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Exhibit 10(g)
PARKVALE FINANCIAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
AS AMENDED JANUARY 1, 1997
(Amendment Number One)
ADOPTED MARCH 16, 1994
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS 19
2.2 DETERMINATION OF TOP HEAVY STATUS 19
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 22
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY 22
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES 23
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR 23
2.7 RECORDS AND REPORTS 24
2.8 APPOINTMENT OF ADVISERS 24
2.9 INFORMATION FROM EMPLOYER 24
2.10 PAYMENT OF EXPENSES 25
2.11 MAJORITY ACTIONS 25
2.12 CLAIMS PROCEDURE 25
2.13 CLAIMS REVIEW PROCEDURE 25
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 26
3.2 APPLICATION FOR PARTICIPATION 26
3.3 EFFECTIVE DATE OF PARTICIPATION 26
3.4 DETERMINATION OF ELIGIBILITY 26
3.5 TERMINATION OF ELIGIBILITY 27
3.6 MISSION OF ELIGIBLE EMPLOYEE 27
3.7 INCLUSION OF INELIGIBLE EMPLOYEE 27
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3.8 ELECTION NOT TO PARTICIPATE 27
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION 28
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION 28
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS 28
4.4 MAXIMUM ANNUAL ADDITIONS 35
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 38
4.6 TRANSFERS FROM QUALIFIED PLANS 39
4.7 DIRECTED INVESTMENT ACCOUNT 41
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY 41
5.2 APPLICATION OF CASH 41
5.3 TRANSACTIONS INVOLVING COMPANY STOCK 41
5.4 LOANS TO THE TRUST 43
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND 44
6.2 METHOD OF VALUATION 44
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT 45
7.2 DETERMINATION OF BENEFITS UPON DEATH 45
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 44
7.4 DETERMINATION OF BENEFITS UPON TERMINATION 44
7.5 DISTRIBUTION OF BENEFITS 50
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED 54
7.7 DISTRIBUTION FOR MINOR BENEFICIARY 55
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 55
7.9 RIGHT OF FIRST REFUSALS 55
7.10 STOCK CERTIFICATE LEGEND 57
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7.11 PUT OPTION 57
7.12 NONTERMINABLE PROTECTIONS AND RIGHTS 57
7.13 ADVANCE DISTRIBUTION FOR HARDSHIP 59
7.14 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION 59
ARTICLE VIII
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 60
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 60
8.3 OTHER POWERS OF THE TRUSTEE 61
8.4 VOTING COMPANY STOCK 64
8.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 66
8.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 66
8.7 ANNUAL REPORT OF THE TRUSTEE 66
8.8 AUDIT 67
8.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 67
8.10 TRANSFER OF INTEREST 68
8.11 DIRECT ROLLOVER 69
ARTICLE IX
AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT 69
9.2 TERMINATION 70
9.3 MERGER OR CONSOLIDATION 71
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS 71
10.2 ALIENATION 71
10.3 CONSTRUCTION OF PLAN 72
10.4 GENDER AND NUMBER 72
10.5 LEGAL ACTION 72
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS 72
10.7 BONDING 72
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 73
10.9 INSURER'S PROTECTIVE CLAUSE 73
10.10 RECEIPT AND RELEASE FOR PAYMENTS 73
10.11 ACTION BY THE EMPLOYER 73
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10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 73
10.13 HEADINGS 74
10.14 APPROVAL BY INTERNAL REVENUE SERVICE 74
10.15 UNIFORMITY 75
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL 75
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS 75
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS 76
11.3 DESIGNATION OF AGENT 76
11.4 EMPLOYEE TRANSFERS 76
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION 76
11.6 AMENDMENT 77
11.7 DISCONTINUANCE OF PARTICIPATION 77
11.8 ADMINISTRATOR'S AUTHORITY 77
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PARKVALE FINANCIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
THIS AGREEMENT, hereby made and entered into this 16th day of March, 1994, and
amended and restated effective January 1, 1997 by motion on December 16, 1997 by
and between Parkvale Financial Corporation (herein referred to as the
"Employer") and Robert D. Pfischner, George W. Newland and Paul A. Mooney
(herein referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established an Employee Stock
Ownership Plan and Trust effective July 16, 1987 (hereinafter called the
"Effective Date") , known as Parkvale Savings Association Employee Stock
Ownership Plan and which Plan shall hereinafter be known as Parkvale Financial
Corporation Employee Stock Ownership Plan (herein referred to as the "Plan") in
recognition of the contribution made to its successful operation by its
employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended; and
WHEREAS, contributions to the Plan will be made by the Employer
and such contributions made to the trust will be invested primarily in the
capital stock of the Employer;
NOW, THEREFORE, effective January 1, 1994, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions of the
Plan pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414 (c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
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1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 2.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
7.2 and 7.5.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.8 "Company Stock" means common stock issued by the Employer (or by a
corporation which is a member of the controlled group of corporations of which
the Employer is a member) which is readily tradeable on an established
securities market. If there is no common stock which meets the foregoing
requirement, the term "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the same controlled group) having a
combination of voting power and dividend rights equal to or in excess of: (A)
that class of common stock of the Employer (or of any other such corporation)
having the greatest voting power, and (B) that class of common stock of the
Employer (or of any other such corporation) having the greatest dividend rights.
Noncallable preferred stock shall be deemed to be "Company Stock" if such stock
is convertible at any time into stock which constitutes "Company Stock"
hereunder and if such conversion is at a conversion price which (as of the date
of the acquisition by the Trust) is reasonable. For purposes of the preceding
sentence, pursuant to Regulations, preferred stock shall be treated as
noncallable if after the call there will be a reasonable opportunity for a
conversion which meets the requirements of the preceding sentence.
1.9 "Company Stock Account" means the account of a Participant which
is credited with the shares of Company Stock purchased and paid for by the Trust
Fund or contributed to the Trust Fund.
1.10 "Compensation" means the total earnings (including bonuses and
overtime compensation) that are paid to or accrued for an Employee for a Plan
Year by an Employer while a Participant, including amounts which are contributed
by the Employer pursuant to a salary reduction agreement or plan, including the
Employer's 401(k) profit sharing plan, which are not includible in the gross
income of the Participant, but excluding both matching and discretionary profit
sharing contributions made by the Employer to the Employer's 401(k) profit
sharing plan. In no event shall Covered Compensation be deemed to exceed
$150,000 for any Participant; provided, that said amount shall be adjusted for
increases in the cost of living in accordance with regulations issued under the
Internal Revenue Code.
For purposes of calculating the limitations upon Annual Additions
described in Section 4.4, the term "Compensation" shall mean a Participant's
earned income, wages, salaries and fees for professional services and other
amounts received for personal services actually
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rendered in the course of employment with an Employer maintaining the Plan
(including, but not limited to, compensation for services on the basis of a
percentage of profits, tips and bonuses), including amounts which are
contributed by the Employer pursuant to a salary reduction agreement or plan and
which are not includible in the gross income of the Participant, but excluding
the following:
(i) Matching and discretionary profit sharing contributions made by the
Employer's 401 (k) profit sharing plan;
(ii) Amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by the Employer either becomes
freely transferable or is no longer subject to a substantial risk or
forfeiture;
(iii) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option;
(iv) Commissions paid to salesmen, including commissions on insurance
premiums and commissions based on loan originations; and
(v) Other amounts which received special tax benefits, or contributions
made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Section
403(b) of the Code (whether or not the amounts are actually excludable
from the gross income of the Employee).
For purposes of this Section, the determination of Compensation shall be made
by:
(a) including amounts which are contributed by the Employer pursuant to
a salary reduction agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or 457, and
Employee contributions described in Code Section 414 (h) (2) that are treated as
Employer contributions.
For a Participant's initial year of participation, Compensation shall be
recognized for the entire Plan Year.
Compensation in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and in such manner as permitted under Code
Section 415(d), except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year the Compensation limit
shall be an amount equal to the Compensation limit for the calendar year in
which the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12). In applying this
limitation, the family group of a Highly Compensated Participant who is subject
to the Family Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of the ten
(10)
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Highly Compensated Employees paid the greatest "415 Compensation" during the
year, shall be treated as a single Participant, except that for this purpose
Family Members shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before the close of
the year. If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then the limitation shall be prorated among the affected
Family Members in proportion to each such Family Member's Compensation prior to
the application of this limitation, or the limitation shall be adjusted in
accordance with any other method permitted by Regulation.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, f or Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
If, as a result of such rules, the maximum "annual addition" limit of
Section 4.4 (a) would be exceeded for one or more of the affected Family
Members, the prorated Compensation of all affected Family Members shall be
adjusted to avoid or reduce any excess. The prorated Compensation of any
affected Family Member whose allocation would exceed the limit shall be adjusted
downward to the level needed to provide an allocation equal to such limit. The
prorated Compensation of affected Family Members not affected by such limit
shall then be adjusted upward on a pro rata basis not to exceed each such
affected Family Member's Compensation as determined prior to application of the
Family Member rule. The resulting allocation shall not exceed such individual's
maximum "annual addition" limit. If, after these adjustments, an "excess amount"
still results, such "excess amount" shall be disposed of in the manner described
in Section 4.5(a) pro rata among all affected Family Members.
For purposes of this Section, if the Plan is a plan described in Code
Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
$200,000 limitation applies
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separately with respect to the Compensation of any Participant from each
Employer maintaining the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then, for Plan
Years prior to the Plan Year which includes the adoption date of this amendment
and restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
For Plan Years beginning prior to January 1, 1989, the $200,000
limit (without regard to Family Member aggregation) shall apply only for Top
Heavy Plan Years and shall not be adjusted.
1.11 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group or individual)
issued pursuant to the terms of the Plan.
1.12 "Current Obligations" means Trust obligations arising from
extension of credit to the Trust and payable in cash within (1) year from the
date an Employer contribution is due. With respect to the estates of decedents
who died prior to July 13, 1989, Trust obligations shall include the liability
for payment of taxes imposed by Code Section 2001, which liability is incurred
pursuant to Code Section 2210(b).
1.13 "Early Retirement Date." This Plan does not provide for a
retirement date prior to Normal Retirement Date.
1.14 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.15 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.16 "Employer" means Parkvale Financial Corporation and any
Participating Employer (as defined in Section 11.1) which shall adopt this Plan;
any successor which shall maintain this Plan; and any predecessor which has
maintained this Plan. The Employer is a corporation with principal offices in
the Commonwealth of Pennsylvania.
1.17 "ESOP" means an employee stock ownership plan that meets the
requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.
1.18 "Exempt Loan" means a loan made to the Plan by a disqualified
person or a loan to
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the Plan which is guaranteed by a disqualified person and which satisfies the
requirements of Section 2550.408b-3 of the Department of Labor Regulations,
Section 54.4975-7(b) of the Treasury Regulations and Section 5.4 hereof.
1.19 "Family Member" means, with respect to an affected Participant,
such Participant's spouse and such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January lst of each year and ending the following December 31st.
1.22 "Forfeiture" means that portion of a Participant's Account that
is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of
a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to Section 7.4(g) (2). In addition, the term Forfeiture shall
also include amounts deemed to be Forfeitures pursuant to any other provision of
this Plan.
1.23 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401 (a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 Compensation" must be determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
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If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "415 Compensation" means compensation determined
pursuant to the Plan then in effect.
1.25 "Highly Compensated Employee" means an Employee described in
Code Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the "determination yearn
and is in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section 1.30(c).
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $50,000 and were in the Top Paid Group of
Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the Regulations under
Code Section 416) and received "415 Compensation" during the "look-back year"
from the Employer greater than 50 percent of the limit in effect under Code
Section 415(b)(1)(A) for any such Plan Year. The number of officers shall be
limited to the lesser of (i) 50 employees; or (ii) the greater of 3 employees or
10 percent of all employees. For the purpose of determining the number of
officers, Employees described in Section 1.50(a), (b), (c) and (d) shall be
excluded, but such Employees shall still be considered for the purpose of
identifying the particular Employees who are officers. If the Employer does not
have at least one officer whose annual '415 Compensation, is in excess of 50
percent of the Code Section 415 (b) (1) (A) limit, then the highest paid officer
of the Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination year" and are
also described in (b), (c) or (d) above when these paragraphs are modified to
substitute "determination year" for "look-back year".
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h), 403(b) or 457, and Employee contributions described in Code Section 414
(h) (2) that are treated as Employer contributions. Additionally, the dollar
threshold amounts specified in (b) and (c) above shall be adjusted at such time
and in such manner as is provided in
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Regulations. In the case of such an adjustment, the dollar limits which shall be
applied are those for the calendar year in which the "determination year" or
"look-back year" begins.
Effective for years after 1996, a "Highly Compensated Employee"
means an Employee described in Code Section 414(q) and the Regulations
thereunder, and generally means an Employee who performed services for the
Employer during the "determination year" and is in one or more of the following
groups:
(a) Employees who at anytime during the "determination year" or
"look-back year" were "five percent owners" as defined in Section 1.30(c).
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $80,000 and were in the Top Paid Group of
Employees during the "look-back year."
The "determination year" shall be the Plan year for which testing
is being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
For purposes of this Section, for years after 1996, the determination
of "415 Compensation" shall be made by including amounts which axe contributed
by the Employer pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer contributions.
Additionally, the dollar threshold amount specified in (b) above shall be
adjusted at such time and in the same manner required under Code Section 415(d),
except that the base period shall be the calendar quarter ending September 30,
1996.
