<PAGE> 1
Registration No. 333-_____
Filed June 28, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
COMMONWEALTH BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as specified in its Articles of Incorporation)
Pennsylvania 23-2828883
- ------------------------ ---------------------------------------
(State of incorporation) (IRS Employer Identification No.)
P.O. Box 2100
70 Valley Stream Parkway
Valley Forge, Pennsylvania 19482
------------------------------------------------------------
(Address of principal executive offices, including zip code)
1993 STOCK INCENTIVE PLAN
1993 DIRECTORS STOCK OPTION PLAN
VOLUNTARY INVESTMENT PLAN
------------------------------------------------------------
(Full Title of the Plans)
<TABLE>
<S> <C>
Copies to:
Raymond A. Tiernan, Esq.
Charles H. Meacham, Chairman, President and Kenneth B. Tabach, Esq.
Chief Executive Officer Elias, Matz, Tiernan & Herrick L.L.P.
Commonwealth Bancorp, Inc. 734 15th Street, N.W.
P.O. Box 2100 Washington, D.C.
70 Valley Stream Parkway (202) 347-0300
Valley Forge, Pennsylvania 19482
(610) 251-1600
- --------------------------------------
(Name, address, and telephone number
of agent for service)
</TABLE>
Page 1 of 78 pages
Index to Exhibits is located on page 6.
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed Proposed
Securities Maximum Maximum Amount of
to be Amount to be Offering Price Aggregate Registration
Registered Registered(1) Per Share Offering Price Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $0.10 100,000(2) $10.75(3) $1,075,000(3) $ 371
Common Stock, par
value $0.10 714,315(4) $ 4.90(5) $3,500,144(5) $1,207
------- --------- -----
Total 814,315 $4,575,144 $1,578
======= ========= =====
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Together with an indeterminate number of additional shares which may
be necessary to adjust the number of shares reserved for issuance pursuant to
the Commonwealth Bancorp, Inc. ("Company" or "Registrant") 1993 Stock Incentive
Plan ("Incentive Plan"), the 1993 Directors Stock Option Plan ("Directors
Plan") and the Voluntary Investment Plan ("VIP") as a result of a stock split,
stock dividend or similar adjustment of the outstanding common stock, $0.10 par
value per share ("Common Stock"), of the Company.
(2) Represents an estimate of such presently undeterminable number of
shares as may be purchased with employee contributions pursuant to the VIP. In
addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended
("Securities Act"), this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the VIP.
(3) Estimated solely for the purposes of calculating the registration fee
in accordance with Rule 457(c) promulgated under the Securities Act. The
Proposed Maximum Offering Price Per Share for the shares to be issued pursuant
to the VIP is equal to the closing sales price of the Common Stock of the
Company on June 24, 1996 on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System.
(4) Represents 100,880 shares reserved for issuance pursuant to the
Directors Plan and 613,435 shares reserved for issuance pursuant to the
Incentive Plan.
(5) Estimated solely for the purpose of calculating the registration fee,
which has been calculated pursuant to Rule 457(h) promulgated under the
Securities Act. The Proposed Maximum Offering Price Per Share is equal to the
weighted average exercise price for the options to purchase 100,880 shares of
Common Stock which are outstanding under the Directors Plan and options to
purchase 613,435 shares of Common Stock which are outstanding under the
Incentive Plan as of the date hereof.
--------------------------
This Registration Statement shall become effective automatically upon
the date of filing in accordance with Section 8(a) of the Securities Act and 17
C.F.R. Section 230.462.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(a) The Company's Prospectus Supplement, dated May 10, 1996,
filed with the Commission as part of a Post-Effective Amendment to
Registration Statement on Form S-1 (Commission File No. 33-80561)
containing audited financial statements of Commonwealth Savings Bank
(the "Bank") for the year ended December 31, 1995;
(b) All reports filed by the Company pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the
financial statements in the Prospectus Supplement referred to in
clause (a) above;
(c) The description of the Common Stock of the Company
contained in the Company's Registration Statement on Form 8-A filed
with the Commission on March 11, 1996;
(d) All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof
and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all
securities then remaining unsold.
Any statement contained in this Registration Statement, or in a
document incorporated or deemed to be incorporated by reference herein, shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein, or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable since the Company's Common Stock is registered under
Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
3
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VI of the Company's Bylaws provides as follows:
6.1 Third Party Actions. The Corporation shall indemnify any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation), by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
representative of another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
action or proceeding if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Corporation
and, with respect to any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful, provided that the Corporation shall not be
liable for any amounts which may be due to any such person in connection with a
settlement of any action or proceeding effected without its prior written
consent or any action or proceeding initiated by any such person (other than an
action or proceeding to enforce rights to indemnification hereunder).
