Exhibit 4.3
SAVINGS AND THRIFT PLAN
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FOR THE EMPLOYEES OF
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BRANCH BANKING & TRUST COMPANY
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(Amended and Restated Effective
January 1, 1994)
SAVINGS AND THRIFT PLAN
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FOR THE EMPLOYEES OF
--------------------
BRANCH BANKING & TRUST COMPANY
------------------------------
(Amended and Restated Effective
January 1, 1994)
TABLE OF CONTENTS
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Article I. The Plan................................................... 1
1.1 Establishment of the Plan.................................... 1
1.2 Applicability of the Plan.................................... 1
1.3 Purpose of the Plan.......................................... 1
Article II. Definitions............................................... 3
2.1 Definitions.................................................. 3
2.2 Gender and Number............................................ 16
Article III. Eligibility and Participation............................ 17
3.1 Eligibility for Participation................................ 17
3.2 Participation................................................ 17
3.3 Eligible Employees........................................... 18
3.4 Rehired Employees............................................ 18
3.5 Loss of Status as an Eligible Employee....................... 18
3.6 Leased Employees............................................. 19
3.7 Participation of Merged or Acquired Employees................ 19
Article IV. Contributions and Allocations............................. 20
4.1 Tax-Deferred Contributions................................... 20
4.2 Matching Contributions and Dividend Replacement
Allocations.................................................. 20
4.3 Pay Reduction Agreements..................................... 22
4.4 Application of Forfeitures................................... 23
4.5 Limitations on Contributions................................. 23
4.6 Limitations on Annual Additions.............................. 27
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4.7 Rollover Contributions....................................... 30
Article V. Employee Stock Ownership Plans............................. 31
5.1 Definitions.................................................. 31
5.2 Establishment of ESOP........................................ 32
5.3 Employer Contributions....................................... 32
5.4 Participant Contributions.................................... 34
5.5 Investment of ESOP Assets.................................... 34
5.6 Purchases of Stock........................................... 34
5.7 Sales of Stock............................................... 34
5.8 Exempt Loan.................................................. 35
5.9 Allocations to Members' Accounts............................. 39
5.10 Participation in the ESOP; Allocable Shares.................. 40
5.11 Accounting for Allocations................................... 41
5.12 Distributions and Withdrawals................................ 42
5.13 Transfers from ESOP Account.................................. 42
5.14 Voting Stock................................................. 43
5.15 Vesting...................................................... 43
5.16 Loans........................................................ 43
5.17 Limitation on Annual Additions............................... 44
Article VI. Investment Elections...................................... 45
6.1 Investment of Contributions and Transferred Assets........... 45
6.2 Investment Transfers......................................... 45
6.3 Investment Elections......................................... 45
6.4 Transfer of Assets........................................... 45
Article VII. Accounts and Records of the Plan......................... 47
7.1 Accounts and Records......................................... 47
7.2 Trust Fund................................................... 47
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7.3 Valuation and Allocation of Expenses......................... 47
7.4 Allocation of Earnings and Losses............................ 47
7.5 Voting of Stock.............................................. 48
Article VIII. Vesting................................................. 49
8.1 Vesting...................................................... 49
8.2 Misconduct Clause............................................ 49
8.3 Forfeitures.................................................. 49
8.4 Treatment of Forfeitable Amounts............................. 49
Article IX. Distributions............................................. 51
9.1 Entitlement to Distribution Upon Death of Member............. 51
9.2 Distribution Upon Termination of Service for
Reasons Other Than Death..................................... 53
9.3 Form of Benefit Payments..................................... 53
9.4 Time of Benefit Payments..................................... 54
9.5 Voluntary Withdrawals........................................ 55
9.6 Hardship Withdrawals......................................... 56
9.7 Eligible Rollover Distributions.............................. 58
9.8 Limitations on Distributions................................. 59
Article X. Loans to Members........................................... 61
10.1 Administrator Authorized to Make Loans....................... 61
10.2 Amount of Loans.............................................. 61
10.3 Interest..................................................... 62
10.4 Term......................................................... 62
10.5 Repayment.................................................... 62
10.6 Loans Treated as Plan Investments............................ 63
10.7 Documents.................................................... 64
Article XI. Amendment and Termination................................. 66
11.1 Amendment and Termination.................................... 66
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11.2 Vesting on Termination or Partial Termination............... 66
11.3 Merger, Consolidation, or Transfer.......................... 67
Article XII. Administration of the Plan............................... 68
12.1 Plan Administrator.......................................... 68
12.2 Appointment to and Resignation from the Committee........... 68
12.3 Powers and Duties of the Committee.......................... 68
12.4 Action by Majority of the Committee......................... 69
12.5 Rules and Regulations of the Committee...................... 69
12.6 Conclusiveness of Reports, Etc.............................. 69
12.7 Claims Procedure............................................ 70
12.8 Employment of Agents........................................ 71
12.9 Compensation and Expenses of Committee...................... 71
12.10 Indemnity for Liability..................................... 71
Article XIII. Trust Arrangements...................................... 73
13.1 Appointment of Trustee...................................... 73
13.2 Removal of Trustee; Appointment of Other Trustee............ 73
13.3 Change in Trust Agreements.................................. 73
13.4 Trust Fund.................................................. 73
13.5 Reversion of Employer Contributions......................... 74
Article XIV. Top-Heavy Plan Provisions................................ 75
14.1 Application of Top-Heavy Provisions......................... 75
14.2 Definitions................................................. 76
14.3 Minimum Contribution........................................ 77
14.4 Limit on Annual Additions; Combined Plan Limit.............. 78
Article XV. Miscellaneous............................................. 80
15.1 No Employment Rights Created................................ 80
15.2 Rights to Trust Assets...................................... 80
15.3 Nonalienation of Benefits................................... 80
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15.4 Expenses.................................................... 81
15.5 Severability................................................ 81
15.6 Governing State............................................. 81
15.7 Facility of Payment......................................... 82
15.8 Missing Persons............................................. 82
15.9 Titles...................................................... 82
APPENDIX A A.1
APPENDIX B B.1
APPENDIX C C.1
APPENDIX D D.1
APPENDIX E E.1
APPENDIX F F.1
APPENDIX G G.1
APPENDIX H H.1
APPENDIX I I.1
APPENDIX J J.1
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SAVINGS AND THRIFT PLAN
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FOR THE EMPLOYEES OF
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BRANCH BANKING & TRUST COMPANY
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(Amended and Restated Effective January 1,
1994)
Article I. The Plan
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1.1 Establishment of the Plan. Branch Banking & Trust Company (the
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"Company") established, effective July 1, 1982, a savings and thrift plan for
its Employees and the Employees of adopting Affiliates. The Plan was
subsequently amended and restated several times. The Plan is hereby further
amended and restated, effective January 1, 1994.
The Plan shall continue to be known as the Savings and Thrift Plan for the
Employees of Branch Banking & Trust Company.
1.2 Applicability of the Plan. Except as otherwise provided in this
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document and its Appendix A, the provisions of this Plan are applicable only to
Employees in the employ of an Employer or an Affiliate on or after January 1,
1994. The benefits with respect to Employees who have terminated, retired, or
died before this date shall be determined under prior plan documents, except as
provided elsewhere in this document and its Appendices or as required by statute
or regulation.
1.3 Purpose of the Plan. The purpose of the Plan is to allow eligible
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Employees to set aside a portion of their wages and salaries on a pretax basis
to accumulate capital for their retirement. The Company and participating
Affiliates wish to encourage Employee savings by matching a portion of these
wage and salary deferrals with Employer contributions. The Company and
participating Affiliates also wish to supplement the retirement income of
eligible Employees, and to allow eligible
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Employees to share in the success of the Company and the Affiliates, through
the employee stock ownership plan portions of the Plan.
The portions of the Plan which are described in Article V, Appendix B, and the
subsequent Appendices are intended to be a stock bonus plan and an employee
stock ownership plan within the meaning of Code section 4975(e)(7). The
remainder of the Plan is intended to constitute a profit sharing plan. The Plan
and any related trusts are intended to meet the requirements of Code sections
401(a), 401(k), 401(m), 501(a), and 4975(e)(7), as applicable.
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Article II. Definitions
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2.1 Definitions. The following words and phrases, when used herein, shall
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have the meanings set forth below unless otherwise clearly required by the
context. Additional definitions pertaining to the employee stock ownership
portions of this Plan are found in Article V, Appendix B, and the subsequent
Appendices.
(a) "Account" means the separate account maintained under the Plan for
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each Member. A Member's Account represents the Member's total
proportionate interest in the Trust Fund as of any Adjustment Date and
consists of the sum of the following subaccounts.
(1) "ESOP Account" means the ESOP Accounts established for the Member
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under Article V. If a Member is, or has been, a Participant in
more than one ESOP under Article V and the Appendices, a separate
subaccount shall be established for the Member under each such
ESOP.
(2) "Matching Contributions Account" means the portion of a Member's
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Account which evidences the value of the Matching Contributions
made on the Member's behalf by an Employer under section 4.2,
including any gains and losses of the Trust Fund attributable
thereto.
(3) "Prior Plans Account" means the portion of a Member's Account
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which evidences the total value of the Member's accounts in the
Thrift Plan for the Employees of Branch Banking & Trust Company
and the Profit Sharing Plan for the Employees of Branch Banking &
Trust Company. These accounts were merged into this Plan as of
January 1, 1986. This subaccount includes any gains and losses
of the Trust Fund attributable thereto.
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(4) "Rollover Contributions Account" means the portion of a Member's
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Account which evidences the value of the contributions and other
amounts described in subparagraphs (A) and (B) below, including
any gains and losses of the Trust Fund attributable thereto.
(A) Rollover Contributions. A Member's Rollover Contributions
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Account shall include the value of the Rollover
Contributions made by the Member under section 4.7.
(B) Plan-to-Plan Transfers. A Member's Rollover Contributions
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Account shall include the value of any assets transferred to
the Plan and credited to the Member's Rollover Contributions
Account pursuant to any qualified asset transfer. For
purposes of this paragraph, a "qualified asset transfer"
means a direct plan-to-plan transfer of assets and
liabilities from, or a merger of, a plan qualified under
Code section 401(a) to or into the Plan, which is authorized
by (i) the terms of an agreement pursuant to which the
Member's previous employer is acquired (in an asset or stock
sale, or otherwise) by, or merged with, the Employer or an
Affiliate, (ii) the vote of the Board or the board of
directors of any Employer, or (iii) any similar agreement or
resolution. A qualified asset transfer shall only be
permitted if the transferred assets can be legally subject
only to the Plan provisions regarding distributions and
withdrawals applicable to Rollover Contributions Accounts as
specified in Article IX.
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A Member who has not satisfied the eligibility provisions of
Article III but who has a balance in a Rollover Contributions
Account solely attributable to Rollover Contributions or a
qualified asset transfer shall be treated as a Member solely with
regard to the Member's Rollover Contributions Account.
(5) "Tax-Deferred Contributions Account" means the portion of a
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Member's Account which evidences the value of the Tax-Deferred
Contributions made on the Member's behalf by an Employer under
section 4.1, including any gains and losses of the Trust Fund
attributable thereto.
The subaccounts described above shall also include any other assets
transferred to, or merged into, such subaccounts from any other plans
qualified under Code section 401(a) and maintained by an employer
acquired by or merged into the Company or a participating Affiliate to
the extent such transfer or merger is approved by the Board or the
board of directors of the participating Affiliate. Such a transfer or
merger shall only be permitted if the transferred assets can be
legally subject only to the Plan provisions regarding distributions
and withdrawals applicable to the affected subaccounts, as specified
in Article IX.
(b) "Act" means the Employee Retirement Income Security Act of 1974 and
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all regulations and regulatory guidance promulgated thereunder, as
amended from time to time.
(c) "Adjustment Date" means the last day of each month, or any other date
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as determined by the Committee.
(d) "Affiliate" means--
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(1) any corporation while it is a member of the same controlled group
of corporations (within the meaning of Code section 414(b)) as
the Company;
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(2) any organization while it is under "common control" with the
Company (within the meaning of Code section 414(c));
(3) any organization while it is an "affiliated service group"
together with the Company (within the meaning of Code section
414(m)); or
(4) any other entity while it is required to be aggregated with the
Company under Code section 414(o).
(e) "Beneficiary" means the individual person or persons designated by a
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Member to receive the balance of the Member's Account, if any, after
the Member's death, as described in section 9.1.
(f) "Board" means the Board of Directors of Branch Banking & Trust Company
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or its Executive Committee acting in its behalf.
(g) "Break in Service" means a Plan Year for which a Member is credited
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with 500 or fewer Hours of Service.
(h) "Broken Service." Years of Continuous Service include service
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rendered by an Employee prior to a Break in Service to the extent
recognized below.
(1) If the Break in Service occurs prior to January 1, 1976, the
Employee shall not receive credit for the period of employment
prior to such Break in Service, and Years of Continuous Service
shall be recognized only for the period of employment that
follows the Employee's date of reemployment.
(2) If the Break in Service occurs on or after January 1, 1976, Years
of Continuous Service accrued prior to such Break in Service
shall be recognized in accordance with subparagraphs (A) and (B)
below.
(A) If at the time the Break in Service occurred the Employee
was vested in his or her Matching Contributions Account in
accordance
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with Article VIII, the Employee shall receive credit for
Years of Continuous Service accrued prior to the Break in
Service.
(B) If at the time the Break in Service occurred the Employee
was not vested in any part of his or her Matching
Contributions Account, the Employee shall receive credit for
Years of Continuous Service accrued prior to the Break in
Service only if the number of consecutive one-year Breaks in
Service is less than five or does not equal or exceed the
Years of Continuous Service prior to the Break in Service.
In the application of this provision, Years of Continuous
Service shall include Years of Continuous Service
immediately preceding the Break in Service plus any Years of
Continuous Service required to be recognized under this
paragraph by reason of any prior Breaks in Service.
(i) "Code" means the Internal Revenue Code of 1986 and all regulations
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and regulatory guidance promulgated thereunder, as amended from time
to time.
(j) "Committee" means the Committee established under Article XII to
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administer the Plan.
(k) "Company" means Branch Banking & Trust Company.
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(l) "Compensation."
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(1) Except as otherwise specified, "Compensation" means earnings paid
to a Participant by an Employer during a Plan Year, including
salary, wages, overtime pay, and such other amounts as determined
by the Board, before any election to reduce Compensation under
sections 4.1 and 4.3 or under any other benefit plan maintained
by an Employer.
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(2) For purposes of satisfying the limits on contributions described
in section 4.5, "Compensation" means an Employee's compensation
as defined in Code section 414(s), including amounts excluded
from the Employee's wages under either Code section 125 or
401(k).
(3) For purposes of applying the limits of Code section 415, as
described in section 4.6, "Compensation" means an Employee's
compensation as defined in Code section 415(c)(3).
To the extent required by law, the Compensation of each Employee that
may be recognized under the Plan for any Plan Year shall not exceed
the amount determined by the Secretary of the Treasury under Code
section 401(a)(17). In determining the Compensation of an Employee
for purposes of this dollar limitation, the rules of Code section
414(q)(6) shall apply, except that in applying such rules, the term
"family" shall include only the spouse of the Employee and any lineal
descendants of the Employee who have not attained age 19 before the
close of the Plan Year. If the dollar limitation on Compensation, as
adjusted, applies to the combined Compensation of the Employee and one
or more family members (as defined in Code section 414(q)(6)(B)), the
contribution and allocation provisions of the Plan shall be applied by
prorating the dollar limitation, as adjusted, among the Employee and
the Employee's family members in proportion that each such
individual's Compensation determined prior to the application of this
limitation bears to the total Compensation of all such individuals
determined prior to the application of this limitation.
(m) "Date of Employment" means the first date on which an Employee
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completes an Hour of Service.
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(n) "Employee" means any person who is employed by the Company or an
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Affiliate.
(o) "Employer" means Branch Banking & Trust Company with principal offices
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in Wilson, North Carolina. Employer also means any other Affiliate
which is authorized by the Board to adopt this Plan and Trust, and
which, by direction of the Affiliate's board of directors, or highest
executive authority if a partnership or proprietorship, adopts this
Plan and Trust.
(p) "Entry Date" means--
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(1) for purposes of Tax-Deferred and Matching Contributions and
Dividend Replacement Allocations (as defined in section 5.1(a)),
January 1, April 1, July 1, and September 1 of each Plan Year;
and
(2) for purposes of the employee stock ownership plans described in
Article V, Appendix B, and the subsequent Appendices, the date on
which the Eligible Employee satisfies the participation
requirements in those provisions.
(q) "Fund" means any of the funds established under the Plan for the
----
investment of Members' Accounts. Except as provided in Article V,
Appendix B, and the subsequent Appendices, the Company shall have the
sole and absolute discretion to establish and terminate such Funds as
it shall deem appropriate.
(r) "Highly Compensated Employee" means, with respect to any Plan Year,
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any individual who is a "highly compensated employee" within the
meaning of Code section 414(q).
The Plan Administrator, in its sole and absolute discretion, may
identify Highly Compensated Employees for any given Plan Year under
any method permissible
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under Code section 414(q), including the method described in Section
4 of Revenue Procedure 93-42.
(s) "Hour of Service" means--
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(1) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours
shall be credited to the Employee for the computation period in
which the duties are performed.
(2) Each hour for which an Employee is paid, or entitled to payment,
by the Employer 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, or leave of
absence. No more than 501 hours shall be credited under this
paragraph for any single continuous period during which no duties
are performed, whether or not such period occurs in a single
computation period.
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same hours shall not be credited both under paragraph (1) or
paragraph (2), as the case may be, and under this paragraph (3).
These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement, or
payment is made.
(4) Each hour which is required to be credited to an Employee for
military service under applicable law and regulations and which
is not otherwise credited under this subsection.
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(5) Hours under this subsection shall be calculated and credited
pursuant to section 2530.200b-2(b) and (c) of the Department of
Labor regulations, which are incorporated herein by reference.
(6) Solely for purposes of determining whether a Break in Service has
occurred, an Employee shall be credited with an Hour of Service
for each hour that would have been credited to such Employee but
for the Employee's absence from employment for maternity or
paternity reasons. In any case in which the Plan Administrator
is unable to determine the hours that would have been credited to
such Employee but for such absence, the Employee shall be
credited with eight Hours of Service for each day of the
normally scheduled workweek the Employee is absent from work
for maternity or paternity reasons. An absence from work for
maternity or paternity reasons means an absence--
(A) by reason of the pregnancy of the Employee,
(B) by reason of the birth of a child of the Employee,
(C) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee,
or
(D) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
No more than 501 Hours of Service shall be credited under this
paragraph for any such absence. Hours of Service under this
paragraph shall be credited in the Plan Year in which the absence
from employment commences if the crediting is necessary to
prevent a Break in Service, or in
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all other cases, such Hours of Service shall be credited in the
following Plan Year.
(7) Effective August 5, 1993, solely for purposes of determining
whether an Employee has incurred a Break in Service, an Employee
shall be credited with an Hour of Service for each hour of the
normally scheduled workweek for each week during any period the
Employee is on an approved leave of absence taken under the
Family and Medical Leave Act of 1993.
(8) Except as provided in paragraphs (6) and (7), an Employee shall
receive 40 Hours of Service for each week of an authorized leave
of absence granted by the Employer for which he or she is not
compensated, up to 501 hours for any period of leave. Such
leaves of absence shall be granted by the Employer pursuant to
rules and policies uniformly applied to all Employees similarly
situated. If an Employee does not return to the employ of the
Employer promptly after the expiration of the leave of absence,
he or she shall be deemed to have terminated employment on the
later of his or her last day of work or the last day for which he
or she was paid or entitled to payment under this subsection;
provided, however, that this sentence shall not apply if the
Employee dies or becomes disabled during the leave of absence.
(9) Effective January 1, 1985, if an individual becomes an Employee
upon the acquisition of all or a portion of the business of the
individual's former employer by an Employer or an Affiliate,
whether by merger, acquisition of assets or stock, or otherwise,
service with the individual's predecessor employer shall be
included in
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determining Hours of Service, except as otherwise provided by a
vote of the Board. In the case of any such individual who
participated in a retirement plan maintained by a former
employer that is merged with the Plan, the individual's Years
of Continuous Service shall be determined pursuant to section
2.1(ii)(4).
(10) The same Hours of Service shall not be credited more than once
under the proceeding paragraphs.
(t) "Matching Contributions" means the contributions made by an Employer
----------------------
under section 4.2, but does not include any contributions to provide
for Dividend Replacement Allocations (as described in section 4.2,
Article V, Appendix B, and the subsequent Appendices).
(u) "Member" means a Participant or a former Participant who still has a
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balance in his or her Account.
(v) "Participant" means any Employee of an Employer who has met and
-----------
continues to meet the active participation requirements of the Plan as
set forth in Article III or any of the Appendices.
(w) "Pay Reduction Agreement" means an agreement described in section 4.3.
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(x) "Plan" means the Savings and Thrift Plan for the Employees of Branch
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Banking & Trust Company as herein set forth or as duly amended.
(y) "Plan Administrator" means the Committee or a person to whom the
------------------
Committee has delegated this function under Article XII.
(z) "Plan Year" means the calendar year.
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(aa) "Rollover Contributions" means the contributions made by an Employee
----------------------
under section 4.7.
(bb) "Stock" means the common stock of BB&T Financial Corporation.
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(cc) "Supplemental Plan" means the Branch Banking & Trust Company
-----------------
Supplemental Executive Retirement Plan.
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(dd) "Tax-Deferred Contributions" means the contributions made by an
--------------------------
Employer on behalf of a Participant pursuant to the Participant's
election to reduce Compensation, as described in section 4.1.
(ee) "Termination of Service" means the last date on which the individual
----------------------
performs duties as an Employee of the Company or an Affiliate.
(ff) "Trust Agreement" means the agreement under which Plan assets are held
---------------
and invested under Article XIII.
(gg) "Trust Fund" or "Trust" means the trust fund established under Article
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XIII to hold the assets of the Plan.
(hh) "Trustee" means the bank, trust company, other financial institution,
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or individual or individuals holding and managing the Trust Fund under
the terms of the Trust Agreement.
(ii) "Year of Continuous Service" shall be determined as follows.
--------------------------
(1) Service Prior to January 1, 1976. For service prior to January
--------------------------------
1, 1976, an Employee shall receive credit for one Year of
Continuous Service for each full year of uninterrupted employment
as a full-time regular Employee from his or her last date of
hire to December 31, 1975 (with any fraction of one-half year
or more being credited as a full year) including periods of
absence authorized by the Employer or required to be recognized
by law.
(2) Service on and After January 1, 1976. For service on and after
------------------------------------
January 1, 1976, an Employee shall receive credit for one Year of
Continuous Service for each Plan Year in which he or she
completes 1,000 or more Hours of Service, plus an additional Year
of Continuous Service if the Employee is credited with 1,000 or
more Hours of Service in
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the 12-month period beginning on his or her Date of Employment.