In determining who is a Highly Compensated Employee, Employees who
are non-resident aliens and who received no earned income (within the meaning
of Code Section 9 11 (d) (2) ) from the Employer constituting United States
source income within the meaning of Code Section 861 (a) (3) shall not be
treated as Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such
Leased Employees are covered by a plan described in Code Section 414 (n) (5) and
are not covered in any qualified plan maintained by the Employer. The exclusion
of Leased Employees for this purpose shall be applied on a uniform and
consistent basis for all of the Employer's retirement plans. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees without regard
to whether they performed services during the 'determination year.,
1.26 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
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preceding the separation year) or any year after the Employee attains age 55 (or
the last year ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five percent owner".
For purposes of this Section, 'determination year, "415 Compensation" and "five
percent owner" shall be determined in accordance with Section 1.25. Highly
Compensated Former Employees shall be treated as Highly Compensated Employees.
The method set forth in this Section for determining who is a 'Highly
Compensated Former Employee" shall be applied on a uniform and consistent basis
for all purposes for which the Code Section 414(q) definition is applicable.
1.27 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.28 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. These hours will 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.
The same Hours of Service shall not be credited both under (1) or (2), as the
case may be, and under (3).
Notwithstanding the, above, (i) no more than 501 Hours of Service
are required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made
by or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for purposes of accrued
benefits, a 1-Year Break in Service, and employment commencement date (or
reemployment commencement date). In addition, Hours of
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Service will be credited for employment with other Affiliated Employers. The
provisions of Department of Labor regulations 2530.200b-2 (b) and (c) are
incorporated herein by reference.
1.29 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.30 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee if
he, at any time during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in one of the
following categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation in effect
under Code Section 415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of Code Section 318)
both more than one-half percent interest and the largest interests in the
Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than five percent (5%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner" means
any person who owns (or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the outstanding stock of the Employer
or stock possessing more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections 414 (b), (c),
(m) and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated under Code Sections
414 (b), (c), (m) and (o) shall be taken into account.
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For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h), 403(b) or 457, and Employee contributions described in Code Section 414
(h) (2) that are treated as Employer contributions.
1.31 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.
1.32 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(a)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient.
Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient. employer. A Leased
Employee shall not be considered an Employee of the recipient:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at least
10% of compensation, as defined in Code Section 415(c)(3), but including amounts
which are contributed by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the Participant under Code
Sections 125, 402 (e) (3), 402 (h), 403 (b) or 457, and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the,
recipient's non-highly compensated work force.
1.33 "Non-Highly Compensated Participant" means any Participant who is
not a Highly Compensated Employee.
1.34 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.35 "Normal Retirement Age" means the Participant's 65th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.36 "Normal Retirement Date" means the first day of the month
coinciding with or next
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following the Participant's Normal Retirement Age.
1.37 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence, and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement of a child
with the Employee in connection with the adoption of such child, or any absence
for the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence,"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence,"
shall not exceed 501.
1.38 "Other Investments Account" means the account of a Participant
which is credited with his share of the net gain (or loss) of the Plan,
Forfeitures and Employer contributions in other than Company Stock and which is
debited with payments made to pay for Company Stock.
1.39 "Participant" means any Eligible Employee who participates in the
Plan as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.40 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's contributions.
1.41 "Plan" means this instrument, including all amendments thereto.
1.42 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January lst of each year and ending the following December
31st.
1.43 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary
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of the Treasury or his delegate, and as amended from time to time.
1.44 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.45 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date or Late Retirement
Date (see Section 7.1).
1.46 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.47 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.48 "Top Heavy Plan" means a plan described in Section 2.2 (a).
1.49 "Top Heavy Plan Year" means a Plan Year during which the Plan is
a Top Heavy Plan.
1.50 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked according
to the amount of "415 Compensation" (determined for this purpose in accordance
with Section 1.25) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414 (n) (5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section 861
(a) (3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17-1/2 hours per week;
(c) Employees who normally work less than six (6) months during
a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
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particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.51 "Total and Permanent Disability" means a physical or
mental condition of a Participant resulting from bodily injury, disease, or
mental disorder which renders him incapable of continuing his usual and
customary employment with the Employer. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.
1.52 "Trustee" means the person or entity named as trustee
herein or in any separate trust forming a part of this Plan, and any successors.
1.53 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.54 "Unallocated Company Stock Suspense Account" means an
account containing Company Stock acquired with the proceeds of an Exempt Loan
and which has not been released from such account and allocated to the
Participants' Company Stock Accounts.
1.55 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.56 "Year of Service" means the computation period of twelve
(12) consecutive months, herein set forth, during which an Employee has at least
1000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service. The participation computation period beginning
after a 1-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of the date on which
the Employee first performed an Hour of Service. An Employee who is credited
with the required Hours of Service in both the initial computation period (or
the computation period beginning after a 1-Year Break in Service) and the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service, shall be credited with two (2) Years of Service
for purposes of eligibility to participate.
For vesting purposes, the computation period shall be the Plan
Year, including periods prior to the Effective Date of the Plan. For all other
purposes, the computation period shall be the Plan Year.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with
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Department of Labor regulation 2530.203-2(c). However, in determining whether an
Employee has completed a Year of Service for benefit accrual purposes in the
short Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of full months in the short Plan
Year.
Years of Service with Parkvale Savings Association shall be
recognized.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416 (b) pursuant to Section 7.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.3 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued Benefits
of Key Employees and (2) the sum of the Aggregate Accounts of Key Employees
under this Plan and all plans of an Aggregation Group, exceeds sixty percent
(60%) of the Present Value of Accrued Benefits and the Aggregate Accounts of all
Key and Non-Key Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate Account balance
shall not be taken into account for purposes of determining whether this Plan is
a Top Heavy or Super Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group) . In addition, if a Participant or
Former Participant has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on the Determination
Date, any accrued benefit for such Participant or Former Participant shall not
be taken into account for the 1 6 purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of Key
Employees under this Plan and all plans of an Aggregation Group, exceeds ninety
percent (90%) of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
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(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any contributions
actually made after the valuation date but due on or before the Determination
Date, except for the first Plan Year when such adjustment shall also reflect the
amount of any contributions made after the Determination Date that are allocated
as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year that includes
the Determination Date or within the four (4) preceding Plan Years. However, in
the case of distributions made after the valuation date and prior to the
Determination Date, such distributions are not included as distributions for top
heavy purposes to the extent that such distributions are already included in the
Participant's Aggregate Account balance as of the valuation date.
Notwithstanding anything herein to the contrary, all distributions, including
distributions made prior to January 1, 1984, and distributions under a
terminated plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further, distributions
from the Plan (including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated as a
distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary employee
contributions shall not be considered to be a part of the Participant's
Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan maintained
by one employer to a plan maintained by another employer), if this Plan provides
the rollovers or plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan transfers as part of the
Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover or plan-to-plan transfer, it
shall not be counted as a distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the Participant's
Aggregate Account balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers are to
be treated as
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the same employer in (5) and (6) above, all employers aggregated under Code
Section 414 (b), (c), (m) and (o) are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key Employee
is a participant in the Plan Year containing the Determination Date or any of
the four preceding Plan Years, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated. Such group shall
be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group will be
considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will be considered a Top Heavy
Plan if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan not required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401 (a)(4) and 410. Such group shall be known as a
Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that is part of the
Required Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in the Permissive Aggregation
Group will be considered a Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on the
Determination Date.
(e) "Determination Date," means (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a defined benefit
plan, the Present Value of Accrued Benefit for a Participant other than a Key
Employee, shall be as determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall be determined as of
the most recent valuation date that
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falls within or ends with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations thereunder for the
first and second plan years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group, exceeds sixty percent (60%) of a
similar sum determined for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary for the proper
administration of the Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their Beneficiaries in accordance with
the terms of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and method," i.e.,
it shall determine whether the Plan has a short run need for liquidity (e.g., to
pay benefits) or whether liquidity is a long run goal and investment growth (and
stability of same) is a more current need, or shall appoint a qualified person
to do so. The Employer or its delegate shall communicate such needs and goals to
the Trustee, who shall coordinate such Plan needs with its investment policy.
The communication of such a "funding policy and method" shall not, however,
constitute a directive to the Trustee as to investment of the Trust Funds. Such
"funding policy and method" shall be consistent with the objectives of this Plan
and with the requirements of Title I of the Act.
(c) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated by it
under the provisions of this Plan or pursuant to procedures established
hereunder. This requirement may be satisfied by formal periodic review by the
Employer or by a qualified person specifically designated by the Employer,
through day-to-day conduct and evaluation, or through other appropriate ways.
(d) The Employer will furnish Plan Fiduciaries and Participants with
notices and information statements when voting rights must be exercised pursuant
to Section 8.4.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or
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be removed by the Employer by delivery of written notice of removal, to take
effect at a date specified therein, or upon delivery to the Administrator if no
date is specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this position.
If the Employer does not appoint an Administrator, the Employer will function as
the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer
the Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401 (a) , and shall comply with the terms of the Act and
all regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder and to
receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
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(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms hereof;
(f) to determine the size and type of any Contract to be purchased
from any insurer, and to designate the insurer from which such Contract shall be
purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to the
Plan;
(h) to consult with the Employer and the Trustee regarding the short
and long-term liquidity needs of the Plan in order that the Trustee can exercise
any investment discretion in a manner designed to accomplish specific
objectives;
(i) to establish and communicate to Participants a procedure, which
includes at least three (3) investment options pursuant to Regulations, for
allowing each Participant to direct the Trustee as to the investment of his
Company Stock Account pursuant to Section 4.7;
(j) to establish and communicate to Participants a procedure and
method to insure that each Participant will vote Company Stock allocated to such
Participant's Company Stock Account pursuant to Section 8.4;
(k) to enter into a written agreement with regard to the payment of
federal estate tax pursuant to Code Section 2210(b);
(l) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection with
the administration of this Plan.
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2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require; and
the Administrator shall advise the Trustee of such of the foregoing facts as may
be pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2. 5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
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choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and has
attained age 21 shall be eligible to participate hereunder as of the date he has
satisfied such requirements. However, any Employee who was a Participant in the
Plan prior to the effective date of this amendment and restatement shall
continue to participate in the Plan. The Employer shall give each prospective
Eligible Employee written notice of his eligibility to participate in the Plan
prior to the close of the Plan Year in which he first becomes an Eligible
Employee.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible Employee
shall make application to the Employer for participation in the Plan and agree
to the terms hereof. Upon the acceptance of any benefits under this Plan, such
Employee shall automatically be deemed to have made application and shall be
bound by the terms and conditions of the Plan and all amendments hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
first day of the Plan Year in which such Employee met the eligibility
requirements of Section 3.1.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such
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determination shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his Participant's Account shall
be forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
(b) In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate but has not incurred a
1-Year Break in Service, such Employee will participate immediately upon
returning to, an eligible class of Employees. If such Participant incurs a
1-Year Break in Service, eligibility will be determined under the break in
service rules of the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture for the Plan Year in
which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
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4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For each Plan Year, the Employer shall contribute to the Plan such
amount as shall be determined by the Employer.
(b) Notwithstanding the foregoing, however, the Employer's
contributions for any Plan Year shall not exceed the maximum amount allowable as
a deduction to the Employer under the provisions of Code Section 404. All
contributions by the Employer shall be made in cash, Company Stock or in such
property as is acceptable to the Trustee.
(c) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it exceeds
the amount which is deductible under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
Employer contributions will be paid in cash, Company Stock or other
property as the Employer may from time to time determine. Company Stock and
other property will be valued at their then fair market value. The Employer
shall pay to the Trustee its contribution to the Plan for each Plan Year within
the time prescribed by law, including extensions of time, for the filing of the
Employer's federal income tax return for the Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date all amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after the
date of receipt by the Administrator of such information, the Administrator
shall allocate such contribution to each Participant's Account in the same
proportion that each such Participant's Compensation for the year bears to the
total Compensation of all Participants for such year.
Only Participants who have completed a Year of Service during the Plan
Year and are actively employed on the last day of the Plan Year shall be
eligible to share in the discretionary contribution for the year.
If the Plan Year is less than twelve months, then the Hours of Service
requirement for completing a Year of Service shall be prorated based on the
number of full calendar months in the short Plan Year. If the Plan is terminated
or a Change in Control as defined in Section 7.4(e) occurs, the date of
termination or Change in Control, as the case may be, shall be treated as the
last day of the Plan Year for purposes of this section.
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Shares received by the Plan from a defined benefit plan maintained by
the Employer ("Reversion Shares") shall be released from the Suspense Account in
a manner such that the number of shares released in a given year, when added to
the number of leveraged shares released from the Suspense Account in that same
year, will equal 12.5% of the total number of Reversion Shares and other shares
held in the Plan, either in allocated or unallocated accounts. The number of
Reversion shares released in a year shall not be less than the number of shares
needed to ensure that the total amount of Reversion Shares released to date is
not less than the total amount of Reversion Shares that would have been released
if they were released ratably over the eight year period beginning with 1987.
The Administrator shall keep adequate records to enable Participants to
determine the cost basis of the Company Stock allocated to their Accounts.
(c) The Company Stock Account of each Participant shall be credited as
of each Anniversary Date with Forfeitures of Company Stock and his allocable
share of Company Stock (including fractional shares) purchased and paid f or by
the Plan or contributed in kind by the Employer. Stock dividends on Company
Stock held in his Company Stock Account shall be credited to his Company Stock
Account when paid. Cash dividends on Company Stock held in his Company Stock
Account shall, in the sole discretion of the Administrator, either be credited
to his Other Investments Account when paid or be used to repay an Exempt Loan;
provided, however, that when cash dividends are used to repay an Exempt Loan,
Company Stock shall be released from the Unallocated Company Stock Suspense
Account and allocated to the Participant's Company Stock Account pursuant to
Section 4.3(f) and, provided further, that Company Stock allocated to the
Participant's Company Stock Account shall have a fair market value not less than
the amount of cash dividends which would have been allocated to such
Participant's Other Investments Account for the year.