6.2 Derivative and Corporate Actions. The Corporation shall
indemnify any person who was or is a party, or is threatened to be made a
party, to any threatened, pending or completed action by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that he is
or was a director or officer of the Corporation or is or was serving at the
request of the Corporation as a representative of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees) actually and
reasonably incurred by him in connection with the defense or settlement of the
action if he acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation, provided that the
Corporation shall not be liable for any amounts which may be due to any such
person in connection with a settlement of any action or proceeding affected
without its prior written consent. Indemnification shall not be made under
this Section 6.2 in respect of any claim, issue or matter as to which the
person has been adjudged to be liable to the Corporation unless and only to the
extent that the court of common pleas of the judicial district embracing the
county in which the registered office of the Corporation is located or the
court in which the action was brought determines upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for the expenses that
the court of common pleas or other court deems proper.
6.3 Mandatory Indemnification. To the extent that a representative
of the Corporation has been successful on the merits or otherwise in defense of
any action or proceeding referred to in Section 6.1 or Section 6.2 or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
4
<PAGE> 5
6.4 Procedure for Effecting Indemnification. Unless ordered by a
court, any indemnification under Section 6.1 or Section 6.2 shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the representative is proper in the circumstances
because he has met the applicable standard of conduct set forth in those
sections. The determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the action or proceeding;
(2) if such a quorum is not obtainable, or if obtainable and a
majority vote of a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or
(3) by the stockholders.
6.5 Advancing Expenses. Expenses (including attorneys' fees)
incurred in defending any action or proceeding referred to in this Article VI
shall be paid by the Corporation in advance of the final disposition of the
action or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined that he
is not entitled to be indemnified by the Corporation as authorized in this
Article VI or otherwise.
6.6 Insurance. The Corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a representative
of the Corporation or is or was serving at the request of the Corporation as a
representative of another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against that liability under the provisions of this
Article VI.
6.7 Modification. The duties of the Corporation to indemnify and
to advance expenses to a director or officer provided in this Article VI shall
be in the nature of a contract between the Corporation and each such person,
and no amendment or repeal of any provision of this Article VI shall alter, to
the detriment of such person, the right of such person to the advance of
expenses or indemnification related to a claim based on an act or failure to
act which took place prior to such amendment or repeal.
The Company carries a liability insurance policy for its officers and
directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable since no restricted securities will be reoffered or
resold pursuant to this Registration Statement.
5
<PAGE> 6
ITEM 8. EXHIBITS
The following exhibits are filed with or incorporated by reference
into this Registration Statement on Form S-8 (numbering corresponds to Exhibit
Table in Item 601 of Regulation S-K):
<TABLE>
<CAPTION>
No. Exhibit Page
--- ------- ----
<S> <C> <C>
4 Common Stock Certificate* --
5 Opinion of Elias, Matz, Tiernan & Herrick E-1
L.L.P. as to the legality of the securities
23.1 Consent of Elias, Matz, Tiernan & Herrick --
L.L.P. (contained in the opinion included
as Exhibit 5)
23.2 Consent of Arthur Andersen LLP E-3
24 Power of attorney for any subsequent --
amendments is located in the signature pages
99.1 1993 Stock Incentive Plan* --
99.2 1993 Directors' Stock Option Plan* --
99.3 Voluntary Investment Plan E-4
</TABLE>
- -----------------------
* Incorporated by reference from the Company's Registration Statement on
Form S-1 (Commission File No. 33-80561) filed with the Commission on December
18, 1995.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act, (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement, and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change in
such information in the
6
<PAGE> 7
Registration Statement; provided, however, that clauses (i) and (ii) do not
apply if the information required to be included in a post-effective amendment
by those clauses is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy expressed in the Securities Act and will be governed by
the final adjudication of such issue.
7
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Commonwealth of Pennsylvania on June 24th, 1996.
COMMONWEALTH BANCORP, INC.
By: /s/ Charles H. Meacham
------------------------------------------------
Charles H. Meacham
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Charles H. Meacham his or her true
and lawful attorney, with full power to sign for such person and in such
person's name and capacity indicated below, and with full power of substitution
any and all amendments to this Registration Statement, hereby ratifying and
confirming such person's signature as it may be signed by said attorney to any
and all amendments.
<TABLE>
<CAPTION>
Name Title Date
- -------------------------------- --------------------------------- --------------------
<S> <C> <C>
/s/ Charles H. Meacham Chairman, President and Chief June 24, 1996
---------------------------- Executive Officer
Charles H. Meacham (principal executive officer)
/s/ Patrick J. Ward Senior Vice President and Chief June 24, 1996
---------------------------- Financial Officer (principal
Patrick J. Ward financial and accounting
officer)
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
Name Title Date
- -------------------------------- --------------------------------- --------------------
<S> <C> <C>
/s/ George C. Beyer, Jr. Director June 24, 1996
--------------------------
George C. Beyer, Jr.
