KRAUSS AND PASTERNACK
ADOPTION AGREEMENT
FOR
STANDARDIZED PROTOTYPE
401(k) PROFIT SHARING PLAN AND TRUST
PLAN O1
IRS SERIAL NO.
K275199a
FIRST AMENDMENT
---------------
January 2003
o o o
ADOPTION AGREEMENT TO ACCOMPANY
KRAUSS AND PASTERNACK STANDARDIZED PROTOTYPE
PROFIT SHARING PLAN AND TRUST WITH CASH OR DEFERRED
ARRANGEMENT PURSUANT TO SECTION 401(k) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(C) Copyright 2002 by Krauss and Pasternack. All rights reserved.
________________________________________________________________________________
Note: This Adoption Agreement is a legal document with important legal
implications. Like any other legal document, it should be carefully
reviewed by your attorney prior to signing.
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PART A
PLAN IDENTIFICATION
1. The undersigned Employer adopts the Krauss and Pasternack Standardized
401(k) Profit Sharing Plan for those Employees who will qualify as
Participants, to be known as the:
Nittany Bank 401(k) Profit Sharing Plan
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(Enter Plan Name)
2. Plan Number [PN]: 001 002 002 003 004 005 006
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3. Full Name of Each Trustee
a. John E. Arrington
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b. Richard C. Barrickman
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c. David Z. Richards, Jr.
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4. Trustees' Address
a. [X] Same as employer (See below)
b. ---------------------------------------
Street or Post Office Box, Apartment No.
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City, State, Zip
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PART B
EMPLOYER INFORMATION
1. Name of principal employer Nittany Bank
2. Address 1276 North Atherton Street Street, Post Office Box
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State College, PA 16803
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City, State, Zip
3. Telephone number including area code (814) 238-5729
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4. The type of entity of the employer is:
|_| Sole Proprietorship |_| Partnership
[X] C Corporation |_| S Corporation
Page 2 of 23
|_| Governmental Entity |_| Other
|_| Non-profit organization exemptfrom income taxes pursuant
to Section 501(c) _________ of the Internal Revenue Code
of 1986, as amended.
5. Employer identification number: 25 - 1819903
----------- --------------------
6. Name and title of principal employer contact John E. Arrington,
Vice President
------------------------------
------------------------------
7. Telephone number of principal employer contact including area code
(814) 867-1273
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8. Date business commenced October 26, 1998
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9. State of incorporation or state of principal place of business Pennsylvania
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10. EMPLOYER'S FISCAL YEAR IS A TWELVE MONTH PERIOD ENDING ON (MONTH)
August AND DAY 31 [OR, IS A 52/53 WEEK YEAR ENDING ON (DAY OF
------ -- --------------
WEEK) OF (MONTH)].
--------------
11. Is employer part of a controlled group? |_| Yes |X] No
12. Is employer part of an affiliated service group? |_| Yes [X| No
13. Names and addresses of other members of controlled group or affiliated
service group included as participating employer under this Plan.
a.
---------------------------------------------------------
b.
---------------------------------------------------------
c.
---------------------------------------------------------
d.
---------------------------------------------------------
e.
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Page 3 of 23
PART C
GENERAL PLAN INFORMATION
1. The Plan and Trust established by the Prototype Plan and Adoption Agreement
is:
a. |_| a new plan established as and from the Effective Date which is the
day of
--------------, --------------.
b. |X] Plan amendment and continuation of a previously established
plan, which plan was originally effective on and from the
1st day of January, 1999. This amendment shall be effective as
--- -------------
and from the 1st day of January, 2003 .
--- -------------
2. The Plan Year, which is the annual accounting period upon which the books
and records of the Plan are kept, shall end each year following the
Effective Date on December 31 (month and day).
-----------
3. Accordingly, a short Plan Year |_| shall |X] shall not be created with
the establishment of the Plan. If so created, the short Plan Year shall
commence on the day of , and close on the day
-- -------- -------- -------
of --------, --------.
