company, or after he has (a) retired from service with the Company, or (b)
terminated his Service with the Company, but before he has received the entire
amount to his credit in the Trust Fund, all amounts held for the benefit of the
Member shall be paid to the Beneficiary or Beneficiaries designated under the
provisions of 6.03; provided, however that in the event there is no named
Beneficiary surviving, or in the event that the named Beneficiary or
Beneficiaries should die before receiving all amounts held in the Member's
Account, any amount due shall be paid in equal portions to such person or
persons in the following classes of successive beneficiaries surviving the
Member: the Member's (a) spouse, (b) natural and adopted children, and children
of deceased children, per stirpes (c) parents in equa1 shares, (d) brothers and
sisters and nephews and nieces who are children of deceased brothers and
sisters, per stirpes, or (e) executors or administrators. The payment shall be
made in a lump sum.
6.03 Designation of Beneficiary. When an Employee becomes a Member under
--------------------------
the Plan he shall designate a Beneficiary who shall be the surviving spouse of
the Member, or, who shall be the person or persons designated by the Member in
the latest written notice received by the Trustees on a form provided by the
Trustees in the event that either: (a) the
20
deceased Member is not survived by a spouse, or (b) the deceased Member's
surviving spouse had irrevocably agreed, in writing, witnessed by a notary
public or a Plan representative, to the designation of another specified
Beneficiary. The Member shall have the right to change his Beneficiary from time
to time in the manner hereinabove described, provided the applicable spousal
consent requirements are again satisfied.
6.04 Time for Payment. Unless the Member otherwise elects another date in
----------------
writing, in no event will payment of benefits be eligible to commence later than
the time set forth in Section 6.041 or, if earlier, one (1) year after the close
of the Plan Year in which the latest of the following events occurs:
(a) the Member separates from service by reason of attaining his
Normal Retirement Age, disability or death; or
(b) the fifth Plan Year following the Plan Year in which the Member
otherwise separates from service, provided that such Member is not
reemployed before the distribution is required to begin under this
subsection (b).
6.041 Unless the Member otherwise elects another date in writing, in no
event will payment of benefits be eligible to commence later then the sixtieth
(60th) day after the close of the Plan Year in which the latest of the following
events occurs:
(a) the Member's sixty-fifth (65th) birthday;
(b) the tenth (10th) anniversary of the date on which the Member's
Participation in the Plan commenced; or
(c) termination of the Member's employment with the Company.
21
6.05 Required Distribution. Distribution of the Account of all Members
---------------------
shall begin no later than the April 1st of the calendar year following the
calendar year in which he attains the age of seventy and one-half (70 1/2). If
a Member continues in the employment of the Company after such date, any
additional allocations (of contributions and earnings) to his Account shall be
paid out as of December 31 of each Plan Year subsequent to the Plan Year in
which he attains the age of seventy and one-half.
22
ARTICLE 7
---------
PAYMENT OF BENEFITS
-------------------
7.01 Method of Payment. When a Member is eligible for a distribution of
-----------------
his share in the Trust Fund in accordance with the provisions of Article 6, the
Committee shall determine the time of payment and shall instruct the Trustees to
pay the Member's Account to him in a lump sum, provided that no lump sum payment
may be made prior to the Member attaining age 62 without the Member's consent if
the value of such payment would be in excess of $3,500.
7.02 Form of Payment. Except as provided in Sections 5.04 and 7.04, all
---------------
payments made under the Plan shall be made in shares of Stock. In the event
that the amount of any distribution is not divisible into whole shares of Stock,
the Trustees shall distribute the largest number of whole shares not in excess
of such amount, and shall either sell the remaining fractional shares to the
Company at fair market value as of the same Valuation Date used to determine the
value of the Member's distribution and distribute the sale proceeds to the
Member, or distribute the value of the remaining fractional shares to or on his
behalf from the funds available in the Trust. Any assets held in a Member's
Account in a form other than Company Stock shall be distributed in cash.
7.03 Limitations on Payments. Neither the method nor the time for payment
-----------------------
of benefits shall be permitted if the anticipated effect would be:
(a) to extend benefits beyond the joint and last survivor life
expectancy of the Member and a designated Beneficiary; or
23
(b) to reduce the Member's benefit more than fifty percent (50%) of
the amount it otherwise would have been if someone other than the
Member's spouse is named in such option.
7.04 Put Option. Except as hereinafter provided, each Qualified Holder of
----------
Stock distributed from the Plan shall have the right, at the times, for the
price, and on the terms specified below, to require the Company to repurchase
any or all of the shares of Stock then held by such Qualified Holder, such right
to be referred to herein as a "Put Option". A Put Option shall be exercised by
written notice by a Qualified Holder to the Committee, specifying the number of
shares of Stock to be repurchased and accompanied by one or more stock
certificates evidencing the Stock tendered and a stock assignment duly executed
in blank. To the extent mutually agreed upon by the Company and the Trustee, the
rights and obligations of the Company hereunder at the time of exercise of such
Put Option may be assumed and discharged by the Trustee. The rights and
obligations of the Company hereunder may also be assumed and discharged by any
one or more other parties designated by the Company and who agree thereto. A
Qualified Holder is any person who is or at any time was a Member of the Plan.
7.041 Any Put Option referred to herein may be exercised at any time
during the sixty-day period which begins on the date the Stock subject to the
Put Option is distributed by the Plan to the Qualified Holder in question and,
if the Qualified Holder fails to exercise the Put Option within said sixty-day
period, during an additional sixty-day period that commences on the later of the
first day of the following Plan Year or the lapse of the initial sixty-day
period, provided, that such sixty-day periods shall be extended by the duration
of any period
24
during which the party bound by the Put Option is prohibited from honoring it by
applicable federal or state law.
7.042 The price per share at which a Put Option is exercisable hereunder
shall be the fair market value thereof determined in good faith and otherwise in
accordance with the Code by the party purchasing the Stock as of the most recent
Valuation Date; provided, however, that if the person exercising the Put Option
is a Disqualified Person as defined in Section 4975(e)(2) of the Internal
Revenue Code, such fair market value shall be determined as of the date of the
purchase. In the case of the exercise of a Put Option by any person other than a
Disqualified Person, a determination of fair market value based on at least an
annual appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction may be relied
upon as a good faith determination of fair market value.
7.043 The purchase price determined pursuant to the foregoing paragraph
shall be payable in cash within 30 days of receipt by the Committee of notice of
exercise of the Put Option, provided that, in the cast of repurchase by the
Company or the Trust (hereinafter referred to as the "Obligor") of shares of
Company Stock which are distributed to the Member as part of a total
distribution, the Obligor may, at its option, purchase such Shares in
substantially equal periodic installments (not less frequently than annually)
over a period beginning not later than 30 days after exercise of the Put Option
and not exceeding five (5) years. As used herein, the term "total distribution"
shall mean the distribution within one (1) taxable year to the Member or his
Beneficiary of the balance of the Member's Account. The obligation to make any
payments under this Section due later than 30 days from the date of
25
exercise of the Put Option shall be evidenced by the Obligor's promissory note
bearing a reasonable rate of interest and shall provide adequate security.
7.044 Notwithstanding the foregoing, no Stock shall be subject to a Put
Option hereunder if it is readily traded when distributed to the Qualified
Holder and at all subsequent times during the sixty-day periods during which the
Put Option would ordinarily be exercisable. Stock is subject to a trading
limitation if it is subject to a restriction under any federal or state
securities law, any regulation thereunder, or an agreement (not otherwise
prohibited by Section 7.05) affecting the Stock which would make the Stock not
as freely tradeable as Stock not subject to such restriction. If any such Stock
is readily traded without restriction when distributed but ceases to be so
traded within either of said sixty-day periods, the Obligor shall so notify the
Qualified Holder within 10 days that for the remainder of such period, the Stock
is subject to a Put Option, such notice to specify the terms of the Put Option.