Company Stock acquired by the Plan with the proceeds of an Exempt Loan
shall only be allocated to each Participant's Company Stock Account upon release
from the Unallocated Company Stock Suspense Account as provided in Section 4.3
(f) herein. Company Stock acquired with the proceeds of an Exempt Loan shall be
an asset of the Trust Fund and maintained in the Unallocated Company Stock
Suspense Account.
(d) As of each Anniversary Date or other valuation date, before the
current valuation period allocation of Employer contributions and Forfeitures,
any earnings or losses (net appreciation or net depreciation) of the Trust Fund
shall be allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts (other than each Participant's Company
Stock Account) bear to the total of all Participants, and Former Participants'
nonsegregated accounts (other than Participants' Company Stock Accounts) as of
such date.
Earnings or losses do not include the interest paid under any
installment contract for the purchase of Company Stock by the Trust Fund or on
any loan used by the Trust Fund to purchase Company Stock, nor does it include
income received by the Trust Fund with respect to Company Stock acquired with
the proceeds of an Exempt Loan; all income received by the Trust Fund from
Company Stock acquired with the proceeds of an Exempt Loan may, at the
discretion of the Administrator, be used to repay such loan.
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Participants' transfers from other qualified plans deposited in the
general Trust Fund shall share in any earnings and losses (net appreciation or
net depreciation) of the Trust Fund in the same manner provided above. Each
segregated account maintained on behalf of a Participant shall be credited or
charged with its separate earnings and losses.
(e) Participants' accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends received on
insurance contracts.
(f) All Company Stock acquired by the Plan with the proceeds of an
Exempt Loan must be added to and maintained in the Unallocated Company Stock
Suspense Account. Such Company Stock shall be released and withdrawn from that
account as if all Company Stock in that account were encumbered. For each Plan
Year during the duration of the loan, the number of shares of Company Stock
released shall equal the number of encumbered shares held immediately before
release for the current Plan Year multiplied by a fraction, the numerator of
which is the amount of principal and interest paid for the Plan Year and the
denominator of which is the sum of the numerator plus the principal and interest
to be paid for all future Plan Years. As of each Anniversary Date, the Plan must
consistently allocate to each Participant's Account, in the same manner as
Employer discretionary contributions pursuant to Section 4.1(a) are allocated,
non-monetary units (shares and fractional shares of Company Stock) representing
each Participant's interest in Company Stock withdrawn from the Unallocated
Company Stock Suspense Account. However, Company Stock released from the
Unallocated Company Stock Suspense Account with cash dividends pursuant to
Section 4.3(c) shall be allocated to each Participant's Company Stock Account in
the same proportion that each such Participant's number of shares of Company
Stock sharing in such cash dividends bears to the total number of shares of all
Participants' Company Stock sharing in such cash dividends. Income earned with
respect to Company Stock in the Unallocated Company Stock Suspense Account shall
be used, at the discretion of the Administrator, to repay the Exempt Loan used
to purchase such Company Stock. Company Stock released from the Unallocated
Company Stock Suspense Account with such income, and any income which is not so
used, and any income which is not so used, must be allocated as income of the
Plan.
(9) Notwithstanding the foregoing, any assets held in a suspense
account (including, without limitation, Company Stock and cash) which are
released from the collateral requirements of an Exempt Loan by reason of the
payment of principal or interest on one or more of such Exempt Loans, which
payment is attributable to the sale of any asset held by the Plan, shall, upon
release, be immediately credited as earnings to the Accounts of Participants who
were Employees on the first day of the applicable Plan Year in proportion to the
respective opening account balances of such accounts as of the first day of the
applicable Plan Year. In addition, if any Company Stock or other asset held in a
suspense account to secure one or more of such Exempt Loans is sold in
connection with a change in control (as defined in Section 7.4(e) of the Plan)
of the Employer, then the proceeds from such sale will be used and distributed
as follows:
(1) if the sales proceeds consist solely of cash, the cash proceeds
shall first be used to repay any existing Exempt Loan(s) secured by such Company
Stock or other assets, and
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thereafter any remaining cash proceeds shall, as of the effective date of the
change in control, be credited as earnings to the Accounts of Participants who
were Employees on the first day of the applicable Plan Year in proportion to the
respective opening account balances of such accounts as of the first day of the
Plan Year containing the effective date of such change in control;
(2) if the sales proceeds consist solely of stock of the company
acquiring control or of an affiliate of such company ("Acquiror Stock"), then
the Acquiror Stock shall be sold by the ESOP in an amount sufficient to generate
sufficient cash to repay any existing Exempt Loan(s) secured by such Company
Stock or other assets, and thereafter any remaining shares of Acquiror Stock
shall, as of the effective date of the change in control, be credited as
earnings to the Accounts of Participants who were Employees on the first day of
the applicable Plan Year in proportion to the respective opening account
balances of such accounts as of the first day of the Plan Year containing the
effective date of such change in control;
(3) if the sales proceeds consist of a combination of cash and Acquiror
Stock, then the cash proceeds shall first be used to repay any existing Exempt
Loan(s) secured by such Company Stock or other assets and then the Acquiror
Stock shall be sold by the ESOP in an amount sufficient to generate sufficient
cash to repay any remaining balance of such Exempt Loan(s), and thereafter any
remaining cash proceeds and/or shares of Acquiror Stock shall, as of the
effective date of the change in control, be credited as earnings to the Accounts
of Participants who were Employees on the first day of the applicable Plan Year
in proportion to the respective opening account balances of such accounts as of
the first day of the Plan Year containing the effective date of such change in
control; and
(4) if the sales proceeds consist of consideration other than cash or
Acquiror Stock, or any combination of other consideration, cash and Acquiror
Stock, then (i) the other consideration shall first be sold to the extent
practicable to repay any existing Exempt Loan(s) secured by such Company Stock
or other assets, (ii) the cash proceeds shall be used second to repay any
remaining balance of such Exempt Loan(s), and (iii) lastly, the Acquiror Stock
shall be sold by the ESOP in an amount sufficient to generate sufficient cash to
repay any remaining balance of such Exempt Loan(s), and thereafter any remaining
other consideration, cash proceeds and/or shares of Acquiror Stock shall, as of
the effective date of the change in control, be credited as earnings to the
Accounts of Participants who were Employees on the first day of the applicable
Plan Year in proportion to the respective opening account balances of such
accounts as of the first day of the Plan Year containing the effective date of
such change in control.
(h) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 7.4(g)(2). The remaining Forfeitures, if any, shall be
allocated among the Participants' Accounts of Participants otherwise eligible to
share in the allocation of discretionary contributions in the same proportion
that each such Participant's Compensation for the year bears to the total
Compensation of all such Participants for the year.
Provided, however, that in the event the allocation of Forfeitures
provided herein shall
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cause the "annual addition" (as defined in Section 4.4) to any Participant's
Account to exceed the amount allowable by the Code, the excess shall be
reallocated in accordance with Section 4.5.
(i) For any Top Heavy Plan Year, Non-Key Employees not otherwise
eligible to share in the allocation of contributions and Forfeitures as provided
above shall receive the minimum allocation provided for in Section 4.3(j) if
eligible pursuant to the provisions of Section 4.3(l).
(j) Participants who are not actively employed on the last day of the
Plan Year due to Retirement (Normal or Late), Total and Permanent Disability or
death shall share in the allocation of contributions and Forfeitures for that
Plan Year only if otherwise eligible in accordance with this Section.
(k) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's Account
of each Non-Key Employee shall be equal to at least three percent (3%) of such
Non-Key Employee's 11415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Non-Key Employee in any defined
contribution plan included with this plan in a Required Aggregation Group).
However, if (1) the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Account of each Key Employee for such Top Heavy
Plan Year is less than three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be included in an Aggregation
Group to enable a defined benefit plan to meet the requirements of Code Section
401 (a) (4) or 410, the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Account of each Non-Key Employee shall be equal
to the largest percentage allocated to the Participant's Account of any Key
Employee.
However, no such minimum allocation shall be required in this Plan for
any Non-Key Employee who participates in another defined contribution plan
subject to Code Section 412 providing such benefits included with this Plan in a
Required Aggregation Group.
(1) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Account of any Key Employee shall be
equal to the ratio of the sum of the Employer's contributions and Forfeitures
allocated on behalf of such Key Employee divided by the "415 Compensation" for
such Key Employee.
(m) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Account of all Non-Key Employees
who are Participants and who are employed by the Employer on the last day of the
Plan Year, including Non-Key Employees who have (1) failed to complete a Year of
Service; and (2) declined to make mandatory contributions (if required) to the
Plan.
(n) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000. Such amount shall be adjusted at the same time and in the
same manner as permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall be
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effective for the Plan Year beginning with or within such calendar year and the
first adjustment to the $200,000 limitation shall be effective on January 1,
1990. For any short Plan Year the "415 Compensation" limit shall be an amount
equal to the "415 Compensation" limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12). However, for Plan Years beginning
prior to January 1, 1989, the $200,000 limit shall apply only for Top Heavy Plan
Years and shall not be adjusted.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OKRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
(o) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable to pre-break
service; and
(2) one account representing his status in the Plan attributable to
post-break service.
(p) Notwithstanding anything to the contrary, for Plan Years
beginning after December 31, 1989, if this is a Plan that would otherwise fail
to meet the requirements of Code Sections 401 (a) (26) , 410 (b) (1) or 410 (b)
(2) (A) (i) and the Regulations thereunder because Employer contributions would
not be allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be expanded to include the
minimum number of Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above.
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The specific Participants who shall become eligible under the terms of this
paragraph shall be those who are actively employed on the last day of the Plan
Year and, when compared to similarly situated Participants, have completed the
greatest number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the applicable test is
still not satisfied, then the group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan Year shall be further
expanded to include the minimum number of Participants who are not actively
employed on the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible to share
shall be those Participants, when compared to similarly situated Participants,
who have completed the greatest number of Hours of Service in the Plan Year
before terminating employment.
(3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have previously been
allocated to Participants may not be reallocated to satisfy these requirements.
In such event, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they been included in
the allocations, even if it exceeds the amount which would be deductible under
Code Section 404. Any adjustment to the allocations pursuant to this paragraph
shall be considered a retroactive amendment adopted by the last day of the Plan
Year.
(4) Notwithstanding the foregoing, for any Top Heavy Plan Year
beginning after December 31, 1992, if the plan would fail to satisfy Code
Section 410(b) if the coverage tests were applied by treating those Participants
whose only allocation would otherwise be provided under the top heavy formula as
if they were not currently benefiting under the Plan, then, for purposes of this
Section 4.3(o), such Participants shall be treated as not benefiting and shall
therefore be eligible to be included in the expanded class of Participants who
will share in the allocation provided under the Plan's non top heavy formula.
(q) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred arrangements of
the Employer or an Affiliated Employer, all such cash or deferred arrangements
shall be treated as one cash or deferred arrangement for the purpose of
determining the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan Years beginning after December 31, 1988, no such
aggregation of cash or deferred arrangements is required.
4.4 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall equal the
lesser of: (1) $30,000 (or, if greater, one-fourth of the dollar limitation in
effect under Code Section 415 (b) (1) (A) ) or (2) twenty-five percent (25%) of
the Participant's "415 Compensation" for such "limitation year." For any short
"limitation year," the dollar limitation in (1) above shall be reduced by a
fraction, the numerator of which is the number of full months in the short
"limitation yearn and the denominator of which is twelve (12).
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(b) For "limitation years" beginning prior to July 13, 1989, the dollar
amount provided for in paragraph (a)(1) above shall be increased by the lesser
of the dollar amount determined under paragraph (a) (1) above or the amount of
Company Stock contributed, or purchased with cash contributed. The dollar amount
shall be increased provided no more than one-third of the Employer's
contributions for the year are allocated to Highly Compensated Participants. In
applying this limitation, the family group of a Highly Compensated Participant
who is subject to the Family Member aggregation rules of Code Section 414 (q)
(6) shall be determined pursuant to Regulations.
(c) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts for any
"limitation year" of (1) Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to an individual
medical account as defined in Code Section 415(l)(2) which is part of a pension
or annuity plan maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e))
maintained by the Employer. For these purposes, it annual additions" of a
defined contribution plan shall not include the allocation of the excess amounts
remaining in the Unallocated Company Stock Suspense Account subsequent to a sale
of stock from such fund in accordance with a transaction described in Section
4.3(g) of the Plan. The "415 Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any contribution for medical
benefits (within the meaning of Code Section 419A(0(2)) after separation from
service which is otherwise treated as an "annual addition", or (2) any amount
otherwise treated as an "annual additional under Code Section 415(t)(1).
(d) For purposes of applying the limitations of Code Section 415, the
following are not "annual additions": (1) the transfer of funds from one
qualified plan to another and (2) provided no more than one-third of the
Employer contributions for the year are allocated to Highly Compensated
Participants, Forfeitures of Company Stock purchased with the proceeds of an
Exempt Loan and Employer contributions applied to the payment of interest on an
Exempt Loan. In addition, the following are not Employee contributions for the
purposes of Section 4.4(c)(2): (1) rollover contributions (as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of
loans made to a Participant from the Plan; (3) repayments of distributions
received by an Employee pursuant to Code Section 411 (a) (7) (B) (cash-outs);
(4) repayments of distributions received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income under Code Section
408(k)(6).