4. The Plan Administrator shall be:
|_| The Employer or
Name or exact title Krauss & Pasternack, Inc.
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Street address 2603 East College Avenue
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City, State, Zip State College, PA 16801
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Telephone, including area code (814) 2352350
-------------------------------------
Employer identification number (EIN) assigned to
Plan Administrator 25 - 1819645
------------ -------------
5. Designated agent for service of legal process shall be:
|_| The Employer
[X] The Plan Administrator
|_| Name or exact title
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Street address
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Page 4 of 23
City, State, Zip
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Note: Service of legal process may also be made on the plan trustee.
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PART D
ELIGIBILITY REQUIREMENTS
1. Definition of Employee:
|X| Employee shall mean any employee of the employer maintaining the
plan or of any other employer required to be aggregated with such
employer under section 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended. The term employee shall also
include any leased employee deemed to be an employee of any
employer described in the previous paragraph as provided in
sections 414(n) or (o) of the Internal Revenue Code of 1986, as
amended.
2. Age requirement to become Eligible Employee:
|_| None.
|_| 201/2 (twenty years and six months).
|X] 21
|_| Other (may not exceed age twenty-one).
------------------
3. Service requirement to become Eligible Employee:
|_| None.
|_| Months (not in excess of 11) of Service.
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|X] 90 Days (not in excess of 300) of Service.
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|_| One (1) Year of Service.
Note: If less than one year of service, no minimum number of Hours of Service
will be required. Thus, part-time employees will become Eligible
Employees after completing the time specified above.
4. Other exclusions:
[X| None.
|_| Employees whose employment is governed by a collective bargaining
agreement between the Employer or a Participating Employer and
"employee representatives" under which retirement benefits were
the subject of good faith bargaining, whether or not such
Employee is covered by any type of retirement plan as a result of
such
Page 5 of 23
good faith bargaining. For this purpose, the term "employee
representatives" does not include any organization more than half
of whose members are owners, officers or executives of the
Employer or a Participating Employer.
|_| Employees who are non-resident aliens who received no earned
income (within the meaning of Section 911(d)(2) of the Code) from
the Employer or a Participating Employer which constitutes income
from sources within the United States (within the meaning of
Section 861(a)(3) of the Code).
5. Hours of Service will be determined on the basis of the method selected
below. Only one method may be selected. The method selected will be applied
to all Employees covered under the Plan.
[X] On the basis of actual paid hours for which an Employee is paid
or entitled to payment.
|_| On the basis of days worked. An Employee will be credited with
ten (10) Hours of Service if under the Plan such Employee would
be credited with at least one (1) Hour of Service during the day.
|_| On the basis of weeks worked. An Employee will be credited with
forty-five (45) Hours of Service if under the Plan such Employee
would be credited with at least one (1) Hour of Service during
the week.
|_| On the basis of semi-monthly payroll periods. An Employee will be
credited with ninety-five (95) Hours of Service if under the Plan
such Employee would be credited with at least one (1) Hour of
Service during the semi-monthly payroll period.
|_| On the basis of months worked. An Employee will be credited with
one-hundred ninety (190) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service
during the month.
6. Waiver of service requirement on initial effective date.
[X] It is elected that the service requirement imposed by item 3
above be waived with respect to Employees of the Employer or a
Participating Employer on the initial Effective Date of this Plan
(not the effective date of any amendment thereto).
7. Date of Participation of Eligible Employee. SEE ATTACHMENT
|_| The first day of the month coincident with or next following the
date on which he met the requirements.
|_| The earlier of the first day of the seventh month or the first
day of the Plan Year coinciding with or next following the date
on which he met the requirements.
Page 6 of 23
|_| The first day of the Plan Year next following the date on which
he met the requirements. (Eligibility must be 1/2 Year of Service
or less and age 201/2 or less.)
