EXHIBIT 10.1
FIRST AMENDMENT TO THE
OCEAN FEDERAL SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP PLAN
March 19, 1997
This First Amendment to the Ocean Federal Savings Bank Employee Stock
Ownership Plan (the "ESOP"), executed on March 19, 1997, by Ocean Federal
Savings Bank (the "Bank").
WITNESSETH THAT:
WHEREAS, the Board of Directors of the Bank adopted the ESOP effective
January 1, 1996; and
WHEREAS, the Board of Directors desires to amend the ESOP to reflect
certain changes which are required by the Internal Revenue Service in order for
the ESOP to obtain a favorable determination of the plan's tax-qualified status
from the Internal Revenue; and
WHEREAS, The Board of Directors also desires to make certain other
clarifying amendments to the ESOP regarding the allocation of discretionary
contributions and the computation period for determining years of service for
purposes of vesting; and
WHEREAS, the Board of Directors also desires to include a
discretionary provision in the plan providing for matching contributions made
with respect to employee salary deferrals made under the Bank's 401(k) plan;
WHEREAS, by previous resolution, the Board of Directors has duly
authorized certain officers to take whatever action necessary to ensure that the
Plan meets the qualification requirements of the Internal Revenue Code and
obtains a favorable determination letter form the Internal Revenue Service
regarding such qualifications; and
WHEREAS, Section 13.4 permits the ESOP to be amended from time to time
as is necessary.
NOW, THEREFORE, BE IT RESOLVED, that the ESOP shall be, and hereby is,
amended as follows:
FIRST CHANGE
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Effective January 1, 1997, Section 4.1 is amended by adding the words
"while a Participant" to the end of the last sentence thereof. Accordingly, the
last sentence of Section 4.1 shall read in its entirety as follows:
The Employers' contributions and available forfeitures for a Plan Year
shall be credited as of the last day of the year to the Accounts of
the Active Participants in proportion to their amounts of Cash
Compensation while a Participant.
SECOND CHANGE
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Effective January 1, 1996, the first sentence of the paragraph
immediately following Section 5.1-2 is deleted in its entirety and replaced with
the following:
For purposes of this Section 5.1 and the following Section 5.2,
"annual addition" means the sum for any year of (a) employer
contributions and forfeitures allocable to a Participant under all
plans (or portions thereof) maintained by an Employer subject to
Section 415(c) of the Code, (b) the Participant's employee
contributions under all such plans (or portions thereof), and (c)
amounts described in Section 419A(d)(2) of the Code (relating to post-
retirement medical benefits of key employees) or allocated to an
annuity or pension plan individual medical account described in
Section 415(1) of the Code, to the extent includable for purposes of
Section 415(c)(2) of the Code. A Participant's employee contributions
described in (a) above shall be determined without regard to (i) any
rollover contributions, (ii) any repayments of loans, or (iii) any
prior distributions repaid upon the exercise of buy-back rights.
THIRD CHANGE
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Effective January 1, 1996, Section 5.2 is hereby amended by adding a new
subsection to the end thereof. New subsection 5.2-3 shall provide as follows:
This subsection applies, if, in addition to this Plan, a Participant
is covered under another qualified defined contribution plan or a
welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, or an individual medical account, as
defined in Section 415(1)(2) of the Code, maintained by the Employer
which provides an annual addition during any limitation year. The
annual additions which may be credited to a Participant's account
under this Plan for any such limitation year will not exceed the
maximum permissible amount (as determined under Section 5.1) reduced
by the annual additions credited to a Participant's account under the
other plans and welfare benefit funds for the same limitation year. If
the allocations to a Participant's Account otherwise required under
this Plan for any Plan Year would cause the limitations of Section 5.1
to be exceeded for that Plan Year, contributions otherwise required
with respect to such Participant under this Plan, shall be reduced to
the extent necessary to comply with the limitations of section 5.1;
provided, however, that in the event that the limitations of Section
5.1 shall be exceeded by reason of the combined amounts contributed
under all of the Employer's defined contribution plans, it is intended
that contributions made under the Employer's other defined
contribution plans be reduced first.
FOURTH CHANGE
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Effective January 1, 1996, Section 9.2 is amended by deleting the
first sentence in its entirety and replacing it with the following language:
For purposes of this Plan, a "Vesting Year" means a twelve (12)
consecutive month period in which an Employee has at least 1,000 Hours
of Service. An Employee's initial Vesting Year shall be the twelve
(12) consecutive month period beginning with the day the Employee
first completes an Hour of Service. A Participant's subsequent Vesting
Years shall be the twelve (12) consecutive month periods coinciding
with the calendar year, commencing with the calendar year which
includes the date the Participant first completed an Hour of Service
with the Employer.
FIFTH CHANGE
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Effective January 1, 1996, the third sentence of Section 10.1 is
hereby amended and restated in its entirety to read as follows:
Notwithstanding the foregoing, if the balance credited to his Account
exceeds, or at the time of any prior distribution exceeded, $3,500,
his benefit shall not be paid before the latest of his 65th birthday
or the tenth anniversary in which he commenced participation in the
Plan, unless he elects an early payment date in a written election
filed with the Committee.