If any such notice is not given within such 10-day period, the number of days
between such 10th day and the day the notice is given shall be added to the
duration of the applicable sixty-day period in which the Put Option is
exercisable. As used herein, the term "readily traded" shall refer to Stock of
the Company that is listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934 or that is quoted on a system
sponsored by a national securities association registered under Section 15(A)(b)
of the Securities Exchange Act.
7.045 These rights with respect to shares of Company Stock shall be
nonterminable once granted except to the extent they cease to be exercisable as
provided in Section 7.044 or are exercised.
26
7.046 If the Stock of the Company held in the Plan is issued by a bank (as
defined in Section 581 of the Code) which is prohibited by law from redeeming or
purchasing its own securities, the Put Option requirements of this Section 7
shall not be applicable, provided that Members who are entitled to a
distribution from the Plan shall receive the value of their Account in cash.
7.05 Offer to Purchase. The Company or the Trustee may at any time offer
-----------------
to purchase any shares of Company Stock (including, if a Put Option is issued,
the Stock not sold under the Put Option described in Section 7.04) which are
held by a former Member (or Beneficiaries), at the then fair market value
determined by the Company or the Trustee in the same manner as fair market value
is determined for purposes of the Put Option described in Section 7.04. The
terms of payment for any such purchase of Company Stock may be either in a lump
sum or in installments over a period not exceeding five (5) years, with interest
payable at a reasonable rate on any unpaid installment balance (as determined by
the Trustee).
7.06 Restrictions on Shares of Company Stock. Shares of Company Stock held
---------------------------------------
or distributed by the Trustee may be restricted as to sale or transfer by the
Articles of Organization or By-Laws of the Company, which restrictions shall be
similarly applicable to all shares of stock of the Company of the same class,
and shall, if required by law, bear such appropriate legends and be subject to
such restrictions as shall, in the opinion of counsel for the Company, be
required in order to assure compliance with applicable federal and state
securities and banking laws. Except as otherwise provided in Section 7.04 no
shares of Company Stock held or distributed by the Trustee may be subject to a
put, call or other option, or buy-sell or similar arrangement. The provisions of
Section 7.04 shall continue to be
27
applicable to Company Stock even if the Plan ceases to be an employee stock
ownership plan under Section 4975(e)(7) of the Code.
28
ARTICLE 8
---------
WITHDRAWALS
-----------
8.01 No Withdrawal of Company Contributions. A Member shall not be
--------------------------------------
entitled to withdraw any portion of his interest in the Trust Fund while he
remains in the service of the Company, except for distributions made pursuant to
the diversification requirements of Section 5.05 and distributions required by
Section 6.05.
29
ARTICLE 9
---------
RIGHTS AND DUTIES OF TRUSTEES
-----------------------------
9.01 Appointment of Trustees. The Board of Directors of the Company shall
-----------------------
appoint one or more Trustees, who may but need not be Members of the Plan, to
administer the Trust Fund and manage the assets held in the Trust Fund. Each
Trustee shall serve at the pleasure of the Board of Directors of the Company,
and may resign at any time by giving the Board of Directors not less than thirty
(30) days' notice unless the Board of Directors accepts a lesser period of
notice.
9.02 Action by Majority of the Trustees. A majority of the Trustees at the
----------------------------------
time in office may do any act which the Plan authorizes or requires the Trustees
to do, and the action of such majority expressed from time to time by a vote at
a meeting, or in writing without a meeting, which shall constitute the action of
the Trustees.
9.03 Powers of Trustees. It shall be the duty of the Trustees to invest
------------------
and reinvest the funds of the Trust pursuant to Section 9.04, and to make
distributions therefrom in accordance with the Plan.
9.04 Investments. Subject to all outstanding obligations of the Trust, the
Trustees shall invest and reinvest all funds contributed to or accruing to the
Trust (except those necessary to (a) pay the liabilities, if any, of the Trust,
(b) pay any expenses incurred by the Trustees which the Company fails to pay or
(c) to make distributions of dividends) primarily in shares of Stock. With due
regard to providing for such primary investment policy, the Trustees may invest
funds in savings accounts, certificates of deposit, high-grade short-term
securities, stocks, bonds, investment companies, common and collective trusts
funds for
30
employee benefit plans which satisfy the requirements of Section
501(a) of the Code (the terms of which shall constitute a part of this Plan), or
investments deemed by the Trustees to be desirable for the Trust, or such funds
may be held in cash or cash equivalents; provided however, that the Trust may,
at the discretion of the Trustee, be invested in any of the investment medium
listed above that may be offered by the Company in the ordinary course of its
banking business. All purchases of Stock shall be made at prices which, in the
judgement of the Trustees, do not exceed the fair market value of such shares.
The determination of the fair market value shall be determined in good faith by
the Trustees in accordance with this Section and in accordance with regulations
to be promulgated by the Secretary of Labor pursuant to Section 3(18) of the
Employee Retirement Income Security Act of 1974. Stock may be acquired for cash
or on terms. The Trustees may keep the Stock in the name of some other person,
firm, or corporation or its own name without disclosing fiduciary capacity. The
Trustees may sell at public auction or private contract, redeem, or otherwise
realize upon such Stock and for such purposes may execute such instruments and
writings and do such things as they shall deem proper.
9.05 Exercise of Voting Rights. Except as provided in Section 9.051, the
-------------------------
Trustee shall at all times be entitled to vote in its discretion shares of
Company Stock held in the Trust but not allocated to the Account of any Member
and any shares of stock not issued by the Company. The Trustee shall in
addition be entitled to vote in its discretion shares of Stock held in the Trust
and allocated to the Stock Account of any Member; provided, that with respect to
any corporate matter that involves the voting of such shares with respect to the
approval or disapproval of any corporate merger or consolidation,
recapitalization,
31
reclassification, liquidation, dissolution, sale of substantially all assets, or
such similar transactions as the Secretary of the Treasury may prescribe in
regulations, each Participant shall be entitled to direct the Trustee as to the
exercise of any voting rights attributable to
shares of Stock then allocated to his Account but only to the extent required by
Sections 401(a)(22) and 409(e)(3) of the Code and the regulations thereunder.
9.051 Registration-Type Class of Securities. Notwithstanding Section
-------------------------------------
9.05, if at any time the Company has a registration-type class of securities,
the Committee shall establish a procedure whereby each Member shall direct the
voting of shares of Company Stock allocated to his Account; if a Member fails so
to direct, the Trustee shall vote such shares. A registration-type class of
securities means a class of securities required to be registered under Section
12 of the Securities Exchange Act of 1934 or a class of securities that would be
required to be so registered except for an exemption from registration provided
under Section 12(g)(2)(H) of said Act.
9.052 Number of Votes. Members entitled to direct the voting of shares
---------------
of Stock allocated to their Accounts pursuant to Sections 9.05 or 9.051 shall
have one (1) vote with respect to each share of Stock. Stock which is held by
the Trust and which is not allocated to the Account of any Member shall be voted
by the Trustee in the same proportion determined after application of the
preceding sentence to the shares of Stock allocated to the Accounts of Members,
unless the Trustee makes a determination that to vote such shares of Stock in a
different proportion would be in the best interest of Members of the Plan.