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PART E
VESTING
1. The vesting schedule for elective contributions or other employer
contributions, based on the number of Years of Service, shall be as
follows:
|_| 100% upon entering Plan.
|_| 0 - 2 Years 0 % |_| 0 - 4 Years 0 %
3 Years 100 % 5 Years 100 %
|_| 0 - 1 Years 0 % |_| 1 Year 25 %
2 Years 20 % 2 Years 50 %
3 Years 40 % 3 Years 75 %
4 Years 60 % 4 Years 100 %
5 Years 80 %
6 Years 100 %
[X] 1 Year 20 % |_| 0 - 2 Years 0 %
2 Years 40 % 3 Years 20 %
3 Years 60 % 4 Years 40 %
4 Years 80 % 5 Years 60 %
5 Years 100 % 6 Years 80 %
7 Years 100 %
2. The vesting schedule for employer matching contributions, based on the
number of Years of Service, shall be as follows: SEE ATTACHMENT
|_| Full and immediate vesting.
|_| Full vesting after (not greater than three (3)) Years of Service.
No vesting prior thereto.
|_| Vesting in the following percentage of the account balance, as a
function of the Participant's Years of Service:
0 - 1 Years 0 %
2 Years 20 %
3 Years 40 %
4 Years 60 %
5 Years 80 %
6 Years 100 %
Page 7 of 23
3. If the vesting schedule has been amended to a less favorable schedule,
enter the pre-amended schedule below:
[X] Vesting schedule has not been amended or amended schedule is more
favorable in all years.
|_| Years of Service Vesting Percentage
---------------- ------------------
---------------- ------------------
---------------- ------------------
---------------- ------------------
---------------- ------------------
---------------- ------------------
4. All Years of Service of the Participant shall be counted except for the
exclusions noted below:
[X] N /A - No exclusions
|_| Service prior to the Effective Date of this Plan or a predecessor
plan shall be disregarded.
|_| Service prior to the Employee's attaining age eighteen (18) shall
be disregarded.
5. Top Heavy Vesting - If the Plan becomes a Top Heavy Plan, the following
vesting schedule, based on number of Years of Service, for such Plan Year
and each succeeding Plan Year, whether or not the Plan is a Top Heavy Plan,
shall apply and shall be treated as a Plan amendment pursuant to this Plan.
Once effective, this schedule will also apply to any contributions made
prior to the effective date of Code Section 416 and/or before the Plan
became a Top Heavy Plan.
SEE ATTACHMENT
|_| Full and immediate vesting.
|_| Full vesting after (not greater than three (3)) Years of Service.
No vesting prior thereto.
|_| Vesting in the following percentage of the account balance, as a
function of the Participant's Years of Service:
0 - 1 Years 0%
2 Years 20 %
3 Years 40 %
4 Years 60 %
5 Years 80 %
6 Years 100 %
Page 8 of 23
Note: This section does not apply to the Account balances of any
Participant who does not have an Hour of Service after the Plan has
initially become top heavy. Such Participant's Account balance attributable
to Employer contributions and Forfeitures will be determined without regard
to this section.
6. This Plan will recognize service with predecessor Employer.
[X] No
|_| Yes: Years of Service with will be recognized for
------------
the purpose of this Plan.
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PART F
COMPENSATION
1. Compensation with respect to any Participant means:
|_| "415 Compensation."
|X| Compensation reportable as wages on Form W-2.
2. Compensation shall be:
|X| Actually paid (Cash Basis).
3. The limitation year, and the period upon which compensation will be based for
testing purposes, shall be:
[X] The Plan Year.
|_| The Fiscal Year coinciding with or ending with the Plan Year.
|_| The Calendar Year coinciding with or ending with the Plan Year.
4. Compensation shall exclude:
[X] N/A - No exclusions.
|_| Moving expenses, expense reimbursements under a
non-accountable plan and other similar expense reimbursements
that due to their unaccountable nature are included on form
W-2.
5. Compensation for the year in which a Participant's participation commenced:
|_| shall include the period employed by the Employer or a
Participating Employer prior to the date that his
participation commenced.
|X] shall be determined only from his date of participation.