/s/ Joseph E. Colen, Jr. Director June 24, 1996
-------------------------
Joseph E. Colen, Jr.
/s/ Richard J. Conner Director June 24, 1996
--------------------------
Richard J. Conner
/s/ William B. Haines, Jr. Director June 24, 1996
--------------------------
William B. Haines, Jr.
/s/ Harry P. Mirabile Director June 24, 1996
--------------------------
Harry P. Mirabile
/s/ Nicholas Sclufer Director June 24, 1996
--------------------------
Nicholas Sclufer
/s/ Matthew T. Welde Director June 24, 1996
-------------------------
Matthew T. Welde
</TABLE>
9
<PAGE> 1
EXHIBIT 5
OPINION OF ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
<PAGE> 2
June 28, 1996
Board of Directors
Commonwealth Bancorp, Inc.
70 Valley Stream Parkway
Valley Forge, Pennsylvania 19482
Re: Registration Statement on Form S-8
814,315 Shares of Common Stock
Gentlemen:
We are special counsel to Commonwealth Bancorp, Inc, a Pennsylvania
corporation (the "Corporation"), in connection with the preparation and filing
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, of a Registration Statement on Form S-8 (the "Registration
Statement"), relating to the registration of up to 613,435 shares of common
stock, par value $0.10 per share ("Common Stock"), to be issued pursuant to the
Corporation's 1993 Stock Incentive Plan ("Incentive Plan") and 100,880 shares
to be issued pursuant to the Corporation's 1993 Directors' Stock Option Plan
(the "Directors' Plan") upon the exercise of stock options and/or appreciation
rights (referred to as "Option Rights") and 100,000 shares of Common Stock to
be issued pursuant to the Corporation's Voluntary Investment Plan (the
"VIP")(the Incentive Plan, the Directors' Plan and the VIP are referred to
together as the "Plans"). The Registration Statement also registers an
indeterminate number of additional shares which may be necessary under the
Plans to adjust the number of shares reserved thereby for issuance as the
result of a stock split, stock dividend or similar adjustment of the
outstanding Common Stock of the Corporation. In addition, the Registration
Statement also covers an indeterminate amount of interests to be offered or
sold pursuant to the VIP. We have been requested by the Corporation to furnish
an opinion to be included as an exhibit to the Registration Statement.
For this purpose, we have reviewed the Registration Statement and
related Prospectuses, the Articles of Incorporation and Bylaws of the
Corporation, the Plans, a specimen stock certificate evidencing the Common
Stock of the Corporation and such other corporate records and documents as we
have deemed appropriate. We are relying upon the originals, or copies
certified or otherwise identified to our satisfaction, of the corporate
<PAGE> 3
Board of Directors
June 28, 1996
Page 2
records of the Corporation and such other instruments, certificates and
representations of public officials, officers and representatives of the
Corporation as we have deemed relevant as a basis for this opinion. In
addition, we have assumed, without independent verification, the genuineness of
all signatures and the authenticity of all documents furnished to us and the
conformance in all respects of copies to originals. Furthermore, we have made
such factual inquiries and reviewed such laws as we determined to be relevant
for this opinion.
For purposes of this opinion, we have also assumed that (i) the shares
of Common Stock issuable pursuant to Option Rights granted under the terms of
the Incentive Plan and the Directors' Plan will continue to be validly
authorized on the dates the Common Stock is issued pursuant to the Option
Rights; (ii) the shares of Common Stock issuable pursuant to the VIP will
continue to be validly authorized on the dates the Common Stock is issued in
accordance with such plan; (iii) on the dates the Option Rights are exercised,
the Option Rights granted under the terms of the Incentive Plan and the
Directors' Plan will constitute valid, legal and binding obligations of the
Corporation and will (subject to applicable bankruptcy, moratorium, insolvency,
reorganization and other laws and legal principles affecting the enforceability
of creditors' rights generally) be enforceable as to the Corporation in
accordance with their terms; (iv) no change occurs in applicable law or the
pertinent facts; and (v) the provisions of "blue sky" and other securities laws
as may be applicable will have been complied with to the extent required.
Based on the foregoing, and subject to the assumptions set forth
herein, we are of the opinion as of the date hereof that the shares of Common
Stock to be issued pursuant to the Plans, when issued and sold pursuant to the
Plans and upon receipt of the consideration required thereby, will be legally
issued, fully paid and non-assessable shares of Common Stock of the
Corporation.