Such years of service shall accrue from the Employee's last
Date of Employment or January 1, 1976, whichever occurs later.
In addition, Years of Continuous Service shall include such
Broken Service as may be recognized under section 2.1(h)(2).
(3) Service with Related Employer. Years of Continuous Service shall
-----------------------------
also include uninterrupted employment with any Affiliate of the
Employer, including employment before the date it became an
Affiliate.
(4) Service with Acquired Business. Effective January 1, 1985,
------------------------------
except as otherwise provided by a vote of the Board, if an
individual becomes an Employee upon the acquisition of all or a
portion of the business of the individual's former employer by an
Employer or an Affiliate, whether by merger, acquisition of
assets or stock, or otherwise, and the Employee was eligible to
participate in a retirement plan maintained by such former
employer (the "former plan"), service with the predecessor
employer shall be included in determining the Employee's Years
of Continuous Service as follows.
(A) If service under the former plan was determined under the
hours-of-service method, the Employee's Years of Continuous
Service shall include his or her years of service under the
former plan through the end of the Plan Year that includes
the date of acquisition. If the last day of such plan year
is not December 31, the Employee shall also receive credit
for a Year of Continuous Service if he or she completes
1,000 or more
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Hours of Service in the Plan Year that includes the date
of acquisition. The Employee shall thereafter receive
credit for Years of Continuous Service as otherwise
provided under this subsection.
(B) If service under the former plan was determined under the
elapsed-time method, the Employee's Years of Continuous
Service shall include his or her years of service under the
former plan through the merger date. The Employee shall
then receive credit for Years of Continuous Service as
otherwise provided under this subsection, taking into
account Hours of Service on and after the first day of the
Plan Year that includes the date of acquisition.
(jj) "Year of Eligibility Service" means any 12-month period during which
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the Employee completes 1,000 or more Hours of Service, beginning on
(1) the Employee's Date of Employment, or (2) any January 1
thereafter. Service with an Affiliate not adopting this Plan shall be
considered service with the Employer when determining if an Employee
has completed a Year of Eligibility Service.
2.2 Gender and Number. The masculine gender shall be deemed to include
-----------------
the feminine, and the singular shall include the plural, unless otherwise
clearly required by the context.
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Article III. Eligibility and Participation
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3.1 Eligibility for Participation. Each Employee who was eligible to
-----------------------------
participate in the Plan on January 1, 1994, and who is an Eligible Employee of
an Employer on January 1, 1994, shall remain eligible to participate in this
Plan. Each other Employee who is or becomes an Eligible Employee on or after
January 1, 1994, shall be eligible to become a Participant in the Plan on the
Entry Date coinciding with or next following the completion of one Year of
Eligibility Service and the attainment of age 21.
3.2 Participation.
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(a) Tax-Deferred and Matching Contributions; Dividend Replacement
-------------------------------------------------------------
Allocations. An Eligible Employee who shall from time to time qualify
-----------
to become a Participant in accordance with section 3.1 may enroll in
the Plan, with regard to Tax-Deferred and Matching Contributions and
Dividend Replacement Allocations (as described under section 4.2), as
of the Entry Date coincident with or next following the date on which
the Eligible Employee satisfies the requirements of section 3.1, or
any Entry Date thereafter. To enroll in the Plan, an Eligible
Employee shall submit an enrollment form at the time and in the manner
specified by the Plan Administrator. This enrollment form shall serve
as--
(1) a Pay Reduction Agreement under section 4.3;
(2) an investment election under section 6.1; and
(3) a Beneficiary designation under section 9.1.
(b) Employee Stock Ownership Plans. Each Eligible Employee shall
------------------------------
automatically become a Participant with regard to eligibility for the
employee stock ownership plans described in Article V, Appendix B, and
the subsequent Appendices on the date on which the Eligible Employee
satisfies the participation requirements in that Article and the
Appendices.
-17-
3.3 Eligible Employees.
------------------
(a) General Rule. Subject to subsection (b), the term "Eligible Employee"
------------
shall mean an Employee of an Employer.
(b) Excluded Employees. There shall be excluded from the class of
------------------
"Eligible Employees" any Employees included in a unit of employees
covered by a collective bargaining agreement, if retirement benefits
were the subject of good faith bargaining, unless such agreement
specifically provides for their participation in the Plan.
3.4 Rehired Employees. Each reemployed Employee who completed a Year of
-----------------
Eligibility Service prior to the Employee's Termination of Service shall, upon
reemployment, become a Participant upon the Employee's satisfying the
requirements of sections 3.1 and 3.2, without regard to the service requirement
of section 3.1. Each other former Employee who is subsequently rehired by the
Company or an Affiliate shall, upon reemployment, become a Participant in
accordance with sections 3.1 and 3.2.
3.5 Loss of Status as an Eligible Employee. For any period during which a
--------------------------------------
Member either (a) remains in the employ of the Company or Affiliate but ceases
to be an Eligible Employee within the meaning of section 3.3 or (b) is no longer
an Employee but has an Account balance under the Plan, no contributions shall be
made on the Member's behalf. This individual shall remain a Member for all
other purposes until the earlier of the Member's death or the complete
distribution (or forfeiture) of the Member's Account.
3.6 Leased Employees. A person who is considered a "leased employee" of
----------------
the Company or an Affiliate, within the meaning of Code section 414(n), shall
not be considered an Employee for
-18-
purposes of participating in this Plan or receiving any contributions or
benefit under this Plan. However, if a leased employee becomes eligible to
participate in the Plan as a result of later employment with an Employer, the
leased employee shall receive credit for service as a leased employee.
Notwithstanding the preceding paragraph, a leased employee shall be included as
an Employee for purposes of applying the requirements described in Code section
414(n)(3) and determining the number and identity of Highly Compensated
Employees.
3.7 Participation of Merged or Acquired Employees. Notwithstanding
---------------------------------------------
sections 3.1 and 3.2, if an individual becomes an Eligible Employee upon the
acquisition of all or a portion of the business of the individual's former
employer by an Employer or an Affiliate, whether by merger, acquisition of
assets or stock, or otherwise, this Employee shall become a Participant, except
as otherwise provided by a vote of the Board, as follows:
(a) If the Employee was a Participant in a qualified defined contribution
plan maintained by the former employer or had satisfied the
eligibility requirements for such plan, the Employee shall be eligible
to participate in the Plan as of the acquisition date.
(b) Each other such Employee shall become eligible to participate in the
Plan in accordance with the provisions of sections 3.1 and 3.2.
-19-
Article IV. Contributions and Allocations
------------------------------------------
4.1 Tax-Deferred Contributions. Each Employer shall contribute to the
--------------------------
Trust Fund for each payroll period on behalf of each Participant of the Employer
an amount equal to the amount by which the Participant's Compensation has been
reduced under a Pay Reduction Agreement described in section 4.3. This
contribution shall be made as soon as practicable after the payroll period;
however, in no event shall contributions under this section for any Plan Year be
made later than (a) the date prescribed by law for the Employer to obtain a
federal income tax deduction for the Plan Year for which the contributions are
made or (b) the date required under the Act, if earlier. Contributions under
this section shall be credited to the Participant's Tax-Deferred Contributions
Account.
4.2 Matching Contributions and Dividend Replacement Allocations.
-----------------------------------------------------------
(a) If the Trustee, on behalf of the Plan, enters into an Employer
Matching Loan (as defined in section C.1(c) of Appendix C), then
beginning at such time as the Committee determines each Employer shall
make Matching Contributions in an amount sufficient to provide for a
matching allocation on behalf of its Participants equal to 100 percent
of the first 2 percent, and 50 percent of the next 4 percent, of each
Participant's Compensation made as a current Tax-Deferred Contribution
under section 4.1 (the "Matching Allocation"); and each Employer shall
make contributions as required to provide for the Dividend Replacement
Allocations described in section C.6 of Appendix C. At the Company's
discretion, the Employers may make contributions to provide for the
Dividend Replacement Allocations by (1) contributing cash to the
Trustee, which the Trustee (as directed by the
-20-
Committee) shall use to pay part of the Employer Matching Loan to
release shares of Stock, (2) contributing cash to the Trustee which
the Trustee (as directed by the Committee) shall use to buy Stock in
the open market, or (3) contributing Stock. An allocation of Stock
under section C.6(a) and (b) of Appendix C shall be counted for
purposes of meeting the allocation requirements of this section 4.2,
using the Fair Market Value of such Stock (as defined in section
5.6) at the time of allocation multiplied by 0.95. Forfeitures under
section 8.3 (valued at Fair Market Value (as defined in section 5.6)
as of the date of any allocation thereof multiplied by 0.95) and the
amount of Excess ESOP Allocation for prior Plan Years not previously
used to reduce Matching Allocations (valued at Fair Market Value as
of the date of any allocation thereof multiplied by 0.95) shall be
used to reduce the Employer's Matching Contribution obligation and
allocated to Participants' ESOP Accounts in the same manner as
shares released from the ESOP suspense account are allocated as set
forth in section C.6(a) of Appendix C.
(b) Prior to the time, as determined by the Committee, that each Employer
shall make contributions in accordance with subsection (a), or if the
Trustee does not enter into an Employer Matching Loan on behalf of the
Plan, each Employer shall make Matching Contributions on behalf of
each of its Participants in an amount equal to 100 percent of the
first 2 percent, and 50 percent of the next 4 percent, of the
Participant's Compensation made as a current Tax-Deferred Contribution
under section 4.1.
(c) Matching Contributions shall be paid to the Trustee at the time or
times as the Employer may determine, but not later than the date
prescribed by law for the
-21-
Employer to obtain a federal income tax deduction for the Plan Year
for which the contributions have been made, and in no event later
than the date required under the Act. Contributions under this
section shall be credited to the Participants' Matching
Contributions Account, except that allocations made pursuant to
Article C shall be allocated to Participants' Employer Matching ESOP
Accounts (as defined in section C.1(b) of Appendix C).
4.3 Pay Reduction Agreements.
------------------------
(a) General Rule. In order to be eligible for Tax-Deferred and Matching
------------
Contributions, and (if applicable) Dividend Replacement Allocations
under 4.2(a), an Eligible Employee who has satisfied the participation
requirements of Article III shall execute a Pay Reduction Agreement,
on a form prescribed by the Plan Administrator. Under this Pay
Reduction Agreement, the Employee's Compensation shall be reduced by a
specified whole percentage up to 16 percent, and the Employer shall
contribute an equal amount to the Plan on the Employee's behalf as
Tax-Deferred Contributions under section 4.1. A Participant's Pay
Reduction Agreement shall remain effective until canceled or amended.
(b) Amendment or Cancellation. A Pay Reduction Agreement may be canceled
-------------------------
by a Participant at any time during the Plan Year by giving notice to
the Plan Administrator at a time and in a manner specified by the Plan
Administrator. This notice shall be effective, and the Pay Reduction
Agreement shall be canceled, as of the date specified in the notice or
as of any later date determined under the Plan Administrator's rules
and procedures.
-22-
A Pay Reduction Agreement may be amended by a Participant otherwise to
increase or decrease the percentage amount of the Employee's
Compensation reduction, by the Participant's giving notice thereof to
the Plan Administrator at a time and in a manner specified by the Plan
Administrator. This notice shall be effective, and the Pay Reduction
Agreement shall be amended, as of the date specified in the notice
or as of any later date determined under the Plan Administrator's
rules and procedures.
Notwithstanding anything in this section to the contrary, any
Participant who is also an active participant in the Supplemental Plan
shall be permitted to cancel or amend the Participant's Pay Reduction
Agreement only as of the first day of each Plan Year.
4.4 Application of Forfeitures. Forfeitures occurring under sections 4.5,
--------------------------
8.3, and Appendix C during any Plan Year in the Account of a Member shall be
used to reduce future Matching Contributions due under section 4.2 (and Appendix
C if applicable) from the Employer of that Member.
4.5 Limitations on Contributions.
----------------------------
(a) In no event shall any Employer make Tax-Deferred Contributions for any
calendar year with respect to any Member which, when aggregated with
any previous deferrals by the Member pursuant to any other cash or
deferred arrangement maintained by the Company or an Affiliate under
Code section 401(k), are in excess of $7,000 (or any greater amount
determined under Code section 402(g)). To the extent that any Tax-
Deferred Contributions are made by an Employer in contravention of the
preceding sentence, such excess amounts (plus earnings or minus
losses, if any, for the calendar
-23-
year) shall be refunded to the Member as soon as administratively
possible, as provided in rules adopted by the Plan Administrator and
in the manner and within the time required by the Code.
(b) In no event shall any Employer make Tax-Deferred Contributions for any
Plan Year that would result in the actual deferral percentage of the
group of Highly Compensated Employees eligible for Tax-Deferred
Contributions exceeding the actual deferral percentage of the group
of all other eligible Employees by more than the greater of--
(1) one and one-quarter times; or
(2) the lesser of (A) two times or (B) two percentage points.
The actual deferral percentage of each group of eligible Employees for
any Plan Year shall be the average of the ratios (calculated
separately for each eligible Employee in each group) of (i) the Tax-
Deferred Contributions made on behalf of each eligible Employee for
the Plan Year to (ii) the eligible Employee's Compensation (either
earned during the entire Plan Year or earned while the Employee was
eligible for Tax-Deferred Contributions, as determined by the Plan
Administrator in its sole and absolute discretion each Plan Year). To
the extent necessary to conform to this limitation, the Plan
Administrator shall reduce, or may limit, Tax-Deferred Contributions
made on behalf of the Highly Compensated Employees in accordance with
regulatory guidance under Code section 401(k). This reduction or
limitation shall be effected by reducing contributions made on behalf
of Highly Compensated Employees (in the order of their actual deferral
percentage) beginning with the Highly Compensated Employees who
elected the highest percentage of such contributions. Any such
reduction
-24-
in the Tax-Deferred Contributions made on behalf of any Member (plus
earnings or minus losses, if any, for the Plan Year) shall be
refunded to the Member as soon as administratively possible, as
provided in rules adopted by the Plan Administrator, but in no event
later than twelve months after the end of the Plan Year.
Any Matching Contributions made or allocated with respect to Tax-
Deferred Contributions which are refunded under this subsection shall
be treated as a forfeiture.
In addition to the foregoing, if the Plan Administrator determines
during the course of a Plan Year that the discrimination test of
Code section 401(k)(3) otherwise might not be met for the Plan Year,
the Plan Administrator may reduce, at any time, the maximum
percentage of Compensation at which Highly Compensated Employees may
elect Tax-Deferred Contributions to such percentage as the Plan
Administrator determines appropriate to ensure that the test shall
be met for such Plan Year.
(c) In no event shall Matching Contributions for any Plan Year be made
which would result in the contribution percentage of the group of
Highly Compensated Employees eligible for Tax-Deferred Contributions
exceeding the contribution percentage of the group of all other
eligible Employees by more than the greater of--
(1) one and one-quarter times; or
(2) the lesser of (A) two times or (B) two percentage points.
The contribution percentage of each group of eligible Employees for
any Plan Year shall be the average of the ratios (calculated
separately for each eligible Employee in each group) of (i) the
Matching
-25-
Contributions made on behalf of each eligible Employee for
the Plan Year to (ii) the eligible Employee's Compensation (either
earned during the entire Plan Year or earned while the Employee was
eligible for Tax-Deferred Contributions, as determined by the Plan
Administrator in its sole and absolute discretion each Plan Year). To
the extent necessary to conform to this limitation, the Plan
Administrator shall reduce, or may limit, Matching Contributions made
on behalf of the Highly Compensated Employees in a manner similar to
the method described in subsection (b). Any such reduction in the
Matching Contributions made on behalf of any Member shall be paid to
the Member (plus earnings or minus losses, if any, for the Plan Year).
Any refund made pursuant to this subsection shall be paid without
regard to any other provision in the Plan. Each refund shall occur
no later than twelve months after the end of the Plan Year.
(d) To the extent permitted by applicable regulations, the Plan
Administrator may elect to take Tax-Deferred Contributions into
account in applying the contribution percentage test of subsection
(c).
(e) To the extent required by Code section 401(m), the limits of this
section shall be applied in a manner that reflects any restrictions on
the multiple use of the alternative limitation contained in paragraph
(2) of subsections (b) and (c).
(f) Notwithstanding any provision of the Plan to the contrary, the Plan
Administrator may comply with the requirements of Code section 401(k)
and (m) as reflected in this section by combining contributions under
this Plan with contributions under any other defined contribution plan
maintained by the Company or an Affiliate, or in any other manner
permissible under Code section 401(k) or 401(m), as applicable.
-26-
Similarly, contributions under this Plan shall be aggregated with
contributions under any other plans to the extent required by the
Code. Any such approach shall comply with the guidelines, if any,
established by the Secretary of the Treasury.
4.6 Limitations on Annual Additions. The provisions of this section 4.6
-------------------------------
shall apply to Plan Years (which shall be the "limitation years" under this Plan
for purposes of Code section 415).
(a) Annual Addition. "Annual Addition" means, for any Member, the sum,
---------------
credited to the Member's Account under this Plan and the Member's
accounts under all other qualified defined contribution plans
maintained by the Company or an Affiliate, of--
(1) Company and Affiliate contributions, including Tax-Deferred
Contributions;
(2) Employee after-tax contributions, but Employee contributions for
plan years before 1987 disregarded under plan provisions in
effect before 1987 shall be disregarded;
(3) forfeitures; and
(4) contributions to an individual, post-retirement medical account
for the Member, to the extent required by Code sections 415(1)
and 419A(d)(2).
Restored forfeitures, repaid distributions, Rollover Contributions,
and loan payments shall not be treated as Annual Additions.
(b) Limitation. Notwithstanding the foregoing provisions of this Article
----------
IV, for any Plan Year the Annual Addition of a Member shall not exceed
the lesser of--
(1) $30,000 (or such higher amount as may be permitted under Code
section 415(c)); or
(2) 25 percent of the Member's Compensation for such Plan Year.
-27-
If, under Article V, Appendix B, and the subsequent Appendices, no
more than one-third of the Plan contributions with respect to such
Plan Year for an ESOP (as defined in section 5.1(c)) are allocated to
Highly Compensated Employees, forfeitures of Stock (to the maximum
extent provided under Code section 415(c)(6)) and interest payments on
any Loan as defined in section 5.1(f) (to the fullest extent provided
in Code section 415(c)(6)) shall not be included in Annual Additions
under this section.
(c) Additional Limitation. If in any Plan Year a Member participates in
---------------------
both a qualified defined contribution plan and qualified defined
benefit plan of the Company or an Affiliate, the sum of the defined
benefit fraction (as defined in Code section 415(e)(2)) and the
defined contribution fraction (as defined in Code section 415(e)(3))
shall not exceed 1.0. In calculating the defined contribution
fraction, the Plan Administrator may, in its discretion, make the
election provided under Code section 415(e)(6). If the Member was a
participant in one or more defined benefit plans maintained by the
Company or an Affiliate that were in existence on May 6, 1986, the
denominator of the defined benefit fraction shall not be less than
1.25 times the sum of the annual benefits under these plans accrued
by the Member as of the end of the last limitation year beginning
before 1987. The preceding sentence shall apply only if the defined
benefit plans, individually and in the aggregate, satisfied the
requirements of Code section 415 for all limitation years beginning
before 1987. Before any contributions are reduced under this Plan,
the benefit under the defined benefit plan shall be reduced to the
extent necessary to ensure that the sum of the defined benefit
-28-
fraction and defined contribution fraction does not exceed 1.0.
(d) Reduction in Annual Additions. If in any Plan Year a Member's Annual
-----------------------------
Addition exceeds the limitation determined above, the excess shall not
be allocated to the Member's accounts in any defined contribution
plan. If the excess is vested, the excess shall be returned to the
Member to the extent permitted by regulations under Code section 415.
If some or all of the excess is not vested, or if some or all of the
excess cannot be returned to the Member under controlling regulations,
the portion that cannot be returned shall be placed in a suspense
account.
The amount held in the suspense account shall be used to reduce
contributions by that Employer for the next Plan Year. The suspense
account shall share in the gains and losses of the Trust Fund on the
same basis as other Accounts. The above reductions shall be applied
first to any other defined contribution plan maintained by an
Employer, and then to this Plan.
(e) Definition of Affiliate. In applying the limitations under this
-----------------------
section, an employer shall be treated as an Affiliate if, in
determining common control under Code section 414(b) and (c), the
phrase "more than 50 percent" was substituted for the phrase "at least
80 percent" each place the latter appears in Code section 1563 and in
the regulations under Code section 414(c).
4.7 Rollover Contributions.
----------------------
(a) Generally. Any Eligible Employee, including an individual who
---------
has not yet satisfied the age or service requirements of Article
III, may
-29-
contribute cash amounts attributable to qualifying rollover
distributions.
(b) Merged or Acquired Employees. Any Eligible Employee who became
----------------------------
an Employee upon acquisition of all or a portion of the business
of the individual's former employer by an Employer or an
Affiliate (whether by merger, acquisition of assets or stock, or
otherwise), including an individual who has not yet satisfied the
age or service requirements of Article III, may contribute cash
amounts or Stock attributable to qualifying rollover
distributions. Any such contributions shall be invested in the
appropriate Funds as soon as practicable.
(c) Limitations. A "qualifying rollover distribution" is a
-----------
distribution described in Code section 402(c), 403(a)(4), or
408(d)(3). Any amounts described in subsection (a) or (b) shall
be credited to a Rollover Contributions Account established for
the Employee. An Eligible Employee who is only eligible for
participation in the Plan by means of this section shall be
treated as a Member solely with regard to the individual's
Rollover Contributions Account.
-30-
Article V. Employee Stock Ownership Plans
------------------------------------------
5.1 Definitions. Any capitalized term not otherwise defined in this
-----------
Article shall have the same meaning as elsewhere in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Dividend Replacement Allocation" shall mean the allocation made
--------------------------------
pursuant to section 5.10(c).
(b) "Employer Contribution" shall mean a contribution of cash by an
---------------------
Employer to the ESOP. To the extent not required to repay a Loan,
Employer Contributions may also be made in Stock. In addition,
contributions may be made by the forgiveness of a portion or all of a
Loan.
(c) "ESOP" shall mean any employee stock ownership plan established as a
----
portion of the Plan by this Article V and Appendix B or any subsequent
Appendix, which is designed to invest primarily in Stock.
(d) "ESOP Account" shall mean the separate account maintained under the
------------
ESOP for each Member, which evidences the total value of the Stock
allocated, under this Article V and the applicable Appendix, to such
Member's Account pursuant to repayment of any Loan by Employer
Contributions and dividends on such Stock, including Stock dividends
paid on shares allocated to such account, and including other shares
contributed by the Employer (or purchased with Employer Contributions)
and allocated to the ESOP Account, adjusted for distributions and
transfers.
(e) "Fair Market Value" shall mean, for any Stock, the Fair Market Value
-----------------
of such Stock as determined under section 5.6.