(e) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Plan Year.
(f) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code Section
415 (d) pursuant to the Regulations.
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The adjusted limitation is effective as of January lst of each calendar year and
is applicable to "limitation years" ending with or within that calendar year.
(g) For the purpose of this Section, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(h) For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code Section 1563(a) or Code Section 414 (b) and (c) as modified by
Code Section 415 (h) ) , is a member of an affiliated service group (as defined
by Code Section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all Employees of
such Employers shall be considered to be employed by a single Employer.
(i) For the purpose of this Section, if this Plan is a Code Section 413
(c) plan, all Employers of a Participant who maintain this Plan will be
considered to be a single Employer.
(j) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different Anniversary
Dates, the maximum "annual additions" under this Plan shall equal the maximum
"annual additions for the "limitation year" minus any "annual additions"
previously credited to such Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined contribution plan
subject to Code Section 412 and a defined contribution plan not subject to Code
Section 412 maintained by the Employer which have the same Anniversary Date,
"annual additions" will be credited to the Participant's accounts under the
defined contribution plan subject to Code Section 412 prior to crediting "annual
additions" to the Participant's accounts under the defined contribution plan not
subject to Code Section 412.
(3) If a Participant participates in more than one defined contribution
plan not subject to Code Section 412 maintained by the Employer which have the
same Anniversary Date, the limitation on the maximum "annual additions" shall be
applied to this Plan after application to the other such defined contribution
plans. The "annual additions" to this Plan shall be the last to be reduced.
(k) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans maintained by
the Employer, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any "limitation year" may not exceed 1.0.
(1) The defined benefit plan fraction for any "limitation year" is a
fraction, the numerator of which is the sum of the Participant's projected
annual benefits under all the defined
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benefit plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the "limitation year" under Code Sections 415(b) and (d) or 140
percent of the highest average compensation, including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first "limitation year" beginning after December 31, 1986,
in one or more defined benefit plans maintained by the Employer which were in
existence on may 6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation year" beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
Code Section 415 for all "limitation years" beginning before January 1, 1987.
(m) The defined contribution plan fraction for any "limitation year" is
a fraction, the numerator of which is the sum of the annual additions to the
Participant's Account under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior "limitation
years" (including the annual additions attributable to the Participant's
nondeductible Employee contributions to all defined benefit plans, whether or
not terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code Section 419(e),
and individual medical accounts, as defined in Code Section 415(l) (2),
maintained by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior limitation years" of
service with the Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation determined under
Code Sections 415 (b) and (d) in effect under Code Section 415 (c) (1) (A) or 35
percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first "limitation year" beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence on
may 6, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last "limitation year" beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first "limitation year" beginning on or after January 1, 1987. The annual
addition for any "limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.
(n) Notwithstanding the foregoing, for any "limitation year,, in which
the Plan is a Top Heavy Plan, 100 percent shall be substituted for 125 percent
in Sections 4.4(l) and 4.4(m) unless
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the extra minimum allocation is being provided pursuant to Section 4.3. However,
for any "limitation year" in which the Plan is a Super Top Heavy Plan, 100
percent shall be substituted for 125 percent in any event.
(o) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall exceed 1.0 in any "limitation year" for any
Participant in this Plan, the Administrator shall limit, to the extent
necessary, the "annual additions" to such Participant's accounts for such
"limitation year." If, after limiting the "annual additions" to such
Participant's accounts for the "limitation year, " the sum of the defined
benefit plan fraction and the defined contribution plan fraction still exceed
1.0, the Administrator shall then adjust the numerator of the defined benefit
plan fraction so that the sum of both fractions shall not exceed 1.0 in any
"limitation year" for such Participant.
(p) Notwithstanding anything contained in this Section to the contrary,
the limitations, adjustments and other requirements prescribed in this Section
shall at all times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically incorporated herein
by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402 (g) (3) ) that may be made with respect to any Participant under the limits
of Section 4.4 or other facts and circumstances to which Regulation 1.415-6(b)
(6) shall be applicable, the "annual additions" under this Plan would cause the
maximum "annual additions" to be exceeded for any Participant, the Administrator
shall (1) distribute any elective deferrals (within the meaning of Code Section
402 (g) (3) ) or return any voluntary Employee contributions credited for the
"limitation year" to the extent that the return would reduce the "excess amount"
in the Participant's accounts (2) hold any "excess amount" remaining after the
return of any elective deferrals or voluntary Employee contributions in a
"Section 415 suspense account" (3) allocate and reallocate the "Section 415
suspense account" in the next "limitation year" (and succeeding "limitation
years" if necessary) to all Participants in the Plan before any Employer or
Employee contributions which would constitute "annual additions" are made to the
Plan for such limitation year" (4) reduce Employer contributions to the Plan for
such "limitation year" by the amount of the "Section 415 suspense account"
allocated and reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any Participant
for a "limitation year" shall mean the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the Plan
without regard to the limitations of Code Section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.4.
(c) For purposes of this Section, "Section 415 suspense account" shall
mean an unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during
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the "limitation year." The "Section 415 suspense account" shall not share in any
earnings or losses of the Trust Fund.
(d) The Plan may not distribute "excess amounts", other than voluntary
Employee contributions, to Participants or Former Participants.
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be transferred
from other qualified plans by Employees, provided that the trust from which such
funds are transferred permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be set up in a
separate account herein referred to as a "Participant's Rollover Account". Such
account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as defined in
Regulation 1. 401 (k) -1 (g) (3) ) , including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market value
of the Participant's Rollover Account shall be used to provide additional
benefits to the Participant or his Beneficiary. Any distributions of amounts
held in a Participant's Rollover Account shall be made in a manner which is
consistent with and satisfies the provisions of Section 7.5, including, but not
limited to, all notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder. Furthermore, such amounts shall be considered as
part of a Participant's benefit in determining whether an involuntary cash-out
of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short term debt
security acceptable to the Trustee until such time as the allocations pursuant
to this Plan have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan" shall mean
any tax qualified plan under Code Section 401(a). The term "amounts transferred
from other qualified plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) distributions
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from another qualified plan which are eligible rollover distributions and which
are either transferred by the Employee to this Plan within sixty (60) days
following his receipt thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit individual retirement
account provided that the conduit individual retirement account has no assets
other than assets which (A) were previously distributed to the Employee by
another qualified plan as a lump-sum distribution (B) were eligible for tax-free
rollover to a qualified plan and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the Employee from a
conduit individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan within sixty (60) days of
his receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies, the
Administrator may require the Employee to establish that the amounts to be
transferred to this Plan meet the requirements of this Section and may also
require the Employee to provide an opinion of counsel satisfactory to the
Employer that the amounts to be transferred meet the requirements of this
Section.
(h) This Plan shall not accept any direct or indirect transfers (as
that term is defined and interpreted under Code Section 401(a)(11) and the
Regulations thereunder) from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit sharing plan which
would otherwise have provided for a life annuity form of payment to the
Participant.
(i) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having the
effect of such a transfer) shall only be permitted if it will not result in the
elimination or reduction of any "Section 411 (d) (6) protected benefit" as
described in Section 9.1.
4.7 DIRECTED INVESTMENT ACCOUNT
(a) Each "Qualified Participant" may elect within ninety (90) days
after the close of each Plan Year during the "Qualified Election Period" to
direct the Trustee in writing as to the investment of 25 percent of the total
number of shares of Company Stock acquired by or contributed to the Plan that
have ever been allocated to such "Qualified Participant's" Company Stock Account
(reduced by the number of shares of Company Stock previously invested pursuant
to a prior election). In the case of the election year in which the Participant
can make his last election, the preceding sentence shall be applied by
substituting "50 percent" for "25 percent". If the "Qualified Participant"
elects to direct the Trustee as to the investment of his Company Stock Account,
such direction shall be effective no later than 180 days after the close of the
Plan Year to which such direction applies.
Notwithstanding the above, if the fair market value (determined
pursuant to Section 6.1 at the Plan valuation date immediately preceding the
first day on which a Qualified Participant" is eligible to make an election) of
Company Stock acquired by or contributed to the Plan and
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allocated to a "Qualified Participant's" Company Stock Account is $500 or less,
then such Company Stock shall not be subject to this paragraph. For purposes of
determining whether the fair market value exceeds $500, Company Stock held in
accounts of all employee stock ownership plans (as defined in Code Section
4975(e)(7)) and tax credit employee stock ownership plans (as defined in Code
Section 409(a)) maintained by the Employer or any Affiliated Employer shall be
considered as held by the Plan.
(b) For the purposes of this Section the following definitions shall
apply:
(1) "Qualified Participant" means any Participant or Former
Participant who has completed ten (10) Plan Years of Service as a Participant
and has attained age 55.
(2) "Qualified Election Period" means the six (6) Plan Year
period beginning with the later of (i) the first Plan Year in which the
Participant first became a "Qualified Participant", or (ii) the first Plan year
beginning after December 31, 1986.
(c) A separate Directed Investment Account shall be established
for each Participant who has directed an investment. Transfers between the
Participant's regular account and his Directed Investment Account shall be
charged and credited as the case may be to each account. The Directed Investment
Account shall not share in Trust Fund earnings, but it shall be charged or
credited as appropriate with the net earnings, gains, losses and expenses as
well as any appreciation or depreciation in market value during each Plan Year
attributable to such account.
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY
(a) The Plan is designed to invest primarily in Company Stock.
(b) With due regard to subparagraph (a) above, the Administrator
may also direct the Trustee to invest funds under the Plan in other property
described in the Trust or in life insurance policies to the extent permitted by
subparagraph (c) below, or the Trustee may hold such funds in cash or cash
equivalents.
(c) With due regard to subparagraph (a) above, the Administrator
may also direct the Trustee to invest funds under the Plan in insurance policies
on the life of any "keyman" Employee. The proceeds of a "keyman" insurance
policy may not be used for the repayment of any indebtedness owed by the Plan
which is secured by Company Stock. In the event any "keyman" insurance is
purchased by the Trustee, the premiums paid thereon during any Plan Year, net of
any policy dividends and increases in cash surrender values, shall be treated as
the cost of Plan investment and any death benefit or cash surrender value
received shall be treated as proceeds from an investment of the Plan.
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(d) The Plan may not obligate itself to acquire company Stock from
a particular holder thereof at an indefinite time determined upon the happening
of an event such as the death of the holder.
(e) The Plan may not obligate itself to acquire company Stock
under a put option binding upon the Plan. However, at the time a put option is
exercised, the Plan may be given an option to assume the rights and obligations
of the Employer under a put option binding upon the Employer.
(f) All purchases of Company Stock shall be made at a price which,
in the judgment of the Administrator, does not exceed the fair market value
thereof. All sales of Company Stock shall be made at a price which, in the
judgment of the Administrator, is not less than the fair market value thereof.
The valuation rules set forth in Article VI shall be applicable.
5.2 APPLICATION OF CASH
Employer contributions in cash and other cash received by the Trust
Fund shall first be applied to pay any Current Obligations of the Trust Fund.
5.3 TRANSACTIONS INVOLVING COMPANY STOCK
(a) No portion of the Trust Fund attributable to (or allocable in
lieu of) Company Stock acquired by the Plan in a sale to which Code Section 1042
or, for estates of decedents who died prior to December 20, 1989, Code Section
2057 applies may accrue or be allocated directly or indirectly under any plan
maintained by the Employer meeting the requirements of Code Section 401(a):
(1) during the "Nonallocation Period", for the benefit of (i)
any taxpayer who makes an election under Code Section 1042 (a) with respect to
Company Stock or any decedent if the executor of the estate of the decedent
makes a qualified sale to which Code Section 2057 applies, (ii) any individual
who is related to the taxpayer or the decedent (within the meaning of Code
Section 267(b)), or
(2) for the benefit of any other person who owns (after
application of Code Section 318(a) applied without regard to the employee trust
exception in Code Section 318 (a) (2) (B) (i) ) more than 25 percent of (i) any
class of outstanding stock of the Employer or Affiliated Employer which issued
such Company Stock, or (ii) the total value of any class of outstanding stock of
the Employer or Affiliated Employer.
(b) Except, however, subparagraph (a) (1) (ii) above shall not
apply to lineal descendants of the taxpayer, provided that the aggregate amount
allocated to the benefit of all such lineal descendants during the
"Nonallocation Period" does not exceed more than five (5) percent of the Company
Stock (or amounts allocated in lieu thereof) held by the Plan which are
attributable to a sale to the Plan by any person related to such descendants
(within the meaning of
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Code Section 267 (c) (4)) in a transaction to which Code Section 1042 or Code
Section 2057 is applied.
(c) A person shall be treated as failing to meet the stock
ownership limitation under paragraph (a) (2) above if such person fails such
limitation:
(1) at any time during the one (1) year period ending on the
date of sale of Company Stock to the Plan, or
(2) on the date as of which Company Stock is allocated to
Participants in the Plan.
(d) For purposes of this Section, "Nonallocation Period" means the
period beginning on the date of the sale of the Company Stock and ending on the
later of:
(1) the date which is ten (10) years after the date of sale,
or
(2) the date of the Plan allocation attributable to the final
payment of the Exempt Loan incurred in connection with such sale.
5.4 LOANS TO THE TRUST
(a) The Plan may borrow money for any lawful purpose, provided the
proceeds of an Exempt Loan are used within a reasonable time after receipt only
for any or all of the following purposes:
(1) To acquire company Stock.