We hereby consent to the reference to this firm under the caption
"Legal Opinion" in the Prospectuses of the Plans and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ KENNETH B. TABACH
-----------------------------------------
Kenneth B. Tabach, a Partner
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ARTHUR ANDERSEN LLP
<PAGE> 2
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
on the consolidated financial statements of Commonwealth Savings Bank as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, and to all references to our firm included in or
made a part of the Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
June 25, 1996
<PAGE> 1
EXHIBIT 99.3
VOLUNTARY INVESTMENT PLAN
<PAGE> 2
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 "Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 "Adjustment Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3 "Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.4 "Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.5 "Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 "Bank Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7 "Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.8 "Commonwealth Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.9 "Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10 "Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.11 "ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.12 "Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.13 "Leased Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.14 "Limitation Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.15 "Limitation Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.16 "Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.17 "Normal Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.18 "Part-Time Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.19 "Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.20 "Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.21 "Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.22 "Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.23 "Qualified Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.24 "Supplemental Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.25 "Supplemental Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.26 "Tax-Sheltered Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.27 "Tax-Sheltered Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.28 "Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.29 "Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.30 "Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.31 "Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Article II - SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1 Hours of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2 Eligibility Computation Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Year of Eligibility Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.4 One-Year Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.5 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Article III - PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.1 Continued Participation of Participants as of December 31, 1988 . . . . . . . . . . . . . . . . . . . 7
Section 3.2 Eligibility Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.3 Date of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
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<PAGE> 3
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
<PAGE> 4
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Article IV - CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1 Right To Make Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.2 Elective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3 Participant Elections Regarding Tax-Sheltered Contributions . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4 Agreement to Make Tax-Sheltered Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.5 Administrator Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.6 Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.7 Profits Not Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.8 Time of Payment of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.9 Irrevocability of Contributions and Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Article V - LIMITATIONS ON CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5.2 Limitations on Tax-Sheltered Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.3 Qualified Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.4 Distribution of Excess Deferral Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.5 Distribution of Excess Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.6 Code Section 415 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.7 Disposition of Excess Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Article VI - PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.1 Participants' Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.2 Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Article VII - ALLOCATION OF BANK CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.1 Allocation to Participants' Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.2 Schedule of Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Article VIII - INVESTMENT OF TRUST ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.1 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.2 Apportionment of Participants' Accounts Among Funds . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.3 Application of Investment Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.4 Special Rules Concerning the Universal Life Insurance Fund . . . . . . . . . . . . . . . . . . . . . 21
Section 8.5 Special Rules Concerning the Commonwealth Common Stock Fund . . . . . . . . . . . . . . . . . . . . . 21
Article IX - VALUATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.1 Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.2 Quarterly Adjustment of Participants' Accounts in Certificate of Deposit Fund . . . . . . . . . . . . 22
Section 9.3 Net Value of Participants' Accounts in Certificate of Deposit Fund . . . . . . . . . . . . . . . . . 22
Article X - BENEFITS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.1 Vesting in Tax-Sheltered, Supplemental, and Bank Accounts . . . . . . . . . . . . . . . . . . . . . 23
Section 10.2 Form and Valuation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.3 Payment of Benefits upon Normal Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.4 Payment of Benefits upon Separation Before Normal Retirement . . . . . . . . . . . . . . . . . . . . 23
Section 10.5 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.6 Designation of Beneficiary; Spouse's Consent to Nonspouse Beneficiary . . . . . . . . . . . . . . . 24
Section 10.7 Requirements Concerning Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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Section 10.8 Incapacitated Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Article XI - WITHDRAWALS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.1 Withdrawals from Supplemental Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.2 Hardship Withdrawals from Tax-Sheltered and Bank Accounts . . . . . . . . . . . . . . . . . . . . . 26
Section 11.3 Withdrawals from Tax-Sheltered and Bank Accounts At and After Age 59-1/2 . . . . . . . . . . . . . . 27
Section 11.4 Time of Withdrawal Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.5 Source of Withdrawals from Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.6 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.7 Valuation of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 11.8 Withdrawals or Loans from Universal Life Insurance Fund . . . . . . . . . . . . . . . . . . . . . . 31