-31-
(f) "Loan" shall mean any loan to the Trustee made or guaranteed by a
----
disqualified person (within the meaning of Code section 4975(e)(2))
for the purpose of permitting the Trustee to finance or refinance the
purchase of Stock for the benefit of Employees as provided in this
Article V, including, but not limited to, a direct cash loan, a
purchase-money transaction, or an assumption of an obligation of the
Trustee.
5.2 Establishment of ESOP. The Company, through written action of the
---------------------
Board in its sole and absolute discretion, and any other Employer, with the
written consent of the Board of the Company, may establish an ESOP as part of
this Plan for the benefit of some or all of the Employees. The terms of the
ESOP established under this Article shall be described in this Article and in
Appendix B or any subsequent Appendix. Each ESOP established hereunder shall be
accounted for separately; the terms of this Article shall be applied to each
such ESOP independently; and a separate subaccount shall be established in the
Account of any Employee for each ESOP in which the Employee participates.
5.3 Employer Contributions. In the event that a Loan is made to the
----------------------
Trustee, for each Plan Year the Company or the appropriate Employer shall make
Employer Contributions to the ESOP in such amounts and at such times as will
enable the Trustee to pay principal and/or interest on any such Loan as they are
due, but only to the extent the principal and interest on any such Loan are not
paid, in the sole and absolute discretion of the Committee, or as otherwise
specified in the appropriate Appendix, by means of a dividend on Stock
originally given as collateral for such Loan. For each Plan Year, the Company
or the appropriate Employer may also make discretionary Employer Contributions
to the ESOP in cash or Stock at such times and in such amounts as the board of
directors of each Employer shall
-32-
determine, subject to the written consent of the Board and the provisions of
the appropriate Appendix. These discretionary Employer Contributions either
shall be used to prepay the Loan or shall be invested in Stock, in the sole
and absolute discretion of the Committee. All Employer Contributions to the
Trust are conditioned on the deductibility of such contributions, and no
Employer Contribution shall be made in excess of the maximum amount allowable
as a deduction for federal income tax purposes. In the event that deductible
Employer Contributions are insufficient to enable the Trustee to pay principal
and interest on such Loan as it is due and not paid (in the sole and absolute
discretion of the Committee or as specified in the applicable Appendix) by
means of a dividend on Stock held as collateral for such Loan, then upon the
Trustee's request the Employer shall make an additional Loan to the ESOP, as
described in Treasury Regulations section 54.4975-7(b)(4)(iii), in sufficient
amounts to meet such principal and interest payments. Alternatively, the
Company or the Employer may make an additional Employer Contribution in an
amount sufficient to make such principal and interest payments, and a suspense
account shall be established under Code sections 415 and 4975. The new Loan
shall also meet all requirements of an "exempt loan" within the meaning of
Treasury Regulations section 54.4975-7(b)(1)(iii). Stock released from the
pledge of the prior Loan as a result of the payment of principal and interest
with the proceeds of a new Loan shall be pledged as collateral to secure the
new Loan. Such Stock shall be released from this new pledge and allocated to
the ESOP Accounts of the Participants in accordance with applicable provisions
of the ESOP.
5.4 Participant Contributions. No Participant shall be required or
-------------------------
permitted to make contributions to an ESOP.
5.5 Investment of ESOP Assets. Assets held under the ESOP shall be
-------------------------
invested primarily in Stock. Employer Contributions,
-33-
and all other ESOP assets, including cash dividends paid on Stock, but
excluding forfeitures, may be used (a) to acquire shares of Stock directly
from Company shareholders (including former Participants) or from the Company
or (b) to pay principal and interest on a Loan.
5.6 Purchases of Stock. All purchases of Stock by the Trustee shall be
------------------
made at a price which does not exceed the Fair Market Value of such Stock. The
determination of Fair Market Value of Stock for all purposes under the Plan
shall be made by the Trustee based upon the last public sale price of the
National Association of Automated Securities Dealer Automated Quotation System
("NASDAQ") on the date of purchase.
5.7 Sales of Stock.
--------------
(a) The Trustee may not sell or resell shares of Stock held in an ESOP
Account, an ESOP Suspense Account, or an ESOP Holding Account (as
described in section 5.8) to any party in interest, within the meaning
of section 3(14) of the Act, except as directed by the Committee in
accordance with subsection (b). Any such sales shall be made at not
less than the Fair Market Value as determined under section 5.6, and
no commission shall be charged. Any such sale shall be made in
conformance with section 408(e) of the Act. All sales proceeds of
allocated Stock shall be credited to the Matching Contributions
Accounts of the Members on whose behalf such sales were made and shall
be distributed in accordance with this Plan.
(b) The Committee shall submit any proposal for the sale or exchange of
Stock held by the Trust Fund in the ESOP Account to the Members as
provided in this subsection (b). Each of the Members shall have the
right, with respect to Stock allocated to the Member's ESOP Account,
to direct the Committee as to the manner
-34-
in which to direct the Trustee to respond to such proposal. The
directions received by the Committee from any Participant shall be
held in confidence by the Committee and shall not be individually
divulged or released to any person except as required by law. As
to Stock which is not allocated to a particular Member's ESOP Account
but is held in the ESOP Suspense Account or the ESOP Holding Account,
and Stock held in an ESOP Account as to which the Committee does not
receive timely and proper direction from the Member, the Committee
shall direct the Trustee to respond to the proposal with respect to
such Stock in the same proportion as the Committee is directing the
Trustee to respond with respect to Stock held in the ESOP Accounts for
which the Committee received timely and proper directions.
5.8 Exempt Loan.
-----------
(a) The Trustee shall obtain Loans as directed by the Committee. Any such
Loan shall meet all requirements necessary to constitute an "exempt
loan" within the meaning of Treasury Regulations section 54.4975-
7(b)(7) and shall be used primarily for the benefit of the Members and
their Beneficiaries. The proceeds of any such Loan shall be used,
within a reasonable time after the Loan is obtained, only for any or
all of the following: to purchase Stock, repay the Loan, or repay any
prior Loan. The number of years to maturity under a Loan must be
definitely ascertainable at all times. Any such Loan shall provide
for no more than a reasonable rate of interest, as determined under
Treasury Regulations section 54.4975-7(b)(7), and must be without
recourse against the ESOP assets other than Stock acquired with the
proceeds of the Loan and shares of Stock that were used as collateral
on a prior Loan
-35-
repaid with the proceeds of the current Loan. The Stock so pledged
shall be placed in an ESOP Suspense Account. Any pledge of Stock
must provide for the release of shares so pledged pursuant to either
the General Rule or the Special Rule as provided below. Once the
Committee has selected either the General Rule or the Special Rule,
that rule shall be used exclusively for the release of pledged
shares of Stock acquired with the proceeds of that particular Loan.
(1) General Rule: Upon any payment of principal and/or interest on
any Loan (whether a regularly scheduled payment or a prepayment),
the following number of shares of Stock shall be released from
the ESOP Suspense Account: upon each such payment during the
duration of any Loan, the number of shares of Stock held in the
ESOP Suspense Account immediately prior to the payment multiplied
by a fraction:
(A) the numerator of which is the amount of principal and
interest paid with respect to such payment; and
(B) the denominator of which is the sum of the numerator plus
the principal and interest becoming due and payable in the
future with respect to such Loan, determined on the basis of
the best available annual projections of the total principal
and interest payable over the life of the Loan.
(2) Special Rule:
(A) Upon any payment of principal on any Loan (whether a
regularly scheduled payment or a prepayment), the following
number of shares of Stock shall be released from the ESOP
Suspense Account: upon each such payment during the
duration of any Loan, the number
-36-
of shares of Stock held in the ESOP Suspense Account
immediately prior to the payment multiplied by a fraction:
(i) the numerator of which is the amount of principal paid
with respect to such payment; and
(ii) the denominator of which is the sum of the numerator
plus the principal becoming due and payable in the
future with respect to such Loan.
(B) The Committee may select the Special Rule only if:
(i) the Loan provides for annual payments of principal and
interest at a cumulative rate which is not less rapid
at any time than level annual payments of such amounts
for ten years;
(ii) the interest included in any payment is disregarded
only to the extent that it would be determined to be
interest under standard loan amortization tables; and
(iii) by reason of a renewal, extension, or refinancing, the
sum of the expired duration of the original Loan, any
renewal period, any extension period, and the duration
of any new Loan does not exceed ten years.
(3) In determining the number of shares to be released from the rule
described in this subsection (a);
(A) the number of future years under the Loan must be definitely
ascertainable and must be determined without taking into
account any possible extensions or renewal periods;
(B) if the Loan provides for a variable interest rate, the
interest to be paid for all future
-37-
Plan Years must be computed by using the interest rate
applicable as of the end of the Plan Year for which the
determination is being made; and
(C) if the Stock allocated to the ESOP Suspense Account includes
more than one class of shares, the number of shares of each
class to be withdrawn for a Plan Year from the ESOP
Suspense Account must be determined by applying the
applicable fraction provided above to each such class.
The shares of Stock released from the ESOP Suspense Account pursuant
to this subsection (a) shall be transferred first to a separate
account (the ESOP Holding Account), and such shares of Stock shall be
allocated to Members' ESOP Accounts as specified in section 5.10.
(b) Payments of principal and interest on any such Loan during a Plan Year
shall be made by the Trustee only from (1) any dividends attributable
to Stock originally given as collateral for a Loan to the extent
permitted in the applicable Appendix, (2) Employer Contributions and
earnings from such Employer Contributions made to the ESOP to meet the
Plan's obligation under a Loan, and (3) the proceeds of a subsequent
Loan made to repay a prior Loan. Such Employer Contributions and
earnings must be accounted for separately by the Plan until the Loan
is repaid.
(c) Notwithstanding any amendment to or termination of the ESOP which
causes it to cease to qualify as a leveraged employee stock ownership
plan within the meaning of Code section 4975(e)(7), no share of Stock
acquired with the proceeds of a Loan obtained by the Trust Fund to
purchase Stock may be subject to a put, call, or other option, or buy-
sell or similar arrangement while
-38-
such shares are held by and when distributed from the ESOP, except
as may be required by Treasury Regulations section 54.4975-7(b)(10).
5.9 Allocations to Members' Accounts.
--------------------------------
(a) The ESOP Account maintained for each Member shall be credited with the
Member's allocable share, as determined under section 5.10 and the
applicable Appendix, of Stock (including fractional shares) purchased
and paid for by the ESOP or contributed in kind to the ESOP. Stock
acquired by the Trustee with the proceeds of a Loan shall be
allocated in accordance with section 5.10 and the applicable
Appendix to the ESOP Accounts of Members as the Stock is released
from the ESOP Suspense Account and the ESOP Holding Account as
provided in section 5.8.
(b) To the extent provided in the applicable Appendix, dividends paid on
Stock purchased with the proceeds of a Loan may be used first to make
Loan payments on such Loan (or a Loan refinancing such a Loan) except
to the extent the Committee determines in its sole and absolute
discretion that dividends paid on Stock that is allocated to a
Member's ESOP Account shall be distributed to such Member or
reinvested in Stock. If dividends paid on shares of Stock are used to
make a Loan payment, shares released from the ESOP Suspense Account as
provided in section 5.8(a) shall be allocated to the ESOP Holding
Account and then to Members' ESOP Accounts in accordance with the
provisions in section 5.10(a). In addition, if dividends paid on
shares of Stock allocated to a Member's ESOP Account are used to make
a Loan payment, Stock shall be allocated to such Members' ESOP
Accounts in accordance with the provisions of section 5.10(c).
-39-
(c) Except as otherwise provided in the applicable Appendix, dividends
paid on shares of Stock allocated to a Member's ESOP Account that are
not used to make a Loan payment shall be either distributed to the
Member or reinvested in Stock, as determined by the Committee in its
sole and absolute discretion. The Committee shall have sole and
absolute discretion to determine whether such dividend will be used to
make a Loan payment.
(d) If upon the completion of the allocations for any Plan Year there are
shares of Stock that cannot be allocated because of the limitations of
Code section 415 (Excess ESOP Allocations), such shares shall (to the
extent permitted by the Code and the Act) be held in the ESOP
Holding Account for future application to the ESOP Accounts and
shall be so applied as the first part of future Dividend Replacement
Allocations and allocations under this Article and the applicable
Appendix.
5.10 Participation in the ESOP; Allocable Shares.
-------------------------------------------
(a) Stock acquired with the proceeds of a Loan and released from the ESOP
Suspense Account shall be released from the ESOP Holding Account and
allocated to each Eligible Participant's ESOP Account as provided in
Appendix B and the subsequent Appendices.
(b) For purposes of section 5.9(b), if dividends paid on shares of Stock
are used to make a Loan payment, shares released from the ESOP
Suspense Account as provided in section 5.8(a) shall be allocated to
each Eligible Participant's ESOP Account as provided in Appendix B and
the subsequent Appendices.
(c) For purposes of subsection (b), if dividends paid on shares of Stock
which have been allocated to a Member's ESOP Account are used to make
a Loan payment, Stock having a total Fair Market Value equal to the
amount of
-40-
the dividend shall be allocated to such Participant's ESOP Account
(the "Dividend Replacement Allocation"). The Committee shall decide
in its sole and absolute discretion whether this Dividend
Replacement Allocation will be made out of (1) shares of Stock
released from the ESOP Suspense Account pursuant to a Loan payment,
in which case the Dividend Replacement Allocation shall be made
prior to all other allocations of shares of Stock released from the
ESOP Suspense Account; (2) shares of Stock purchased with additional
Employer Contributions to provide for the Dividend Replacement
Allocations; or (3) shares of Stock contributed as an additional
Employer Contribution to provide for the Dividend Replacement
Allocations.
5.11 Accounting for Allocations. The Committee shall adopt accounting
--------------------------
procedures for the purpose of making the allocations, valuations, and
adjustments to Members' ESOP Accounts provided in this Article, Appendix B, and
the subsequent Appendices. Except as provided in Treasury Regulations section
54.4975-11, Stock acquired by the Plan shall be accounted for as provided under
Treasury Regulations section 1.401(a)-1(b)(2)(ii), allocations of Stock shall be
made separately, and the Committee shall maintain adequate records of the cost
basis of all shares of Stock allocated to each Member's ESOP Account and furnish
such information to the Trustee regarding the same as may be necessary to allow
the Trustee to perform its duties under this section upon the written request of
the Trustee. From time to time, the Committee may modify the accounting
procedures for the purpose of achieving equitable and nondiscriminatory
allocations among the ESOP Accounts of Members in accordance with the general
concepts of the Plan and the provisions of this section.
5.12 Distributions and Withdrawals. A Member may elect to receive
-----------------------------
distributions and withdrawals from the Member's ESOP
-41-
Account in the same manner as permitted under Article IX for distributions and
withdrawals from the Matching Contributions Account of amounts invested in the
Stock Fund; provided, however, that withdrawals of Stock shall be made in the
following order: (a) from the Matching Contributions Account Stock Fund, (b)
from the ESOP Account described in Appendix B, (c) from the ESOP Account
described in Appendix C, and (d) from any other ESOP in which the Member
participates. A Member who elects to receive a lump-sum distribution from the
ESOP Account may receive such distribution in Stock.
5.13 Transfers from ESOP Account. Each Member may elect quarterly, by
---------------------------
giving notice at a time and in a manner specified by the Plan Administrator, to
have Stock in the Member's ESOP Account transferred from the ESOP (in whole-
share increments) to the Member's Matching Contributions Account under the Plan,
liquidated and invested in one or more of the Funds (other than the Stock
Fund), except that, unless the Member has reached age 55 and participated in
the ESOP for 10 years, (a) no such transfer shall be allowed if the Member has
any Stock in any other Account under the Plan (not including any other ESOP
Account) and (b) a Member may not transfer Stock from the Member's ESOP
Account in any quarter in which the Member transfers any amount in the
Member's Account to the Stock Fund. In addition, any transfer shall be made in
the following order: (1) from the ESOP Account described in Appendix B, (2)
from the ESOP Account described in Appendix C, and (3) from any other ESOP
Account of the Member.
5.14 Voting Stock. A Member shall be entitled to direct the exercise of
------------
voting rights or other rights with respect to the Stock allocated to the
Member's ESOP Account. The Committee shall provide to each Member materials
pertaining to the exercise of such rights containing all the information
distributed to shareholders as part of BB&T Financial Corporation's distribution
-42-
of such information to shareholders, together with a form directing the
Committee to vote such Member's Stock as instructed. The Committee shall direct
the Trustee to vote Stock allocated to ESOP Accounts in accordance with such
direction. As to Stock for which the Committee does not receive timely and
proper direction from any Member (or Beneficiary) (including unallocated shares
held in the ESOP Suspense Account and the ESOP Holding Account), the Committee
shall direct the Trustee to vote such Stock in the ESOP in the same proportion
that it directs the Trustee to vote Stock in the ESOP as to which timely and
proper directions are received.
5.15 Vesting. A Participant shall vest in the Participant's ESOP Account
-------
in the manner described in the applicable Appendix.
5.16 Loans. No loans to Members or Beneficiaries shall be permitted from
-----
an ESOP Account.
5.17 Limitation on Annual Additions. To the extent the limitation on
------------------------------
annual additions of section 4.6 is exceeded for a Participant, the Participant's
Tax-Deferred Contributions under section 4.1 shall be reduced prior to reduction
of contributions under this Article V and the applicable Appendix.
-43-
Article VI. Investment Elections
---------------------------------
6.1 Investment of Contributions and Transferred Assets. Except as
--------------------------------------------------
otherwise provided in Article V, Appendix B, and the subsequent Appendixes, each
Member may elect to have the contributions made on the Member's behalf, and any
assets rolled over or transferred to the Member's Rollover Contributions Account
pursuant to a qualified asset transfer described in section 2.1(a)(4)(B),
invested in increments of 5 percent of the total in any one or more of the
Funds.
6.2 Investment Transfers. Except as otherwise provided in Article V,
--------------------
Appendix B, and the subsequent Appendices, each Member may elect quarterly, by
giving notice at a time and in a manner specified by the Plan Administrator, to
have the assets in any Fund transferred to any one or more of the other Funds.
Any such election shall take effect as of the date specified in the notice or as
of any later date determined under the Plan Administrator's rules and
procedures.
6.3 Investment Elections. Each Member may make the election described in
--------------------
section 6.1 by filing an election form with the Plan Administrator upon becoming
a Member. Such elections may be changed as of the first day of any month by
giving notice at a time and in a manner specified by the Plan Administrator.
6.4 Transfer of Assets. The Plan Administrator shall direct the
------------------
Trustee to transfer moneys or other property from one Fund to another Fund as
may be necessary to carry out the Members' transfer transactions in accordance
with uniform rules established by the Plan Administrator.
-44-
Article VII. Accounts and Records of the Plan
----------------------------------------------
7.1 Accounts and Records. The Accounts and records of the Plan shall
--------------------
be maintained by the Committee and shall accurately disclose the status of the
Accounts of each Member or the Member's Beneficiary in the Plan.
Each Member shall be advised from time to time, at least once during each Plan
Year, as to the status of the Member's Account.
7.2 Trust Fund. Each Member shall have an undivided proportionate
----------
interest in the Trust Fund which shall be measured by the proportion that the
market value of the Member's Account bears to the total market value of all
Accounts as of the date that this interest is being determined.
7.3 Valuation and Allocation of Expenses. As of each Adjustment
------------------------------------
Date, the Trustee shall determine the fair market value of the Trust Fund after
first deducting any expenses which have not been paid by the Employers in their
sole and absolute discretion. The value of any Stock held by the Trust Fund
shall be determined as of the Adjustment Date. Unless paid by the Employers in
their sole and absolute discretion, and subject to any limitations imposed by
the Act or other applicable law, all costs and expenses incurred in connection
with the general administration of the Plan and the Trust Fund shall be
chargeable to the Trust Fund.
7.4 Allocation of Earnings and Losses. Except as otherwise provided
---------------------------------
in Article V, Appendix B, and the subsequent Appendices, as of each Adjustment
Date, the Committee, with the assistance of the Trustee, shall allocate the net
earnings and gains or losses of each Fund within the Trust Fund since the
preceding Adjustment Date to each Member's Account in the same proportion that
the market value of the Member's Account bears to the total market
-45-
value of all Members' Accounts. For this purpose, the Committee shall adopt
uniform rules which conform to applicable law and generally accepted
accounting practices. The foregoing shall not apply to the loan fund which
shall be accounted for separately so that interest on a Member's loan is
credited solely to the Member's Account.
7.5 Voting of Stock. Except as otherwise provided in Article V,
---------------
Appendix B, and the subsequent Appendices, each Member shall be entitled to vote
as to any matter any whole and/or fractional shares of Stock which have been
allocated to the Member's Account in accordance with the rules and procedures
promulgated by the Committee. Stock in the Stock Fund for which no voting
instructions are received shall be voted by the Trustee in the same proportion
as the Stock in the Stock Fund for which instructions are received from Members.
-46-
Article VIII. Vesting
----------------------
8.1 Vesting. Except as otherwise provided in section 8.2, Appendix
-------
B, and the subsequent Appendices, a Member shall, at all times, have a fully
vested and nonforfeitable interest in the Member's Account.
8.2 Misconduct Clause. The Matching Contributions Account of a
-----------------
Member who engages in misconduct including, but not limited to, embezzlement,
larceny, theft, and other dishonest acts, or who engages in direct competition
with an Employer while an Eligible Employee shall vest in accordance with the
following schedule:
Years of Continuous Service Vested Percentage
--------------------------- -----------------
0-5 0%
5 or more 100%
Notwithstanding the preceding provisions, a Member shall be 100 percent vested
in his or her Matching Contributions Account if the Member attains age 65 prior
to his or her Termination of Service.
8.3 Forfeitures. If a Member's Account is not fully vested on the
-----------
Member's Termination of Service, the unvested portion of the such Account shall
be deemed forfeited by the Member as of the Adjustment Date coincident with or
next following such Termination of Service. These forfeitures shall be used to
reduce the Employer's contributions as provided in section 4.4.
8.4 Treatment of Forfeitable Amounts.
--------------------------------
(a) Restoration of Forfeitures. If a Member is reemployed by the
--------------------------
Employer prior to incurring five consecutive one-year Breaks in
Service, the amount of any forfeiture described in section 8.3
shall be restored.
-47-
Restored forfeitures shall be credited to the Member's Matching
Contributions Account (or an ESOP Account under Article V, as
appropriate) as soon as administratively practicable following
the Member's reemployment date. Forfeitures shall be restored
first from current forfeitures with respect to Accounts of
other Members. To the extent such other forfeitures are
insufficient, an additional Employer contribution shall be
made.
(b) Five Consecutive One-Year Breaks in Service. If a Member is not
-------------------------------------------
reemployed by the Employer prior to incurring five consecutive
Breaks in Service, the Member shall permanently forfeit the
portion of the Member's Account that had not become
nonforfeitable under sections 8.1 and 8.2.