9.053 Voting on Offers. As soon as practicable after the commencement
----------------
of a tender or exchange offer ("Offer") for shares of Stock, the Committee shall
use its best efforts to cause
32
each Member and former Member (whose Account has allocated to it any shares of
Stock) to be advised in writing of the terms of the Offer, and to be provided
with forms by which the Member may instruct the Trustee, or revoke such
instructions, to tender shares of Stock credited to his Account, to the extent
permitted under the terms of such Offer. Subject to the provisions of this
Article 9, the Trustee shall follow the directions of each Member, but the
Trustee shall not tender shares for which no instructions are received unless it
makes a determination that to tender such shares is in the best interest of the
Members. In advising Members of the terms of the Offer, the Committee may
include statements from the Board of Directors setting forth its position with
respect to the Offer. The giving of instructions by a Member to the Trustee to
tender shares and the tender thereof shall not be deemed a withdrawal or
suspension from the Plan or a forfeiture of any portion of the Member's interest
in the Plan solely by reason of the giving of such instructions and the
Trustee's compliance therewith. The number of shares as to which a Member may
provide instructions shall be the total number of shares credited to his Account
as of the close of business on the day preceding the date on which the Offer is
commenced or such earlier date as shall be designated by the Committee which the
Committee, in its sole discretion, deems appropriate for reasons of
administrative convenience. Any securities received by the Trustee as a result
of a tender of shares of Stock shall be held, and any cash so received, shall be
invested in short-term investments, for the Account of the Member or former
Member with respect to whom shares were tendered pending any reinvestment by the
Trustee, as it may deem appropriate, consistent with the purposes of the Plan.
33
9.06 Reliance on Trustees as Owner. No person dealing with the Trustees
-----------------------------
shall be required to take any notice of this Agreement, but all persons so
dealing shall be protected in treating the Trustees as the absolute owners with
full power of disposition of all the monies, Stock, and other property of the
Trust, and all persons dealing with the Trustees are released from inquiry into
the decision or authority of the Trustees and from seeing to the application of
monies, Stock, or other property paid for or delivered to the Trustees.
9.07 Liquidation of Assets. In the event that cash is required by the
---------------------
Trustees to effect any action or distribution under this Trust, or to pay any
expenses of this Trust, or for any other reason deemed sufficient by the
Trustees consistent with any outstanding obligations of the Trust, the Trustees
shall take such action as to the sale or other disposition of Stock forming a
part of the Trust as will provide the amount of cash necessary for such
payments.
9.08 Evidence on Which Trustees May Act. In taking any action or
----------------------------------
determining any fact or question which may arise under this Trust, the Trustees
may, with respect to the affairs of the Company or its Employees, rely upon any
statement by the Company with respect thereto. In the event that any dispute
may arise regarding the payment of any sums or regarding any act to be performed
by the Trustees, the Trustees may in their sole discretion retain such payment
or postpone the performance of such act until actual adjudication of such act
shall have been made in a Court of competent jurisdiction; or until they shall
have been indemnified against loss to their satisfaction; provided, however,
that in the event of any such dispute, the Trustees may rely upon and act in
accordance with any directions received from the Company.
34
9.09 Discretionary Action. Wherever under the provisions of this
--------------------
Agreement the Trustees are given any discretionary power or powers, such power
or powers shall not be exercised in such manner as to cause any discrimination
in favor of or against any Employee or class of Employees. Any discretionary
action taken by the Trustees hereunder shall, to the extent possible, be
consistent with any prior discretionary action taken by them under similar
circumstances, and to this end the Trustees shall keep a record of all
discretionary action taken by them under any provision hereof.
9.10 Records and Accounting. The Trustees shall keep accurate and
----------------------
detailed records of their transactions hereunder and all their accounts, books,
and records relating thereto shall be open at all reasonable times to the
inspection of the Company and its authorized representatives. The Trustees shall
render in writing at least once each twelve (12) months, accounts of their
transactions under this Agreement to the Company and the Company may approve
such accounts of the Trustee by an instrument in writing delivered to the
Trustees. In the absence of the filing in writing by the Company of exceptions
or objections to any such account within sixty (60) days after the receipt by
the Company of any such account, the Company shall be deemed to have approved
such account; and in such case, or upon the written approval of the Company of
any such account, the Trustees shall be released, relieved, and discharged with
respect to all matters and things set forth in such account except to the extent
provided by the Employee Retirement Income Security Act and other applicable
Federal law. Except as may otherwise be required by applicable Federal law, no
person interested in the Trust or otherwise other than the Company may require
an accounting or bring any action against the Trustees with respect to the Trust
and its actions as Trustees. In any proceeding
35
instituted by the Trustees and/or the Company, only the Company and/or the
Trustees shall be the necessary parties. The Trustees shall from time to time
make such other reports and furnish such other information concerning the Trust
as the Company may in writing reasonably request or as may be required by
applicable Federal law.
9.11 Payment of Taxes. The Trustee shall upon direction of the Company
----------------
pay out of the Trust Fund any and all taxes of any and kinds, including without
limitation property taxes and income taxes levied or assessed under existing or
future laws upon or in respect of the Trust or any monies, securities or other
property forming a part thereof or the income therefrom subject to the terms of
any agreements or contracts made with respect to trust investments which make
other provisions for such tax payments. The Trustees may assume that any taxes
assessed on or in respect of the Trust or its income are lawfully assessed
unless the Company shall in writing advise the Trustees that in the opinion of
counsel for the Company such taxes are not or may not be lawfully assessed. In
the event that the Company shall so advise the Trustees, the Trustees will, if
so requested in writing by the Company, contest the validity of such taxes in
any manner deemed appropriate by the Company or its counsel; or the Company may
itself contest the validity of any such taxes in the name of the Trustees; and
the Trustees agree to execute all documents, instruments, claims and petitions
necessary or advisable in the opinion of the Company or its counsel for the
refund, abatement, reduction, or elimination of any such taxes.
9.12 Compensation and Expenses of Trustees. The Trustees shall serve with
-------------------------------------
such compensation for their services as shall be mutually agreed to between the
Company and the Trustees, and all such fees and expenses of the Trust (including
those arising under Section
36
9.14 hereof) shall be paid by the Trust to the extent that they are not paid by
the Company. If the Trustee is a full time employee no compensation (other than
normal wages paid by the Company) shall be paid to such Trustee from the Trust.
If any Trustee shall die, resign, be removed, or for any other reason cease to
be a Trustee, he shall be replaced by a successor, if any, appointed by the
Board of Directors and until he is so replaced, the remaining Trustees shall
exercise all of the powers of the Trustees. The appointment of a successor
Trustee shall be effective upon written notification to the Company and to the
Trustees of his acceptance of such appointment.
9.13 Legal Action. Except to the extent required by the Employee
------------
Retirement Income Security Act, the Trustees shall not be required to institute
any legal action or to appear or participate in any legal action to which they
may be a party, except to contest taxes, unless they shall have been first
indemnified to their satisfaction by the Company for all loss, cost, and
liability.
9.14 Liability of Trustees. Except as otherwise provided in Section 405
---------------------
of the Employee Retirement Income Security Act of 1974, no Trustees shall be
liable for any act or omission of any other Trustees or otherwise for any loss,
damage, or depreciation which may result in connection with the exercise of his
duties or with the exercise of his discretion or upon any other act or omission
hereunder except when due to his own willful misconduct. The Company either
through insurance or otherwise shall indemnify and hold harmless each Trustee
from any and all claims, loss, damage, expenses (including any reasonable
counsel fees) and liability (including any reasonable amounts paid in settlement
with the Employer's approval), arising from any act or omission of such Trustee,
except when the same is judicially
37
determined to be due to the willful misconduct of such Trustee. No bond, surety,
or other security shall be required of the Trustees unless specifically
requested by the Company or unless required by law, in which case the cost of
such bond, surety, or other security shall be an expense chargeable in
accordance with Section 9.12.