Page 9 of 23
6. Compensation shall be determined:
|_| Exclusive of amounts excluded from gross income pursuant to
Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B) and 403(b) of
the Internal Revenue Code of 1986, as amended.
[X] Inclusive of amounts excluded from gross income pursuant to
Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B) and 403(b) of
the Internal Revenue Code of 1986, as amended.
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PART G
ELECTIVE CONTRIBUTIONS
1. The Minimum elective deferral permitted, as a percent of compensation or
dollar amount, shall be:
|_| N/A - No minimum.
2 %
[X] ---------------------
|_| dollars
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2. The maximum elective deferral permitted shall be:
[X] 15 %
------------
|_| The maximum percentage that does not exceed the limits of
Sections 402(g) of the Internal Revenue Code of 1986, as
amended.
3. A person eligible to make a salary reduction election may make such election:
|_| At any time while being so eligible.
|X] At the time that the Participant first becomes so eligible,
and if not then elected, on the first day of each calendar
quarter.
|_| At the time that the Participant first becomes so eligible,
then on the first day of each Plan Year while eligible, and on
the first day of the seventh (7th) month of each Plan Year
while eligible.
4. The Participant's elected salary reduction percentage may be modified by
him:
|_| At any time, as frequently as desired.
Page 10 of 23
|X] No more frequently than once per calendar quarter.
|_| Once per calendar quarter to be effective on the first
business day of the next calendar quarter.
|_| At any time, but not more than two (2) changes may be made
in any one Plan Year.
5. A Participant's investment election may be modified by him:
|_| N/A participants do not direct investments.
|_| At any time, as frequently as desired.
|X] No more frequently than once per calendar quarter.
|_| Once per calendar quarter to be effective on the first
business day of the next calendar quarter.
|_| At any time, but not more than two (2) changes may be made in
any one Plan Year.
6. Shall a participant be permitted to include within his election cash
bonuses paid within seventy-five (75) days after the end of the Plan Year?
|_| Yes |X] No
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PART H
EMPLOYER'S MATCHING CONTRIBUTIONS
1. The Employer's matching contributions shall be determined as follows:
SEE ATTACHMENT
|_| N/A. There will be no matching contributions.
|_| The Employer will make matching contributions equal to __ %
(e.g. 50%) of the Participant's salary reductions.
|_| The Employer will make matching contributions equal to the
sum of __%, (the "Base Match Percentage") of the portion of
the Participant's salary reduction which does not exceed __%
of the Participant's Compensation plus % (the "Secondary
Match Percentage") of the portion of the Participant's
salary reduction which exceeds that percentage of the
Participant's Compensation, but does not exceed __% of the
Participant's Compensation.
Note: The percentage elected for the Secondary Match
Percentage may not exceed the percentage elected for the Base
Match Percentage.
|_| The Employer may make matching contributions equal to a
discretionary percentage, to be determined by the Employer, of
the Participant's salary reductions.
Page 11 of 23
2. May Employer matching contributions be used as Qualified Matching
contributions?
[X] Yes, to meet the Actual Deferral Percentage Test.
|_| No
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PART I
OTHER EMPLOYER CONTRIBUTIONS
1. Discretionary Employer profit sharing contributions other than matching
contributions or qualified non-elective contributions;
|_| shall not be permitted.
|_| shall be limited to the Employer's or Participating
Employer's (as the case may be) then current or accumulated
net profits.
|X] Shall be made in the discretion of the Employer without regard
to the Employer's (or any Participating Employer's) then
current or accumulated net profits, as permitted by Section
401(a)(27)(A) of the Code, provided however, in connection
with the election of such potion, the Employer hereby
designates this Plan as a profit sharing plan and not a money
purchase pension plan, in accordance with Section
401(a)(27)(B).