-48-
Article IX. Distributions
--------------------------
9.1 Entitlement to Distribution Upon Death of Member.
------------------------------------------------
(a) Death of Member. In the event of a Member's death before the complete
---------------
distribution of the Member's Account balance, the Beneficiary of the
Member shall be entitled to receive the entire balance remaining in
the Member's Account as of the first Adjustment Date coincident with
or next following the Member's death, as provided in sections 9.3 and
9.4.
(b) Designation of Beneficiary.
--------------------------
(1) General Rule. Each Member may designate one or more persons as
------------
Beneficiary to receive the Member's Account balance in the event
of the Member's death. Each designation shall be made on a form
provided by the Plan Administrator, shall be effective only when
filed in writing with the Plan Administrator, and shall revoke
all prior designations, subject to paragraph (2) below.
(2) Rule for Surviving Spouses. A Member's surviving spouse shall be
--------------------------
the Member's sole Beneficiary unless, before the Member's death,
one or more other persons have been named pursuant to a qualified
alternate designation (as defined in paragraph (3)) made and
filed with the Plan Administrator before the Member's death or
unless the Plan Administrator determines that the consent
otherwise required under paragraph (3) could not have been
obtained because the Member's spouse could not be located or
because of any other circumstances the Secretary of Treasury
shall prescribe by regulation.
(3) Qualified Alternate Designation. A designation shall be a
-------------------------------
qualified alternate designation only if--
-49-
(A) the Member, in a signed written instrument, designates by
name one or more persons to be Beneficiary in lieu of, or
along with, the Member's surviving spouse;
(B) the Member's surviving spouse (if any), determined at the
time of the Member's death, gives written consent to this
waiver that states the Beneficiary designated by the Member
and acknowledges the effect of this consent; and
(C) this consent is witnessed by a notary public or a Plan
representative.
A qualified alternate designation may not be changed without
spousal consent. Any spousal consent to a qualified alternate
designation shall be irrevocable.
(4) Default Beneficiary. If no person is otherwise designated under
-------------------
this subsection, or if a designation is revoked in whole or in
part, or if no designated Beneficiary survives the Member, the
Member's Beneficiary shall be the surviving spouse or, if there
is no surviving spouse, the Member's estate.
(5) Death of Beneficiary. If the Beneficiary is receiving or is
--------------------
entitled to receive payments from the Trust Fund and dies before
receiving all the payments due the Beneficiary, any remaining
payments shall be made to a contingent Beneficiary, if any. If
there is no contingent Beneficiary, the balance shall be paid to
the estate of the Beneficiary as of the Adjustment Date
coincident with or next following the date of the Beneficiary's
death.
If any payment is made under the Plan to any Beneficiary, in
reasonable reliance on (A) a written
-50-
statement by the Member that the Member was unmarried, (B) a spousal
consent that on its face conformed to the requirements set forth
above, or (C) evidence establishing to the Plan Administrator's
satisfaction that a Member's spouse could not be located at the time
of a Beneficiary designation, the Plan's liability for death
benefits shall be satisfied, to the extent of such payment, and the
Plan shall have no liability to any spouse to such extent.
9.2 Distribution Upon Termination of Service for Reasons Other Than Death.
----------------------------------------------------------------------
Upon a Member's Termination of Service for reasons other than death, the Member
shall be entitled to the distribution of the vested portion of the Member's
Account as of the Adjustment Date provided in section 9.4.
9.3 Form of Benefit Payments.
------------------------
(a) Optional Forms. Except as provided in section 9.4(b), the
--------------
distribution of a benefit to a Member or Beneficiary under section 9.1
or 9.2 shall be made in either of the following ways as the Member or
Beneficiary shall elect:
(1) in a lump sum;
(2) subject to section 9.8, in installments payable in substantially
equal amounts continuing over a period certain as elected by the
Member, not exceeding the longest of 15 years, the Member's life
expectancy, or the life expectancy of the Member and the Member's
Beneficiary, provided that in no event will payments under this
paragraph (2) be less than $100 per month; or
(3) any combination of the above.
(b) Earnings and Losses. Amounts payable hereunder shall continue to
-------------------
accrue earnings and losses under
-51-
section 7.4, Article V, Appendix B, and the subsequent Appendices
pending such payment.
(c) Stock Distributions. Subject to section 5.12, the Member or
-------------------
Beneficiary may elect to have any withdrawal or other distribution
from the Stock Fund or from the ESOP Account paid either in cash or
shares of Stock held in that Fund or Account.
9.4 Time of Benefit Payments.
------------------------
(a) General Rule. Except as otherwise provided in subsections (b), (c),
------------
and (d), and section 9.8, distribution of benefits under the Plan
shall commence as soon as practicable following the Adjustment Date
coincident with or next following the later of (1) the date on which
the Member attains age 65 or (2) the Member's Termination of Service.
(b) Small Amounts. If a Member incurs a Termination of Service before age
-------------
65 and the vested value of the Member's Account as of the first
Adjustment Date coincident with or next following such Termination of
Service is not greater than $3,500, distribution shall be made in a
single lump sum in cash or shares as soon as practicable following
said Adjustment Date.
(c) Earlier or Later Distribution Upon Consent. If a Member incurs a
------------------------------------------
Termination of Service, and the Member's vested Account balance as of
the first Adjustment Date coincident with or next following such
Termination of Service is greater than $3,500, distribution may
commence as soon as practicable after said Adjustment Date, or any
later Adjustment Date, as the Member requests in writing. In no
event, may distribution be deferred beyond the time described in
section 9.8(a).
(d) Distributions Upon Death. A distribution to a Beneficiary under
------------------------
section 9.1 shall be made as soon as
-52-
practicable following the first Adjustment Date coincident with or
next following the Member's death, unless the Beneficiary elects to
defer distribution until a later date. In no event may distribution
be deferred beyond the time described in section 9.8(a).
9.5 Voluntary Withdrawals.
---------------------
(a) Order of Withdrawal. A Member who is an Employee may withdraw (but
-------------------
not more often than twice in any Plan Year), upon giving notice to the
Plan Administrator at a time and in a manner specified by the Plan
Administrator, all or a portion of the nonforfeitable funds in the
Member's Account (valued as of the Adjustment Date immediately
preceding the withdrawal), except funds in the Member's Tax-Deferred
Contributions Account, in the following order:
(1) the portion of the Member's Prior Plans Account representing the
Member's after-tax contributions (and related earnings);
(2) the portion of the Member's Prior Plans Account representing
Employer contributions (and related earnings);
(3) the Member's Matching Contributions Account;
(4) the Member's Rollover Contributions Account;
(5) the Member's ESOP Account under Appendix B;
(6) the Member's ESOP Account under Appendix C; and
(7) any other employee stock ownership account maintained under the
Plan for the Member.
(b) Rules Governing Withdrawals.
---------------------------
(1) Selection of Fund for Withdrawal. Any distribution under this
--------------------------------
section or section 9.6 shall be made from the Funds in the
proportion determined by the Member. Distributions from the
Stock Fund and the accounts described in Appendix B and the
subsequent Appendices shall be
-53-
in whole shares of Stock, unless the Member, by filing a written
request with the Committee, demands distribution to be made in
cash. Fractional shares shall be paid in cash. For purposes of
distribution under the Plan, the value of Stock shall be the cash
actually received from the sale of such stock (less commissions,
if any).
(2) Restrictions on Withdrawals of Matching Contributions. No
-----------------------------------------------------
amounts may be withdrawn from the Matching Contributions Account,
or any ESOP Account under Appendix B or the subsequent
Appendices, unless the Member making the withdrawal has been
participating in the Plan for at least 60 months or unless the
amounts being withdrawn have been in the Member's Account for at
least 24 months.
9.6 Hardship Withdrawals. A Member who is an Employee may make a hardship
--------------------
withdrawal from the Member's Tax-Deferred Contributions Account. The amount of
hardship withdrawal shall be limited to (i) the Member's Tax-Deferred
Contributions (or other similar pretax contributions under Code section 401(k)
for Members whose accounts under plans maintained by prior employers were
transferred into this Plan, to the extent these contributions can be
specifically identified) plus (ii) earnings attributable to the Member's Tax-
Deferred Contributions and similar pretax contributions as of December 31, 1988
(to the extent such earnings can be specifically identified). A withdrawal is
on account of hardship only if it is on account of an immediate and heavy
financial need of the Member and the amount withdrawn is necessary to satisfy
such need. A distribution will be on account of an immediate and heavy
financial need only if it is on account of--
(a) medical expenses described in Code section 213(d) incurred by the
Member, the Member's spouse, or any
-54-
dependents of the Member or necessary for any such person to obtain
medical care described in section 213(d);
(b) purchase (excluding mortgage payments) of a principal residence of the
Member;
(c) payment of tuition and related educational fees for the next 12 months
of postsecondary education for the Member, or the Member's spouse,
children, or dependents;
(d) the need to prevent the eviction of the Member from the principal
residence or foreclosure on the mortgage of the Member's principal
residence; or
(e) any other situation deemed under regulations issued by the Internal
Revenue Service to constitute an immediate and heavy financial need
for purposes of Code section 401(k).
A hardship withdrawal shall be deemed necessary to satisfy an immediate and
heavy financial need described above, if the following requirements are met:
(1) the distribution does not exceed the amount of the Member's
immediate and heavy financial need;
(2) the Member has previously obtained all other distributions and
nontaxable loans currently available from the Employers' plans;
(3) all plans maintained by the Employers suspend all Member
contributions for the 12-month period following receipt of the
hardship distribution; and
(4) contributions (if any) made by the Member for the Plan Year
during which the suspension in paragraph (3) ends shall not, when
aggregated with contributions in the Plan Year the suspension
begins, exceed the limitation imposed under Code section 402(g).
-55-
A Member shall not fail to be treated as an eligible Employee for the purpose of
section 4.5 merely because the Member's contributions are suspended pursuant to
paragraph (3) or (4).
9.7 Eligible Rollover Distributions. This section applies to
-------------------------------
distributions made on or after January 1, 1993.
(a) General Rule. Notwithstanding any provision of the Plan to the
------------
contrary that would otherwise limit a distributee's election under
this subsection, 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.
(b) Definitions.
-----------
(1) Eligible rollover distribution. An eligible rollover
------------------------------
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Code section 401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible retirement plan. An eligible retirement plan is an
------------------------
individual retirement account described
-56-
in Code section 408(a), an individual retirement annuity
described in Code section 408(b), an annuity plan described in
Code section 403(a), or a qualified trust described in Code
section 401(a), 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 an
individual retirement annuity.
(3) Distributee. A distributee includes an employee or former
-----------
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code section 414(p), are
distributees with regard to the interest of the spouse or former
spouse.
(4) Direct rollover. A direct rollover is a payment by the Plan to
---------------
the eligible retirement plan specified by the distributee.
9.8 Limitations on Distributions.
----------------------------
(a) Required Commencement Date. Notwithstanding the foregoing provisions
--------------------------
of this Article IX, unless the Member otherwise elects in writing,
distribution to a Member shall not take place later than the sixtieth
day after the close of the Plan Year in which the latest of the
following events occurs:
(1) the Member's attainment of age 65;
(2) the Member's tenth anniversary of the date on which the Member's
commenced participation in the Plan; or
(3) the Member's Termination of Service.
-57-
In no event will a Member's Account be distributed later than the
April 1 following the calendar year in which the Member attains age
70-1/2. In the case of a Member who has attained age 70-1/2 before
January 1, 1988, or during calendar year 1988, this subsection shall
be modified, as appropriate, to reflect the transitional rules under
section 1121(d)(4) of the Tax Reform Act of 1986 and any
regulations, notices, or similar pronouncements of the Internal
Revenue Service.
All distributions under this Plan shall be made in accordance with
Code section 401(a)(9). Provisions of the Plan regarding the payment
of distributions shall be interpreted and applied in accordance with
Code section 401(a)(9).
(b) Incidental Death Benefit. The minimum amount which must be
------------------------
distributed each calendar year shall be the amount determined by
dividing the balance in the Member's Account by the "applicable
divisor." The "applicable divisor" shall be determined under
regulations issued by the Secretary of the Treasury, including the
minimum distribution incidental benefit requirements of Code section
401(a)(9).
-58-
Article X. Loans to Members
----------------------------
10.1 Administrator Authorized to Make Loans.
--------------------------------------
(a) Current Employees. Except as otherwise provided in Article V,
-----------------
Appendix B, and the subsequent Appendices, upon application of a
Member who is currently an Employee, the Plan Administrator may direct
the Trustee to make a cash loan to the Member from the Member's
Account. Whether these loans are made, as well as their amounts and
terms, shall be in the sole discretion of the Plan Administrator
(exercised in a nondiscriminatory manner), subject to the provisions
of this Article. Appropriate disclosure shall be made pursuant to the
Truth in Lending Act to the extent applicable.
(b) Other Eligible Persons. Loans shall also be available on a reasonably
----------------------
equivalent basis to a Member or Beneficiary who is a "party in
interest," as such term is defined in section 3(14) of the Act.
(c) Owner-Employees and Shareholder-Employees. Notwithstanding any other
-----------------------------------------
provision of this Article, no loan shall be made to an owner-employee,
a member of the family of an owner-employee, or a shareholder-
employee, as these terms are defined in Code section 4975(d), except
as permitted under the applicable provisions of the Act and the Code.
10.2 Amount of Loans.
---------------
(a) Minimum Amount. The minimum amount of any loan permitted under this
--------------
Article shall be $1,000.
(b) Maximum Amount. The amount of such loan (when added to the
--------------
outstanding balance of all loans to the Member from the Member's
Account) shall not exceed the lesser of--
(1) $50,000, reduced by the excess (if any) of--
-59-
(A) the highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the loan
was made, over
(B) the outstanding balance of loans from the Plan on the date
the loan is made; or
(2) 50 percent of the Member's Account at the relevant time.
The amount of the loan also shall not exceed the value of the Member's
Account exclusive of any ESOP Account under this Plan.
(c) Collateral. A portion of the Member's Account equal to the amount of
----------
the loan shall be used as collateral to secure the loan.
10.3 Interest. Each loan made under the Plan shall bear a rate of interest
--------
equal to the prime rate charged by the Company at the time the loan is made,
plus one percentage point.
10.4 Term. A loan shall be for the term (in whole-year increments)
----
requested by the Member but shall not exceed five years. Loans shall be made as
of an Adjustment Date chosen by the Plan Administrator. Only one loan may be
outstanding to a Member at any time, and only one loan request may be submitted
by a Member in a Plan Year.
10.5 Repayment.
---------
(a) Loans shall be repaid in equal installments, one per pay period (but
in no event less than quarterly), representing a combination of
interest and principal, sufficient to amortize the loan during its
term. Upon a change of the Member's payroll period, repayment amounts
shall be adjusted if necessary to reflect the change.
(b) Payments by active Employees shall be made through payroll
withholding.
-60-
(c) Except as provided in subsection (d), should there be an outstanding
loan balance with respect to a Member at the time of the Member's
Termination of Service, the remaining balance shall become
immediately due and payable as of the last day of the month in which
the Termination of Service occurs. If the Member does not repay the
full loan balance upon Termination of Service, the Member's Account
shall be offset by the unpaid loan balance as soon as practicable
following Termination of Service. The loan shall be considered fully
repaid as of the date of this reduction.
(d) If a Member described in section 10.1(b) has an outstanding loan
balance upon Termination of Service, the Member shall be permitted to
repay the loan by making regular installment payments equal to the
amount determined under subsection (a). If the Member does not
continue to repay the loan after Termination of Service, the Member's
Account shall be adjusted in the manner described in subsection (c).
(e) Prepayments may be made without penalty but must include the full
amount of outstanding principal.
10.6 Loans Treated as Plan Investments.
---------------------------------
(a) Loan proceeds distributed to a Member shall be charged first to the
Member's Tax-Deferred Contributions Account; second, the Member's
Matching Contributions Account; third, the Member's Prior Plans
Account; and fourth, the Member's Rollover Contributions Account.
Loan proceeds distributed to the Member shall be charged, on a pro
rata basis, to each Fund (other than the loan fund) in which the
Member's affected subaccount is invested. A promissory note of the
face value of the loan shall then be credited as an asset of an
individual loan fund established in the Member's
-61-
name. The value of a Member's Account shall include the amount of
principal and accrued interest remaining to be paid under such
notes.
(b) As soon as reasonably practicable following receipt of loan
repayments, the Trustee shall credit principal repayments to the
appropriate subaccount of the Member to which the amount of loan
principal was originally charged, in the reverse order from which
the loan originated. Interest payments shall be credited to the
Member's subaccounts on a pro rata basis reflecting the relative
outstanding principal balances at the time of the payment. The
amount of the loan repayment (including principal and interest)
shall be invested in the Funds in accordance with the investment
election last submitted by the Member pursuant to section 6.1.
10.7 Documents. No loan under this Article shall be made until the Member
---------
has completed the appropriate forms, and submitted to the Plan Administrator the
following:
(a) a loan application setting forth any information the Plan
Administrator deems appropriate;
(b) a promissory note designating the Trustee as payee, stating the
amount, term, repayment schedule, interest rate, and other terms and
conditions consistent with this Article;
(c) the Member's written authorization and direction that the Employer
shall withhold each payroll period, and remit to the Trustee, the
installment amounts determined under section 10.5(a); and
(d) a security agreement granting a conditional security interest in the
Member's Account to the Trustee as security for repayment of the loan.
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Article XI. Amendment and Termination
--------------------------------------
11.1 Amendment and Termination. The Company expects the Plan to be
-------------------------
permanent, but the Company must necessarily and does hereby reserve the right to
amend or modify in any respect, or to terminate, the Plan at any time, for any
reason whatsoever, by written resolution of the Board or any of its committees
or, to the extent permissible, by written instrument signed by the appropriate
officers of the Company. The Company may make any modifications or amendments
to the Plan, retroactively if necessary or appropriate, to qualify or maintain
the Plan as a plan meeting the requirements of Code section 401(a) or of the
Act.
No amendment of the Plan shall cause any part of the Trust Fund to be used for
or diverted to purposes other than the exclusive benefit of the Members, their
surviving spouses, or their beneficiaries covered by the Plan. No plan
amendment may decrease the accrued benefit of any Member. Retroactive plan
amendments may not decrease the accrued benefit of any Member determined as of
the time the amendment was adopted. The Committee shall have the right to amend
or modify the Plan by vote of its members; provided, however, that such
amendments shall be administrative in nature, or mandated by any applicable law,
and shall not increase the costs of the Plan.
11.2 Vesting on Termination or Partial Termination. Upon a complete or
---------------------------------------------
partial termination of the Plan or complete discontinuance of contributions to
the Plan (within the meaning of Treasury Regulations section 1.411(d)-2), no
further contributions shall be made under the Plan; all accrued benefits
credited to the Account of each Member (or, in the case of a partial
termination, each affected Member within the meaning of Treasury Regulations
section 1.411(d)-2) shall fully vest; and
-63-
the Accounts of any affected Members shall be distributed at the time and in
the manner specified in Article IX.
11.3 Merger, Consolidation, or Transfer. In the case of any merger or
----------------------------------
consolidation of the Plan with, or any transfer of assets and liabilities of the
Plan to, any other plan, provision shall be made so that each Member would, if
the Plan were then terminated, receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit the
Member would have been entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then been terminated.
-64-
Article XII. Administration of the Plan
----------------------------------------
12.1 Plan Administrator. The general administration of the Plan shall be
------------------
carried out by a Committee, appointed by the Board, which shall act as the "plan
administrator" and the "named fiduciary" within the meaning of Title I of the
Act. The Committee shall have the authority to delegate to one or more persons
the duties and responsibilities of Plan Administrator. The Committee shall
consist of at least three members who shall serve at the pleasure of the Board.
12.2 Appointment to and Resignation from the Committee. The Board may
-------------------------------------------------
remove any member of the Committee at any time. In the event of the removal,
death, resignation, or inability to act of a member, the Board may appoint a
successor. Appointment and removal shall be by vote of the Board and shall be
effective upon the filing with the Trustee of a certificate setting forth such
action. Any member of the Committee may resign at any time, effective upon
delivering a written resignation to the Board.
12.3 Powers and Duties of the Committee. Except as to powers and duties
----------------------------------
and the determination of questions herein expressly reserved to the Company or
an Employer or given to the Trustee, the Committee shall have full charge of the
administration of this Plan with all powers necessary to enable it properly to
carry out its duties. These powers shall include (without limitation) the
authority to interpret the Plan and to determine all questions relating to (a)
the interpretation of the Plan; (b) the eligibility of Participants; (c) the
dates and other considerations regarding participation or termination of
employment; and (d) the benefit to which any Member or Beneficiary may become
entitled hereunder, all in its sole and absolute discretion. Any exercise of
these powers by the Committee shall be conclusive and binding upon all persons
having or claiming to have any interest or right under the Plan and
-65-
shall be given the maximum deference allowed by law. The Committee shall have
the power to direct the Trustee to obtain Loans (as defined in Article V), and
to direct the Trustee with respect to the investment of all assets and income
held under the Plan.
12.4 Action by Majority of the Committee. All action by the Committee
-----------------------------------
hereunder shall be authorized by a majority of the members, either by vote at a
meeting or by a writing signed by the majority. The Committee may certify to
the Trustee, by majority vote or action as provided for herein, the name of one
member of the Committee authorized to act for it in its relationship with the
Trustee. The Trustee shall be and hereby is authorized to act in pursuance of
the written instructions of any member of the Committee so designated.
12.5 Rules and Regulations of the Committee. The Committee may make such
--------------------------------------
rules and regulations in connection with its administration of the Plan as are
consistent with the terms and provisions hereof.
12.6 Conclusiveness of Reports, Etc. The members of the Committee, and the
------------------------------
Company and any other Employer and their officers and directors, shall be
entitled to rely upon all tables, valuations, certificates, and reports
furnished by any enrolled actuary selected by the Committee, upon all
certificates and reports made by any accountant selected by the Committee, the
Company, or any other Employer, and upon all opinions given by any legal counsel
selected by the Committee. The members of the Committee, and the Company and
any other Employers and their officers and directors, shall be fully protected
with respect to any action taken or suffered by them in good faith in reliance
upon any such actuary, accountant, or counsel, and all action so taken or
suffered shall be conclusive upon all persons.
-66-
12.7 Claims Procedure. If any claim for benefits under the Plan is wholly
----------------
or partially denied, the claimant shall be given notice in writing of such
denial within 90 days after receipt of the claim (or within an additional 90
days if special circumstances require an extension of time, and written notice
of the extension shall be furnished to the claimant). Notice of the denial
shall set forth the following information:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on which the denial is
based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why this
material or information is necessary;
(d) an explanation that a full and fair review by the Committee of the
decision denying the claim may be requested by the claimant or the
claimant's authorized representative by filing with the Committee,
within 60 days after this notice has been received, a written request
for such review; and
(e) a statement that, if a request is so filed, the claimant or the
claimant's authorized representative may review pertinent documents
and submit issues and comments in writing within the same 60-day
period specified in subsection (d).