38
ART
---
ADMINISTRATION OF THE PLAN
--------------------------
10.01 Retirement and Administrative Committee. The general administration
---------------------------------------
of the Plan and the responsibility for carrying out the provisions of the Plan
shall be placed in an Retirement and Administrative Committee (the "Committee"),
the members of which shall be appointed by the Board of Directors. The
membership of the Committee may be changed by the Board of Directors at any time
and from time to time hereafter; provided, however, that the Committee at all
times shall consist of not fewer than three individuals; and, provided further,
that any changes in the membership of the Committee shall be certified to the
Trustees in writing by the Board of Directors. Any Member of the Committee may
resign at any time by delivery of a written notice of resignation to the
chairman or secretary of the Board of Directors.
10.02 Chairman, Secretary, Records. The members of the Committee shall
----------------------------
elect a Chairman from among their members and a Secretary who may, but need not,
be one of the members of the Committee. The Committee may also designate other
positions within the membership of the Committee. The Secretary shall keep
minutes of the Committee's proceedings and all dates, records and documents
pertaining to the administration of the Plan.
10.03 Majority Vote, Execution of Certificates. The action of the
----------------------------------------
Committee shall be determined by the vote or by agreement in writing or by other
affirmative expression of a majority of its members; provided however, that the
Committee may, by majority vote, designate one of its members to execute all
documents for and on behalf of the Committee.
39
Any certificate or other written direction on behalf of the Committee shall be
signed by those individuals granted authority by the Committee to sign documents
on its behalf.
10.04 Powers.
------
(A) The Committee may appoint such agents, who need not be members
of the Committee, as it may deem necessary for the effective
exercise of its duties, and may delegate to such agents any
powers and duties, both ministerial and discretionary, as the
said Committee may deem expedient or appropriate.
(B) Except as to matters required by the terms of the Plan and
Trust, the Committee shall have complete control of the
administration of this Plan, with all powers necessary to enable
it properly to carry out its duties in that respect. Not in
limitation, but in amplification of the foregoing, the Committee
shall have power to construe this Plan and to determine all
questions that may arise hereunder. It shall determine all
questions relating to the eligibility of employees to
participate in this Plan and the amount of benefit to which any
person may become entitled hereunder.
(C) To the extent not covered by any applicable insurance policy,
the Company shall indemnify each member of the Committee against
any and all claims, loss, damages, expense, and liability
arising from any action or failure to act, except when the same
is judicially determined to be due to the gross negligence or
willful misconduct of such member.
40
10.05 Rules and Regulations. Subject to the limitations of this Article
---------------------
10 of the Plan, the Committee from time to time shall establish such
supplemental rules and regulations for the administration of the Plan and the
transaction of its business as it deems necessary.
10.06 Other Fiduciary Capacity. Nothing contained in this Article 10 of
------------------------
the Plan shall prevent a member of the Committee from serving the Plan in other
fiduciary capacities.
10.07 Employment of Professional Assistance. The Company is empowered, on
-------------------------------------
behalf of the Trust, to engage accountants, actuaries, legal counsel and such
other personnel as it deems necessary or advisable to assist it in the
performance of its duties under the Plan. The functions of any such persons
engaged by the Company shall be limited to the specific services and duties for
which they were engaged, and such persons shall have no other duties,
obligations or responsibilities under the Plan or Trust.
10.08 Reliance. The Committee and the Trustees shall be entitled to rely
--------
conclusively upon all advice, counsel and opinions provided by accountants,
actuaries, legal counsel and other professional assistants engaged pursuant to
Section 10.07.
10.09 Expenses of Administration.
--------------------------
(A) Direct charges and expenses arising out of the purchase or sale
of securities, and taxes levied on or measured by such
transactions shall be charged against the Trust Fund.
(B) The Company shall pay all other expenses reasonably incurred in
administering the Plan, including expenses of the Committee and
the Trustees, such compensation to the Trustees as from time to
time may be agreed between the Company and the Trustees (as set
forth in Section
41
9.14), fees for legal services, and all taxes, if any, other
than those charged to the Trust under Section 10.09(A),
provided that, at the discretion of the Company, such expenses
may be paid from the Trust.
10.10 Allocation of Fiduciary Responsibility. The Trustees and the
--------------------------------------
Company shall be the "named fiduciaries" of the Plan as defined in Section
402(a) of the Employee Retirement Income Security Act of 1974. The named
fiduciaries shall have only those specific powers, duties, responsibilities, and
obligations as are specifically given them under the Plan and Trust.
(A) Company. The Company shall have the sole responsibility for
-------
making contributions required under the Plan. The Company shall
have the sole authority to appoint and remove the Trustee and
members of the Committee. Moreover, the Company shall have the
sole authority to terminate or amend the Plan or to merge or
consolidate the Plan with other employee benefit plan. The Company
shall be the "plan administrator" as defined under the Employee
Retirement Income Security Act of 1974.
(B) The Trustees. The Trustees shall have the sole responsibility of
------------
administering the Trust Fund and of managing the assets held in
the Trust Fund, all as specifically provided under the Plan and
Trust.
(C) The Committee. The general administration of the Plan, and the
-------------
responsibility for carrying out the provisions hereof, shall be
placed in the Committee which is authorized and required to take
all action necessary to ensure that the Plan meets the
requirements of the Employee
42
Retirement Income Security Act of 1974 as now in effect and as it
may hereafter be amended from time to time.
10.11 No Joint Fiduciary Responsibilities. The Plan and Trust are
-----------------------------------
intended to allocate to each named fiduciary the individual responsibility for
the prudent execution of the functions assigned to him, and none of such
responsibilities or any other responsibility shall be shared by two or more of
such named fiduciaries unless such sharing shall be provided by a specific
provision of this Plan and Trust. Whenever one named fiduciary is required by
the Plan and Trust to follow the directions of another named fiduciary, the two
named fiduciaries shall not be deemed to have been assigned a shared
responsibility, but the responsibility of the named fiduciary giving the
directions shall be deemed his sole responsibility, and the responsibility of
the named fiduciary receiving those directions shall be to follow them insofar
as such instructions are on their face proper under applicable law.
10.12 Claims Procedure.
----------------
(A) The right of any Member, Beneficiary or other person claiming a
benefit shall be initially determined by the Committee or its
appointed agent. Any denial by the Committee or agent of the
claim for benefits under the Plan shall be stated in writing and
delivered or mailed to the claimant within ninety (90) days of
receipt of the claimant's written application (unless the
Committee notifies the claimant in writing that an extension of
up to ninety (90) day additional is necessary because of reasons
stated in the extension notice). Such notice of denial shall set
forth the reasons therefor, including specific reference to the
pertinent provisions of the
43
Plan on which the denial is based, a description of any
additional material or information necessary to perfect the
claim with an explanation of why such material or information is
necessary, and an explanation of the procedure for appeal of the
denial.