Article XII - TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.1 Top-Heavy Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.2 Top-Heavy Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article XIII - NONALIENATION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 13.1 No Alienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article XIV - ALLOCATION OF FIDUCIARY RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.1 Allocation of Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.2 No Joint Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.3 Co-Fiduciary Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.4 Employment of Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.5 Standards of Fiduciary Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Article XV - THE ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 15.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 15.2 Responsibilities of Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 15.3 Plan Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 15.4 Benefit Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 15.5 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 15.6 Discretionary Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 15.7 Contracting for Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 15.8 Delegation of Administrative Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Article XVI - THE TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 16.1 Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 16.2 Investment Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 16.3 Benefit Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 16.4 Removal and Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Article XVII - PLAN AMENDMENT, MERGER, CONSOLIDATION,
OR TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17.2 Merger or Transfer of Assets or Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17.3 Discontinuance of Contributions or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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Article XVIII - RELATING TO THE PARTICIPATING EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18.1 Action by Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18.2 Participating Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Article XIX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 19.1 Application of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 19.2 Undivided Interest in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 19.3 No Right to Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.4 Plan Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.5 Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.7 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Article XX - DIRECT ROLLOVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 20.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 20.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
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<PAGE> 7
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
WHEREAS, Commonwealth Federal Savings and Loan Association
adopted the Commonwealth Federal Savings and Loan Association Voluntary
Investment Plan effective January 1, 1966; and
WHEREAS, the Plan was subsequently amended and restated from
time to time and was most recently amended and restated effective January 1,
1989 to make certain changes to the Plan, including (i) changes required by the
Tax Reform Act of 1986 and other recent legislation and regulations and (ii) a
change to the name of the Plan to reflect the March 1, 1990 renaming of
Commonwealth Federal Savings and Loan Association as "Commonwealth Federal
Savings Bank"; and
WHEREAS, Commonwealth Federal Savings Bank was renamed
"Commonwealth Savings Bank" (the "Bank") effective July 1, 1994; and
WHEREAS, the Bank desires to make certain changes to the Plan
and to incorporate certain interim amendments, including (i) changes required
by the Omnibus Budget Reconciliation Act of 1993 and (ii) a change to the name
of Plan to reflect the new name of the Bank.
NOW, THEREFORE, effective January 1, 1994, (except as
otherwise specifically provided herein) and subject to approval by the District
Director of Internal Revenue, the Bank hereby amends and restates the
Commonwealth Savings Bank Voluntary Investment Plan (the "Plan") in its
entirety as follows:
Article I
DEFINITIONS
The following words and phrases, as used herein, shall have
the following meanings unless the context clearly indicates otherwise:
Section 1.1 "Accrued Benefit" shall mean the total of the
amounts credited to a Participant's Tax-Sheltered Account, Supplemental
Account, and Bank Account.
Section 1.2 "Adjustment Factor" shall mean the cost-of-living
adjustment factor prescribed by the Secretary of the Treasury under Code
Section 415(d) for years beginning after December 31, 1987, as applied to such
items and in such manner as the Secretary shall provide.
Section 1.3 "Administrator" shall mean the person, persons,
or entity appointed to administer the Plan in accordance with the provisions of
Section 15.1.
Section 1.4 "Affiliate" shall mean any corporation which is a
member of a controlled group of corporations (within the meaning of Code
Section 414(b)) of which the Bank is a member; any other trade or business
which is under common control (within the meaning of Code Section 414(c)) with
the Bank; any trade or business which is a member of an affiliated service
group (within the meaning of Code Section 414(m)) of which the Bank is a
member; and any other entity required to be aggregated with the Bank pursuant
to regulations under Code Section 414(o).
<PAGE> 8
For purposes of applying Code Section 414(b) and Section 414(c) to the
limitations on benefits set forth in Section 5.6, the phrase "more than 50
percent" shall be substituted for the phrase "at least 80 percent" each place
it appears in Code Section 1563(a)(1).
Section 1.5 "Bank" shall mean on and before June 30, 1994,
Commonwealth Federal Savings Bank, a corporation organized and existing under
the laws of the United States of America, and its Affiliates which have adopted
the Plan, and their successor or successors. Effective July 1, 1994, "Bank"
shall mean Commonwealth Savings Bank, and its Affiliate which have adopted the
Plan, and their successor or successors.
Section 1.6 "Bank Account" shall mean the account established
and maintained pursuant to Section 6.2 to hold certain contributions made by
the Bank on behalf of a Participant prior to January 1, 1986, and forfeitures
allocated to the account prior to January 1, 1986.
Section 1.7 "Code" shall mean the Internal Revenue Code of
1986, as amended.
Section 1.8 "Commonwealth Stock" shall mean the common stock
of the Bank.
Section 1.9 "Compensation" shall mean the total wages or
salary actually payable to an Employee by the Bank for any period (prior to any
reduction for Tax-Sheltered Contributions under the Plan or for contributions
made by salary reduction, pursuant to the Participant's election, to a
cafeteria plan maintained by the Bank under Code Section 125(c)), including
bonus, overtime, incentive, or other extra pay; provided, however, that
"Compensation" shall exclude all bonuses paid on or after January 1, 1990,
including bonuses paid under the Management by Objective Program. In addition,
with respect to Plan Years beginning after December 31, 1988 and before January
1, 1994, the annual Compensation of any Participant taken into account under
the Plan shall not exceed $200,000 multiplied by the Adjustment Factor. For
Plan Years beginning on and after January 1, 1994, Compensation of any
Participant taken into account under the Plan shall not exceed $150,000
multiplied by the Adjustment Factor. In determining the Compensation of a
Participant for purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except that in applying such rules, the term "family"
shall include only the spouse of the Participant and any lineal descendants of
the Participant who have not attained age 19 before the close of the Plan Year.