2. The method of allocation of Employer discretionary profit sharing
contributions other than matching contributions or qualified non-elective
contributions.
|X] Such discretionary contributions shall be allocated in the
same ratio as each Participant's Compensation bears to the
total of such Compensation of all Participants eligible to
share in the allocation.
|_| Such discretionary contributions shall be allocated in an
amount equal to 5.7% of the sum of each Participant's
Compensation plus Excess Compensation. However, if the
Employer does not contribute a sufficient total contribution
to apply the previous sentence, each Participant will be
allocated a share of the contribution in the same proportion
that his Compensation plus his Excess Compensation for the
Plan Year bears to the total Compensation plus the total
Excess Compensation of all Participants for eligible to share
in the allocation for that Plan Year. Second, the balance of
the contribution, if any will be allocated in the same
proportion that each Participant's Compensation bears to the
total Compensation of all Participant's eligible to share in
the allocation for that Plan Year.
Page 12 of 23
|_| Such discretionary contributions shall be allocated in the
same manner described above, except that "Excess
Compensation" shall be defined as each Participant's
Compensation in excess of _________% (more than 80% and less
than 100%) the taxable wage base and 5.4% shall be used
instead of the 5.7% shown above.
|_| Such discretionary contributions shall be allocated in the
same manner described above, except that "Excess
Compensation" shall be defined as each Participant's
Compensation in excess of ________% (not less than 20% nor
more then 80%) of the taxable wage base and 4.3% shall be
used instead of 5.4 shown above.
3. Qualified Non-Elective Contributions will;
|X] Not be permitted.
|_| Be permitted in the discretion of the Employer.
|_| Be made to the extent needed to pass the Actual Deferral Percentage Test for
the Plan Year.
4. Participant's who shall be included in the allocation for the Plan Year shall
be those who:
|X| Either complete more than five-hundred (500) Hours of Service
during the Plan Year or are employed on the last day of the
Plan Year.
5. Forfeitures:
|X] shall reduce the otherwise determined Employer Contribution
for the Plan Year.
|_| shall be allocated to the Participants in proportion to their
Compensation for the Plan Year.
PART J
SAFE HARBOR CODA PROVISIONS
1. |_| If checked, the Safe Harbor CODA provisions of Section 4.16 of the Plan
Document apply.
2. ADP Test Safe Harbor Contributions
In lieu of Basic Matching Contributions, the employer will make the
following contributions for the Plan Year [Select Either or Both]:
|_| Enhanced Matching Contributions
The employer will make Matching Contributions to the account of each
Eligible Employee in an amount equal to the sum of:
Page 13 of 23
i. The employee's Elective Deferrals that do not exceed _______
percent of the employee's Compensation for the Plan Year plus
ii. __ percent of the employee's Elective Deferrals that exceed
__ percent of the employee's Compensation for the Plan Year and
that do not exceed __ percent of the employee's Compensation for
the Plan Year.
[In the blank in (i) and the second blank in (ii), insert a number that
is 3 or greater but not greater than 6. The first and last blanks in
(ii) must be completed so that, at any rate of elective deferrals, the
matching contribution is at least equal to the matching contribution
receivable if the employer were making basic matching contributions,
but the rate of match cannot increase as deferrals increase. For
example if "4" is inserted in the blank in (i), (ii) need not be
completed.]
|_| Safe Harbor Nonelective Contributions
The employer will make a Safe Harbor Nonelective Contribution to the
account of each Eligible Employee in an amount equal to 3 percent of the
employee's Compensation for the Plan Year, unless the employer inserts a greater
percentage here .
3. ACP Test Safe Harbor Matching Contributions
[No additional contributions are required in order to satisfy the
requirements for a Safe Harbor CODA. However, if the employer desires to
make matching contributions other than basic or enhanced matching
contributions, then complete the following.]