(B) A claimant who has had an initial claim denied or his duly
authorized representative may (i) request a review by written
application to the Committee, (ii) review pertinent documents,
and (iii) submit issues and comments in writing. Such request
for review shall be filed with the Committee within sixty (60)
days after receipt by the claimant of the notice of denial; and
within sixty (60) days after receipt of such request, or, in
special circumstances, such as the need to hold a hearing,
require an extended period for processing, as soon thereafter as
possible, but not later than one-hundred and twenty (120) days
after receipt of such request, the Committee shall render its
decision in writing, setting forth the specific reasons
therefor, including specific references to the pertinent
provisions of the Plan on which the decision is based.
(C) Any notice or decision by the Committee or its agent shall be
written in a manner calculated to be understood by the claimant.
Such decisions shall be final and binding upon the person
claiming an interest in the Plan.
10.13 Notice to Employee. The Committee shall cause to be furnished to
------------------
each Employee a written summary of the Plan, any amendments thereto, and such
other reports and statements as may
44
be required under applicable law. The foregoing summary shall include the name
of the Trustee and the Plan Administrator and shall set forth the Employee's
rights and duties with respect to the benefits available to him under the Plan.
10.14 Government Reports. The Committee shall submit annually to the
------------------
Secretary of Labor and the Secretary of Treasury the reports and statements
required under the Employee Retirement Income Security Act of 1974.
45
ARTICLE 11
----------
NON-ALIENATION OF BENEFITS
--------------------------
11.01 Spendthrift Provision. Beneficial interests of Members or their
---------------------
Beneficiaries in the Trust Fund shall not be assignable nor subject to
attachment nor receivership, nor shall they pass to any Trustee on bankruptcy or
be reached or applied by any legal process for the payment of any obligations of
any such person.
11.02 Qualified Domestic Relations Orders. Notwithstanding any provisions
-----------------------------------
of the Plan to the contrary, if there is entered any qualified domestic
relations order (within the meaning of Section 414(p) of the Internal Revenue
Code and ERISA Section 206(d)(3)(B), as added by the Retirement Equity Act of
1984) that affects the payment of benefits hereunder, such benefits shall be
paid in accordance with the applicable requirements of such order.
46
ARTICLLE 12
-----------
AMENDMENT AND TERMINATION
-------------------------
12.01 Right to Amend or Terminate. While it is the intention of the
---------------------------
Company to continue the Plan indefinitely, the Company reserves the right to
modify, amend, or terminate the Plan in whole or in part at any time by an
instrument in writing pursuant to authority of a vote of the Board of Directors;
provided that any such modification, amendment, or termination does not make it
possible for any portion of the Trust Fund to be used for or diverted to
purposes other than for the exclusive benefit of Members, retired Members,
former Members, or their Beneficiaries after the payment of administrative
expenses or taxes levied on the Trust Fund. Any amendment may be made
retroactively to the extent permitted by the Internal Revenue Code.
12.02 Liquidation of Trust Fund. In the event of liquidation of the
-------------------------
entire Trust Fund, the Trustees shall adjust all Accounts to reflect payment of
all expenses, all losses, or profits and reallocations; and each Member, retired
Member, former Member, and each Beneficiary of a Member entitled to a
distribution under the Plan shall be entitled to the entire amount to his credit
in the Trust Fund. The Trustees shall distribute such amount in Stock in one
lump sum. Amounts represented by Fractional Shares shall be distributed in
accordance with the procedures in Section 7.02.
47
ARTICLE 13
----------
GENERAL PROVISIONS
------------------
13.01 Rights Against the Company. Neither the establishment of the Plan,
--------------------------
nor of the Trust Fund, nor any modification thereof, nor the payment of any
benefits hereunder shall be construed as giving to any Employee or Member the
right to be retained in the service of the Company or as interfering with the
right of the Company to discharge any Employee at any time.
13.02 Records. The Company and Trustees shall make available all the
-------
information reasonably necessary to set up and maintain Members' records and
Accounts.
13.03 Payments to Incompetents. In the event that any person entitled to a
------------------------
distribution under this Plan is unable to care for his affairs because of
illness or accident, any payment due (unless prior claim therefor shall have
been made by a duly qualified guardian or other legal representative) may be
paid to the spouse, parent, child, brother or sister, or other person deemed by
the Trustee to have incurred expenses for such person otherwise entitled to
payment. Any such payment shall be a payment for the account of the persons
entitled to the benefit, and shall be a complete discharge of any liability of
the Plan therefor.
13.04 Mailing of Benefits. Each Member or Beneficiary shall furnish the
-------------------
Trustees with the address to which benefits shall be mailed. If any such
benefits mailed by regular United States mail to the last such address appearing
on the Trustee's records are returned because the addressee is not at that
address, and if the person entitled to such benefit does not communicate with
the Trustees in writing for a period of two years thereafter and the Trustees
have made a reasonable effort to locate such person, the interest of such Member
shall be
48
distributed to his Beneficiary. If no Beneficiary has been designated by the
Member, or if such designated Beneficiary cannot be located, then such Member's
interest shall be distributed in accordance with Section 6.03.
13.05 Return of Contributions. Notwithstanding anything to the contrary
-----------------------
elsewhere contained in this Plan, if the Internal Revenue Service shall issue an
initial determination letter stating that the Plan as contained herein does not
meet the requirements of Section 401 of the Internal Revenue Code, the Company
shall be entitled to a return of its contributions made hereunder on the basis
of the Plan as contained herein within one year after the date of the denial of
qualification.
Notwithstanding the foregoing, contributions made by the Company may be
returned to the Company if:
(a) The contribution was made because of a mistake of fact and the
contribution is returned within one (1) year of the mistake in
payment; or
(b) The contribution was conditioned upon its deductibility, the
deduction is disallowed and the contribution is returned within
one (1) year of disallowance of the deduction.
The return of a contribution to the Company shall be permitted if the
amount so returned (i) is the excess of the amount actually contributed over the
amount which would have been contributed if there had been no mistake in fact or
error in determining the deduction, as the case may be, (ii) does not include
the earnings attributable to such contribution, and (iii) is reduced by any
losses attributable to such contribution. In no case may the Account of any
49
Employee be reduced by such return to less than such Account would have been had
the returned contribution not been made in the first instance.
13.06 Merger or Consolidation. In the event that this Plan is merged with
-----------------------
or consolidated with any other plan, or the assets or liabilities accrued under
this Plan are transferred to any other plan, each Member's benefit under such
other plan shall be at least as great immediately after such merger,
consolidation, or transfer (if such plan were then to terminate) as the benefit
to which he would have been entitled under this Plan immediately before such
merger, consolidation, or transfer (if the Plan were then to terminate).
13.07 Construction. The provisions of this Agreement shall be construed,
------------
administered, and enforced according to the laws of the Commonwealth of
Massachusetts unless superseded by applicable Federal Law. All contributions to
the Trust shall be deemed to be made in the Commonwealth of Massachusetts.
13.08 Liability of Company. Subject to its agreement to indemnify Trustees
--------------------
and except as otherwise provided by applicable Federal law any neither the
Company nor any person acting on behalf of the Company shall be liable for any
act or omission on the part of any Trustee, or for any act performed or the
failure to perform any act by any person with respect to this Agreement, the
Plan or Trust, the Company's only duty being to use reasonable care in the
selection of the Trustees.
13.09 Impossibility of Performance. In case it becomes impossible for the
----------------------------
Company or the Trustees to perform any act under this Plan and Trust, that act
shall be performed in which the judgement of the Trustees will most nearly carry
out the intent and purpose of this
50
Plan and Trust. All parties to this Agreement or in any way interested in this
Plan and Trust shall be bound by any acts performed under such condition.