If, as a result of the application of such rules, the above limitation is
exceeded, then the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as determined under this
Section 1.9 prior to the application of the limitation.
Section 1.10 "Employee" shall mean any person who is directly
or indirectly compensated for services as an employee of the Bank or an
Affiliate, and shall include any Leased Employee.
Section 1.11 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
Section 1.12 "Fund" shall mean any of the funds established
for the investment of Plan assets pursuant to Section 8.1.
Section 1.13 "Leased Employee" shall mean a leased employee
of the Bank or an Affiliate within the meaning of Code Section 414(n)(2).
Notwithstanding the foregoing, if all such leased employees constitute less
than 20 percent of the
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<PAGE> 9
nonhighly compensated work force (within the meaning of Code Section
414(n)(5)(C)(ii)) of the Bank and the Affiliates, the term "Leased Employee"
shall not include any leased employee covered by a plan described in Code
Section 414(n)(5).
Section 1.14 "Limitation Compensation" shall mean
compensation as defined in Treas. Reg. Section 1.415-2(d)(1) and Section
1.415-2(d)(2) actually paid or made available during a specified period.
Section 1.15 "Limitation Year" shall mean the Plan Year.
Section 1.16 "Normal Retirement Age" shall mean:
(a) age 62, in the case of an Employee who
commenced employment with the Bank or an Affiliate before January 1, 1980; and
(b) age 65, in the case of an Employee who
commences employment with the Bank or an Affiliate after December 31, 1979.
Section 1.17 "Normal Retirement Date" shall mean the first
day of the month coincident with or next following the date on which a
Participant attains his Normal Retirement Age.
Section 1.18 "Part-Time Employee" shall mean an Employee who
is scheduled to work less than 37-1/2 hours per week.
Section 1.19 "Participant" shall mean an Employee who has met
the requirements for participation set forth in Article III and has begun to
participate in the Plan.
Section 1.20 "Pension Plan" shall mean the Commonwealth
Savings Bank Pension Plan (formerly named the "Commonwealth Federal Savings
Bank Pension Plan") as in effect from time to time.
Section 1.21 "Plan" shall mean the Commonwealth Savings Bank
Voluntary Investment Plan (formerly named the "Commonwealth Federal Savings
Bank Voluntary Investment Plan") as set forth herein and as it may be amended
from time to time.
Section 1.22 "Plan Year" shall mean a period of 12
consecutive calendar months beginning on January 1 of each year.
Section 1.23 "Qualified Nonelective Contributions" shall mean
those contributions made by the Bank pursuant to Section 5.3.
Section 1.24 "Supplemental Account" shall mean the account
established and maintained pursuant to Section 6.2 to which the Supplemental
Contributions made by a Participant prior to January 1, 1987 are allocated.
Section 1.25 "Supplemental Contributions" shall mean those
after-tax contributions made by a Participant prior to January 1, 1987.
Section 1.26 "Tax-Sheltered Account" shall mean the account
established and maintained pursuant to Section 6.2 to which the Tax- Sheltered
Contributions made by the Bank on behalf of a Participant are allocated.
Section 1.27 "Tax-Sheltered Contributions" shall mean those
contributions made by the Bank on behalf of a Participant at the Participant's
election pursuant to Section 4.2(a).
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<PAGE> 10
Section 1.28 "Trust" shall mean the trust maintained pursuant
to this Plan, to which contributions shall be made and from which benefit
payments shall be made in accordance with the terms of the Plan.
Section 1.29 "Trust Agreement" shall mean the Commonwealth
Federal Savings Bank Voluntary Investment Plan Trust Agreement, entered into
effective January 1, 1989, and as such Agreement may be amended from time to
time.
Section 1.30 "Trustees" shall mean the individuals named in
the Trust Agreement to continue the Trust under the Plan, and any duly
appointed additional or successor Trustee or Trustees acting thereunder.
Section 1.31 "Valuation Date" shall mean the last business
day of each calendar quarter and, for purposes of Section 8.2(c), May 31, 1993.
Article II
SERVICE
Section 2.1 Hours of Service.