The decision of the Committee upon review shall be made promptly, and not later
than 60 days after the Committee's receipt of the request for review, unless
special circumstances require an extension of time for processing. In such a
case, the claimant shall be notified and a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for review.
If the claim is denied, wholly or in part, the claimant shall be given a copy of
the decision promptly. The decision shall be in writing and shall include
specific reasons for the denial, shall include specific references to the
-67-
pertinent Plan provisions on which the denial is based, and shall be written
in a manner calculated to be understood by the claimant.
12.8 Employment of Agents. The Committee may employ agents, including
--------------------
without limitation custodians, accountants, consultants, or attorneys, to
exercise and perform the powers and duties of the Committee as the Committee
delegates to them, and to render such services to the Committee as the Committee
may determine. The Committee may enter into agreements setting forth the terms
and conditions of such service. The Committee may appoint an independent public
accountant to audit the Plan. The compensation of these agents shall be an
expense chargeable in accordance with section 12.9.
12.9 Compensation and Expenses of Committee. Unless otherwise determined
--------------------------------------
by the Company, the members of the Committee shall serve without compensation
for services as such, but all expenses of the Committee shall be paid in
accordance with the provisions of section 15.4. These expenses shall include
any expenses incident to the functioning of the Plan, including without
limitation attorneys' fees and the compensation of other agents, accounting and
clerical charges, expenses, if any, of being bonded as required by the Act, and
any other costs of administering the Plan.
12.10 Indemnity for Liability. To the extent permitted by law, the Company
-----------------------
shall indemnify each member (and former member) of the Committee, and any other
current or former Employee, officer, or director of the Company or the
Employers, against any and all claims, losses, damages, and expenses, including
counsel fees, and any liability, including any amounts paid in settlement with
the Company's approval, incurred by any such person on account of such person's
action, or failure to act, in connection with the Plan, except when the same is
judicially determined to
-68-
be attributable to the gross negligence or willful misconduct of such person.
-69-
Article XIII. Trust Arrangements
---------------------------------
13.1 Appointment of Trustee. A Trustee for the Plan shall be named in the
----------------------
Trust Agreement, and, upon acceptance thereof, the Trustee shall perform the
duties and exercise the authority of the Trustee as set forth in the Plan and in
the Trust Agreement.
13.2 Removal of Trustee; Appointment of Other Trustee. The Company
------------------------------------------------
reserves the right to remove the Trustee at any time and to appoint a successor
Trustee.
13.3 Change in Trust Agreements. The Company may from time to time enter
--------------------------
into such further agreements with a Trustee or other parties and make such
amendments to Trust Agreements, as it may deem necessary or desirable to carry
out the Plan. Such action shall be taken by written resolution of the Board or
any of its committees or, to the extent permissible, by written instrument
signed by the appropriate officers of the Company. The Company may take such
other steps and execute such other instruments as it may deem necessary or
desirable to put the Plan into effect or to execute it.
13.4 Trust Fund. All deposits under this Plan shall be paid to the Trustee
----------
and deposited in the Trust Fund. All assets of the Trust Fund, including
investment income, shall be retained for the exclusive benefit of Members and
Beneficiaries and shall be used to pay benefits under the Plan or to pay
administrative expenses of the Plan and of the Trust Fund, to the extent not
paid by the Company or an Employer in its sole and absolute discretion. Assets
of the Trust Fund shall not revert to or inure to the benefit of the Company or
an Employer, except as provided in section 13.5.
13.5 Reversion of Employer Contributions.
-----------------------------------
-70-
(a) Notwithstanding anything to the contrary contained in this Plan, if
the Internal Revenue Service initially determines that the Plan does
not meet the requirements of Code section 401, the Employer shall be
entitled to receive a return of all its contributions made hereunder.
(b) That portion of a contribution made by the Employer by a mistake of
fact shall be returned to the Employer within one year after the
payment of the contribution.
(c) That portion of a contribution made by the Employer and disallowed by
the Internal Revenue Service as a deduction under Code section 404
shall be returned to the Employer within one year after the Internal
Revenue Service disallows the deduction. All contributions by
Employers are strictly conditioned on their deductibility under Code
section 404.
(d) Earnings attributable to the contributions to be returned under this
section shall not be returned to the Employer, and any losses
attributable to such contributions shall reduce the amount returned.
-71-
Article XIV. Top-Heavy Plan Provisions
---------------------------------------
14.1 Application of Top-Heavy Provisions. The top-heavy provisions of this
-----------------------------------
Article shall be applied as follows.
(a) Single Plan Determination. Except as provided in subsection (b)(2)
-------------------------
below, if as of the Applicable Determination Date the aggregate of the
Account balances of Key Employees under the Plan exceeds 60 percent of
the aggregate amount of the Account balances of all Employees (other
than former Key Employees) under the Plan, the Plan will be top-heavy,
and the provisions of this Article shall become applicable. For the
purposes of this Article--
(1) Account balances shall include the aggregate amount of any
distributions made with respect to the Employee during the five-
year period ending on the Applicable Determination Date and any
contribution due but unpaid as of said Applicable Determination
Date; and
(2) the Account balance of any individual who has not performed
services for the Company or the Affiliates at any time during the
five-year period ending on the Applicable Determination Date
shall not be taken into account.
The determination of the foregoing ratio, including the extent to
which distributions, rollovers, and transfers shall be taken into
account, shall be made in accordance with Code section 416.
(b) Aggregation Group Determination.
-------------------------------
(1) If as of the Applicable Determination Date the Plan is a member
of a Required Aggregation Group which is top-heavy, the
provisions of this Article shall become applicable. For purposes
of this subsection (b), an Aggregation Group shall be
-72-
top-heavy, as of the Applicable Determination Date, if the sum
of--
(A) the aggregate of Account balances of Key Employees under all
defined contribution plans in the group, and
(B) the present value of accrued benefits for Key Employees
under all defined benefit plans in the group
exceeds 60 percent of the same amounts determined for all
employees (other than former Key Employees) under all plans
included within the Aggregation Group. The determination of the
foregoing ratio, including the extent to which distributions
(including distributions from terminated plans), rollovers, and
transfers are taken into account, shall be made in accordance
with Code section 416.
(2) If the Plan is top-heavy under subsection (a) above, but the
Aggregation Group is not top-heavy, this Article shall not be
applicable.
(c) The Committee. The Committee shall have responsibility to make all
-------------
calculations to determine whether the Plan is top-heavy.
14.2 Definitions. For purposes of this Article, the following definitions
-----------
apply.
(a) Aggregation Group means a required aggregation group or a permissive
-----------------
aggregation group as follows.
(1) Required Aggregation Group. All plans maintained by the Company
--------------------------
and the Affiliates in which a Key Employee participates shall be
aggregated to determine whether or not the plans, as a group, are
top-heavy. Each other plan of the Company and the Affiliates
which enables this Plan to meet the
-73-
requirements of Code section 401(a) or section 410 shall also
be aggregated.
(2) Permissive Aggregation Group. One or more plans maintained by
----------------------------
the Company and the Affiliates, which are not required to be
aggregated, may be aggregated with each other or with plans under
paragraph (1) if such group would continue to meet the
requirements of Code sections 401(a)(4) and 410 with these
plan(s) being taken into account.
(b) Applicable Determination Date shall mean, with respect to the Plan,
-----------------------------
the Determination Date for the Plan Year of reference and, with
respect to any other plan, the Determination Date for any Plan Year of
the plan which falls within the calendar year as the Applicable
Determination Date of the Plan.
(c) Determination Date shall mean, with respect to the initial plan year
------------------
of a plan, the last day of the Plan Year and, with respect to any
other plan year of a plan, the last day of the preceding Plan Year of
the plan.
(d) Key Employee shall mean a Member, former Member, or a Beneficiary as
------------
prescribed in Code section 416(i)(1). Where the individual's
compensation is a factor in determining whether the individual is a
Key Employee, compensation shall mean compensation as defined by Code
section 414(q)(7).
14.3 Minimum Contribution. For each Plan Year with respect to which the
--------------------
Plan is top-heavy, the minimum amount contributed by the Employer under the Plan
and the Company and the Affiliates under all other qualified defined
contribution plans maintained by the Company and the Affiliates for the benefit
of each Participant who is not a Key Employee and who is otherwise eligible for
such a contribution shall be the lesser of--
-74-
(a) 3 percent of the nonkey Participant's compensation (as defined in
section 14.2(d)) for the Plan Year, or
(b) the nonkey Participant's compensation (as defined in section 14.2(d))
times a percentage equal to the largest percentage of such
compensation of any Key Employee allocated under such plan with
respect to any Key Employee for the Plan Year.
This minimum contribution is determined without regard to any Social Security
contribution. Contributions attributable to a salary reduction or similar
arrangement shall not be taken into account. The minimum contribution
provisions stated above shall not apply to any Member who was not employed by
the Company or an Affiliate on December 31 of the Plan Year.
This section shall not apply to a Participant covered under a qualified defined
benefit plan or a qualified defined contribution plan maintained by the Company
or the Affiliates if the Participant's vested benefit thereunder satisfies the
requirements of Code section 416(c). Amounts contributed under this section
shall be credited to a Member's Matching Contributions Account, and shall be
subject to the vesting provisions of this Plan applicable to said Matching
Contributions Account.
14.4 Limit on Annual Additions; Combined Plan Limit. If the Plan is
----------------------------------------------
determined to be top-heavy, Code section 415(e)(2)(B) and 415(e)(3)(B) shall be
applied by substituting "1.0" for "1.25." This limitation shall not be
applicable, however, if--
(a) the Plan would not be top-heavy if "90 percent" is substituted for "60
percent" in section 14.1(a) and 14.1(b)(1); and
(b) for each Plan Year with respect to which the Plan is top-heavy, an
Employer contribution is made for Participants who are not Key
Employees equal to the sum of 1 percent of the nonkey Participant's
compensation
-75-
for the Plan Year plus the amount of the contribution determined
under section 14.3.
-76-
Article XV. Miscellaneous
--------------------------
15.1 No Employment Rights Created. Neither the establishment nor the
----------------------------
continuation of the Plan, nor anything contained within the Plan, shall be
deemed to give any person the right to continued employment by the Company or
the Affiliates, or to affect the right of the Company or the Affiliates to
terminate the employment of any individual.
15.2 Rights to Trust Assets. No Employee or Beneficiary shall have any
----------------------
right to, or interest in, any assets of the Trust Fund upon termination of
employment or otherwise, except as specifically provided under the Plan, and
then only to the extent of the benefits payable under the Plan to the Employee
or Beneficiary out of the assets of the Trust Fund. All payments of benefits as
provided for in this Plan shall be made solely out of assets of the Trust Fund,
and neither the Company, the Affiliates, nor any fiduciary shall be liable
therefor in any manner.
15.3 Nonalienation of Benefits. Except to the extent permissible under
-------------------------
Code sections 401(a)(13) and 414(p), benefits payable under this Plan shall not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any liability which is for
alimony or other payments for the support of a spouse or former spouse, or for
any other relative of the Employee, prior to actually being received by the
person entitled to the benefit under the terms of the Plan. Any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or
otherwise dispose of any right to benefits payable hereunder shall be void. The
Trust Fund shall not in any manner be liable for, or subject to, the debts,
contracts, liabilities,
-77-
engagements, or torts of any person entitled to benefits hereunder.
The preceding paragraph shall also apply to the creation, assignment, or
recognition of a right to any interest or benefit payable with respect to a
Member pursuant to a domestic relations order, unless this order is determined
to be a qualified domestic relations order (as defined in Code section 414(p)).
The Committee shall establish reasonable procedures to determine the qualified
status of domestic relations orders and to administer distributions under these
qualified orders.
15.4 Expenses. All reasonable expenses of the Plan and Trust Fund shall be
--------
paid by, and constitute a charge upon, the Trust Fund, except to the extent that
these expenses may have been paid by the Company or an Employer in its sole and
absolute discretion. These expenses shall include any expenses incident to the
functioning of the Plan, including, without limitation, attorneys' fees and the
compensation of actuaries and other agents, accounting and clerical charges,
expenses, if any, of being bonded as required by the Act, and any other costs of
administering the Plan.
15.5 Severability. In the event that any provision of this Plan is held
------------
invalid or illegal for any reason, such invalidity or illegality shall not
affect the remaining parts of the Plan, and the Plan shall be enforced and
construed as if this provision had never been inserted herein.
15.6 Governing State. The Plan shall be construed in accordance with the
---------------
laws of the State of North Carolina except to the extent these laws have been
preempted by laws of the United States.
-78-
15.7 Facility of Payment. If the Committee shall find that any person to
-------------------
whom a benefit is payable from the Trust Fund is unable to care for the person's
affairs because of illness or accident, any payments due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee, or other
legal representative) may be paid to the recipient's spouse, child, parent,
brother or sister, or to any person deemed by the Committee to have incurred
expense for such person otherwise entitled to payment. Any such payment shall
be a complete discharge of any liability under the Plan therefor.
15.8 Missing Persons. If the Committee is unable to locate a proper payee
---------------
within one year after a benefit becomes payable, the Committee may treat the
benefit as a forfeiture; however, if a claim for benefits is subsequently
presented by a person entitled to a payment, the forfeited amount shall be
recredited upon verification of the claim, except for those amounts that have
been paid pursuant to an escheat or other applicable law.
15.9 Titles. The titles of sections are included only for convenience and
------
shall not be construed as part of this Plan or in any respect affecting or
modifying its provisions.
* * * * * * * * * *
IN WITNESS WHEREOF, BRANCH BANKING & TRUST COMPANY has caused this
instrument to be executed by its duly authorized officer, effective as of the
date specified in Article I above.
BRANCH BANKING & TRUST COMPANY
ATTEST:
By:
----------------------------
-79-
By:
------------------------
-80-
APPENDIX A
----------
Special Effective Dates
-----------------------
Pursuant to section 1.2 of the Plan, the following provisions of the Plan shall
be effective as of the special effective date indicated herein:
Plan Provision Special Effective Date
- ---------------- ----------------------
Section 2.1(l) January 1, 1989
Section 2.1(r) January 1, 1987
Section 4.5 January 1, 1987
Section 4.6 January 1, 1987
Section 9.8 January 1, 1989
A.1
APPENDIX B
----------
Profit Sharing Employee Stock Ownership Plan
--------------------------------------------
B.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Profit Sharing ESOP" shall mean the employee stock ownership plan
-------------------
established as a portion of the Plan by Article V and this Appendix B,
which is designed to invest primarily in Stock.
(b) "Profit Sharing ESOP Account" shall mean the separate account
---------------------------
maintained under the Profit Sharing ESOP for each Member, which
evidences the total value of the Stock allocated to such Member's
Account pursuant to repayment of the Profit Sharing Loan, including
stock dividends paid on shares allocated to such account, adjusted for
distributions and transfers.
(c) "Profit Sharing Loan" shall mean any Loan under Article V to the
-------------------
Trustee in connection with the Profit Sharing ESOP.
B.2 Effective Date. When, and to the extent, authorized in writing by the
--------------
Board, a Profit Sharing ESOP shall be established under the Plan.
B.3 Profit Sharing Employer Contributions. In the event that a Profit
-------------------------------------
Sharing Loan is made to the Trustee, for each Plan Year each Employer shall make
Employer Contributions to the Profit Sharing ESOP in cash or otherwise and at
such times as will enable the Trustee to pay principal and/or interest on any
such Profit Sharing Loan as they are due, but only to the extent the principal
and interest on any such Profit Sharing Loan are not paid, in the sole and
absolute discretion of the Committee,
B.1
by means of a dividend on Stock originally given as collateral for such Profit
Sharing Loan. In addition, such contributions may be made by the forgiveness
of a portion or all of a Profit Sharing Loan. The share of each Employer in
the aggregate contribution to the Profit Sharing ESOP for each Plan Year shall
be equal to the total amount of contributions to the Profit Sharing ESOP
attributable to the Participants who are Employees of such Employer eligible
for a Profit Sharing ESOP allocation for the Plan Year, as determined by the
Company.
For each Plan Year, each Employer may also make discretionary Employer
Contributions to the Profit Sharing ESOP in cash or Stock at such times and in
such amounts as the board of directors of each Employer shall determine, subject
to the consent of the Company. These discretionary contributions either shall
be used to prepay a Profit Sharing Loan or shall be invested in Stock, in the
sole and absolute discretion of the Committee.
B.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Profit Sharing Loans as directed by the
Committee. Any pledge of Stock in connection with an Profit Sharing
Loan must provide for the release of shares so pledged pursuant to
either the General Rule or the Special Rule in section 5.8 of the
Plan.
(b) Payments of principal and interest on any Profit Sharing Loan during a
Plan Year shall be made by the Trustee only from (1) any dividends
attributable to Stock originally given as collateral for a Profit
Sharing Loan, (2) Profit Sharing Contributions and earnings from such
Profit Sharing Contributions made to the ESOP to meet the Plan's
obligation under an Profit Sharing Loan, and (3) the proceeds of a
subsequent Profit Sharing Loan, as determined by the Committee in its
sole and absolute discretion.
B.2
B.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) The Profit Sharing ESOP Account maintained for each Participant shall
be credited with the Member's allocable share under section B.6 of
Stock purchased and paid for by the Profit Sharing ESOP or contributed
in kind to the Profit Sharing ESOP. Stock acquired by the Trustee
with the proceeds of a Profit Sharing Loan shall be allocated in
accordance with section B.6 to the Profit Sharing ESOP Accounts of
Participants as the Stock is released from the Profit Sharing ESOP
Suspense Account as provided in section B.4.
(b) Dividends paid on shares of Stock purchased with the proceeds of a
Profit Sharing Loan shall be applied as described in section B.6.
B.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of a Profit Sharing Loan and released
from the Profit Sharing ESOP Suspense Account shall be released from
the Profit Sharing ESOP Holding Account and allocated to each Eligible
Participant's Profit Sharing ESOP Account in the ratio that the
Eligible Participant's Compensation bears to the total Compensation of
all Eligible Participants. For purposes of this section, an "Eligible
Participant" shall mean an Eligible Employee described in section 3.1.
Notwithstanding the foregoing, the Board may limit, by a written
resolution, the group of Eligible Participants in any Plan Year to any
reasonably determinable group of Eligible Employees who are not Highly
Compensated Employees.
Stock not acquired with the proceeds of a Profit Sharing Loan but
acquired with, or contributed as, discretionary Employer Contributions
under section B.3
B.3
for the Plan Year shall be allocated to the Profit Sharing ESOP
Accounts of Eligible Participants in the same manner as described in
the first sentence of this subsection.
(b) If dividends paid on shares of Stock are used to make a Profit Sharing
Loan payment, shares released from the Profit Sharing ESOP Suspense
Account as provided in section B.4 shall be allocated to each Eligible
Participant's Profit Sharing ESOP Account in the same manner as shares
released pursuant to an Employer Contribution as set forth in the
first sentence of subsection (a).
(c) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) or (b) greater than or equal to an amount that
would cause the Plan to fail the requirements of Code section
401(a)(4) or 410(b). Any amount that cannot be allocated to a Highly
Compensated Employee due to this limitation shall be allocated in the
same manner as provided in subsection (a) to each Eligible Participant
whose allocation under subsection (a) is less than such Participant's
maximum allocation permitted under this subsection.
B.7 Vesting. A Participant shall vest in the Participant's Profit Sharing
-------
ESOP Account in the same manner as provided under Article VIII for a Matching
Contributions Account.
B.4
APPENDIX C
----------
Employer Matching Employee Stock Ownership Plan
-----------------------------------------------
C.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Employer Matching ESOP" shall mean the employee stock ownership plan
----------------------
established as a portion of the Plan by Article V and this Appendix C,
which is designed to invest primarily in Stock.
(b) "Employer Matching ESOP Account" shall mean the separate account
------------------------------
maintained under the Employer Matching ESOP for each Member, which
evidences the total value of the Stock allocated to such Member's
Account pursuant to repayment of the Employer Matching Loan, including
stock dividends paid on shares allocated to such account, adjusted for
distributions and transfers.
(c) "Employer Matching Loan" shall mean any Loan under Article V to the
----------------------
Trustee in connection with the Employer Matching ESOP.
C.2 Effective Date. When, and to the extent, authorized in writing by the
--------------
Board, an Employer Matching ESOP shall be established under the Plan.
C.3 Employer Contributions. For each Plan Year each Employer may make
----------------------
discretionary Employer Contributions to the Employer Matching ESOP in cash or
Stock at such times and in such amounts as the board of directors of each
Employer shall determine, subject to the consent of the Company. Each Employer
also shall make contributions as required under section 4.2 and as necessary to
carry out the provisions of this Plan. In the event that an Employer Matching
Loan is made to the Trustee, each
C.1
Employer shall make Employer Contributions to the Employer Matching ESOP in
cash in such amounts and at such times as will enable the Trustee to pay
principal and/or interest on any such Employer Matching Loan as they are due,
but only to the extent the principal and interest on any such Employer
Matching Loan are not paid, in the sole and absolute discretion of the
Committee, by means of a dividend on Stock originally given as collateral for
such Employer Matching Loan. The share of each Employer in the aggregate
contribution to the Employer Matching ESOP for each Plan Year shall be equal
to the total amount of the contributions to the Employer Matching ESOP
attributable to the Participants who are Employees of such Employer, as
determined by the Company.
C.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Employer Matching Loans as directed by the
Committee. Any pledge of Stock in connection with an Employer
Matching Loan must provide for the release of shares so pledged
pursuant to either the General Rule or the Special Rule in section 5.8
of the Plan.
(b) Payments of principal and interest on any such Employer Matching Loan
during a Plan Year shall be made by the Trustee only from (1) any
dividends attributable to Stock originally given as collateral for the
Employer Matching Loan, (2) Employer Contributions and earnings from
such Employer Contributions made to the Employer Matching ESOP to meet
the Plan's obligation under an Employer Matching Loan, and (3) the
proceeds of a subsequent Employer Matching Loan made to repay a prior
Employer Matching Loan. Such Employer Contributions and earnings must
be accounted for separately by the Plan until the Employer Matching
Loan is repaid.
C.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) The Employer Matching ESOP Account maintained for each Participant
shall be credited with the Participant's allocable shares, as
determined under section C.6, of
C.2
Stock purchased and paid for by the Employer Matching ESOP or
contributed in kind to the Employer Matching ESOP. Stock acquired by
the Trustee with the proceeds of an Employer Matching Loan shall be
allocated in accordance with section C.6 to the Employer Matching
ESOP Accounts of Participants as the Stock is released from the
Employer Matching ESOP Suspense Account as provided in section C.4.