For the Plan Year, the employer will make ACP Test Safe Harbor Matching
Contributions to the account of each Eligible Employee in the amount of
[Elect One]:
|_| a. ___ percent of the employee's Elective Deferrals that do not exceed
6 percent of the employee's Compensation for the Plan Year.
|_| b. ___ percent of the employee's Elective Deferrals that do not exceed
___ percent of the employee's Compensation for the Plan Year plus
___ percent of the employee's Elective Deferrals thereafter, but no
Matching Contributions will be made on Elective Deferrals that exceed
6 percent of Compensation. [The number inserted in the third blank
cannot exceed the number inserted in the first blank.]
|_| c. the employee's Elective Deferrals that do not exceed a percentage
of the employee's Compensation for the Plan Year. Such percentage is
determined by the employer for the year but in no event can exceed 4
percent of the employee's Compensation. Vesting of ACP Test Safe
Harbor Matching Contributions
ACP Test Safe Harbor Matching Contributions will be vested in
accordance with the following schedule if not top heavy:
|_| 100% upon entering Plan.
|_| 0 - 2 Years 0 % |_| 0 - 4 Years 0 %
3 Years 100 % 5 Years 100 %
Page 14 of 23
|_| 0 - 1 Years 0 % |_| 1 Year 25 %
2 Years 20 % 2 Years 50 %
3 Years 40 % 3 Years 75 %
4 Years 60 % 4 Years 100 %
5 Years 80 %
6 Years 100 %
|_| 1 Year 20 % |_| 0 - 2 Years 0 %
2 Years 40 % 3 Years 20 %
3 Years 60 % 4 Years 40 %
4 Years 80 % 5 Years 60 %
5 Years 100 % 6 Years 80 %
7 Years 100 %
ACP Test Safe Harbor Matching Contributions will be vested in
accordance with the following schedule if top heavy:
|_| 100% upon entering Plan.
|_| 0 - 2 Years 0 %
3 Years 100 %
|_| 0 - 1 Years 0 %
2 Years 20 %
3 Years 40 %
4 Years 60 %
5 Years 80 %
6 Years 100 %
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PART K
RETIREMENT DATES
1. A Participant's Normal Retirement Age shall be:
|X] The date that the Participant attains his 65th (not greater
than sixty-fifth) birthday.
|_| The latter of the date that the Participant attains his (not
greater than sixty-fifth) birthday and the (not greater than
fifth) anniversary of the date that his participation in the
Plan commenced.
2. A Participant's Normal Retirement Date will be:
|X] The date that the Participant attains his Normal Retirement Age.
|_| The first day of the month coincident with or next following
the date that the Participant attains his Normal Retirement
Age.
Page 15 of 23
|_| The first day of the Plan Year in which the Participant attains
his Normal Retirement Age.
3. A Participant's Early Retirement Date will be:
|_| N/A. No early retirement provisions desired.
|X] The first day of the month after both attaining his 55th
birthday and completing 6 Years of Service.
|_| The day that the Participant both attains his birthday and
completes Years of Service.
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PART L
PARTICIPANTS' CONTRIBUTIONS
1. Participants' (post tax) contributions:
|X] Shall not be permitted.
|_| Shall be permitted up to % of his Compensation.
------------
2. If Participants' post tax contributions shall be permitted:
|_| Recharacterization of salary reduction contributions shall also
be permitted.
|_| Recharacterization of salary reduction contributions shall not
be permitted.
3. A person eligible to make (post tax) contributions:
|_| May elect to make such contributions at any time while being so
eligible.
|_| May elect to make such contributions at the time that he first
becomes eligible to do so, and, if not then elected, may elect
to make such contributions on the first day of each calendar
quarter thereafter.
4. Any election to make (post tax) contributions may be modified by him:
|_| At any time, as frequently as desired.
|_| No more frequently than once per calendar quarter.
Page 16 of 23
|_| To be effective on the first business day of each calendar
quarter.
|_| At any time, but not more than two (2) such changes may be
made in any one Plan Year.
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PART M
ALLOCATIONS AND DISTRIBUTIONS
1. Distributions upon termination of employment prior to retirement may be made:
|X] If the Participant so elects, as soon as practical after his
termination of employment.
|_| If the Participant so elects, at any time after sustaining a
Break-in-Service.
|_| If the Participant so elects, at any time after reaching his
Early Retirement Date.
|_| Distributions (subject to the minimum distribution rules)
will be made after the later of the Participant's
termination of employment and his attaining his Normal
Retirement Date.