(a) "Hours of Service" shall be determined from
records maintained by the Bank or Affiliate and shall include the following:
(1) Each hour for which an Employee is
directly or indirectly paid, or entitled to payment, by the
Bank or an Affiliate for the performance of duties.
(2) Each hour for which an Employee is
directly or indirectly paid, or entitled to payment, by the
Bank or an Affiliate on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty, or leave of absence.
(3) Each hour for which back pay
(irrespective of mitigation of damages) is either awarded or
agreed to by the Bank or an Affiliate, provided that the same
Hours of Service shall not be credited under paragraph (1) or
paragraph (2) and under this paragraph (3).
(b) In the case of a payment which is made or due
on account of a period during which an Employee performs no duties, and which
results in the crediting of Hours of Service under subsection (a)(2), or in the
case of an award or agreement for back pay, to the extent that such award or
agreement is made with respect to a period described in subsection (a)(2), the
number of Hours of Service to be credited shall be determined in accordance
with the applicable regulations prescribed by the Secretary of Labor and set
forth in 29 CFR Section 2530.200b-2(b).
(c) Hours of Service described in subsection (a)
shall be credited to Eligibility Computation Periods in accordance with the
applicable regulations prescribed by the Secretary of Labor and set forth in 29
CFR Section 2530.200b-2(c).
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<PAGE> 11
(d) Notwithstanding the foregoing provisions of
this Section 2.1:
(1) In no event shall the number of
credited Hours of Service attributable to a single continuous
period (whether or not such period occurs in a single
Eligibility Computation Period) for which no duties are
performed exceed 1,000 Hours of Service.
(2) An Hour of Service shall not be
credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by such
Employee.
(3) The term "Hour of Service" shall not
include any 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 if such payment is
made or due under a plan maintained solely for the purpose of
complying with workers' compensation, unemployment
compensation, or disability insurance laws.
(e) Solely for purposes of determining whether an
Employee has incurred a One-Year Break in Service, the term "Hour of Service"
shall also include the following hours:
(1) Each hour credited on the basis of
40 Hours of Service per week or eight Hours of Service per
working day during which an Employee is on an uncompensated
leave of absence not in excess of two years, authorized by the
Bank under its standard personnel practices, provided such
Employee resumes employment with the Bank upon the expiration
of such leave.
(2) For absences from work for maternity
or paternity reasons, each Hour of Service which would
otherwise have been credited to an Employee but for such
absence, or, in any case in which such Hours of Service cannot
be determined, eight Hours of Service per day of such absence.
The total number of hours treated as Hours of Service under
this paragraph (2) for any absence from work for maternity or
paternity reasons, when aggregated with any hours credited
under any other provision of this Section 2.1 which relate to
the same absence, shall not exceed 501. An absence from work
for maternity or paternity reasons means a continuous absence:
(A) by reason of the pregnancy of
the Employee;
(B) by reason of the birth of a
child of the Employee;
(C) by reason of the placement of a
child with the Employee in connection with the
adoption of such child by such Employee; or
(D) for purposes of caring for such
child for a period beginning immediately following
such birth or placement.
The Hours of Service credited under this paragraph (2) shall
be credited (i) in the Eligibility Computation Period in which
the absence begins, if the crediting is necessary to prevent a
One-
-5-
<PAGE> 12
Year Break in Service in such Eligibility Computation Period,
or (ii) in all other cases, in the following Eligibility
Computation Period.
(f) In the case of an Employee for whom the Bank
or Affiliate does not maintain records of his hours worked and hours for which
payment is made or due, the number of Hours of Service to be credited to such
Employee in an Eligibility Computation Period shall be determined on the basis
of periods of employment, which shall be the payroll periods of the Bank or
Affiliate applicable to such Employee. An Employee shall be credited with a
number of Hours of Service, determined in accordance with the following table,
for each of his payroll periods in which he actually has at least one Hour of
Service:
<TABLE>
<CAPTION>
Payroll Period Hours of Service Credited
-------------- -------------------------
<S> <C>
Weekly 45
Semimonthly 95
Monthly 190
</TABLE>
(g) Except as otherwise expressly provided in the
Plan or required by law or regulation, an Employee shall receive credit for his
Hours of Service with an Affiliate for purposes of determining his Years of
Eligibility Service, and shall receive such credit only to the extent that such
Hours are during the period that the employer for whom the services are
performed is an Affiliate. Subject to the limitations of the preceding
sentence, the number of Hours of Service to be credited to an Employee on
account of a period of service with an Affiliate shall be determined in
accordance with the other provisions of this Section 2.1.
(h) If an Employee has a leave of absence for
service on active duty in the armed forces of the United States, he shall, upon
his return, receive, in addition to the credit for Hours of Service to which he
is entitled under subsections (a) through (g), such other credit as may be
prescribed by Federal laws relating to military service and veterans'
reemployment rights.