(b) Dividends paid on Stock purchased with the proceeds of an Employer
Matching Loan shall be used first to make Employer Matching Loan
payments on such Employer Matching Loan (or an Employer Matching Loan
refinancing such an Employer Matching Loan) except to the extent the
Committee determines in its sole and absolute discretion that
dividends paid on Stock that is allocated to a Member's Account shall
be distributed to such Member or reinvested in Stock. If dividends
paid on shares of Stock are used to make an Employer Matching Loan
payment, shares released from the Employer Matching ESOP Suspense
Account as provided in section C.4 shall be allocated to the Employer
Matching ESOP Holding Account and then to Members' Employer Matching
ESOP Accounts in accordance with the provisions in section C.6(a). In
addition, if dividends paid on shares of Stock allocated to a Member's
Employer Matching ESOP Account are used to make an Employer Matching
Loan payment, Stock shall be allocated to such Members' Employer
Matching ESOP Accounts in accordance with the provisions of section
C.6(c).
(c) Dividends paid on shares of Stock allocated to a Member's Employer
Matching ESOP Account that are not used to make an Employer Matching
Loan payment shall be either distributed to such Member or reinvested
in Stock, as determined by the Committee in its sole and absolute
discretion. The Committee shall have the sole
C.3
and absolute discretion to determine whether such dividends will be
used to make an Employer Matching Loan payment.
C.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of an Employer Matching Loan and
released from the Employer Matching ESOP Suspense Account shall be
released from the Employer Matching ESOP Holding Account and allocated
to a Participant's Employer Matching ESOP Account to the extent
necessary to fund the Matching Contribution required pursuant to
section 4.2 of the Plan. To the extent that at the end of the Plan
Year any Stock in the Employer Matching ESOP Holding Account remains
unallocated in excess of the amount necessary to fund the Matching
Contribution required pursuant to section 4.2, the Matching
Contribution shall be increased in increments of one one-hundredth
(.01) of a percentage point until such Stock is completely allocated
among Participants' Employer Matching ESOP Accounts.
(b) If dividends paid on shares of Stock are used to make an Employer
Matching Loan payment, shares released from the Employer Matching ESOP
Suspense Account as provided in section C.4 shall be allocated to a
Member's Employer Matching ESOP Account in the same manner as shares
released pursuant to an Employer Contribution as set forth in
subsection (a).
(c) If dividends paid on shares of Stock which have been allocated to a
Member's Employer Matching Account are used to make an Employer
Matching Loan payment, Stock having a total Fair Market Value equal to
the amount of the dividend divided by .95 shall be allocated to such
Member's Employer Matching ESOP Account (the "Dividend Replacement
Allocation"). The Committee shall decide in its sole and absolute
discretion whether the
C.4
Dividend Replacement Allocation will be made out of (1) shares of
Stock released from the Employer Matching ESOP Suspense Account
pursuant to an Employer Matching Loan payment, in which case the
Dividend Replacement Allocation shall be made prior to all other
allocations of shares of Stock released from the Employer Matching
ESOP Suspense Account; (2) shares of Stock purchased with Employer
Contributions made pursuant to section 4.2 to provide for the
Dividend Replacement Allocations; or (3) shares of Stock contributed
pursuant to section 4.2 to provide for the Dividend Replacement
Allocations.
C.7 Nondiscrimination Limitation on Amount of Matching Contributions. All
----------------------------------------------------------------
Matching Contributions are expressly conditioned on such contributions being
deductible under Code section 404. Matching Contributions provided through the
Employer Matching ESOP shall satisfy the contribution percentage requirement of
Code section 401(m) separately from any other contributions or allocations
provided through the Plan. Matching Contributions provided through the Employer
Matching ESOP may not be treated as qualified nonelective contributions for
purposes of the actual deferral percentage requirement of Code section 401(k).
In determining whether the contribution percentage requirements of Code section
401(m) are satisfied, shares of Stock purchased by the Employer Matching ESOP
shall be valued at their original cost to the Employer Matching ESOP; and shares
contributed in kind to the Employer Matching ESOP shall be valued at their Fair
Market Value on the date of receipt by the Employer Matching ESOP.
C.8 Vesting. A Participant shall vest in the Participant's Employer
-------
Matching ESOP Account in the same manner as provided under Article VIII for a
Matching Contributions Account.
C.5
APPENDIX D
----------
Albemarle Employee Stock Ownership Plan
---------------------------------------
D.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Albemarle" shall mean Albemarle Savings and Loan Association, Inc.
---------
(b) "Albemarle Compensation" shall mean earnings paid to an Albemarle
----------------------
Participant for the calendar year 1991, including salary, wages, and
overtime pay.
(c) "Albemarle Contribution" shall mean a contribution of cash by
----------------------
Albemarle or the Company to the Albemarle ESOP. In addition,
contributions may be made by the forgiveness of a portion or all of an
Albemarle Loan.
(d) "Albemarle ESOP" shall mean the employee stock ownership plan
--------------
established as a portion of the Plan by Article V and this Appendix D,
which is designed to invest primarily in Stock.
(e) "Albemarle ESOP Account" shall mean the separate account maintained
----------------------
under the Albemarle ESOP for each Member, which evidences the total
value of the Stock allocated to such Member's Account pursuant to
repayment of the Albemarle Loan, including stock dividends paid on
shares allocated to such account, adjusted for distributions and
transfers.
(f) "Albemarle Loan" shall mean any Loan under Article V to the Trustee in
--------------
connection with the Albemarle ESOP.
(g) "Albemarle Participant" shall mean a person who becomes a participant
---------------------
in the Albemarle ESOP in accordance with section D.3.
(h) "Effective Date" shall mean August 8, 1991.
--------------
D.1
(i) "Year of Albemarle Service" shall mean each calendar year, as of the
-------------------------
Effective Date, during which the Employee of Albemarle had completed
1,000 or more Hours of Service for Albemarle.
D.2 Albemarle Contributions. In the event that an Albemarle Loan is made
-----------------------
to the Trustee, Albemarle or the Company shall make Albemarle Contributions to
the Albemarle ESOP in such amounts and at such times as required to enable the
Trustee to pay principal and/or interest on any such Albemarle Loans as they are
due.
D.3 Participation in the Albemarle ESOP. Each Employee of Albemarle on
-----------------------------------
the Effective Date shall become a Participant in the Albemarle ESOP on the
Effective Date; except that any Employee who participates in the Albemarle Long-
Term Service Stock Awards Program shall not participate in the Albemarle ESOP.
D.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Albemarle Loans as directed by the Committee.
Any pledge of Stock in connection with an Albemarle Loan must provide
for the release of shares so pledged pursuant to the General Rule in
section 5.8 of the Plan.
(b) Payments of principal and interest on any Albemarle Loan during a Plan
Year shall be made by the Trustee only from (1) Albemarle
Contributions and earnings from such Albemarle Contributions made to
the ESOP to meet the Plan's obligation under an Albemarle Loan and (2)
the proceeds of a subsequent Albemarle Loan made to repay a prior
Albemarle Loan. No payments of principal and interest on an Albemarle
Loan shall be made from dividends attributable to Stock originally
given as collateral for an Albemarle Loan.
D.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
D.2
(a) Stock acquired by the Trustee with the proceeds of an Albemarle Loan
shall be allocated in accordance with section D.6 to the Albemarle
ESOP Accounts of Albemarle Participants as the Stock is released from
the Albemarle Suspense Account as provided in section D.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Albemarle ESOP Account shall be paid in cash to each
Albemarle Participant who is an Employee on the dividend record date
for such dividend in the ratio that his or her Albemarle ESOP Account
balance on such dividend record date bears to the total value of all
Albemarle ESOP Account balances of all Albemarle Participants who are
Employees on such dividend record date; except that such dividends
paid in 1991 shall be paid in cash to Albemarle Participants (whether
or not an Employee of Albemarle) in the ratio that his or her
Albemarle ESOP Account balance immediately after the allocation
pursuant to the first payment under the initial Albemarle Loan bears
to the total value of all Albemarle ESOP Account balances at such
time. Dividends paid on shares of Stock that have been allocated to
an Albemarle Participant's Albemarle ESOP Account shall be paid to
such Albemarle Participant in cash.
D.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of an Albemarle Loan and released
from the Albemarle Suspense Account shall be allocated to an Albemarle
Participant's Albemarle ESOP Account as follows: each Albemarle
Participant shall receive a fraction of the total number of shares
released from the Albemarle Suspense Account equal to (1) 0.5 times
the number of Years of Albemarle Service of such Albemarle Participant
divided by the total number of Years of Albemarle Service of all
Albemarle Participants plus (2) 0.5 times the Albemarle
D.3
Participant's Compensation divided by the Compensation of all
Albemarle Participants. However, an Albemarle Participant shall not
be entitled to an allocation under this section unless the Albemarle
Participant was an Employee on the date of the payment under the
Albemarle Loan that resulted in the release of shares of Stock from
the Albemarle Suspense Account, or the Albemarle Participant
terminated service with Albemarle or the Company during such Plan Year
due to death, disability, or retirement. For purposes of determining
an Albemarle Participant's allocation under this section, an Albemarle
Participant who terminates during the Plan Year due to death,
disability, or retirement shall, subject to the limitations of Code
section 415 and any other applicable restrictions, be deemed to be
employed through the last day of such Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or equal to an amount that would
cause the Plan to fail the requirements of Code section 401(a)(4) or
410(b). Any amount that cannot be allocated to a Highly Compensated
Employee due to this limitation shall be allocated in the same manner
as provided in subsection (a) to each Albemarle Participant whose
allocation under subsection (a) is less than such Participant's
maximum allocation permitted under this subsection.
D.7 Vesting. A Participant shall vest in the Participant's Albemarle ESOP
-------
Account in the same manner as provided under Article VIII for a Matching
Contributions Account.
D.4
D.5
APPENDIX E
----------
Gate City Employee Stock Ownership Plan
---------------------------------------
E.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Effective Date" shall mean August 8, 1991.
--------------
(b) "Gate City" shall mean Gate City Federal Savings Bank.
---------
(c) "Gate City Compensation" shall mean earnings paid to a Gate City
----------------------
Participant for the calendar year 1991, including salary, wages, and
overtime pay.
(d) "Gate City Contribution" shall mean a contribution of cash by Gate
----------------------
City or the Company to the Gate City ESOP. In addition, contributions
may be made by the forgiveness of a portion or all of a Gate City
Loan.
(e) "Gate City ESOP" shall mean the employee stock ownership plan
--------------
established as a portion of the Plan by Article V and this Appendix E,
which is designed to invest primarily in Stock.
(f) "Gate City ESOP Account" shall mean the separate account maintained
----------------------
under the Gate City ESOP for each Member, which evidences the total
value of the Stock allocated to such Member's Account pursuant to
repayment of the Gate City Loan, including stock dividends paid on
shares allocated to such account, adjusted for distributions and
transfers.
(g) "Gate City Loan" shall mean any Loan under Article V to the Trustee in
--------------
connection with the Gate City ESOP.
(h) "Gate City Participant" shall mean a person who becomes a participant
---------------------
in the Gate City ESOP in accordance with section E.3.
(i) "Year of Gate City Service" shall mean each calendar year, as of the
-------------------------
Effective Date, during which the
E.1
Employee of Gate City had completed 1,000 or more Hours of Service
for Gate City.
E.2 Gate City Contributions. In the event that a Gate City Loan is made
-----------------------
to the Trustee, Gate City or the Company shall make Gate City Contributions to
the Gate City ESOP in such amounts and at such times as required to enable the
Trustee to pay principal and/or interest on any such Gate City Loans as they are
due.
E.3 Participation in the Gate City ESOP. Each Employee of Gate City on
-----------------------------------
the Effective Date shall become a Participant in the Gate City ESOP on the
Effective Date; except that the six most highly compensated executives on the
Effective Date and any Employee who participates in the BB&T Financial
Corporation 1991 Special Purpose Stock Option and Restricted Stock Plan shall
not participate in the Gate City ESOP.
E.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Gate City Loans as directed by the Committee.
Any pledge of Stock in connection with the Gate City Loan must provide
for the release of shares so pledged pursuant to the General Rule in
section 5.8 of the Plan.
(b) Payments of principal and interest on any Gate City Loan during a Plan
Year shall be made by the Trustee only from (1) Gate City
Contributions and earnings from such Gate City Contributions made to
the ESOP to meet the Plan's obligation under a Gate City Loan and (2)
the proceeds of a subsequent Gate City Loan made to repay a prior Gate
City Loan. No payments of principal and interest shall be made from
dividends attributable to Stock originally given as collateral for a
Gate City Loan.
E.5 Allocations to Participants' Gate City Accounts; Dividends.
----------------------------------------------------------
E.2
(a) Stock acquired by the Trustee with the proceeds of a Gate City Loan
shall be allocated in accordance with section E.6 to the Gate City
ESOP Accounts of Gate City Participants as the Stock is released from
the Gate City Suspense Account as provided in section E.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Gate City ESOP Account shall be paid in cash to each
Gate City Participant who is an Employee on the dividend record date
for such dividend in the ratio that his or her Gate City ESOP Account
balance on such dividend record date bears to the total value of all
Gate City ESOP Account balances of all Gate City Participants who are
Employees on such dividend record date; except that such dividends
paid in 1991 shall be paid in cash to Gate City Participants (whether
or not an Employee of Gate City) in the ratio that his or her Gate
City ESOP Account balance immediately after the allocation pursuant to
the first payment under the initial Gate City Loan bears to the total
value of all Gate City ESOP Account balances at such time. Dividends
paid on shares of Stock that have been allocated to a Gate City
Participant's Gate City ESOP Account shall be paid to such Gate City
Participant in cash.
E.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of a Gate City Loan and released from
the Gate City Suspense Account each Plan Year shall be allocated to a
Gate City Participant's Gate City ESOP Account as follows: each Gate
City Participant shall receive a fraction of the total number of
shares released from the Gate City Suspense Account equal to (1) 0.5
times the number of Years of Gate City Service of such Gate City
Participant divided by the total number of Years of Gate City
Service of all Gate City Participants plus
E.3
(2) 0.5 times the Gate City Participant's Compensation divided by
the Compensation of all Gate City Participants. However, a Gate City
Participant shall not be entitled to an allocation under this
section unless the Gate City Participant was an Employee on the date
of the payment under the Gate City Loan that resulted in the release
of shares of Stock from the Gate City Suspense Account, or the Gate
City Participant terminated service with Gate City or the Company
during such Plan Year due to death, disability, or retirement. For
purposes of determining a Gate City Participant's allocation under
this section, a Gate City Participant who terminates service during
the Plan Year due to death, disability, or retirement shall, subject
to the limitations of Code section 415 and any other applicable
restrictions, be deemed to be employed through the last day of such
Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or equal to an amount that would
cause the Plan to fail the requirements of Code section 401(a)(4) or
410(b). Any amount that cannot be allocated to a Highly Compensated
Employee due to this limitation shall be allocated in the same manner
as provided in subsection (a) to each Gate City Participant whose
allocation under subsection (a) is less than such Participant's
maximum allocation permitted under this subsection.
E.7 Vesting. A Participant shall vest in the Participant's Gate City ESOP
-------
Account in the same manner as provided under Article VIII for a Matching
Contributions Account.
E.4
APPENDIX F
----------
Peoples Employee Stock Ownership Plan
-------------------------------------
F.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Effective Date" shall mean June 26, 1992.
--------------
(b) "Peoples" shall mean Peoples Federal Savings Bank of Thomasville, N.C.
-------
(c) "Peoples Compensation" shall mean earnings paid to a Peoples
--------------------
Participant for the calendar year 1991, including salary, wages, and
overtime pay.
(d) "Peoples Contribution" shall mean a contribution of cash by Peoples or
--------------------
the Company to the Peoples ESOP. In addition, contributions may be
made by the forgiveness of a portion or all of a Peoples Loan.
(e) "Peoples ESOP" shall mean the employee stock ownership plan
------------
established as a portion of the Plan by Article V and this Appendix F,
which is designed to invest primarily in Stock.
(f) "Peoples ESOP Account" shall mean the separate account maintained
--------------------
under the Peoples ESOP for each Member, which evidences the total
value of the Stock allocated to such Member's Account pursuant to
repayment of the Peoples Loan, including stock dividends paid on
shares allocated to such account, adjusted for distributions and
transfers.
(g) "Peoples Loan" shall mean any Loan under Article V to the Trustee in
------------
connection with the Peoples ESOP.
(h) "Peoples Participant" shall mean a person who becomes a participant in
-------------------
the Peoples ESOP in accordance with section F.3.
F.1
(i) "Year of Peoples Service" shall mean each calendar year, as of the
-----------------------
Effective Date, during which the Employee of Peoples had completed
1,000 or more Hours of Service for Peoples.
F.2 Peoples Contributions. In the event that a Peoples Loan is made to
---------------------
the Trustee, Peoples or the Company shall make Peoples Contributions to the
Peoples ESOP in such amounts and at such times as required to enable the Trustee
to pay principal and/or interest on any such Peoples Loans as they are due.
F.3 Participation in the Peoples ESOP. Each Employee of Peoples on the
---------------------------------
Effective Date who is regularly scheduled to work 1,000 hours or more a year
shall become a Participant in the Peoples ESOP on the Effective Date.
F.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Peoples Loans as directed by the Committee.
Any pledge of Stock in connection with a Peoples Loan must provide for
the release of shares so pledged pursuant to the General Rule in
section 5.8 of the Plan.
(b) Payments of principal and interest on any such Peoples Loan during a
Plan Year shall be made by the Trustee only from (1) Peoples
Contributions and earnings from such Peoples Contributions made to the
ESOP to meet the Plan's obligation under a Peoples Loan and (2) the
proceeds of a subsequent Peoples Loan made to repay a prior Peoples
Loan. No payments of principal and interest on a Peoples Loan shall
be made from dividends attributable to Stock originally given as
collateral for a Peoples Loan.
F.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) Stock acquired by the Trustee with the proceeds of a Peoples Loan
shall be allocated in accordance with
F.2
section F.6 to the Peoples ESOP Accounts of Peoples Participants as
the Stock is released from the Peoples Suspense Account as provided
in section F.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Peoples ESOP Account shall be paid in cash to each
Peoples Participant who is an Employee on the dividend record date for
such dividend in the ratio that his or her Peoples ESOP Account
balance on such dividend record date bears to the total value of all
Peoples ESOP Account balances for all Peoples Participants who are
Employees on such dividend record date. Dividends paid on shares of
Stock that have been allocated to a Peoples Participant's Peoples ESOP
Account shall be paid to such Peoples Participant in cash.
F.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of a Peoples Loan and released from
the Peoples Suspense Account each Plan Year shall be allocated to a
Peoples Participant's Peoples ESOP Account as follows: each Peoples
Participant shall receive a fraction of the total number of shares
released from the Peoples Suspense Account equal to (1) 0.5 times the
number of Years of Peoples Service of such Peoples Participant divided
by the total number of Years of Peoples Service of all Peoples
Participants plus (2) 0.5 times the Peoples Participant's Peoples
Compensation divided by the Peoples Compensation of all Peoples
Participants. However, a Peoples Participant shall not be entitled to
an allocation under this section unless the Peoples Participant was an
Employee on the date of the payment under the Peoples Loan that
resulted in the release of shares of Stock from the Peoples Suspense
Account, or he or she terminated service with Peoples or the Company
during such Plan Year due to death, disability,
F.3
or retirement. For purposes of determining a Peoples Participant's
allocation under this section, a Peoples Participant who terminated
service during the Plan Year due to death, disability, or retirement
shall, subject to the limitations of Code section 415 and any other
applicable restrictions, be deemed to be employed through the last
day of such Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or equal to an amount that would
cause the Plan to fail the requirements of Code section 401(a)(4) or
410(b). Any amount that cannot be allocated to a Highly Compensated
Employee due to this limitation shall be allocated in the same manner
as provided in subsection (a) to each Peoples Participant whose
allocation under subsection (a) is less than such Peoples
Participant's maximum allocation permitted under this subsection (b).
F.7 Vesting. A Participant shall vest in the Participant's Peoples ESOP
-------
Account in the same manner as provided under Article VIII for a Matching
Contributions Account.
F.4
APPENDIX G
----------
Carolina Savings Employee Stock Ownership Plan
----------------------------------------------
G.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Carolina Savings" shall mean Carolina Savings Bank of Wilmington,
----------------
N.C.
(b) "Carolina Savings Compensation" shall mean earnings paid to a Carolina
-----------------------------
Savings Participant for the calendar year 1992, including salary,
wages, and overtime pay.
(c) "Carolina Savings Contribution" shall mean a contribution by Carolina
-----------------------------
Savings or the Company to the Carolina Savings ESOP. In addition,
contributions may be made by the forgiveness of a portion or all of a
Carolina Savings Loan.
(d) "Carolina Savings ESOP" shall mean the employee stock ownership plan
---------------------
established as a portion of the Plan by Article V and this Appendix G,
which is designed to invest primarily in Stock.
(e) "Carolina Savings ESOP Account" shall mean the separate account
-----------------------------
maintained under the Carolina Savings ESOP for each Member, which
evidences the total value of the Stock allocated to such Member's
Account pursuant to repayment of the Carolina Savings Loan, including
stock dividends paid on shares allocated to such account, adjusted for
distributions and transfers.
(f) "Carolina Savings Loan" shall mean any Loan under Article V to the
---------------------
Trustee in connection with the Carolina Savings ESOP.
(g) "Carolina Savings Participant" shall mean a person who becomes a
----------------------------
participant in the Carolina Savings ESOP in accordance with section
G.3.
G.1
(h) "Effective Date" shall mean May 6, 1993.
--------------
(i) "Year of Carolina Savings Service" shall mean each calendar year, as
--------------------------------
of the Effective Date, during which the Employee of Carolina Savings
had completed 1,000 or more Hours of Service for Carolina Savings.
G.2 Carolina Savings Contributions. In the event that a Carolina Savings
------------------------------
Loan is made to the Trustee, Carolina Savings or the Company shall make Carolina
Savings Contributions to the Carolina Savings ESOP in such amounts and at such
times as required to enable the Trustee to pay principal and/or interest on any
such Carolina Savings Loans as they are due.
G.3 Participation in the Carolina Savings ESOP. Each Employee of Carolina
------------------------------------------
Savings on the Effective Date who is regularly scheduled to work 1,000 hours or
more a year shall become a participant in the Carolina Savings ESOP on the
Effective Date.
G.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Carolina Savings Loans as directed by the
Committee. Any pledge of Stock in connection with a Carolina Savings
Loan must provide for the release of shares so pledged pursuant to the
General Rule in section 5.8 of the Plan.
(b) Payments of principal and interest on any Carolina Savings Loan during
a Plan Year shall be made by the Trustee only from (1) Carolina
Savings Contributions and earnings from such Carolina Savings
Contributions made to the ESOP to meet the Plan's obligation under a
Carolina Savings Loan and (2) the proceeds of a subsequent Carolina
Savings Loan made to repay a prior Carolina Savings Loan. No payments
of principal and interest on a Carolina Savings Loan shall be made
from dividends attributable to Stock originally given as collateral
for a Carolina Savings Loan.