2. The form of distribution permitted are:
|X] Lump sums only.
|_| Lump sums and period certain installment.
|_| Lump sums, period certain installments and life annuities.
AND, pursuant to Plan Section 6.13,
|X] No annuities are allowed (avoids Joint and Survivor rules).
|_| Annuities are allowed.
3. Distributions upon death will:
|_| Be made within five (5) years of death for all
beneficiaries.
|_| Begin within one (1) year of death for a designated
beneficiary and be payable over the life (or over a period
not exceeding the life expectancy) of such beneficiary,
except that if the beneficiary is the Participant's spouse,
begin within the time the Participant would have attained
age 701/2.
|X] Be made pursuant to the election of the Participant or
beneficiary.
Page 17 of 23
4. Life expectancies for minimum distribution required:
|_| Shall be recalculated for the Participant and/or his
beneficiaries only if he or his beneficiaries so elect.
|X] Shall not be recalculated.
|_| Shall be recalculated for the Participant but shall not be
recalculated for his beneficiaries.
5. For limitation years beginning before January 1, 2000, the combined
limitation on contributions provided by Section 415(c) of the Code shall be
computed as follows for any Participant who is or was covered under any
other qualified defined contribution plan maintained by the Employer, or a
Participating Employer, other than a master or prototype plan, including a
welfare benefit fund (in accordance with Section 419(e) of the Code) or an
individual medical account (in accordance with Section 415 (b)(2) of the
Code), under which amounts are treated as annual additions to any person
who is also a Participant.
|X] N/A. No such other plans exist.
|_| The provisions of this Plan regarding maximum benefits or
contributions (in accordance with Section 415 of the Code)
shall be applied as though such other plans were also master
or prototype plans.
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PART N
TOP HEAVY PROVISIONS
1. When a Non-Key Employee is a Participant in this Plan and a Defined Benefit
Plan maintained by the Employer, indicate which method will be utilized to
avoid duplication of top heavy minimum benefits.
|X] The Employer does not maintain a Defined Benefit Plan.
|_| A minimum, non-integrated contribution of five percent (5%)
of Compensation will be provided in this Plan.
|_| A minimum, non-integrated contribution of seven and one-half
percent (7.5%) of each Non-Key Employee's total Compensation
will be in this Plan.
2. The present value of the accrued benefit for Top Heavy purposes where the
Employer maintains a Defined Benefit Plan in addition to this Plan, will be
based on:
|X] N/A. The Employer does not maintain a Defined Benefit Plan.
|_| Interest rate of %.
----------
|_| Mortality based upon the mortality table.
-----------------
Page 18 of 23
3. When a Non-Key employee is a Participant in this Plan and any other defined
contribution plan maintained by the Employer or a Participating Employer:
|X] N/A. Neither the Employer nor any Participating Employer
maintains any other defined contribution plan.
|_| A minimum, non-integrated contribution of three percent (3%)
of Compensation shall be provided from a defined
contribution plan subject to a funding standard account
(pursuant to Section 412 of the Code) maintained by the
Employer or a Participating Employer.
|_| A minimum, non-integrated, contribution of three percent
(3%) of Compensation will be provided from this Plan in
accordance with the provisions.
4. For purposes of determining Top Heavy Status, a Highly Compensated Active
Employee will be defined as an Employee who:
|X] was a 5 percent owner (as defined in Section 416(i)(l) of
the Code) of the employer at any time during the current or
the preceding plan year.
|X] for the preceding year
(i) had compensation from the employer in excess of $80,000
(as adjusted by the Secretary pursuant to Section
415(d) of the Code, except that the base period shall
be the calendar quarter ending September 30, 1996), and
(ii) if the employer elects the application of this clause
for such preceding year, was in the Top-Paid Group of
Employees for such preceding year.
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PART O
MISCELLANEOUS
1. Loans to Participants:
|_| Will be permitted up to the limit permitted by Section 72(p)
of the Code.
|X] Will not be permitted.
|_| Shall be permitted only for financial hardship or necessity.