13.10 Headings. The headings and subheadings in this instrument are for
--------
convenience of reference only, and the instrument is not to be construed
according to such headings.
13.11 Execution of Agreement. This Agreement may be executed in any number
----------------------
of counterparts, and each fully executed counterpart shall be deemed an
original.
51
ARTICLE
-------
TOP-HEAVY PROVISIONS
--------------------
14.01 Article Controls. Any Plan provisions to the contrary
----------------
notwithstanding, the provisions of this Article 14 shall control to the extent
required to cause the Plan to comply with the requirements imposed by Section
416 of the Code.
14.02 Definitions. Where the following words and phrases appear in this
-----------
Article 13, they shall have the respective meanings set forth below, unless
their context clearly indicates to the contrary:
(a) Account Balance. As of any Valuation Date, the aggregate amount
---------------
credited to an individual's Account or Accounts under a qualified
defined contribution plan (excluding employee contributions which
were deductible within the meaning of Section 219 of the Code and
rollover or transfer contributions made by or on behalf of such
individual to such plan from another qualified plan, sponsored by
an entity other than the Company or an Affiliated Employer)
increased by (i) the aggregate distributions made to such
individual from such plan during a five-year period ending on the
Determination Date, and (ii) the amount of any contributions due
as of the Determination Date immediately following such Valuation
Date.
(b) Accrued Benefit. As of any Valuation Date, the present value
---------------
(computed on the basis of the Assumptions) of the cumulative
accrued benefit (excluding the portion thereof which is
attributable to employee
52
contributions which were deductible pursuant to Section 219 of the
Code, to rollover or transfer contributions made by or on behalf
of such individual to such plan from another qualified plan
sponsored by an entity other than the Company or other Affiliated
Employer, to proportional subsidies or to ancillary benefits) of
an individual under a qualified defined benefit plan increased by
(i) the aggregate distributions made to such individual from such
plan during a five (5) year period ending on the Determination
Date and (ii) the estimated benefit accrued by such individual
between such Valuation Date and the Determination Date immediately
following such Valuation Date.
(c) Aggregation Group. The group of qualified plans maintained by the
-----------------
Company and each Affiliated Employer consisting of (i) each plan
in which a Key Employee participates and each other plan which
enables a plan in which a Key Employee participates to meet the
requirements of Sections 401(a)(4) and 410 of the Code, or (ii)
each plan in which a Key Employee participates, each other plan
which enables a plan in which a Key Employee participates to meet
the requirements of Sections 401(a)(4) and 410 of the Code and any
other plan which the Company elects to include as a part of such
group; provided, however, that the Company may not elect to
include a plan in such a group if its inclusion would cause the
group to fail to meet the requirements of Sections 401(a)(4) and
410 of the Code.
53
(d) Assumptions. For purposes of this Article 13, the interest rate
-----------
and mortality assumptions specified for top-heavy status
determination purposes in any qualified defined benefit plan
included in an Aggregation Group which includes the Plan.
(e) Determination Date. For the first Plan Year of any plan, the last
------------------
day of such Plan Year, and for each subsequent Plan Year of such
plan, the last day of the preceding Plan Year. For purposes of
determining whether an Aggregation Group is Top-Heavy the
Determination Date for each separate plan falling within the same
calendar year shall be utilized.
(f) Former Key Employee. With respect to any Plan Year, any
-------------------
individual who was a Key Employee in a previous Plan Year but who
is not a Key Employee with respect to such Plan Year. For purposes
of this definition, a beneficiary (who would not otherwise be a
Key Employee) of a deceased Former Key Employee shall be deemed to
be a Former Key Employee in substitution for such deceased Former
Key Employee.
(g) Key Employee. With respect to any Plan Year, any individual who
------------
at any time during such Plan Year or during any of the four (4)
Plan Years immediately preceding such Plan Year was (i) an officer
of the Company or an Affiliated Employer having an annual
compensation greater than 50 percent of the amount in effect under
Section 415(b)(1)(A) of the Internal Revenue Code for such Plan
Year, (ii) one of the ten (10) employees having an annual
compensation greater than 50 percent of the dollar
54
limitation specified in Section 415(b)(1)(A) of the Internal
Revenue Code for any Plan Year and owning both the largest
interests in the Company or an Affiliated Employer and greater
than a one-half percent (1/2%) interest in the Company or an
Affiliated Employer, (iii) an owner of five percent (5%) or more
of the outstanding stock of the Company or an Affiliated Company
or of stock possessing five percent (5%) or more of the total
combined voting power of all the stock of the Company or an
Affiliated Employer, or (iv) an employee whose Remuneration
(during the calendar year including the Determination Date)
exceeded $150,000 and who was an owner of one percent (1%) or more
of the outstanding stock of the Company or an Affiliated Employer
or of stock possessing one percent (1%) or more of the total
combined voting power of all of the stock of the Company or an
Affiliated Employer. For purposes of this definition, (i) an
individual shall be deemed to own stock owned by other individuals
as provided in Section 318 of the Code, but substituting five
percent (5%) for fifty percent (50%) in subparagraph (c) of
Section 318(a)(2) of the Internal Revenue Code, (ii) a beneficiary
(who would not otherwise be a Key Employee) of a deceased Key
Employee shall be deemed to be a Key Employee in substitution for
such deceased Key Employee, and (iii) the total number of Key
Employees who are officers of the Company and the Affiliated
Employers shall be limited to: if there is a total of less than
thirty (30) employees of the Company and
55
Affiliated Employers, three (3); if there is a total of more than
thirty (30) but less than five hundred (500) employees of the
Company and Affiliated Employers, ten percent (10%) of such total;
and, if there is a total of more than five hundred (500) employees
of the Company and Affiliated Employers, fifty (50).
(h) Plan Year. With respect to any plan, the annual accounting period
---------
used by such plan for annual reporting purposes.
(i) Remuneration. An individual's earned income, wages, salaries, and
------------
other amounts actually paid or made available by the Company or an
Affiliated Employer to such individual during a Plan Year for
personal services actually rendered in the course of employment
with the Company or an Affiliated Employer (subject to exclusion
of amounts specified by regulations promulgated under Section 415
of the Code).
(j) Valuation Date. With respect to any Plan Year of any defined
--------------
contribution plan, the most recent date within the twelve (12)
month period prior to a Determination Date as of which the trust
fund established under such plan was valued and the net income (or
loss) thereof allocated to Members' accounts. With respect to any
Plan Year of a defined benefit plan, the most recent date within a
twelve-month period prior to a Determination Date as of which the
plan assets were valued for purposes of computing plan costs for
purposes of the requirements imposed under Section 412 of the
Code.
56
14.03 Top-Heavy Status.
----------------
(a) The Plan shall be deemed to be top-heavy if, as of any
Determination Date, (i) the sum of Account Balances of Members who
are Key Employees exceeds sixty percent (60%) of the sum of
Account Balances of all Members (excluding the Account Balances of
Former Key Employees) unless an Aggregation Group including the
Plan is not top-heavy, or (ii) an Aggregation Group including the
Plan is top-heavy. An Aggregation Group shall be deemed to be top-
heavy as of a Determination Date if the sum (computed in
accordance with Section 416(g)(2)(B) of the Code and the
regulations promulgated thereunder) of (i) the Account Balances of
Key Employees under all defined contribution plans included in the
Aggregation Group and (ii) the Accrued Benefits of Key Employees
under all defined benefit plans included in the Aggregation Group
exceeds sixty percent (60%) of the sum of the Account Balances and
the Accrued Benefits of all individuals (excluding Former Key
Employees) under such plans. If an individual has not performed
services for the Company or an Affiliated Employer at any time
during the previous five (5) years, his or her Account Balance or
Accrued Benefit shall not be taken into account.