G.2
G.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) Stock acquired by the Trustee with the proceeds of a Carolina Savings
Loan shall be allocated in accordance with section G.6 to the Carolina
Savings ESOP Accounts of Carolina Savings Participants as the Stock is
released from the Carolina Savings Suspense Account as provided in
section G.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Carolina Savings ESOP Account shall be paid in cash to
each Carolina Savings Participant who is an Employee on the dividend
record date for such dividend in the ratio that his or her Carolina
Savings ESOP Account balance on such dividend record date bears to the
total value of all Carolina Savings ESOP Account balances for all
Carolina Savings Participants who are Employees on such dividend
record date. Dividends paid on shares of Stock that have been
allocated to a Carolina Savings Participant's Carolina Savings ESOP
Account shall be paid to such Carolina Savings Participant in cash.
G.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of a Carolina Savings Loan and
released from the Carolina Savings ESOP Suspense Account shall be
allocated to a Carolina Savings Participant's Carolina Savings ESOP
Account as follows: each Carolina Savings Participant shall receive a
fraction of the total number of shares released from the Carolina
Savings ESOP Suspense Account equal to (1) 0.5 times the number of
Years of Carolina Savings Service of such Carolina Savings Participant
divided by the total number of Years of Carolina Savings Service of
all Carolina Savings Participants plus (2) 0.5 times the Carolina
Savings Participant's Compensation divided by the Compensation
G.3
of all Carolina Savings Participants. However, a Carolina Savings
Participant shall not be entitled to an allocation under this
section unless the Carolina Savings Participant was an Employee on
the date of the payment under the Carolina Savings Loan that
resulted in the release of shares of Stock from the Carolina Savings
Suspense Account, or the Carolina Savings Participant terminated
service with Carolina Savings or the Company during such Plan Year
due to death, disability, or retirement. For purposes of determining
a Carolina Savings Participant's allocation under this section, a
Carolina Savings Participant who terminates during the Plan Year due
to death, disability, or retirement shall, subject to the
limitations of Code section 415 and any other applicable
restrictions, be deemed to be employed through the last day of such
Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or equal to an amount that would
cause the Plan to fail the requirements of Code section 401(a)(4) or
410(b). Any amount that cannot be allocated to a Highly Compensated
Employee due to this limitation shall be allocated in the same manner
as provided in subsection (a) to each Carolina Savings Participant
whose allocation under subsection (a) is less than such Participant's
maximum allocation permitted under this subsection.
G.7 Vesting. A Participant shall vest in the Participant's Carolina
-------
Savings ESOP Account in the same manner as provided under Article VIII for a
Matching Contributions Account.
G.4
APPENDIX H
----------
Edenton Savings Employee Stock Ownership Plan
---------------------------------------------
H.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Edenton" shall mean Edenton Savings and Loan Association, Inc.
-------
(b) "Edenton Compensation" shall mean earnings paid to an Edenton
--------------------
Participant for the calendar year 1992, including salary, wages, and
overtime pay.
(c) "Edenton Contribution" shall mean a contribution of cash by Edenton or
--------------------
the Company to the Edenton ESOP. In addition, contributions may be
made by the forgiveness of a portion or all of an Edenton Loan.
(d) "Edenton ESOP" shall mean the employee stock ownership plan
------------
established as a portion of the Plan by Article V and this Appendix H,
which is designed to invest primarily in Stock.
(e) "Edenton ESOP Account" shall mean the separate account maintained
--------------------
under the Edenton ESOP for each Member, which evidences the total
value of the Stock allocated to such Member's Account pursuant to
repayment of the Edenton Loan, including stock dividends paid on
shares allocated to such account, adjusted for distributions and
transfers.
(f) "Edenton Loan" shall mean any Loan under Article V to the Trustee in
------------
connection with the Edenton ESOP.
(g) "Edenton Participant" shall mean a person who becomes a participant in
-------------------
the Edenton ESOP in accordance with section H.3.
(h) "Effective Date" shall mean May 6, 1993.
--------------
H.1
(i) "Year of Edenton Service" shall mean each calendar year, as of the
-----------------------
Effective Date, during which the Employee of Edenton had completed
1,000 or more Hours of Service for Edenton.
H.2 Edenton Contributions. In the event that an Edenton Loan is made to
---------------------
the Trustee, Edenton or the Company shall make Edenton Contributions to the
Edenton ESOP in such amounts and at such times as required to enable the Trustee
to pay principal and/or interest on any such Edenton Loans as they are due.
H.3 Participation in the Edenton ESOP. Each Employee of Edenton on the
---------------------------------
Effective Date who is regularly scheduled to work 1,000 hours or more a year
shall become a Participant in the Edenton ESOP on the Effective Date.
H.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Edenton Loans as directed by the Committee.
Any pledge of Stock in connection with an Edenton Loan must provide
for the release of shares so pledged pursuant to the General Rule in
section 5.8 of the Plan.
(b) Payments of principal and interest on any Edenton Loan during a Plan
Year shall be made by the Trustee only from (1) Edenton Contributions
and earnings from such Edenton Contributions made to the ESOP to meet
the Plan's obligation under an Edenton Loan and (2) the proceeds of a
subsequent Edenton Loan made to repay a prior Edenton Loan. No
payments of principal and interest on an Edenton Loan shall be made
from dividends attributable to Stock originally given as collateral
for an Edenton Loan.
H.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) Stock acquired by the Trustee with the proceeds of an Edenton Loan
shall be allocated in accordance with
H.2
section H.6 to the Edenton ESOP Accounts of Edenton Participants as
the Stock is released from the Edenton ESOP Suspense Account as
provided in section H.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Edenton ESOP Account shall be paid in cash to each
Edenton Participant who is an Employee on the dividend record date for
such dividend in the ratio that his or her Edenton ESOP Account
balance on such dividend record date bears to the total value of all
Edenton ESOP Account balances of all Edenton Participants who are
Employees on such dividend record date. Dividends paid on shares of
Stock that have been allocated to an Edenton Participant's Edenton
ESOP Account shall be paid to such Edenton Participant in cash.
H.6 Allocable Shares.
----------------
(a) Stock acquired with the proceeds of an Edenton Loan and released from
the Edenton ESOP Suspense Account shall be allocated to an Edenton
Participant's Edenton ESOP Account as follows: each Edenton
Participant shall receive a fraction of the total number of shares
released from the Edenton ESOP Suspense Account equal to (1) 0.5 times
the number of Years of Edenton Service of such Edenton Participant
divided by the total number of Years of Edenton Service of all Edenton
Participants plus (2) 0.5 times the Edenton Participant's Compensation
divided by the Compensation of all Edenton Participants. However, an
Edenton Participant shall not be entitled to an allocation under this
section unless the Edenton Participant was an Employee on the date of
the payment under the Edenton Loan that resulted in the release of
shares of Stock from the Edenton ESOP Suspense Account, or the Edenton
Participant terminated service with Edenton or the Company during such
Plan Year due to death, disability,
H.3
or retirement. For purposes of determining an Edenton Participant's
allocation under this section, an Edenton Participant who terminates
during the Plan Year due to death, disability, or retirement shall,
subject to the limitations of Code section 415 and any other
applicable restrictions, be deemed to be employed through the last
day of such Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or equal to an amount that would
cause the Plan to fail the requirements of Code section 401(a)(4) or
410(b). Any amount that cannot be allocated to a Highly Compensated
Employee due to this limitation shall be allocated in the same manner
as provided in subsection (a) to each Edenton Participant whose
allocation under subsection (a) is less than such Participant's
maximum allocation permitted under this subsection.
H.7 Vesting. A Participant shall vest in the Participant's Edenton ESOP
-------
Account in the same manner as provided under Article VIII for a Matching
Contributions Account.
H.4
APPENDIX I
----------
Mutual Savings-Reidsville Employee Stock Ownership Plan
-------------------------------------------------------
I.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Effective Date" shall mean October 29, 1993.
--------------
(b) "Mutual Savings-Reidsville" shall mean Mutual Savings Bank of
-------------------------
Rockingham County, S.S.B.
(c) "Mutual Savings-Reidsville Compensation" shall mean earnings paid to a
--------------------------------------
Mutual Savings-Reidsville Participant for the calendar year 1992,
including salary, wages, and overtime pay.
(d) "Mutual Savings-Reidsville Contribution" shall mean a contribution of
--------------------------------------
cash by Mutual Savings-Reidsville or the Company to the Mutual
Savings-Reidsville ESOP. In addition, contributions may be made by
the forgiveness of a portion or all of a Mutual Savings-Reidsville
Loan.
(e) "Mutual Savings-Reidsville ESOP" shall mean the employee stock
------------------------------
ownership plan established as a portion of the Plan by Article V and
this Appendix I, which is designed to invest primarily in Stock.
(f) "Mutual Savings-Reidsville ESOP Account" shall mean the separate
--------------------------------------
account maintained under the Mutual Savings-Reidsville ESOP for each
Member, which evidences the total value of the Stock allocated to such
Member's Account pursuant to repayment of the Mutual Savings-
Reidsville Loan, including stock dividends paid on shares allocated to
such account, adjusted for distributions and transfers.
I.1
(g) "Mutual Savings-Reidsville Loan" shall mean any Loan under Article V
------------------------------
to the Trustee in connection with the Mutual Savings-Reidsville ESOP.
(h) "Mutual Savings-Reidsville Participant" shall mean a person who
-------------------------------------
becomes a participant in the Mutual Savings-Reidsville ESOP in
accordance with section I.3.
(i) "Year of Mutual Savings-Reidsville Service" shall mean each calendar
-----------------------------------------
year, as of the Effective Date, during which the Employee of Mutual
Savings-Reidsville had completed 1,000 or more Hours of Service for
Mutual Savings-Reidsville.
I.2 Mutual Savings-Reidsville Contributions. In the event that a Mutual
---------------------------------------
Savings-Reidsville Loan is made to the Trustee, Mutual Savings-Reidsville or the
Company shall make Mutual Savings-Reidsville Contributions to the Mutual
Savings-Reidsville ESOP in such amounts and at such times as required to enable
the Trustee to pay principal and/or interest on any such Mutual Savings-
Reidsville Loans as they are due.
I.3 Participation in the Mutual Savings-Reidsville ESOP. Each Employee of
---------------------------------------------------
Mutual Savings-Reidsville on the Effective Date who is regularly scheduled to
work 1,000 hours or more a year shall become a Participant in the Mutual
Savings-Reidsville ESOP on the Effective Date.
I.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Mutual Savings-Reidsville Loans as directed
by the Committee. Any pledge of Stock in connection with a Mutual
Savings-Reidsville Loan must provide for the release of shares so
pledged pursuant to the General Rule in section 5.8 of the Plan.
(b) Payments of principal and interest on any Mutual Savings-Reidsville
Loan during a Plan Year shall be made by the Trustee only from (1)
Mutual Savings-
I.2
Reidsville Contributions and earnings from such Mutual Savings-
Reidsville Contributions made to the ESOP to meet the Plan's
obligation under a Mutual Savings-Reidsville Loan and (2) the
proceeds of a subsequent Mutual Savings-Reidsville Loan made to
repay a prior Mutual Savings-Reidsville Loan. No payments of
principal and interest on a Mutual Savings-Reidsville Loan shall be
made from dividends attributable to Stock originally given as
collateral for a Mutual Savings-Reidsville Loan.
I.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) Stock acquired by the Trustee with the proceeds of a Mutual Savings-
Reidsville Loan shall be allocated in accordance with section I.6 to
the Mutual Savings-Reidsville ESOP Accounts of Mutual Savings-
Reidsville Participants as the Stock is released from the Mutual
Savings-Reidsville ESOP Suspense Account as provided in section I.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Mutual Savings-Reidsville ESOP Account shall be paid in
cash to each Mutual Savings-Reidsville Participant who is an Employee
on the dividend record date for such dividend in the ratio that his or
her Mutual Savings-Reidsville ESOP Account balance on such dividend
record date bears to the total value of all Mutual Savings-Reidsville
ESOP Account balances of all Mutual Savings-Reidsville Participants
who are Employees on such dividend record date. Dividends paid on
shares of Stock that have been allocated to a Mutual Savings-
Reidsville Participant's Mutual Savings-Reidsville ESOP Account shall
be paid to such Mutual Savings-Reidsville Participant in cash.
I.6 Allocable Shares.
----------------
I.3
(a) Stock acquired with the proceeds of a Mutual Savings-Reidsville Loan
and released from the Mutual Savings-Reidsville ESOP Suspense Account
shall be allocated to a Mutual Savings-Reidsville Participant's Mutual
Savings-Reidsville ESOP Account as follows: each Mutual Savings-
Reidsville Participant shall receive a fraction of the total number
of shares released from the Mutual Savings-Reidsville ESOP Suspense
Account equal to (1) 0.5 times the number of Years of Mutual Savings-
Reidsville Service of such Mutual Savings-Reidsville Participant
divided by the total number of Years of Mutual Savings-Reidsville
Service of all Mutual Savings-Reidsville Participants plus (2) 0.5
times the Mutual Savings-Reidsville Participant's Compensation
divided by the Compensation of all Mutual Savings-Reidsville
Participants. However, a Mutual Savings-Reidsville Participant shall
not be entitled to an allocation under this section unless the
Mutual Savings-Reidsville Participant was an Employee on the date of
the payment under the Mutual Savings-Reidsville Loan that resulted
in the release of shares of Stock from the Mutual Savings-Reidsville
ESOP Suspense Account, or the Mutual Savings-Reidsville Participant
terminated service with Mutual Savings-Reidsville or the Company
during such Plan Year due to death, disability, or retirement. For
purposes of determining a Mutual Savings-Reidsville Participant's
allocation under this section, a Mutual Savings-Reidsville
Participant who terminates during the Plan Year due to death,
disability, or retirement shall, subject to the limitations of Code
section 415 and any other applicable restrictions, be deemed to be
employed through the last day of such Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or equal to an amount that would
cause the Plan to fail
I.4
the requirements of Code section 401(a)(4) or 410(b). Any amount
that cannot be allocated to a Highly Compensated Employee due to
this limitation shall be allocated in the same manner as provided in
subsection (a) to each Mutual Savings-Reidsville Participant whose
allocation under subsection (a) is less than such Participant's
maximum allocation permitted under this subsection.
I.7 Vesting. A Participant shall vest in the Participant's Mutual
-------
Savings-Reidsville ESOP Account in the same manner as provided under Article
VIII for a Matching Contributions Account.
I.5
APPENDIX J
----------
Citizens Savings-Mooresville Employee Stock Ownership Plan
----------------------------------------------------------
J.1 Definitions. Any capitalized term not otherwise defined herein
-----------
shall have the same meaning as in the Plan.
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is clearly required by the context.
(a) "Citizens Savings-Mooresville" shall mean Citizens Savings Bank,
----------------------------
S.S.B., Mooresville, N.C.
(b) "Citizens Savings-Mooresville Compensation" shall mean earnings paid
-----------------------------------------
to a Citizens Savings-Mooresville Participant for the calendar year
1992, including salary, wages, and overtime pay.
(c) "Citizens Savings-Mooresville Contribution" shall mean a contribution
-----------------------------------------
of cash by Citizens Savings-Mooresville or the Company to the Citizens
Savings-Mooresville ESOP. In addition, contributions may be made by
the forgiveness of a portion or all of a Citizens Savings-Mooresville
Loan.
(d) "Citizens Savings-Mooresville ESOP" shall mean the employee stock
---------------------------------
ownership plan established as a portion of the Plan by Article V and
this Appendix J, which is designed to invest primarily in Stock.
(e) "Citizens Savings-Mooresville ESOP Account" shall mean the separate
-----------------------------------------
account maintained under the Citizens Savings-Mooresville ESOP for
each Member, which evidences the total value of the Stock allocated to
such Member's Account pursuant to repayment of the Citizens Savings-
Mooresville Loan, including stock dividends paid on shares allocated
to such account, adjusted for distributions and transfers.
(f) "Citizens Savings-Mooresville Loan" shall mean any Loan under Article
---------------------------------
V to the Trustee in connection with the Citizens Savings-Mooresville
ESOP.
J.1
(g) "Citizens Savings-Mooresville Participant" shall mean a person who
----------------------------------------
becomes a participant in the Citizens Savings-Mooresville ESOP in
accordance with section J.3.
(h) "Effective Date" shall mean December 23, 1993.
--------------
(i) "Year of Citizens Savings-Mooresville Service" shall mean each
--------------------------------------------
calendar year, as of the Effective Date, during which the Employee of
Citizens Savings-Mooresville had completed 1,000 or more Hours of
Service for Citizens Savings-Mooresville.
J.2 Citizens Savings-Mooresville Contributions. In the event that a
------------------------------------------
Citizens Savings-Mooresville Loan is made to the Trustee, Citizens Savings-
Mooresville or the Company shall make Citizens Savings-Mooresville Contributions
to the Citizens Savings-Mooresville ESOP in such amounts and at such times as
required to enable the Trustee to pay principal and/or interest on any such
Citizens Savings-Mooresville Loans as they are due.
J.3 Participation in the Citizens Savings-Mooresville ESOP. Each Employee
------------------------------------------------------
of Citizens Savings-Mooresville on the Effective Date who is regularly scheduled
to work 1,000 hours or more a year shall become a Participant in the Citizens
Savings-Mooresville ESOP on the Effective Date.
J.4 Exempt Loan.
-----------
(a) The Trustee shall obtain Citizens Savings-Mooresville Loans as
directed by the Committee. Any pledge of Stock in connection with a
Citizens Savings-Mooresville Loan must provide for the release of
shares so pledged pursuant to the General Rule in section 5.8 of the
Plan.
(b) Payments of principal and interest on any Citizens Savings-Mooresville
Loan during a Plan Year shall be made by the Trustee only from (1)
Citizens Savings-Mooresville Contributions and earnings from such
J.2
Citizens Savings-Mooresville Contributions made to the ESOP to meet
the Plan's obligation under a Citizens Savings-Mooresville Loan and
(2) the proceeds of a subsequent Citizens Savings-Mooresville Loan
made to repay a prior Citizens Savings-Mooresville Loan. No payments
of principal and interest on a Citizens Savings-Mooresville Loan
shall be made from dividends attributable to Stock originally given
as collateral for a Citizens Savings-Mooresville Loan.
J.5 Allocations to Participants' Accounts; Dividends.
------------------------------------------------
(a) Stock acquired by the Trustee with the proceeds of a Citizens Savings-
Mooresville Loan shall be allocated in accordance with section J.6 to
the Citizens Savings-Mooresville ESOP Accounts of Citizens Savings-
Mooresville Participants as the Stock is released from the Citizens
Savings-Mooresville ESOP Suspense Account as provided in section J.4.
(b) Dividends paid on shares of Stock that have not been allocated to a
Participant's Citizens Savings-Mooresville ESOP Account shall be paid
in cash to each Citizens Savings-Mooresville Participant who is an
Employee on the dividend record date for such dividend in the ratio
that his or her Citizens Savings-Mooresville ESOP Account balance on
such dividend record date bears to the total value of all Citizens
Savings-Mooresville ESOP Account balances of all Citizens Savings-
Mooresville Participants who are Employees on such dividend record
date. Dividends paid on shares of Stock that have been allocated to a
Citizens Savings-Mooresville Participant's Citizens Savings-
Mooresville ESOP Account shall be paid to such Citizens Savings-
Mooresville Participant in cash.
J.6 Allocable Shares.
----------------
J.3
(a) Stock acquired with the proceeds of a Citizens Savings-Mooresville
Loan and released from the Citizens Savings-Mooresville ESOP Suspense
Account shall be allocated to a Citizens Savings-Mooresville
Participant's Citizens Savings-Mooresville ESOP Account as follows:
each Citizens Savings-Mooresville Participant shall receive a
fraction of the total number of shares released from the Citizens
Savings-Mooresville ESOP Suspense Account equal to (1) 0.5 times the
number of Years of Citizens Savings-Mooresville Service of such
Citizens Savings-Mooresville Participant divided by the total number
of Years of Citizens Savings-Mooresville Service of all Citizens
Savings-Mooresville Participants plus (2) 0.5 times the Citizens
Savings-Mooresville Participant's Compensation divided by the
Compensation of all Citizens Savings-Mooresville Participants.
However, a Citizens Savings-Mooresville Participant shall not be
entitled to an allocation under this section unless the Citizens
Savings-Mooresville Participant was an Employee on the date of the
payment under the Citizens Savings-Mooresville Loan that resulted in
the release of shares of Stock from the Citizens Savings-Mooresville
ESOP Suspense Account, or the Citizens Savings-Mooresville
Participant terminated service with Citizens Savings-Mooresville or
the Company during such Plan Year due to death, disability, or
retirement. For purposes of determining a Citizens Savings-
Mooresville Participant's allocation under this section, a Citizens
Savings-Mooresville Participant who terminates during the Plan Year
due to death, disability, or retirement shall, subject to the
limitations of Code section 415 and any other applicable
restrictions, be deemed to be employed through the last day of such
Plan Year.
(b) In no event may a Highly Compensated Employee receive an allocation
under subsection (a) greater than or
J.4
equal to an amount that would cause the Plan to fail the
requirements of Code section 401(a)(4) or 410(b). Any amount that
cannot be allocated to a Highly Compensated Employee due to this
limitation shall be allocated in the same manner as provided in
subsection (a) to each Citizens Savings-Mooresville Participant
whose allocation under subsection (a) is less than such
Participant's maximum allocation permitted under this subsection.
J.7 Vesting. A Participant shall vest in the Participant's Citizens
-------
Savings-Mooresville ESOP Account in the same manner as provided under Article
VIII for a Matching Contributions Account.
J.5
APPENDIX A
- ----------
APPENDIX B
- ----------
APPENDIX C
- ----------
APPENDIX D
- ----------
APPENDIX E
- ----------
APPENDIX F
- ----------
APPENDIX G
- ----------
APPENDIX H
- ----------
APPENDIX I
- ----------
APPENDIX J
- ----------
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES OF
BRANCH BANKING & TRUST COMPANY
TRUST AGREEMENT
THIS TRUST AGREEMENT, made and entered into on the 30th day of June, 1982
and restated and amended effective this 1st day of January, 1994, between BRANCH
BANKING & TRUST COMPANY, a corporation organized and existing under the laws of
the State of North Carolina, as sponsor of the Savings and Thrift Plan for the
Employees of Branch Banking & Trust Company (and certain of its subsidiaries),
referred to herein as "Employer" and BRANCH BANKING & TRUST COMPANY in its
fiduciary capacity, referred to herein as the "Trustee."
WITNESSETH THAT:
----------------
WHEREAS, the Employer has amended the Savings and Thrift Plan for the
Employees of Branch Banking & Trust Company (the "Plan") of which this Trust
Agreement is a part, to permit Employees and future Employees to acquire stock
ownership interests in the Employer through the Plan; and
WHEREAS, Article XII provides that this Trust Agreement may be amended by
resolution of the Board of the Employer; and
WHEREAS, the Employer intends that this Trust, as amended, shall constitute
a part of the Plan, qualifying under Sections 401 and 501 of the Internal
Revenue Code of 1986 and complying with the Employee Retirement Income Security
Act of 1974 ("ERISA").