(2) To repay such loan.
(3) To repay a prior Exempt Loan.
(b) All loans to the Trust which are made or guaranteed by a
disqualified person must satisfy all requirements applicable to Exempt Loans
including but not limited to the following:
(1) The loan must be at a reasonable rate of interest;
(2) Any collateral pledged to the creditor by the Plan shall consist
only of the Company Stock purchased with the borrowed funds;
(3) Under the terms of the loan, any pledge of Company Stock shall
provide for the release of shares so pledged on a pro-rata basis pursuant to
Section 4.3(f);
(4) Under the terms of the loan, the creditor shall have no recourse
against the Plan except with respect to such collateral, earnings attributable
to such collateral, Employer contributions (other than contributions of Company
Stock) that are made to meet Current Obligations and earnings attributable to
such contributions;
(5) The loan must be for a specific term and may not be payable at the
demand of any person, except in the case of default;
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(6) In the event of default upon an Exempt Loan, the value of the Trust
Fund transferred in satisfaction of the Exempt Loan shall not exceed the amount
of default. If the lender is a disqualified person, an Exempt Loan shall provide
for a transfer of Trust Funds upon default only upon and to the extent of the
failure of the Plan to meet the payment schedule of the Exempt Loan;
(7) Exempt Loan payments during a Plan Year must not exceed an amount
equal to: (A) the sum, over all Plan Years, of all contributions and cash
dividends paid by the Employer to the Plan with respect to such Exempt Loan and
earnings on such Employer contributions and cash dividends, less (B) the sum of
the Exempt Loan payments in all preceding Plan Years. A separate accounting
shall be maintained for such Employer contributions, cash dividends and earnings
until the Exempt Loan is repaid.
(c) For purposes of this Section, the term "disqualified person" means
a person who is a Fiduciary, a person providing services to the Plan, an
Employer any of whose Employees are covered by the Plan, an employee
organization any of whose members are covered by the Plan, an owner, direct or
indirect, of 50% or more of the total combined voting power of all classes of
voting stock or of the total value of all classes of the stock, or an officer,
director, 10% or more shareholder, or a highly compensated Employee.
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary
Date, and at such other date or dates deemed necessary by the Administrator,
herein called "valuation date," to determine the net worth of the assets
comprising the Trust Fund as it exists on the "valuation date." In determining
such net worth, the Trustee shall value the assets comprising the Trust Fund at
their fair market value as of the "valuation date" and shall deduct all expenses
for which the Trustee has not yet obtained reimbursement from the Employer or
the Trust Fund.
6.2 METHOD OF VALUATION
Valuations must be made in good faith and based on all relevant factors
for determining the fair market value of securities. In the case of a
transaction between a Plan and a disqualified person, value must be determined
as of the date of the transaction. For all other Plan purposes, value must be
determined as of the most recent "valuation date" under the Plan. An independent
appraisal will not in itself be a good faith determination of value in the case
of a transaction between the Plan and a disqualified person. However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will be deemed
to be a good faith determination of value. Company Stock not readily tradeable
on an established securities market shall be valued by an independent appraiser
meeting requirements
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similar to the requirements of the Regulations prescribed under Code Section
170(a)(1).
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.3, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date,
or as soon thereafter as is practicable, the Trustee shall distribute all
amounts credited to such Participant's Account in accordance with Sections 7.5
and 7.6.
7.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or other
termination of his employment, all amounts credited to such Participant's
Account shall become fully Vested. If elected, distribution of the Participant's
Account shall commence not later than one (1) year after the close of the Plan
Year in which such Participant's death occurs. The Administrator shall direct
the Trustee, in accordance with the provisions of Sections 7.5 and 7.6, to
distribute the value of the deceased Participant's accounts to the Participant's
Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct the Trustee, in accordance with the provisions of Sections 7.5 and 7.6,
to distribute any remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and of the right of
any person to receive payment shall be conclusive.
(d) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the Participant may
designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court order to such
effect (and there is no "qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
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(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Administrator. However, the Participant Is
spouse must again consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. In the event no valid designation of Beneficiary exists
at the time of the Participant's death, the death benefit shall be payable to
his estate.
(e) Any consent by the Participant's spouse to waive any rights to the
death benefit must be in writing, must acknowledge the effect of such waiver,
and be witnessed by a Plan representative or a notary public. Further, the
spouse's consent must be irrevocable and must acknowledge the specific nonspouse
Beneficiary.
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or other termination of his employment, all amounts credited
to such Participant's Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Trustee, in accordance with
the provisions of Sections 7.5 and 7.6, shall distribute to such Participant all
amounts credited to such Participant's Account as though he had retired. If such
Participant elects, distribution shall commence not later than one (1) year
after the close of the Plan Year in which Total and Permanent Disability occurs.
7.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or subsequent to
the termination of a Participant's employment f or any reason other than death,
Total and Permanent Disability or retirement, the Administrator may direct the
Trustee to segregate the amount of the Vested portion of such Terminated
Participant's Account and invest the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit, common or collective
trust fund of a bank or a deferred annuity. In the event the Vested portion of a
Participant's Account is not segregated, the amount shall remain in a separate
account for the Terminated Participant and share in allocations pursuant to
Section 4.3 until such time as a distribution is made to the Terminated
Participant.
If a portion of a Participant's Account is forfeited, Company Stock
allocated to the Participant's Company Stock Account must be forfeited only
after the Participant's Other Investments Account has been depleted. If interest
in more than one class of Company Stock has been allocated to a Participant's
Account, the Participant must be treated as forfeiting the same proportion of
each such class.
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In the event that the amount of the Vested portion of the Terminated
Participant's Account equals or exceeds the fair market value of any insurance
Contracts, the Trustee, when so directed by the Administrator and agreed to by
the Terminated Participant, shall assign, transfer, and set over to such
Terminated Participant all Contracts on his life in such form or with such
endorsements so that the settlement options and forms of payment are consistent
with the provisions of Section 7.5. In the event that the Terminated
Participant's Vested portion does not at least equal the fair market value of
the Contracts, if any, the Terminated Participant may pay over to the Trustee
the sum needed to make the distribution equal to the value of the Contracts
being assigned or transferred, or the Trustee, pursuant to the Participant's
election, may borrow the cash value of the Contracts from the insurer so that
the value of the Contracts is equal to the Vested portion of the Terminated
Participant's Account and then assign the Contracts to the Terminated
Participant.
Distribution of the funds due to a Terminated Participant shall be made
on the occurrence of an event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer (upon the
Participant's death, Total and Permanent Disability or Normal Retirement).
However, at the election of the Participant, the Administrator shall direct the
Trustee to cause the entire Vested portion of the Terminated Participant's
Account to be payable to such Terminated Participant. Distribution to a
Participant shall not include any Company Stock acquired with the proceeds of an
Exempt Loan until the close of the Plan Year in which such loan is repaid in
full. Any distribution under this paragraph shall be made in a manner which is
consistent with and satisfies the provisions of Sections 7.5 and 7.6, including,
but not limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's Vested benefit derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution, the Administrator shall
direct the Trustee to cause the entire Vested benefit to be paid to such
Participant in a single lump sum.
For purposes of this Section 7.4, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall be deemed
to have received a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account determined
on the basis of the Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
Less than 5 0 %
5 100 %
(c) Notwithstanding the vesting schedule provided for in paragraph (b)
above, for any
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Top Heavy Plan Year, the Vested portion of the Participant's Account of any
Participant who has an Hour of Service after the Plan becomes top heavy shall be
a percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of Service
according to the following schedule:
Vesting Schedule
Years of Service Percentage
Less than 3 0 %
3 100 %
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan,
the Administrator shall revert to the vesting schedule in effect before this
Plan became a Top Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the Vested percentage
of a Participant's Account shall not be less than the Vested percentage attained
as of the later of the effective date or adoption date of this amendment and
restatement.
(e) Notwithstanding the vesting schedule above, each Participant's
Account in the Plan shall become 100% vested upon the effective date of a Change
in Control as defined below, of the Employer. For purposes of this paragraph, a
"Change in Control of the Corporation" shall mean a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended, or any successor thereto, whether or not the Employer is
registered under the Exchange Act.
(f) The computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Plan. For this purpose, the Plan shall be treated as
having been amended if the Plan provides for an automatic change in vesting due
to a change in top heavy status. In the event that the Plan is amended to change
or modify any vesting schedule, a Participant with at least three (3) Years of
Service as of the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then such Participant
shall be subject to the new vesting schedule. The Participant's election period
shall commence on the adoption date of the amendment and shall end 60 days after
the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g)(1) If any Former Participant shall be reemployed by the Employer
before a 1-Year
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Break in Service occurs, he shall continue to participate in the Plan in the
same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received, or was deemed to have received, a distribution of his
entire Vested interest prior to his reemployment, his forfeited account shall be
reinstated only if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first period of five
(5) consecutive 1-Year Breaks in Service commencing after the distribution, or
in the event of a deemed distribution, upon the reemployment of such Former
Participant. In the event the Former Participant does repay the full amount
distributed to him, or in the event of a deemed distribution, the undistributed
portion of the Participant's Account must be restored in full, unadjusted by any
gains or losses occurring subsequent to the Anniversary Date or other valuation
date coinciding with or preceding his termination. The source for such
reinstatement shall first be any Forfeitures occurring during the year. If such
source is insufficient, then the Employer shall contribute an amount which is
sufficient to restore any such forfeited Accounts provided, however, that if a
discretionary contribution is made for such year, such contribution shall first
be applied to restore any such Accounts and the remainder shall be allocated in
accordance with Section 4.3.
(3) If any Former Participant is reemployed after a 1-Year Break
in Service has occurred, Years of Service shall include Years of Service prior
to his 1-Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in Service,
his pre-break and post-break service shall be used for computing Years of
Service for eligibility and for vesting purposes only after he has been employed
for one (1) Year of Service following the date of his reemployment with the
Employer;
(ii) Any Former Participant who under the Plan does not have
a nonforfeitable right to any interest in the Plan resulting from Employer
contributions shall lose credits otherwise allowable under (i) above if his
consecutive 1-Year Breaks in Service equal or exceed the greater of (A) five (5)
or (B) the aggregate number of his pre-break Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to pre-break service
shall not be increased as a result of post-break service;
(iv) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded pursuant to (ii) above
completes one (1) Year of Service for eligibility purposes following his
reemployment with the Employer, he shall participate in the Plan retroactively
from his date of reemployment;
(v) If a Former Participant who has not had his Years of
Service before a 1-
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Year Break in Service disregarded pursuant to (ii) above completes a Year of
Service (a 1-Year Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively from the first day
of the Plan Year during which he completes one (1) Year of Service.
7.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the Participant (or
if no election has been made prior to the Participant's death, by his
Beneficiary), shall direct the Trustee to distribute to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one or more of
the following methods:
(1) One lump-sum payment;
(2) Payments over a period certain in monthly, quarterly, semiannual,
or annual installments. The period over which such payment is to be made shall
not extend beyond the earlier of the Participant's life expectancy (or the life
expectancy of the Participant and his designated Beneficiary) or the limited
distribution period provided for in Section 7.5(b).
(b) Unless the Participant elects in writing a longer distribution
period, distributions to a Participant or his Beneficiary attributable to
Company Stock shall be in substantially equal monthly, quarterly, semiannual, or
annual installments over a period not longer than five (5) years. In the case of
a Participant with an account balance attributable to Company Stock in excess of
$500,000, the five (5) year period shall be extended one (1) additional year
(but not more than five (5) additional years) for each $100,000 or fraction
thereof by which such balance exceeds $500,000. The dollar limits shall be
adjusted at the same time and in the same manner as provided in Code Section
415(d).
(c) Any distribution to a Participant who has a benefit which exceeds,
or has ever exceeded, $3,500 at the time of any prior distribution shall require
such Participant's consent if such distribution commences prior to the later of
his Normal Retirement Age or age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any benefit. However, any
election to defer the receipt of benefits shall not apply with respect to
distributions which are required under Section 7.5(f).
(2) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the first day on
which all events have occurred which entitle the Participant to such benefit.
(3) Written consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not be made more than
90 days before the first day on which all events have occurred which entitle the
Participant to such benefit.
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(4) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the distribution.
If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the notice
required under Regulation 1. 411 (a) 11 (c) is given, provided that: (1) the
Administrator clearly informs the Participant that the Participant has a right
to a period of at least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (2) the Participant, after receiving the
notice, affirmatively elects a distribution.
(d) Notwithstanding anything herein to the contrary, the Administrator,
in his sole discretion, may direct that cash dividends on shares of Company
Stock allocable to Participants' or Former Participants' Company Stock Accounts
be distributed to such Participants or Former Participants within 90 days after
the close of the Plan Year in which the dividends are paid.
(e) Any part of a Participant's benefit which is retained in the Plan
after the Anniversary Date on which his participation ends will continue to be
treated as a Company Stock Account or as an Other Investments Account (subject
to Section 7.4 (a)) as provided in Article IV. However, neither account will be
credited with any further Employer contributions or Forfeitures.
(f) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits shall be made in accordance with the
following requirements and shall otherwise comply with Code Section 401 (a) (9)
and the Regulations thereunder (including Regulation 1.401(a)(9)-2), the
provisions of which are incorporated herein by reference:
Effective for years after 1996, a Participant's benefits shall be
distributed or must begin to be distributed to him not later than April lst of
the calendar year following the later of (i) the calendar year in which the
Participant attains age 70-1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this clause (ii) shall not apply in
the case of a Participant who is a "five (5) percent owner" at any time during
the five (5) Plan Year period ending in the calendar year in which he attains
age 70-1/2 or, in the case of a Participant who becomes a "five (5) percent
owner" during any subsequent Plan Year, clause (ii) shall no longer apply and
the required beginning date shall be the April lst of the calendar year
following the calendar year in which such subsequent Plan year ends. Such
distributions shall be equal to or greater than any required distribution.