(b) If the Plan is determined to be top-heavy for a Plan Year for
which it is part of an Aggregation Group which includes a
qualified defined benefit plan which is also top-heavy, the
requirements of Section 416(c) shall be
57
satisfied for such Plan Year by providing the minimum benefit
required by said Section under such defined benefit plan for each
Member. If the Plan is determined to be top-heavy for a Plan Year
and it is not part of an Aggregation Group which includes a
qualified defined benefit plan which is also top-heavy, the
Company shall contribute to the Plan for such Plan Year on behalf
of each Member who is not a Key Employee and who has not
terminated his employment as of the last day of such Plan Year an
amount equal to:
(i) the lesser of (a) three percent (3%) of such Member's
Remuneration for such Plan Year, or (b) a percent of such
Member's Remuneration for such Plan Year equal to the
greatest percent determined by dividing for each Key
Employee the amount of contributions allocated to such Key
Employee's Account for such Plan Year pursuant to Article 4
by such Key Employee's Remuneration not in excess of
$200,000 for such Plan Year; reduced by
(ii) the amount allocated to such Member's Account for such Plan
Year pursuant to Article 4.
(c) In the event that a Member also participates in a defined benefit
plan of the Company during a Plan Year in which the Plan is a
Top-Heavy Plan or a Super Top-Heavy Plan, the limitations under
Section 4.05 of the Plan shall apply, except that the factor of
one-hundred percent (100%)
58
shall be substituted for the factor of one-hundred twenty-five
(125%) as set forth under such Section with regard to the defined
benefit plan and defined contribution plan fractions. If the Top-
Heavy Plan is not a Super Top-Heavy Plan, the preceding sentence
shall not apply if:
(1) the Member's minimum benefit under the defined benefit plan
is increased to equal the product of (a) and (b) below:
(a) the lesser of
(i) three percent (3%) multiplied by his years of
service (up to a maximum of ten (10) years), or
(ii) thirty percent (30%); multiplied by:
(b) his highest average annual Form W-2 compensation for a
five (5) consecutive year period required to be taken
into account pursuant to Code Section 416(c), or
(2) the Member's minimum contribution under Section
13.03(b)(i)(a) of the Plan is increased to four percent (4%)
of a Member's Remuneration.
(3) Super Top-Heavy Plan means a plan in which the top-heavy
determination pursuant to Section 13.03(2) is performed
substituting ninety percent (90%) for sixty percent (60%).
14.04 Termination of Top-Heavy Status. If the Plan has been deemed to be
-------------------------------
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article
59
13 shall cease to apply to the Plan effective as of the day following the
Determination Date on which it is determined to no longer be top-heavy.
IN WITNESS WHEREOF these presents have been signed and sealed for in behalf
of the parties hereto, in the case of the Company by its duly authorized
officer, as of the date first above written.
CAPE COD BANK AND TRUST COMPANY, as
the Company
By: James H. Rice
------------------------------------
Title: President
CAPE COD BANK AND TRUST COMPANY, as
the Trustee
By: James H. Rice
-----------------------------------
Title: President
60
FIRST AMENDMENT
TO
CAPE COD BANK AND TRUST COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
WHEREAS, Cape Cod Bank and Trust Company (hereinafter referred to as
"Company") has established the Cape Cod Bank and Trust Company Employee Stock
Ownership Plan and Trust (hereinafter referred to as "Plan"), effective January
1, 1989; and
WHEREAS, Section 12.01 of the Plan reserves to the Company the right to
amend the Plan at any time;
NOW, THEREFORE in consideration of the foregoing, the Company, pursuant to
authority granted by its Board of Directors, hereby agrees to amend the Plan in
accordance with the following provisions, said amendment to be effective January
1, 1989:
Section 4.01(b) shall be amended in its entirety as follows:
"(b) Any excess Stock not allocated in accordance with subsection (a)
above shall be placed in a suspense account which shall be established
and maintained to hold such excess Stock until such time as it is
allocated in accordance with the following. One-seventh (1/7) of such
Stock (or such higher proportion as the Board of Directors may
determine each year), but not in excess of the amounts permitted in
the limitation under Code Section 415, shall be released and allocated
as of the last day of each of the following Plan Years until all such
Stock has been allocated to the Accounts of Members who are then
employed by the Company in the proportion that such Member's Annual
Compensation bears to the total Annual Compensation of all Members.
IN WITNESS WHEREOF, Cape Cod Bank and Trust Company has caused this
instrument to be executed in its name on its behalf this 20th day of September,
1990, by its officer thereunto duly authorized.
CAPE COD BANK AND TRUST COMPANY
By:/s/Noal D. Reid
--------------------------------------
Title: Executive Vice President
and Treasurer
SECOND AMENDMENT TO
THE CAPE COD BANK AND TRUST COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
WHEREAS, Cape Cod Bank and Trust Company (the "Company") has established
the Cape Cod Bank and Trust Company Employee Stock Ownership Plan (the "Plan")
for its eligible employees, originally effective January 1, 1989; and
WHEREAS, Section 12:01 of the Plan reserves to the Employer the right to
amend the Plan:
NOW THEREFORE, the Plan is amended by this Second Amendment, effective as
of
January 1, 1992.
1. Section 1.03 of the Plan be and hereby is revised in its entirety and the
following substituted therefor:
"1.03 "Annual Compensation" means the basic compensation paid to an
Employee by the Company while a Member during each Plan Year and including
commissions paid to salespersons and any elective deferrals made under a
plan maintained by the Company which qualifies under Section 401(k) or 125
of the Code, but excluding bonus payments, overtime, special incentive
payments, and any expense allowance payments or any group life insurance
contributions includible in income. "Annual Compensation" to be taken into
account under the Plan shall not exceed Two Hundred Thousand Dollars
($200,000), or such other amount as may be provided pursuant to applicable
law or regulations; provided however, that in determining the Annual
Compensation of a 5 percent owner (as defined in Section 416 of the
Internal Revenue Code) or one of the top 10 Employees by total earnings
from the Company, the Annual Compensation of a spouse and of a lineal
descendant under the age of 19 before the end of the Plan Year shall be
aggregated with such Employee's Annual Compensation."
2. Section 1.08 of the Plan be and hereby is revised in its entirety and the
following substituted therefor:
"1.08 "Company" means Cape Cod Bank and Trust Company situated in Hyannis,
Massachusetts, and any successor thereof; and any corporation now or
hereinafter affiliated with Cape Cod Bank and Trust Company which is
designated by the Board as entitled to adopt the Plan for its eligible
employees, and which does so by a vote of its governing body; and any
successor to any of the foregoing, either singly or as a group, as the
context may require; which eligible Employers shall include Montcalm
Corporation effective January 1, 1992 and CCB&T Investment Company, Inc.
effective July 1, 1992."
3. Section 2.02 of the Plan be and hereby is revised in its entirety and the
following substituted therefor:
"2.02 Eligibility Service. An Employee shall be credited with one year of
-------------------
"Eligibility Service" for each computation period in which he is credited
with 1,000 Hours of Service, including periods of service prior to the
Effective date of the Plan. The initial computation period shall be the
twelve-month period commencing on the Employee's date of employment.
Subsequent computation periods shall be the consecutive twelve-month
periods commencing on the anniversary date of the Employee's date of
employment. For purposes of determining Eligibility Service for Employees
of any Affiliated Company, only service following the date of affiliation
shall be included, unless otherwise provided for."