NOW, THEREFORE, the Employer and the Trustee do hereby agree each with the
other to amend and restate the Trust Agreement as follows:
1
ARTICLE I
---------
Name and Effective Date of Trust
--------------------------------
Section 1.1. The name of this Trust is "The Savings and Thrift Plan for
------------
the Employees of Branch Banking & Trust Company Trust."
Section 1.2. The effective date of this Amendment to the Trust Agreement
------------
shall be January 1, 1994.
ARTICLE II
----------
Definitions
-----------
Section 2.1. Definitions in Articles II, and other provisions of the
------------
Savings and Thrift Plan for the Employees of Branch Banking & Trust Company (the
"Plan") shall have the same meaning wherever used in this Trust Agreement,
unless the context clearly indicates otherwise.
Section 2.2. ESOP Stock shall mean any Stock held in the ESOP Account, the
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Albemarle ESOP Account, the Gate City ESOP Account, the Peoples ESOP Account,
the Carolina Savings ESOP Account, the Edenton Savings ESOP Account, the Mutual
Savings-Reidsville ESOP Account, the Citizens Savings-Mooresville ESOP Account,
the ESOP Holding Account, a Suspense Account, or any other ESOP Account
subsequently established under the Plan.
Section 2.3. Qualifying Employer Security shall mean stock or a marketable
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obligation of the Employer, as provided in Section 407 of ERISA and Section 4975
of the Internal Revenue Code of 1986.
Section 2.4. Qualifying Employer Real Property shall mean parcels of
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Employer real property, as provided in Section 407 of ERISA and Section 4975 of
the Internal Revenue Code of 1986.
Section 2.5. Trust shall mean the Trust established pursuant to this Trust
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Agreement.
ARTICLE III
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Establishment and Irrevocability of the Trust
---------------------------------------------
Section 3.1. The Trustee accepts the Trusts created hereby and covenants
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that it will hold
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all property which it may receive hereunder, in trust, for the exclusive
purpose of providing benefits to eligible Employees and their Beneficiaries
and defraying reasonable expenses of administering the Plan upon the terms and
conditions herein stated.
Section 3.2. (a) All contributions made by the Employer shall be
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irrevocable, except as provided in Section 3.2(b) below, and prior to the
satisfaction of all liabilities of the Plan with respect to Participants and
their Beneficiaries, no part of the corpus of the Trust Fund nor any income
therefrom shall revert to the Employer or be used for or diverted to purposes
other than for the exclusive benefit of the Participants or former Participants
and their Beneficiaries.
(b) Notwithstanding the foregoing, contributions made by the Employer
may be returned to the Employer pursuant to Article XI or if:
(i) the contribution was conditioned on the qualification of
the Plan under the Code, the Plan does not so qualify and
the contribution is returned within one year after the
Plan is found not to so qualify;
(ii) the contribution was made due to a mistake of fact; the
contribution is returned within one year of the mistaken
payment of the contribution and the return satisfies the
requirements of paragraph (v) below;
(iii) the contribution was conditioned on its deductibility, the
deduction is disallowed, the contribution is returned
within one year of the disallowance of the deduction, and
the return satisfies the requirements of paragraph (v)
below;
(iv) in the case of a contribution which would otherwise be an
excess contribution, as defined by section 4972(c) of the
Internal Revenue Code of 1986, a correcting distribution,
as permitted by Section 4972(b), shall be made to the
Company in order to avoid the excise tax otherwise levied
on excess contributions;
(v) the return of a Plan contribution to the Employer
satisfies the
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requirements of this paragraph if the amount so returned
(a) does not exceed the amount which would have been
contributed had there been no mistake of fact or had
there been no error in determining the deduction, as the
case may be and (b) does not include the earnings
attributable to such contributions. However, a return
will not satisfy the requirements of this paragraph
unless the amount of the contribution so returned is
reduced by any losses attributable to the contribution.
(c) All title in and to the assets comprising the Trust Fund shall at
all times be vested exclusively in the Trustee, and no other person
claiming through or under any such person shall have any right to or
interest in any part of the Trust Fund, except the right to receive
benefit payments as determined in accordance with the Plan.
Section 3.3. Except insofar as applicable law may otherwise require, and
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as permitted with respect to ESOP stock, no assets of the Trust Fund shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind and any
attempt to alienate, sell, transfer, assign, pledge, attach, charge or otherwise
encumber any such amount, whether presently or hereafter payable, shall be void.
The Trust Fund shall in no manner be liable for or subject to the debts or
liabilities of any person entitled to any amount payable out of the Trust Fund.
ARTICLE IV
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General Duties of the Employer and the Trustee
----------------------------------------------
Section 4.1. General Duties of Employer. The Employer shall provide the
------------ --------------------------
Trustee with a certified copy of the Plan and with copies of all amendments
promptly upon their adoption and shall from time to time certify to the Trustee
the names and specimen signatures of the members of the Committee appointed in
accordance with the Plan, who have authority to control and manage the operation
and administration of the Plan. The Employer shall make its contribution, which
contribution shall be in cash or stock, as required by the Plan, and, where
allowed by the Plan, may
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be in other property acceptable to the Trustee. The Employer shall keep
accurate books and records with respect to its employees for purposes of
administering the Plan and Trust.
Section 4.2. Funding Policy. The Trustee shall invest and reinvest the
------------ --------------
Trust Fund and to the extent provided in the Plan as directed by the Committee
in accordance with the Plan. From time to time the Committee shall communicate
to the Trustee in writing the current funding policy and method that have been
established to carry out objectives of the Plan.
Section 4.3. General Duties of Trustee. (a) The Trustee shall hold all
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property received by it hereunder, which, together with the income and gains
therefrom and additions thereto, shall constitute the Trust Fund. The Trustee
shall manage, invest and reinvest the Trust Fund, collect the income thereof,
and make payments therefrom, all as hereinafter provided. The Trustee shall be
responsible only for the property actually received by it hereunder. It shall
have no duty or authority to compute any amount to be paid to it by the Employer
or to bring any action or proceeding to enforce the collection from the Employer
of any contribution to the Trust Fund.
(b) The Trustee shall discharge its duties solely in the interest of the
Participants and Beneficiaries:
(i) for the exclusive purpose of providing benefits to
Participants and Beneficiaries and defraying reasonable
expenses of administering the Plan;
(ii) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters could use in the
conduct of an enterprise of a like character and with like
aims;
(iii) by diversifying the investments of the Trust (other than ESOP
Stock), except as provided in the Plan, so as to minimize the
risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
(iv) in accordance with the documents and instruments governing the
trust insofar as such documents and instruments are consistent
with the provisions of the Act.
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ARTICLE V
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Investment and Administrative Powers of the Trustee
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Section 5.1. Investment Powers of the Trustee. With respect to any and
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all sums received by the Trustee from the Employer and Affiliates, the Trustee
is authorized and empowered, in its sound judgment (except as otherwise directed
by the Committee with respect to ESOP Stock or the investment of Accounts
elected by Members pursuant to the Plan):
(a) To hold uninvested from time to time, without liability for interest
thereon, such sum of money as is necessary for the cash requirements of the
Plan; and to keep such portion of the Trust Fund in cash or cash balances as the
Trustee may from time to time deem to be in the best interests of the Trust
Fund.
(b) To invest and reinvest the principal and income of the Trust Fund,
without distinction between principal and income, in such securities as, but not
limited to, Stock, common stocks, preferred stocks, bonds, bills, notes,
commercial papers, debentures, mortgages, equipment trust certificates,
investment trust certificates, mutual funds, and also in other investments,
whether real, personal or mixed property, including investments in deposits
which bear a reasonable rate of interest in the Trustee's banking department.
(c) To invest and reinvest all or any specified portion of the Trust Fund
collectively with funds of other pension and profit sharing trusts exempt from
tax under Section 501(a) of the Internal Revenue Code of 1986 by reason of
qualifying under Section 401(a) of the Code (as such Sections may be renumbered,
amended or reenacted) by investment collectively or commingled in a trust fund
which has been or may hereafter be established and maintained by the Trustee,
the instrument or instruments establishing such trust fund or funds, as amended
from time to time, being made part of this Trust Agreement so long as any
portion of the Trust Fund shall be invested through the medium thereof.
Section 5.2. Administrative Powers of the Trustee. The Trustee shall be
------------ ------------------------------------
authorized and empowered, in its discretion (except to the extent the Plan
provides that the Trustee shall follow the direction of the Committee), to
exercise any and all of the following rights, powers and
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privileges with respect to any cash, securities or other properties held by
the Trustee in trust hereunder:
(a) To sell, exchange, transfer, mortgage, pledge, lease or otherwise
dispose of or grant options with respect to any Trust assets at public or
private sale upon such terms and conditions as the Trustee deems appropriate
(except ESOP Stock, which shall be sold, exchanged, transferred, mortgaged,
pledged, leased or otherwise disposed of or granted options with respect to,
only as directed by the Committee in accordance with the Plan). Such sales may
be public or private, for cash or credit, or partly for cash and partly for
credit, and may be made without notice or advertisement of any kind.
(b) As directed by the Committee in accordance with the Plan, to borrow
from any lender (including a party in interest as defined in Section 3(14) of
ERISA) to finance the acquisition of shares of Stock, giving its note as Trustee
with such reasonable interest and security for the loan as may be appropriate or
necessary; provided, however, that any such borrowing shall comply with the
provisions of the Plan.
(c) To exercise all voting rights pertaining to any securities (except
ESOP Stock, which shall be voted by the Trustee as directed by the Committee in
accordance with the Plan and provided that, in accordance with the Plan, each
Participant shall be entitled to exercise all voting rights pertaining to all
other shares of Stock allocated to his Account) or otherwise consent to or
request any action on the part of the issuer of any such securities, and to give
general or special proxies or powers of attorney with respect to such securities
with or without power of substitution.
(d) To consent to or participate in amalgamations, reorganizations,
recapitalizations, consolidations, mergers, liquidations, or similar
transactions with respect to any securities (except ESOP Stock, with respect to
which the Trustee may consent to or participate in amalgamations, mergers,
liquidations, or similar transactions only as directed by the Committee in
accordance with the Plan), and to accept and to hold any other securities issued
in connection therewith.
(e) To exercise any subscription rights or conversion privileges with
respect to any securities held in the Trust Fund.
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(f) To collect and receive any and all money and other property of
whatsoever kind or nature due or owing or belonging to the Trust Fund and to
give full discharge and acquittance thereof and to extend the time of payment of
any obligation at any time owing to the Trust Fund, as long as such extension is
for a reasonable period, and continues reasonable interest.
(g) To cause any securities or other property to be registered in, or
transferred to, the individual name of the Trustee or in the name of one or more
of its nominees, or one or more nominees of any system for the centralized
handling of securities, or it may retain them unregistered and in form
permitting transferability by delivery, but the books and records to the Trust
shall at all times show that all such investments are a part of the Trust Fund.
(h) To organize under the laws of any State a corporation for the purpose
of acquiring and holding title to any property which it is authorized to acquire
under this Trust Agreement and to exercise with respect thereto any or all of
the powers set forth in this Trust Agreement.
(i) To manage, operate, repair, improve, develop, preserve, mortgage or
lease for any period any real property or any oil, mineral or gas properties,
royalties, interest or rights held by it directly or through any corporation,
either alone or by joining with others, using other Trust assets for any of such
purposes; to modify, extend, renew, waive or otherwise adjust any or all of the
provisions of any such mortgage or lease; and to make provision for amortization
of the investment in or depreciation of the value of such property.
(j) To settle, compromise, or submit to arbitration any claims, debts or
damages due or owing to or from the Trust; to commence or defend suits or legal
proceedings whenever, in its judgment, any interest of the Trust requires it;
and to represent the Trust in all suits or legal proceedings in any court of law
or equity or before any other body or tribunal, insofar as such suits or
proceedings relate to any property forming part of the Trust Fund or to the
administration of the Trust Fund.
(k) To borrow money from others for the purposes of the Trust, but the
Trustee shall not be authorized to borrow any money from its banking department
or from the Employer or any Affiliate.
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(1) Generally to do all acts, whether or not expressly authorized, which
the Trustee deems necessary or desirable, but acting at all times according to
the principles of prudence herein expressed in Section 4.3(b) and, to the extent
provided in the Plan, in accordance with the direction of the Committee.
Section 5.3. Trustee's Authority. Persons dealing with the Trustee shall
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be under no obligation to see to the proper applications of any money paid or
property delivered to the Trustee or to inquire into the Trustee's authority as
to any transaction, provided, however, that this provision shall not relieve any
plan fiduciary dealing with the Trustee from fulfilling his fiduciary duty as
set forth in the Plan and in accordance with ERISA.
ARTICLE VI
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Powers and Duties of the Trustee in the Disbursement of the Trust Fund
----------------------------------------------------------------------
Except for reasonable administrative expenses, and other reasonable fees
and charges incurred in connection with the proper administration of the Trust
Fund, as are otherwise provided for herein, the Trustee shall make such
distributions in cash or property from the Trust Fund only to such person or
persons, including a paying agent or agents designated by the Committee or the
Committee as paying agent, at such time or times, and in such amounts as are
directed in writing by the Committee. Any cash or property so paid or delivered
to any paying agent shall be held in trust until disbursed in accordance with
the Plan.
ARTICLE VII
-----------
Taxes, Expenses and Compensation of the Trustee
-----------------------------------------------
All reasonable investment and administrative expenses (including brokerage
costs, federal and state transfer taxes, shipping expense and charges of
correspondent banks or the Trustee) and any income or other taxes of any kind
whatsoever which may be properly levied or assessed under existing or future
laws upon, or in respect of the Trust Fund or the Trust hereby created shall be
paid by the Trustee out of the Trust Fund, and, until paid, shall constitute a
charge upon the said
9
Trust Fund. The reasonable expenses of any expert or advisor employed by the
Committee from time to time in connection with the administration of the Plan
may be paid from the Trust Fund pursuant to directions from said Committee. If
the Employer pays any expense that constitutes a charge upon the Trust Fund
pursuant to this or any other provision of this Trust Agreement, the Trustee
may reimburse the Employer for such payment from the Trust Fund.
ARTICLE VIII
------------
Accounts of the Trustee
-----------------------
The Trustee shall keep accurate and detailed accounts with respect to the
assets constituting the Trust Fund, including but not limited to, records with
respect to contributions to the Trust Fund, disbursements from the Trust Fund,
the purchase or sale of assets, the cost and fair market value of assets
retained, and the income gain or loss derived periodically from the investments
held in the Trust Fund. The Trustee shall file an annual report with the
Committee within three months following the close of each Plan Year, and at such
other intervals as are requested by the Committee with respect to the
transactions effected by the Trustee during such Plan Year or other period.
ARTICLE IX
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Resignation, Removal or Substitution of Trustee
-----------------------------------------------
Section 9.1. The Trustee may be removed by the Board at any time by giving
------------
reasonable notice in writing of such action to the Trustee. The Trustee may
resign at any time by giving reasonable notice in writing of such action to the
Employer. Within sixty (60) days after such removal or resignation of the
Trustee, the Trustee shall file with the Employer a written account, to the date
of such removal or resignation, in form similar to, and containing information
similar to that required to be set forth in, the annual report provided for
heretofore in Article VIII.
Section 9.2. Upon removal or resignation of the Trustee, the Board shall
------------
designate a successor trustee to act hereunder, which shall have the same powers
and duties as those conferred upon the Trustee. Upon such designation, and upon
the written acceptance of the successor
10
trustee, the Trustee shall assign, transfer and pay over to such successor
trustee the assets then constituting the Trust Fund, provided, however, that
the Trustee is authorized to reserve such sum of money (and for that purpose
to liquidate such property as may be necessary to produce such sum) as may
seem advisable for payment of all proper charges against the Trust Fund
including expenses in connection with such resignation or removal, and any
balance of such reserve remaining after the payment of such charges shall be
paid over to the successor trustee.
Section 9.3. In the event of the removal or resignation of the Trustee,
------------
the Trustee shall deliver to the successor Trustee all records which shall be
required to enable the successor to perform its duties and responsibilities
hereunder.
ARTICLE X
---------
For the Protection of the Trustee
---------------------------------
Section 10.1. Any action of the Board pursuant to any of the provisions of
-------------
this Trust Agreement may be evidenced by a resolution of the Board certified
over the signature of the Secretary or an Assistant Secretary of the Employer
and under its corporate seal, and the Trustee shall be protected to the extent
the law permits in acting in accordance with any such resolution so certified.
Any action of the Employer pursuant to any of the provisions of this Trust
Agreement may be evidenced by a letter or other communication signed by any
officer of the Employer.
Section 10.2. All requests, directions, orders, requisitions and
-------------
instructions of the Committee to the Trustee shall be in writing. They shall be
signed by any member of the Committee authorized by the majority to sign. The
Trustee shall act in accordance with, and shall be protected to the extent the
law permits in acting in accordance with and relying upon, such requests,
directions, orders, requisitions, instructions and any other communications,
unless upon their face such communications constitute prohibited transactions as
defined by Section 4975(b) of the Internal Revenue Code of 1986, or if such
transactions would not be in the best interest of the Participants and
Beneficiaries.
11
Section 10.3. The Employer shall furnish the Trustee from time to time
-------------
with certified copies of the resolutions of its Board evidencing the appointment
and termination of office of any members of the Committee and the appointment of
successors thereto. The Trustee shall be entitled to assume that the membership
of the Committee is as so stated in any such certified copy of resolutions of
the Board delivered to it, and the Trustee shall not be charged with notice of
any change in the membership of a Committee until it shall have received a
certified copy of a resolution of the Board evidencing such change. If at any
time the full number of Committee members provided for in the Plan has not been
designated by the Employer, the member or members acting at such time shall be
deemed to be the Committee, or if at any time there is no member of the
Committee, the Board shall be deemed to be the Committee.
Section 10.4. The Trustee may from time to time consult with counsel, and
-------------
shall be protected to the extent the law permits in acting upon such advice of
counsel as respects legal questions. The Trustee may also from time to time
employ agents, accountants, actuaries, and consultants acceptable to the
Employer and delegate to them such ministerial duties associated with the
administration of the Plan or the management of the Trust as it sees fit. In
the event that the Trustee does delegate such ministerial duties, it shall
periodically review the performance of the person(s) to whom these duties have
been delegated. The Trustee may pay out of the Trust Fund any reasonable
compensation agreed upon by the Employer for any person(s) employed pursuant to
this Section.
Section 10.5. The Trustee may make any distribution or payment required to
-------------
be made by it hereunder by mailing its check for the specified amount, or
delivering the specified property, to the person to whom such distribution or
payment is to be made, at such address as may have been last furnished to the
Trustee, or if no such address shall have been so furnished, to such person in
care of the Employer or the Committee, or (if so directed by the Committee) by
crediting the account of such person or by transferring funds to such person's
account by bank wire or transfer.
12
ARTICLE XI
----------
Duration of the Trust - Right to Terminate
------------------------------------------
Section 11.1. This Trust shall continue for such time as may be necessary
-------------
to accomplish the purpose for which it was created but, subject to Title IV of
ERISA, may be terminated at any time by the Employer by action of its Board.
Notice of such termination shall be given to the Trustee by an instrument in
writing executed by the Employer and acknowledged in the same form as this Trust
Agreement, together with a certified copy of the resolution of the Board
authorizing such termination. The Employer shall send a copy of such notice to
each member of the Committee.
Section 11.2. Upon termination of the Trust, provided that the Trustee has
-------------
not received instructions to the contrary from the Committee, the Trustee shall
with reasonable promptness liquidate the Trust. In affecting such liquidation,
the Trustee shall pay the reasonable expenses of the Trust, including Trust,
actuarial and other expenses involved in the termination, repay any ESOP loan
and distribute the balance thereof according to written directions from the
Committee.
Section 11.3. If the Plan is terminated with respect to a group of
-------------
persons, the portion of the Trust Fund attributable to such group shall be held
and disposed of in accordance with the written instructions of the Committee,
which shall be given in conformity with the Plan, ERISA and, if required under
ERISA, the certification of an actuary.
Section 11.4. The Employer shall not have any beneficial interest in the
-------------
Trust Fund or any part thereof and no part of the Trust Fund shall revert to or
be paid to the Employer, either directly or indirectly, except in accordance
with Section 3.2 hereof or in accordance with Section 4.4 of the Plan providing
for reduction of the Employer's contribution by forfeitures, and except that
such amounts, if any, remaining after the satisfaction of all liabilities under
the Plan and which are due to actuarial surplus shall be returned.
Section 11.5. From and after the date of the direction to terminate and
-------------
until the final distribution of the Trust Fund, the Trustee shall continue to
have all the powers and duties provided under this Trust Agreement which are
necessary or expedient for the orderly liquidation and distribution of the Trust
Fund.
13
ARTICLE XII
-----------
Right to Amend
--------------
The Employer may at any time, by resolution of its Board, alter, modify, or
amend, in whole or in part, any or all of the provisions of this Trust
Agreement, provided that no such alteration, modification or amendment may
affect the rights, duties or responsibilities of the Trustee without its consent
and, provided further, that no such alteration, modification or amendment may
permit any part of the corpus or income of the Trust Fund to be used for or
diverted to purposes other than for the exclusive benefit of the Participants
and Beneficiaries at any time prior to the satisfaction of all liabilities under
the Plan with respect to such persons.
ARTICLE XIII
------------
Miscellaneous
-------------
Section 13.1. Any corporation into which the Trustee may be merged, or
-------------
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Trustee may be a party, or any corporation
succeeding to the business of the Trustee or to which substantially all of the
assets of the Trustee may be transferred, shall be the successor of the Trustee
hereunder without any further action on the part of the parties hereto, with
like effect as if such successor trustee had originally been named trustee
herein.
Section 13.2. This Trust Agreement and the Trust hereby created shall be
-------------
deemed to be a qualified trust and shall in all respects be construed and
regulated by the laws of the State of North Carolina, except where such laws are
superseded by the Internal Revenue Code of 1986 or by ERISA.
Section 13.3. The Trustee hereby accepts this Trust and agrees to hold,
-------------
subject to all the terms and conditions of this Trust Agreement, all the
property now or hereafter constituting the Trust Fund.
14
IN WITNESS WHEREOF, Branch Banking & Trust Company as plan sponsor has caused
this Trust Agreement to be executed in its corporate name by its COO, and its
corporate seal to be hereunto affixed and to be attested by its Secretary, and
Branch Banking & Trust Company in its fiduciary capacity, as Trustee, has caused
this Trust Agreement to be executed in its corporate name by one of its Trust
Officers, all on the ________ day of April, 1994.
BRANCH BANKING & TRUST COMPANY
By:
-----------------------------------
Chief Operating Officer
Attest
- ----------------------------------
Secretary
BRANCH BANKING & TRUST COMPANY, AS TRUSTEE
By:
-----------------------------------
Senior Vice President
Attest
- ----------------------------------
Trust Officer
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