(1) A Participant's benefits shall be distributed to him not later than
April lst of the calendar year following the later of (i) the calendar year in
which the Participant attains age 70-1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this clause (ii) shall not apply in
the case of a Participant who is a "five (5) percent owner" at any time during
the five (5) Plan Year period ending in the calendar year in which he attains
age 70-1/2 or, in the case of a Participant who becomes a "five (5) percent
owner" during any subsequent Plan Year, clause (ii) shall no longer apply and
the required beginning date shall be the April lst of the calendar year
following the calendar year in which such subsequent Plan Year ends.
Alternatively, distributions
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to a Participant must begin no later than the applicable April lst as determined
under the preceding sentence and must be made over a period certain measured by
the life expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with Regulations.
Notwithstanding the foregoing, clause (ii) above shall not apply to any
Participant unless the Participant had attained age 70-1/2 before January 1,
1988 and was not a "five (5) percent owner" at any time during the Plan Year
ending with or within the calendar year in which the Participant attained age
66-1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall only be
made in accordance with the incidental death benefit requirements of Code
Section 401 (a) (9) (G) and the Regulations thereunder.
Additionally, for calendar years beginning before 1989, distributions may also
be made under an alternative method which provides that the then present value
of the payments to be made over the period of the Participant's life expectancy
exceeds fifty percent (50%) of the then present value of the total payments to
be made to the Participant and his Beneficiaries.
(g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance with
the following requirements and shall otherwise comply with Code Section 401 (a)
(9) and the Regulations thereunder. If it is determined pursuant to Regulations
that the distribution of a Participant's interest has begun and the Participant
dies before his entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 7.5 as of his date of
death. If a Participant dies before he has begun to receive any distributions of
his interest under the Plan or before distributions are deemed to have begun
pursuant to Regulations, then his death benefit shall be distributed to his
Beneficiaries by December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
However, the 5-year distribution requirement of the preceding paragraph
shall not apply to any portion of the deceased Participant's interest which is
payable to or for the benefit of a designated Beneficiary. In such event, such
portion may, at the election of the Participant (or the Participant's designated
Beneficiary), be distributed over a period not extending beyond the life
expectancy of such designated Beneficiary provided such distribution begins not
later than December 31st of the calendar year immediately following the calendar
year in which the Participant died. However, in the event the Participant's
spouse (determined as of the date of the Participant's death) is his
Beneficiary, the requirement that distributions commence within one year of a
Participant's death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the Participant would have attained
age 70-1/2. If the surviving spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of this Section shall apply as
if the spouse was the Participant.
(h) For purposes of Section 7.5(g), the election by a designated
Beneficiary to be
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excepted from the 5-year distribution requirement must be made no later than
December 31st of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a designated Beneficiary
who is the Participant's surviving spouse, the election must be made by the
earlier of: (1) December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later, the calendar year in
which the Participant would have attained age 70-1/2; or (2) December 31st of
the calendar year which contains the fifth anniversary of the date of the
Participant's death. An election by a designated Beneficiary must be in writing
and shall be irrevocable as of the last day of the election period stated
herein. In the absence of an election by the Participant or a designated
Beneficiary, the 5-year distribution requirement shall apply.
(i) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse may, at the election of the Participant or the
Participant's spouse, be redetermined in accordance with Regulations. The
election, once made, shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using the return multiples
in Tables V and VI of Regulation 1. 72-9.
(j) Except as limited by Sections 7.5 and 7.6, whenever the Trustee is
to make a distribution or to commence a series of payments on or as of an
Anniversary Date, the distribution or series of payments may be made or begun on
such date or as soon thereafter as is practicable. However, unless a Former
Participant elects in writing to defer the receipt of benefits (such election
may not result in a death benefit that is more than incidental) , the payment of
benefits shall begin not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs:
(1) the date on which the Participant attains the earlier of age 65
or the Normal Retirement Age specified herein;
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(3) the date the Participant terminates his service with the
Employer.
(k) If a distribution is made at a time when a Participant is not fully
Vested in his Participant's Account (employment has not terminated) and the
Participant may increase the Vested percentage in such account:
(1) a separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution; and
(2) at any relevant time, the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by the formula: X
equals P(AB plus (R x D)) - (R x
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D) For purposes of applying the formula: P is the Vested percentage at the
relevant time, AB is the account balance at the relevant time, D is the amount
of distribution, and R is the ratio of the account balance at the relevant time
to the account balance after distribution.
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED
(a) Distribution of a Participant's benefit may be made in cash or
Company Stock or both, provided, however, that if a Participant or Beneficiary
so demands, such benefit (other than Company Stock reinvested pursuant to
Section 4.7(a)) shall be distributed only in the form of Company Stock. Prior to
making a distribution of benefits, the Administrator shall advise the
Participant or his Beneficiary, in writing, of the right to demand that benefits
be distributed solely in Company Stock.
(b) If a Participant or Beneficiary demands that benefits be
distributed solely in Company Stock, distribution of a Participant's benefit
will be made entirely in whole shares or other units of Company Stock. Any
balance in a Participant's Other Investments Account will be applied to acquire
for distribution the maximum number of whole shares or other units of Company
Stock at the then fair market value. Any fractional unit value unexpended will
be distributed in cash. If Company Stock is not available for purchase by the
Trustee, then the Trustee shall hold such balance until Company Stock is
acquired and then make such distribution, subject to Sections 7.5(j) and 7.5(f).
(c) The Trustee will make distribution from the Trust only on
instructions from the Administrator.
(d) Notwithstanding anything contained herein to the contrary, if the
Employer's charter or by-laws restrict ownership of substantially all shares of
Company Stock to Employees and the Trust Fund, as described in Code Section
409(h)(2), the Administrator shall distribute a Participant's Account entirely
in cash without granting the Participant the right to demand distribution in
shares of Company Stock.
(e) Notwithstanding anything contained herein to the contrary, the
above-referenced right to receive distributions in the form of shares of Company
Stock shall be automatically terminated in the event of the sale or other
disposition by the Trustees of all shares of company Stock held by the Trust.
Furthermore, if the Employer's articles of incorporation or bylaws restrict
ownership of substantially all shares of Company Stock to Employees and the
Trust Fund, as described in Code Section 409(h) (2), the Administrator shall
distribute a Participant's Account entirely in cash without granting the
Participant the right to demand distribution in shares of Company Stock.
(f) Except as otherwise provided herein, Company Stock distributed by
the Trustee may be restricted as to sale or transfer by the by-laws or articles
of incorporation of the Employer, provided restrictions are applicable to all
Company Stock of the same class. If a Participant is required to offer the sale
of his Company Stock to the Employer before offering to sell his
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Company Stock to a third party, in no event may the Employer pay a price less
than that offered to the distributes by another potential buyer making a bona
fide offer and in no event shall the Trustee pay a price less than the fair
market value of the Company Stock.
(g) If Company Stock acquired with the proceeds of an Exempt Loan
(described in Section 5.4 hereof) is available for distribution and consists of
more than one class, a Participant or his Beneficiary must receive substantially
the same proportion of each such class.
7.7 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary.
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
7.9 RIGHT OF FIRST REFUSALS
(a) If any Participant, his Beneficiary or any other person to whom
shares of Company Stock are distributed from the Plan (the "Selling
Participant") shall, at any time, desire to sell some or all of such shares (the
"Offered Shares") to a third party (the "Third Party"), the Selling Participant
shall give written notice of such desire to the Employer and the Administrator,
which notice shall contain the number of shares offered for sale, the proposed
terms of the sale and the names and addresses of both the Selling Participant
and Third Party. Both the Trust Fund and the Employer shall each have the right
of first refusal for a period of fourteen (14) days from the date the Selling
Participant gives such written notice to the Employer and the Administrator
(such fourteen (14) day period to run concurrently against the Trust Fund and
the Employer) to acquire the Offered Shares. As between the Trust Fund and the
Employer, the Trust Fund shall have priority to acquire the shares pursuant to
the right of first refusal. The selling price and terms shall be the same as
offered by the Third Party.
(b) If the Trust Fund and the Employer do not exercise their right of
first refusal within
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the required fourteen (14) day period provided above, the Selling Participant
shall have the right, at any time following the expiration of such fourteen (14)
day period, to dispose of the Offered Shares to the Third Party; provided,
however, that (i) no disposition shall be made to the Third Party on terms more
favorable to the Third Party than those set forth in the written notice
delivered by the Selling Participant above, and (ii) if such disposition shall
not be made to a third party on the terms offered to the Employer and the Trust
Fund, the offered Shares shall again be subject to the right of first refusal
set forth above.
(c) The closing pursuant to the exercise of the right of first refusal
under Section 7.9(a) above shall take place at such place agreed upon between
the Administrator and the Selling Participant, but not later than ten (10) days
after the Employer or the Trust Fund shall have notified the Selling Participant
of the exercise of the right of first refusal. At such closing, the Selling
Participant shall deliver certificates representing the Offered Shares duly
endorsed in blank for transfer, or with stock powers attached duly executed in
blank with all required transfer tax stamps attached or provided for, and the
Employer or the Trust Fund shall deliver the purchase price, or an appropriate
portion thereof, to the Selling Participant.
(d) Except as provided in this paragraph (d), no Company Stock acquired
with the proceeds of an Exempt Loan complying with the requirements of Section
5.4 hereof shall be subject to a right of first refusal. Company Stock acquired
with the proceeds of an Exempt Loan, which is distributed to a Participant or
Beneficiary, shall be subject to the right of first refusal provided for in
paragraph (a) of this Section only so long as the Company Stock is not publicly
traded. The term "publicly traded" refers to a securities exchange registered
under Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) or that
is quoted on a system sponsored by a national securities association registered
under Section 15A(b) of the Securities Exchange Act (15 U.S.C. 780). In
addition, in the case of Company Stock which was acquired with the proceeds of a
loan described in Section 5.4, the selling price and other terms under the right
must not be less favorable to the seller than the greater of the value of the
security determined under Section 6.2, or the purchase price and other terms
offered by a buyer (other than the Employer or the Trust Fund), making a good
faith offer to purchase the security. The right of first refusal must lapse no
later than fourteen (14) days after the security holder gives notice to the
holder of the right that an offer by a third party to purchase the security has
been made. The right of first refusal shall comply with the provisions of
paragraphs (a), (b) and (c) of this Section, except to the extent those
provisions may conflict with the provisions of this paragraph.
7.10 STOCK CERTIFICATE LEGEND
Certificates for shares distributed pursuant to the Plan shall contain the
following legend:
"The shares represented by this certificate are transferable only upon
compliance with the terms of PARKVALE FINANCIAL CORPORATION EMPLOYEE STOCK
OWNERSHIP PLAN effective as of January 1, 1994, which grants to Parkvale
Financial Corporation a right of first refusal, a copy of said Plan being on
file in the office of the Company."
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7.11 PUT OPTION
(a) If Company Stock which was not acquired with the proceeds of an
Exempt Loan is distributed to a Participant and such Company Stock is not
readily tradeable on an established securities market, a Participant has a right
to require the Employer to repurchase the Company Stock distributed to such
Participant under a fair valuation formula. Such Stock shall be subject to the
provisions of Section 7.11(c).
(b) Company Stock which is acquired with the proceeds of an Exempt Loan
and which is not publicly traded when distributed, or if it is subject to a
trading limitation when distributed, must be subject to a put option. For
purposes of this paragraph, a "trading limitation" on a Company Stock is a
restriction under any Federal or State securities law or any regulation
thereunder, or an agreement (not prohibited by Section 7.12) affecting the
Company Stock which would make the Company Stock not as freely tradeable as
stock not subject to such restriction.
(c) The put option must be exercisable only by a Participant, by the
Participant's donees, or by a person (including an estate or its distributes) to
whom the Company Stock passes by reason of a Participant's death. (Under this
paragraph Participant or Former Participant means a Participant or Former
Participant and the beneficiaries of the Participant or Former Participant under
the Plan.) The put option must permit a Participant to put the Company Stock to
the Employer. Under no circumstances may the put option bind the Plan. However,
it shall grant the Plan an option to assume the rights and obligations of the
Employer at the time that the put option is exercised. If it is known at the
time a loan is made that Federal or State law will be violated by the Employer's
honoring such put option, the put option must permit the Company Stock to be
put, in a manner consistent with such law, to a third party (e.g., an affiliate
of the Employer or a shareholder other than the Plan) that has substantial net
worth at the time the loan is made and whose net worth is reasonably expected to
remain substantial.
The put option shall commence as of the day following the date the
Company Stock is distributed to the Former Participant and end 60 days
thereafter and if not exercised within such 60-day period, an additional 60-day
option shall commence on the first day of the fifth month of the Plan Year next
following the date the stock was distributed to the Former Participant (or such
other 60-day period as provided in regulations promulgated by the Secretary of
the Treasury). However, in the case of Company Stock that is publicly traded
without restrictions when distributed but ceases to be so traded within either
of the 60-day periods described herein after distribution, the Employer must
notify each holder of such Company Stock in writing on or before the tenth day
after the date the Company Stock ceases to be so traded that for the remainder
of the applicable 60-day period the Company Stock is subject to the put option.