4. Section 5.04 of the Plan be and hereby is revised in its entirety and the
following substituted therefor:
"Section 5.04 Payment of Dividends. Cash dividends received by the Trust
--------------------
on Stock allocated to a Member's Account shall be paid to such Member in
cash as soon as practicable after receipt by the Trustee, but not later
than ninety (90) days after the end of the Plan Year in which the dividends
were received. Cash dividends received by the Trust on Stock held in the
Suspense Account shall be paid to Members in cash in the same proportion
that the number of shares of Stock allocated to a Member's Account bears to
the total number of shares of Stock allocated to the Accounts of all
Members; such dividends to be paid as soon as practicable after receipt by
the Trustee, but not later than ninety (90) days after the end of the Plan
Year in which the dividends were received.
Dividends received by the Trust in the form of Stock on Stock allocated to
a Member's Account shall be allocated to the Member's Account. Dividends
received by the Trust in the form of Stock on Stock held in the Suspense
Account shall be allocated to the Member's Account in the same proportion
that the number of shares of Stock allocated to a Member's Account bears to
the total number of shares of Stock allocated to the Accounts of all
Members."
5. Section 7.07 of the Plan be and hereby is added to the Plan immediately
following Section 7.06 to read as follows:
"7.07 Direct Rollovers. This Section applies to all distributions made on
----------------
or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Section, 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.
7.071 For purposes of Section 7.07, the following words shall have the
following meanings unless a different meaning is plainly required by the
context:
2
(a) "eligible rollover distribution" shall mean any distribution of all or
a portion of the balance to the credit of the distributee, except that
an eligible rollover distribution does not include any distribution
that is one in 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 10 years or more, any distribution to the extent
such distribution is required under Section 6.05, 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 company securities).
(b) "eligible retirement plan" shall mean an individual retirement account
described in Section 408(a) Internal Revenue Code, an individual
retirement annuity described in Section 408(b) Internal Revenue Code,
an annuity plan described in Section 403(a) Internal Revenue Code, or
a qualified trust described in Section 401(a) Internal Revenue 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.
(c) "distributee" shall mean 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 11.02, are distributees with regard to the interest of the
spouse or former spouse.
(d) "direct rollover" shall mean a payment by the Plan to the eligible
retirement plan specified by the distributee."
IN WITNESS WHEREOF, Cape Cod Bank and Trust Company has caused this
instrument to be executed by its duly authorized representative this 8th day of
July, 1993.
Attest: Cape Cod Bank and Trust Company
/s/Morton D. Furber, Jr. By:/s/Noal D. Reid
- ------------------------ ----------------------------
Title:Executive Vice President
and Treasurer
3
THIRD AMENDMENT TO
THE CAPE COD BANK AND TRUST COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Cape Cod Bank and Trust Company (the "Company") has established
the Cape Cod Bank and Trust Company Employee Stock Ownership Plan (the "Plan")
for its eligible employees, originally effective January 1, 1989; and
WHEREAS, Section 12.01 of the Plan reserves to the Employer the right to
amend the Plan:
NOW THEREFORE, the Plan is amended as follows:
1. Section 1.03 of the Plan be and hereby is revised in its entirety and the
following substituted therefor:
"1.03 "Annual Compensation" for years beginning prior to January 1, 1995
means the basic compensation paid to an Employee by the Company while a
Member during each Plan Year and including commissions paid to salespersons
and any elective deferrals made under a plan maintained by the Company
which qualifies under Section 401(k) or Section 125 of the Code, but
excluding bonus payments, overtime, special incentive payments, and any
expense allowance payments or any group life insurance contributions
includible in income. For years beginning on or after January 1, 1995
"Annual Compensation" means the total taxable earnings as reported on Form
W-2, paid by the Employer during a Plan Year, and including any amounts
subject to salary reduction under a plan maintained by the Employer
pursuant to Internal Revenue Code Section 401(k) or Section 125. Effective
January 1, 1989, "Annual Compensation" to be taken into account under the
Plan in any Plan Year shall not exceed Two Hundred Thousand Dollars
($200,000) or such other amount as may be provided pursuant to applicable
law or regulations. For Plan Years-beginning on or after January 1, 1994,
the Annual Compensation of each Member taken into account for determining
benefits provided under the Plan for any Plan Year shall not exceed One
Hundred Fifty Thousand Dollars ($150,000) (as adjusted 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 twelve months, over which annual Compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than twelve months, the annual
compensation limit under Section 401(a)(17) of the Code 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 twelve. In
determining the compensation of a 5 percent owner (as defined in Section
416 of the Internal Revenue Code) or one of the top 10 Employees by total
earnings from the Company, the Annual Compensation of a spouse and of a
lineal descendant under the age of 19 before the end of the Plan Year shall
be aggregated with such Employee's Annual Compensation."
IN WITNESS WHEREOF, Cape Cod Bank and Trust Company has caused this
instrument to be executed by its duly authorized representative this eighth day
of June, 1995.
Attest: Cape Cod Bank and Trust Company
/s/ Morton D. Furber, Jr. By: /s/Noal D. Reid
- ------------------------ -------------------------------
Title: Executive Vice President
Treasurer
2
CAPE COD BANK AND TRUST COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
Fourth Amendment
----------------
The Cape Cod Bank and Trust Company Employee Stock Ownership Plan and
Trust, dated as of January 1, 1989, as amended, is hereby further amended,
pursuant to Section 12.01 thereof, as follows:
A. Amendments
1. Article I is hereby amended by deleting section 1.18 in its entirety
and substituting therefor the following:
"Stock" and "Company Stock" mean shares of common stock issued by CCBT
Bancorp, Inc. (the "Holding Company") (or a member of the controlled group which
includes the Holding Company) which are readily tradeable on an established
securities market or, if such stock is not readily tradeable, shares of common
stock issued by the Holding Company which meet the requirements of section
409(1)(2) of the Code.
2. Article VII is hereby amended by deleting references to the "Company"
in the first, third and fourth sentences of Section 7.04 and substituting
therefor the "Holding Company."
3. Article VII is hereby further amended by deleting the references to
the "Company" in the first sentence of Section 7.043 and substituting therefor
"the Holding Company."
4. Article VII is hereby further amended by deleting the reference to the
"Company" in the last sentence of Section 7.044 and substituting therefor the
"Holding Company."
5. Article VII is hereby further amended by deleting the reference to
the "Company" in Section 7.046 and substituting therefor the "Holding Company."
6. Article VII is hereby further amended by deleting all references to
the "Company" in Section 7.05 and substituting therefor the "Holding Company."
7. Article VII is hereby further amended by deleting references to the
"Company" in Section 7.06 and substituting therefor the "Holding Company."
B. Miscellaneous
1. This Fourth Amendment shall become effective upon the consummation of
the Reorganization as contemplated by the Plan of Reorganization and
Acquisition, dated as of October 8, 1998, between the Holding Company and the
Company.
2. The Trust Agreement is in all other respects hereby confirmed.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Fourth Amendment has been signed and sealed for
and on behalf of the undersigned by their duly authorized officer this 11th day
of February, 1999.
CAPE COD BANK AND TRUST COMPANY
By: /s/ Stephen B. Lawson
----------------------------
Stephen B. Lawson
President and Chief Executive Officer
CCBT BANCORP, INC.
By: /s/ Stephen B. Lawson
--------------------------------
Stephen B. Lawson
President and Chief Executive Officer