SIXTH CHANGE
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Effective January 1, 1996, Section 12.4 shall be amended by deleting
the last sentence thereof in its entirety and replacing it with the following
sentence:
The value of any stock that is not traded on a generally recognized
public market shall be valued as of each Valuation Date by an
appraiser meeting requirements similar to the requirements of the
regulation prescribed under Section 170(a)(1) of the Code.
SEVENTH CHANGE
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Effective January 1, 1997, Sections 2, 4, 5, and 9 of the ESOP shall
be amended to include language that will permit the employer to make matching
contributions (made with respect to the participant's 401(k) salary reduction
contributions) to the ESOP. Specifically, Section 2 is hereby amended by
including the definition of "Matching Employer Contributions" and Sections 4, 5
and 9 are hereby amended by adding new subsections 4.5 and 5.5, and revising
subsections 9.1 and 9.6 as follows:
Section 2. Definitions
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"Matching Employer Contributions" means contributions made by the
Employer pursuant to Section 4.5 to a Participant's Matching Employer
Contributions Account.
Section 4.5 Matching Employer Contributions
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For each Plan Year commencing with the Plan Year 1997, the Employer,
in its sole discretion, may make a contribution equal to a percentage of the
Employee Basic Contributions made for the Plan Year on behalf of each
Participant under the terms of the Retirement plan for Ocean Federal Savings
Bank ("401(k) Plan").
Section 5.5 Nondiscrimination Test for Matching Employer
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Contributions
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Notwithstanding anything herein to the contrary, the Plan shall meet
the nondiscrimination test of Section 401(m) of the Code (described in Section
5.5-1) and applicable regulations for each Plan Year. In order to meet the
nondiscrimination test, any or all of the following steps may be taken:
(a) At any time during the Plan Year, the Committee may limit
the amount of Matching Employer Contributions that may be made on
behalf of Highly Compensated Employees;
(b) The Committee may reduce the Matching Employer
contributions made for the Plan Year to the extent necessary to
meet the requirements of Section 401(m) of Code, in the manner
described in Section 5.5-1;
(c) The Committee may recommend to the Board that the
Employer make an additional Matching Employer Contribution to the
plan for the benefit of Participants who are not Highly
Compensated Employees. This additional allocation may be based on
Participant's Total Compensation; and
(d) The Committee may take any other steps that the Committee
deems appropriate.
5.5-1 For Plan Years beginning after December 31, 1996, the
nondiscrimination requirements of Section 401(m) of the Code
require that, in each Plan Year, the Contribution Percentage
(defined below) of the eligible Highly Compensated Employees for
such Plan Year does not exceed the greater of:
(a) The Contribution Percentage of all other eligible
Employees for the preceding Plan Year multiplied by 1.25; or
(b) The lesser of the Contribution Percentage of all other
eligible Employees for the preceding Plan Year multiplied by 2, or the
Contribution Percentage of all other eligible Employees for the
preceding Plan Year plus 2 percentage points.
The Committee may elect to calculate the Contribution Percentages
using the Plan Year rather than the preceding Plan Year; provided, however, that
if the Committee so elects, the election may only be changed as provided by the
Secretary of the Treasury.
5.5-2 The Contribution Percentage for a group of Employees is
the average of the ratios, calculated separately for each Employee in the group,
of the amount of Matching Employer Contributions that are credited under the
Plan on behalf of each Employee for the Plan Year, to the Employee's
Compensation for the Plan Year. Use of the alternative limitation shall be
subject to the provisions of Treasury Regulation Section 1.401(m)-2 regarding
the multiple use of the alternative deferral tests set forth in Sections 401(k)
and 401(m) of the Code.
5.5-3 Notwithstanding the foregoing, if the test described in
Section 5.5-1 is not satisfied for a Plan Year, the Committee may use any other
test permitted under Section 401(m) of the Code or applicable Treasury
Regulations to determine whether the Plan meets the nondiscrimination
requirements of Section 401(m) of the Code.
9.1 Deferred Vesting in Accounts
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_________ A Participant's vested interest in his Account attributable to his
Employer's contributions pursuant to Sections 4.1 and 4.2 shall be based on his
Vesting Years in accordance with the following table, subject to the balance of
this Section 9:
Percentage of
Vesting Years Interest Vested
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fewer than 5 0%
5 or more 100%
A Participant's vested interest in his Account attributable to
Employer's Matching Contribution shall be determined in accordance with the
provisions of the Retirement plan for Ocean Federal Savings Bank.
9.6 Forfeitures, Repayment and Restoral
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Accounting for Forfeitures A forfeiture shall be charged to the Participant's
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Account as of the first day of the first Valuation Period in which the
forfeiture becomes certain pursuant to Section 9.5. Except as otherwise provided
in that Section, at the discretion of the Committee, a forfeiture shall be used
to reduce any matching Employer Contributions made by the terminated
Participant's Employer under Section 4.5 or be added to the contributions of the
terminated Participant's Employer which are to be credited to other Participants
pursuant to Section 4.1, as of the last day of the Plan Year in which the
forfeiture becomes certain.
IN WITNESS WHEREOF, the Bank has adopted this First Amendment to the
ESOP and caused this instrument to be executed by its duly authorized officers
as of the above date.
ATTEST:
_________________________________By: _______________________________________
Secretary` President