The number of days between the tenth day and the date on which notice is
actually given, if later than the tenth day, must be added to the duration of
the put option. The notice must inform distributees of the term of the put
options that they are to hold. The terms must satisfy the requirements of this
paragraph.
The put option is exercised by the holder notifying the Employer in
writing that the put option is being exercised; the notice shall state the name
and address of the holder and the number
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of shares to be sold. The period during which a put option is exercisable does
not include any time when a distributes is unable to exercise it because the
party bound by the put option is prohibited from honoring it by applicable
Federal or State law. The price at which a put option must be exercisable is the
value of the Company Stock determined in accordance with Section 6.2. Payment
under the put option involving a "total Distribution" shall be paid in
substantially equal monthly, quarterly, semiannual or annual installments over a
period certain beginning not later than thirty (30) days after the exercise of
the put option and not extending beyond (5) years. The deferral of payment is
reasonable if adequate security and a reasonable interest rate on the unpaid
amounts are provided. The amount to be paid under the put option involving
installment distributions must be paid not later than thirty (30) days after the
exercise of the put option. Payment under a put option must not be restricted by
the provisions of a loan or any other arrangement, including the terms of the
Employer's articles of incorporation, unless so required by applicable state
law.
For purposes of this Section, "Total Distribution" means a distribution
to a Participant or his Beneficiary within one taxable year of the entire Vested
Participant's Account.
(d) An arrangement involving the Plan that creates a put option must
not provide for the issuance of put options other than as provided under this
Section. The Plan (and the Trust Fund) must not otherwise obligate itself to
acquire Company Stock from a particular holder thereof at an indefinite time
determined upon the happening of an event such as the death of the holder.
7.12 NONTERMINABLE PROTECTIONS AND RIGHTS
No Company Stock, except as provided in Section 4.3 (o) and Section
7.11 (b), acquired with the proceeds of a loan described in Section 5.4 hereof
may be subject to a put, call, or other option, or buy-sell or similar
arrangement when held by and when distributed from the Trust Fund, whether or
not the Plan is then an ESOP. The protections and rights granted in this Section
are nonterminable, and such protections and rights shall continue to exist under
the terms of this Plan so long as any Company Stock acquired with the proceeds
of a loan described in Section 5.4 hereof is held by the Trust Fund or by any
Participant or other person for whose benefit such protections and rights have
been created, and neither the repayment of such loan nor the failure of the Plan
to be an ESOP, nor an amendment of the Plan shall cause a termination of said
protections and rights.
7.13 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall direct
the Trustee to distribute to any Participant in any one Plan Year up to the
lesser of 100% of his Vested Participant's Account valued as of the last
Anniversary Date or other valuation date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Any distribution made
pursuant to this Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately preceding the date of
distribution, and the Participant's
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Account shall be reduced accordingly. Withdrawal under this Section shall be
authorized if the distribution is on account of:
(1) Expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his spouse, or any of his dependents (as
defined in Code Section 152) or necessary for these persons to obtain medical
care;
(2) The costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) Payment of tuition and related educational fees for the
next twelve (12) months of post-secondary education for the Participant, his
spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of Sections
7.5 and 7.6, including, but not limited to, all notice and consent requirements
of Code Section 411(a)(11) and the Regulations thereunder.
7.14 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate payee"
under a "qualified domestic relations order". Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order", even if the affected Participant has not
separated from service and has not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the meaning
set forth under Code Section 414(p).
ARTICLE VIII
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined by the
Employer, to invest, manage, and control the Plan assets subject, however, to
the direction of an Investment Manager if the Trustee should appoint such
manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay benefits required
under the Plan to be paid to Participants, or, in the event of their death, to
their Beneficiaries;
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(c) To maintain records of receipts and disbursements and furnish to
the Employer and/or Administrator for each Plan Year a written annual report per
Section 8.7; and
(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign papers
on their behalf.
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income and in such
securities or property, real or personal, wherever situated, as the Trustee
shall deem advisable, including, but not limited to, stocks, common or
preferred, bonds and other evidences of indebtedness or ownership, and real
estate or any interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the short and
long-term financial needs of the Plan on the basis of information furnished by
the Employer. In making such investments, the Trustee shall not be restricted to
securities or other property of the character expressly authorized by the
applicable law for trust investments; however, the Trustee shall give due regard
to any limitations imposed by the Code or the Act so that at all times the Plan
may qualify as an Employee Stock Ownership Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the duties
of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) In the event the Trustee invests any part of the Trust Fund,
pursuant to the directions of the Administrator, in any shares of stock issued
by the Employer, and the Administrator thereafter directs the Trustee to dispose
of such investment, or any part thereof, under circumstances which, in the
opinion of counsel for the Trustee, require registration of the securities under
the Securities Act of 1933 and/or qualification of the securities under the Blue
Sky laws of any state or states, then the Employer at its own expense, will take
or cause to be taken any and all such action as may be necessary or appropriate
to effect such registration and/or qualification.
(d) The Trustee, at the direction of the Administrator, shall ratably
apply for, own, and pay premiums on Contracts on the lives of the Participants.
If a life insurance policy is to be purchased for a Participant, the aggregate
premium for ordinary life insurance for each Participant must be less than 50%
of the aggregate of the contributions and Forfeitures to the credit of the
Participant at any particular time. If term insurance is purchased with such
contributions, the aggregate premium must be less than 25% of the aggregate
contributions and Forfeitures allocated to a Participant's Account. If both term
insurance and ordinary life insurance are purchased with such contributions, the
amount expended for term insurance plus one-half of the premium for ordinary
life insurance may not in the aggregate exceed 25% of the aggregate
contributions and Forfeitures allocated to a Participant's Account. The Trustee
must convert the entire value of the life insurance contracts at or before
retirement into cash or provide for a periodic income so that
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no portion of such value may be used to continue life insurance protection
beyond retirement, or distribute the Contracts to the Participant. In the event
of any conflict between the terms of this Plan and the terms of any insurance
Contract purchased hereunder, the Plan provisions shall control.
8.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of the Plan,
shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other property and
to retain the same. In conjunction with the purchase of securities, margin
accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase, or
otherwise dispose of any securities or other property held by the Trustee, by
private contract or at public auction. No person dealing with the Trustee shall
be bound to see to the application of the purchase money or to inquire into the
validity, expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's nominees, and
to hold any investments in bearer form, but the books and records of the Trustee
shall at all times show that all such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem advisable;
and for any sum so borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part, of the Trust Fund;
and no person lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) 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
Plan, without liability for interest thereon;
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(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as Trustee
hereunder, whether or not such securities or other property would normally be
purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be necessary
or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims, debts,
or damages due or owing to or from the Plan, to commence or defend suits or
legal or administrative proceedings, and to represent the Plan in all suits and
legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be agent or
counsel for the Employer;
(k) To apply for and procure from responsible insurance companies, to
be selected by the Administrator, as an investment of the Trust Fund such
annuity, or other Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or from time to time,
whatever rights and privileges may be granted under such annuity, or other
Contracts; to collect, receive, and settle for the proceeds of all such annuity
or other Contracts as and when entitled to do so under the provisions thereof;
(1) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To invest in shares of investment companies registered under the
Investment Company Act of 1940;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To vote Company Stock as provided in Section 8.4;
(q) To consent to or otherwise participate in reorganizations,
recapitalization, consolidations, mergers and similar transactions with respect
to Company Stock or any other securities and to pay any assessments or charges
in connection therewith;
(r) To deposit such Company Stock (but only if such deposit does not
violate the provisions of Section 8.4 hereof) or other securities in any voting
trust, or with any protective or like committee, or with a trustee or with
depositories designated thereby;
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(s) To sell or exercise any options, subscription rights and conversion
privileges and to make any payments incidental thereto;
(t) To exercise any of the powers of an owner, with respect to such
Company Stock and other securities or other property comprising the Trust Fund.
The Administrator, with the Trustee's approval, may authorize the Trustee to act
on any administrative matter or class of matters with respect to which direction
or instruction to the Trustee by the Administrator is called for hereunder
without specific direction or other instruction from the Administrator;
(u) To sell, purchase and acquire put or call options if the options
are traded on and purchased through a national securities exchange registered
under the Securities Exchange Act of 1934, as amended, or, if the options are
not traded on a national securities exchange, are guaranteed by a member firm of
the New York Stock Exchange;
(v) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem necessary to
carry out the purposes of the Plan.
(w) Directed Investment Account. The powers granted to the Trustee
shall be exercised in the sole fiduciary discretion of the Trustee. However,
pursuant to Section 4.7, each Participant is authorized and empowered, in his
sole and absolute discretion, to give directions to the Trustee pursuant to the
procedure established by the Administrator and in such form as the Trustee may
require concerning the investment of the Participant's Directed Investment
Account. The Trustee shall comply as promptly as practicable with directions
given by the Participant hereunder. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in its sole and
absolute discretion, deems such directions improper by virtue of applicable law.
The Trustee shall not be responsible or liable for any loss or expense which may
result from the Trustee's refusal or failure. to comply with any directions from
the Participant. Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's Directed Investment
Account.
8.4 VOTING COMPANY STOCK
If the Employer has a registration-type class of securities, each
Participant or Beneficiary shall be entitled to direct the Trustee as to the
manner in which the Company Stock which is entitled to vote and which is
allocated to the Company Stock Account of such Participant or Beneficiary is to
be voted. If the Employer does not have a registration-type class of securities,
each Participant or Beneficiary in the Plan shall be entitled to direct the
Trustee as to the manner in which voting rights on shares of Company Stock which
are allocated to the Company Stock Account of such Participant or Beneficiary
are to be exercised with respect to any corporate matter which involves the
voting of such shares with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as prescribed in Regulations. For purposes
of this Section, the term "registration-type class of securities" means:
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(A) a class of securities required to be registered under Section 12 of the
Securities Exchange Act of 1934; and (B) a class Of Securities which would be
required to be so registered except for the exemption from registration provided
in subsection (g)(2)(H) of such Section 12.
The Trustee shall vote all shares of Company Stock held by it as part
of the Plan assets in the Unallocated Company Stock Suspense Account in the same
proportion for and against proposals to stockholders of the Employer as
Participants and Beneficiaries actually vote shares of Company Stock which have
been allocated to their individual company Stock Accounts; provided, however,
that notwithstanding the foregoing, if the Trustee determines that compliance
with the Act, compliance with the fiduciary duties of the Trustee, or compliance
with the Employer ESOP Voting Policy requires the shares held in the Unallocated
Company Stock Suspense Account to be voted in a different manner, then the
Trustee shall vote the shares held in the Unallocated Company Stock suspense
Account in a manner that complies with the Act, the Trustee's fiduciary duties,
and the Employer ESOP Voting Policy. In the event that not all shares of Company
stock which have been allocated to the individual Company Stock Accounts of
Participants and Beneficiaries are voted by the Participants or Beneficiaries
for or against particular proposals to stockholders of the Employer, the shares
allocated to individual company Stock Accounts which either abstained on the
proposal to stockholders or were not actually voted on such proposal shall be
disregarded in determining the percentage of Company Stock voted for and against
the proposal to stockholders by Participants and Beneficiaries. The Trustee
shall not vote those shares of Company Stock which have been allocated to the
individual Company Stock Accounts of participants and Beneficiaries for which no
instructions have been received, unless the Trustee determines that compliance
with the Act, compliance with the fiduciary duties of the Trustee, or compliance
with the Employer ESOP Voting Policy requires the Trustee to vote such shares.
Notwithstanding the foregoing, if any agreement entered into by the
Trust provides for voting of any shares Of Company Stock pledged as security for
any obligation of the Plan, then such shares of Company Stock shall be voted in
accordance with such agreement.
If the Employer does not have a registration-type class of securities
and the bylaws of the Employer require the Plan to vote an issue in a manner
that reflects a one-man, one-vote philosophy, each Participant or Beneficiary
shall be entitled to cast one vote on an issue and the Trustee shall vote the
shares held by the Plan in proportion to the results of the votes cast on the
issue by the Participants and Beneficiaries.
In the event a tender offer is made for shares of Company Stock,
(a) The Trustee shall distribute in a timely manner to each Participant
or Beneficiary such information as is distributed to holders of said stock in
connection with the tender or exchange offer.
(b) All such stock held by the Trustee in Participant Accounts shall be
tendered or not tendered by the Trustee in accordance with directions it
receives from Participants or Beneficiaries, provided, however, that
notwithstanding the foregoing, if the Trustee determines that compliance with
the Act or compliance with the fiduciary duties of the Trustee requires the
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stock allocated to Participant's Accounts be tendered or not tendered in a
different manner, then the Trustee shall tender or not tender such stock in a
manner that complies with the Act and the Trustee's fiduciary duties. Each
Participant or Beneficiary shall be entitled to direct the Trustee with respect
to the tender of such stock allocated to his Account. The instructions received
by the Trustee from Participants or Beneficiaries shall be held by the Trustee
in confidence and shall not be divulged or released to any person other than on
a need to know basis.
(c) The Trustee shall not tender any such stock allocated to
Participant Accounts with respect to which directions by Participants or
Beneficiaries are not received, unless the Trustee determines that compliance
with the Act or compliance with the fiduciary duties of the Trustee requires the
Trustee to tender such shares.
(d) The Trustee shall tender shares of Company Stock held in the
Unallocated Company Stock Suspense Account in the same proportion in which
Participants and Beneficiaries actually tender the shares of Company Stock which
have been allocated to their individual Company Stock Accounts; provided,
however, that notwithstanding the foregoing, if the Trustee determines that
compliance with the Act or compliance with the fiduciary duties of the Trustee
requires the shares held in the Unallocated Company Stock Suspense Account to be
tendered or not tendered in a different manner, then the Trustee shall tender or
not tender the shares held in the Unallocated Company Stock Suspense Account in
a manner that complies with the Act and the Trustee's fiduciary duties.