2. If permitted, loans to participants:
|X] N/A. Loans are not permitted.
Page 19 of 23
|_| Shall be accounted for as a directed investment.
|_| Shall be subject to a minimum of $500 per loan.
|_| Shall be subject to a minimum of $1,000 per loan.
3. Participant directed investment accounts:
|_| Shall not be permitted.
|X] Shall be permitted with respect to all Participant accounts.
|_| Shall be permitted to the extent of the vested portion of
the Participant's accounts.
4. Transfers from Qualified Plans.
|X] Yes, transfers from qualified plans (and rollovers) will be
allowed.
|_| No, transfers from qualified plans (and rollovers) will not
be allowed.
AND, if transfers are allowed, transfers will be permitted.
|X] From any Employee, even if not a Participant.
|_| From Participants only.
5. Hardship distributions:
|X] Are allowed to the extent permitted by law.
|_| Are not permitted under the Plan.
6. Pre-retirement distributions (other than for hardship):
|X] Are not permitted.
|_| May be elected by the Participant with respect to the amount
which he is then fully vested at any time after the
Participant has attained age fifty-nine and one-half (59
1/2).
7. This Plan is part of a formal paired plan and is paired with:
|X] N/A. This Plan is not part of a paired plan.
|_|
------------------------------------------------------------
Name of plan with which this Plan is paired. May only be
paired with Krauss and Pasternack Plans number 02 or 03.
Page 20 of 23
The adopting employer may rely on an opinion letter issued by the
Internal Revenue Service as evidence that the plan is qualified under section
401 of the Internal Revenue Code except to the extent provided in Rev. Proc.
2000-20, 2000-6 I.R.B. 553 and Announcement 2001-77, 2001-30 I.R.B.
An employer who has ever maintained or who later adopts any plan
(including a welfare benefit fund, as defined in section 419(e) of the Code,
which provides post-retirement medical benefits allocated to separate accounts
for key employees, as defined in section 419A(d)(3) of the Code, or an
individual medical account, as defined in section 415 (1)(2) of the Code) in
addition to this Plan may not rely on the opinion letter issued by the Internal
Revenue Service with respect to the requirements of sections 415 and 416.
If the employer who adopts or maintains multiple plans wishes to obtain
reliance with respect to the requirements of sections 415 and 416, application
for a determination letter must be made to Employee Plans Determinations of the
Internal Revenue Service.
The employer may not rely on the opinion letter in certain other
circumstances, which are specified in the opinion letter issued with respect to
the plan or in Revenue Procedure 2000-20 and Announcement 2001-77.
This adoption agreement may be used only in conjunction with basic plan
document #01.
In order to be kept informed of amendments to this regional prototype
plan, you must register your adoption of the Plan with Krauss and Pasternack,
2603 East College Avenue, State College, Pennsylvania 16801 (814) 235-2350.
Page 21 of 23
IN WITNESS WHEREOF, the Employer, all Participating Employees and the
Trustees, have caused this Plan to be executed this 1st day of January, 2003 in
--- -------------
the city or town of State College and the State of Pennsylvania
------------- ------------
EMPLOYER
Nittany Bank
- -------------------------------------- -----------------------------
Name of Employer Trustee
By:
- -------------------------------------- -----------------------------
Signature Trustee
Vice President
- -------------------------------------- -----------------------------
Title Trustee
PARTICIPATING EMPLOYERS
- -------------------------------------- ------------------------------
Name of Participating Employer Name of Participating Employer
By: By:
---------------------------------- --------------------------
Signature Signature
- -------------------------------------- -----------------------------
Title Title
- -------------------------------------- ------------------------------
Name of Participating Employer Name of Participating Employer
By: By:
---------------------------------- --------------------------
Signature Signature
- -------------------------------------- -----------------------------
Title Title
- --------------------------------------------------------------------------------
CAUTION: The failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan.
- --------------------------------------------------------------------------------