8.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
(a) The Trustee shall make distributions from the Trust Fund at such
times and in such numbers of shares or other units of Company Stock and amounts
of cash to or for the benefit of the person entitled thereto under the Plan as
the Administrator directs in writing. Any undistributed part of a Participant's
interest in his accounts shall be retained in the Trust Fund until the
Administrator directs its distribution. , Where distribution is directed in
Company Stock, the Trustee shall cause an appropriate certificate to be issued
to the person entitled thereto and mailed to the address furnished it by the
Administrator. Any portion of a Participant's Account to be distributed in cash
shall be paid by the Trustee mailing its check to the same person at the same
address. If a dispute arises as to who is entitled to or should receive any
benefit or payment, the Trustee may withhold or cause to be withheld such
payment until the dispute has been resolved.
(b) As directed by the Administrator, the Trustee shall make payments
out of the Trust Fund. Such directions or instructions need not specify the
purpose of the payments so directed and the Trustee shall not be responsible in
any way respecting the purpose or propriety of such payments except as mandated
by the Act.
(c) In the event that any distribution or payment directed by the
Administrator shall be mailed by the Trustee to the person specified in such
direction at the latest address of such person filed with the Administrator, and
shall be returned to the Trustee because such person cannot be located at such
address, the Trustee shall promptly notify the Administrator of such return.
Upon
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the expiration of sixty (60) days after such notification, such direction shall
become void and unless and until a further direction by the Administrator is
received by the Trustee with respect to such distribution or payment, the
Trustee shall thereafter continue to administer the Trust as if such direction
had not been made by the Administrator. The Trustee shall not be obligated to
search for or ascertain the whereabouts of any such person.
8.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
8.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary
Date or receipt of the Employer's contribution for each Plan Year, the Trustee
shall furnish to the Employer and Administrator a written statement of account
with respect to the Plan Year for which such contribution was made setting
forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust Fund; and
(e) such further information as the Trustee and/or Administrator deems
appropriate. The Employer, forthwith upon its receipt of each such statement of
account, shall acknowledge receipt thereof in writing and advise the Trustee
and/or Administrator of its approval or disapproval thereof. Failure by the
Employer to disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The approval by
the Employer of any statement of account shall be binding as to all matters
embraced therein as between the Employer and the Trustee to the same extent as
if the account of the Trustee had been settled by judgment or decree in an
action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all persons having or
claiming an interest in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
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8.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act and
the regulations thereunder for any Plan Year, the Administrator shall direct the
Trustee to engage on behalf of all Participants an independent qualified public
accountant for that purpose. Such accountant shall, after an audit of the books
and records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of his audit setting forth his
opinion as to whether any statements, schedules or lists that are required by
Act Section 103 or the Secretary of Labor to be filed with the Plan's annual
report, are presented fairly in conformity with generally accepted accounting
principles applied consistently. All auditing and accounting fees shall be an
expense of and may, at the election of the Administrator, be paid from the Trust
Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank, insurance
company, or similar institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall transmit and certify
the accuracy of that information to the Administrator as provided in Act Section
103 (b) within one hundred twenty (120) days after the end of the Plan Year or
by such other date as may be prescribed under regulations of the Secretary of
Labor.
8.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer,
at least thirty (30) days before its effective date, a written notice of his
resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at least
thirty (30) days before its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any Trustee,
a successor may be appointed by the Employer; and such successor, upon accepting
such appointment in writing and delivering same to the Employer, shall, without
further act, become vested with all the estate, rights, powers, discretions, and
duties of his predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such designation, the
successor shall, without further act, become vested with all the estate, rights,
powers, discretions, and duties of his predecessor with the like effect as if he
were originally named as Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he shall
furnish to the
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Employer and Administrator a written statement of account with respect to the
portion of the Plan Year during which he served as Trustee. This statement shall
be either (i) included as part of the annual statement of account for the Plan
Year required under Section 8.7 or (ii) set forth in a special statement. Any
such special statement of account should be rendered to the Employer no later
than the due date of the annual statement of account for the Plan Year. The
procedures set forth in Section 8.7 for the approval by the Employer of annual
statements of account shall apply to any special statement of account rendered
hereunder and approval by the Employer of any such special statement in the
manner provided in Section 8.7 shall have the same effect upon the statement as
the Employer I s approval of an annual statement of account. No successor to the
Trustee shall have any duty or responsibility to investigate the acts or
transactions of any predecessor who has rendered all statements of account
required by Section 8.7 and this subparagraph.
8.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee
at the direction of the Administrator shall transfer the Vested interest, if
any, of such Participant in his account to another trust forming part of a
pension, profit sharing or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
8.11 DIRECT ROLLOVER
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a distributes 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 distributes in a direct rollover.
(b) For purposes of this Section the following definitions shall apply:
(1) An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributes, 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 distributes or the joint
lives (or joint life expectancies) of the distributes 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) An eligible retirement plan is an individual retirement
account described in Code Section 408 (a), an individual retirement annuity
described in Code Section 408(b), an
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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 individual retirement annuity.
(3) A distributes 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) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributes.
ARTICLE IX
AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the Plan,
subject to the limitations of this Section. Any such amendment shall be adopted
by formal action of the Employer's board of directors and executed by an officer
authorized to act on behalf of the Employer. However, any amendment which
affects the rights, duties or responsibilities of the Trustee and Administrator
may only be made with the Trustee's and Administrator's written consent. Any
such amendment shall become effective as provided therein upon its execution.
The Trustee shall not be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the amendment affects the
duties of the Trustee hereunder.
Notwithstanding anything contained in this Plan to the contrary, the
provisions of the Plan governing the amount and timing of the Employer's
contributions to the Plan and the allocation of such contributions to
Participants shall not be amended more than once every six months, other than to
comport with changes in the code, ERISA, or the rules promulgated under such
statutes.
(b) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to pay
taxes and administration expenses) to be used for or diverted to any purpose
other than for the exclusive benefit of the Participants or their Beneficiaries
or estates; or causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger, plan
transfer or similar transaction) shall be effective to the extent it eliminates
or reduces any "Section 411(d) (6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits" the result of
which is a
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further restriction on such benefit unless such protected benefits are preserved
with respect to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d) (6) protected benefits' are
benefits described in Code Section 411(d)(6)(A), early retirement benefits
and retirement-type subsidies, and optional forms of benefit.
In addition, no such amendment shall have the effect of terminating the
protections and rights set forth in Section 7.12, unless such termination shall
then be permitted under the applicable provisions of the Code and Regulations;
such a termination is currently expressly prohibited by Regulation 54.4975-11
(a)(3) ii).
9.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the Plan
by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination, all amounts credited to the
affected Participants' Accounts shall become 100% Vested as provided in Section
7.4 and shall not thereafter be subject to forfeiture, and all unallocated
amounts shall be allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets of the Trust Fund to Participants in a manner
which is consistent with and satisfies the provisions of Sections 7.5 and 7.6.
Except as permitted by Regulations, the termination of the Plan shall not result
in the reduction of "Section 411(d)(6) protected benefits" in accordance with
Section 9.1(c).
9.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 9.1(c).
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the
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right to be retained in the service of the Employer or to interfere with the
right of the Employer to discharge any Participant or Employee at any time
regardless of the effect which such discharge shall have upon him as a
Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall be
payable out of the Trust Fund to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or against
such person, and the same shall not be recognized by the Trustee, except to such
extent as may be required by law.
(b) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414 (p) , and those other domestic relations
orders permitted to be so treated by the Administrator under the provisions of
the Retirement Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the extent
provided under a "qualified domestic relations order," a former spouse of a
Participant shall be treated as the spouse or surviving spouse for all purposes
under the Plan.
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the Commonwealth of Pennsylvania, other than its laws
respecting choice of law, to the extent not preempted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they shall be entitled to be reimbursed
from the Trust Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become liable.
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10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the happening of
any contingency, by collateral arrangement or by any other means, for any part
of the corpus or income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants, or their
Beneficiaries.
(b) In the event the Employer shall make an excessive contribution
under a mistake of fact pursuant to Act Section 403 (c) (2) (A), the Employer
may demand repayment of such excessive contribution at any time within one (1)
year following the time of payment and the Trustees shall return such amount to
the Employer within the one (1) year period. Earnings of the Plan attributable
to the excess contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
10.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted
by the Act and regulations thereunder, shall be bonded in an amount not less
than 10% of the amount of the funds such Fiduciary handles; provided, however,
that the minimum bond shall be $1,000 and the maximum bond, $500,000. The
amount of funds handled shall be determined at the beginning of each Plan Year
by the amount of funds handled by such person, group, or class to be covered and
their predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary,
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
10.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no
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duty to see to the application of any funds paid to the Trustee, nor be required
to question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
10.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan. In general, the Employer shall have the sole
responsibility for making the contributions provided for under Section 4.1; and
shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method"; and to amend
or terminate, in whole or in part, the Plan. The Administrator shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan. No
named Fiduciary shall guarantee the Trust Fund in any manner against investment
loss or depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity. In the furtherance of their responsibilities hereunder,
the "named Fiduciaries" shall be empowered to interpret the Plan and Trust and
to resolve ambiguities, inconsistencies and omissions, which findings shall be
binding, final and conclusive.
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10.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, contributions to
this Plan are conditioned upon the initial qualification of the Plan under Code
Section 401. If the Plan receives an adverse determination with respect to its
initial qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the application for
the determination is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan was adopted, or such
later date as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except Sections
3.6, 3.7, and 4.1(c), any contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the Employer may,
within one (1) year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance. Earnings of the
Plan attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount so
returned.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL
The Employer may request an interpretative letter from the Securities
and Exchange Commission stating that the transfers of Company Stock contemplated
hereunder do not involve transactions requiring a registration of such Company
Stock under the Securities Act of 1933. In the event that a favorable
interpretative letter is not obtained, the Employer reserves the right to amend
the Plan and Trust retroactively to their Effective Dates in order to obtain a
favorable interpretative letter or to terminate the Plan.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
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Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity, whether an affiliate
or subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating Employers, as
well as all increments thereof. However, the assets of the Plan shall, on an
ongoing basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or Participating
Employer who contributed such assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under the
Plan, and all amounts credited to such Participant's Account as well as his
accumulated service time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of employment shall
inure only to the benefit of the Participants of the Employer or Participating
Employer by which the forfeiting Participant was employed, except if the
Forfeiture is for an Employee whose Employer is an Affiliated Employer, then
said Forfeiture shall be allocated to the Participants employed by the Employer
or Participating Employers who are Affiliated Employers. Should an Employee of
one ("First") Employer be transferred to an associated ("Second") Employer which
is an Affiliated Employer, such transfer shall not cause his account balance
(generated while an Employee of "First" Employer) in any manner, or by any
amount to be forfeited. Such Employee's Participant Account balance for all
purposes of the Plan, including length of service, shall be considered as though
he had always been employed by the "Second" Employer and as such had received
contributions, forfeitures, earnings or losses, and appreciation or depreciation
in value of assets totaling the amount so transferred.
(e) Any expenses of the Trust which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the same
proportion that the total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the credit of all
Participants.
11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this Plan;
provided, however,
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that with respect to all of its relations with the Trustee and Administrator for
the purpose of this Plan, each Participating Employer shall be deemed to have
designated irrevocably the Employer as its agent. Unless the context of the Plan
clearly indicates the contrary, the word "Employer" shall be deemed to include
each Participating Employer as related to its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall be
allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall only be by the written action of each
and every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
11.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or revoke
its participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or
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reduction of any "Section 411 (d) (6) protected benefits" in accordance with
Section 9. 1 (c) . If no successor is designated, the Trustee shall retain such
assets for the Employees of said Participating Employer pursuant to the
provisions of Article VII hereof. In no such event shall any part of the corpus
or income of the Trust as it relates to such Participating Employer be used for
or diverted to purposes other than for the exclusive benefit of the Employees of
such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
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IN WITNESS WHEREOF, this Plan has been executed the day and year first above
written.
Signed, sealed and delivered
in the presence of:
Parkvale Financial Corporation
/s/ STEVEN A. FRIEDMAN By /s/ ROBERT J. MCCARTHY, JR.
- ------------------------------- --------------------------------
Robert J. McCarthy, Jr.
President and C.E.O.
/s/ BRUCE C. GILLEYLEN
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WITNESSES AS TO EMPLOYER
ATTEST /s/ ERNA A. GOLOTA
----------------------------
Erna A. Golota, Secretary
/s/ STEVEN A. FRIEDMAN /s/ ROBERT D. PFISCHNER (Seal)
- ------------------------------- ----------------------------------
TRUSTEE - Robert D. Pfischner
/s/ BRUCE C. GILLEYLEN
- -------------------------------
WITNESSES AS TO TRUSTEE
/s/ STEVEN A. FRIEDMAN /s/ GEORGE W. NEWLAND (Seal)
- ------------------------------- ----------------------------------
TRUSTEE - George W. Newland
/s/ BRUCE C. GILLEYLEN
- -------------------------------
WITNESSES AS TO TRUSTEE
/s/ STEVEN A. FRIEDMAN /s/ PAUL A. MOONEY (Seal)
- ------------------------------- ---------------------------------
TRUSTEE - Paul A. Mooney
/s/ BRUCE C. GILLEYLEN
- -------------------------------
WITNESSES AS TO TRUSTEE
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