Section 2.2 Eligibility Computation Period. An Employee's
initial "Eligibility Computation Period" shall be the 12-consecutive-month
period beginning on the date such Employee first completes an Hour of Service.
The Employee's second Eligibility Computation Period shall be the Plan Year
which includes the first anniversary of the date on which he first completes an
Hour of Service, and his subsequent Eligibility Computation Periods shall be
the succeeding Plan Years. If an Employee incurs a One-Year Break in Service,
his Eligibility Computation Periods shall thereafter be determined as provided
in the preceding two sentences, measuring from the date on which he first
completes an Hour of Service following such One-Year Break in Service.
Section 2.3 Year of Eligibility Service.
(a) An Employee shall be considered to have
completed a "Year of Eligibility Service" in any Eligibility Computation Period
in which he completes 1,000 or more Hours of Service. Such Year of Eligibility
Service shall be credited to such Employee at the end of such Eligibility
Computation Period, whether or not the Employee is still employed by the Bank
or an Affiliate.
(b) If an Employee incurs a One-Year Break in
Service and then completes an Hour of Service, his Years of Eligibility Service
completed
-6-
<PAGE> 13
prior to such Break shall be credited to the Employee. Such Employee shall
participate in the Plan as of the date on which he completes such Hour of
Service if on that date he meets the eligibility requirements set forth in
Section 3.2 (taking into account his Years of Eligibility Service prior to such
Break).
Section 2.4 One-Year Break in Service. An Employee shall be
considered to have incurred a "One-Year Break in Service" for eligibility
purposes in any Eligibility Computation Period in which he completes not more
than 500 Hours of Service.
Section 2.5 Transfers.
(a) Transfer from Covered Employment. If a
Participant is transferred from employment with the Bank covered under the Plan
to employment with the Bank not covered under the Plan or to employment with an
Affiliate which has not adopted the Plan, he shall not thereby incur a One-Year
Break in Service, and his subsequent Years of Eligibility Service shall be
taken into account for purposes of eligibility; but he may not elect to have
the Bank make Tax-Sheltered Contributions on his behalf after the transfer,
unless he subsequently returns to covered employment. Notwithstanding the
preceding sentence, a Participant who transfers to an employment status with
the Bank where he is a Part-Time Employee (and therefore not eligible for
participation in the Plan pursuant to Section 3.2) may elect to have the Bank
continue to make Tax-Sheltered Contributions on his behalf after his transfer
for the remainder of the Plan Year in which the transfer occurs, but not
thereafter.
(b) Transfer to Covered Employment. If an
Employee is transferred from employment with the Bank not covered under the
Plan or from employment with an Affiliate which has not adopted the Plan to
employment with the Bank covered under the Plan, his Years of Eligibility
Service prior to the transfer shall be taken into account for purposes of
eligibility. If such Employee satisfies the eligibility requirements of
Section 3.2 upon his transfer to employment with the Bank covered under the
Plan, he shall become a Participant as of the January 1 or July 1 following
such transfer.
Article III
PARTICIPATION
Section 3.1 Continued Participation of Participants as of
December 31, 1988. Any Employee of the Bank who was a Participant as of
December 31, 1988, shall continue to participate in the Plan as of January 1,
1989 (provided he has not been transferred to employment not covered under the
Plan).
Section 3.2 Eligibility Requirements. Any other Employee of
the Bank (except for any Part-Time Employee or Leased Employee) shall be
eligible to participate in the Plan in accordance with the following rules:
(a) An Employee who first completes an Hour of
Service for the Bank on or after the date on which he attains age 30 but before
July 1, 1989, shall be eligible to commence participation in the Plan under
Section 3.3 without meeting any service requirement.
(b) Effective December 31, 1988, an Employee not
described in subsection (a) shall be eligible to commence participation in the
Plan under Section 3.3 when he has both attained age 21 and completed one Year
of Eligibility Service.
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<PAGE> 14
Section 3.3 Date of Participation. An Employee shall become
a Participant as of the January 1 or July 1 next following his attainment of
eligibility under Section 3.2, provided he is an Employee of the Bank on the
applicable January 1 or July 1 and has not been transferred to employment not
covered under the Plan.
Article IV
CONTRIBUTIONS
Section 4.1 Right To Make Contributions. Except as otherwise
specifically provided in the Plan, a Participant may make Tax-Sheltered
Contributions under the Plan during any period when he is an Employee of the
Bank.
Section 4.2 Elective Contributions.
(a) Tax-Sheltered Contributions. A Participant
may elect to have the Bank make Tax-Sheltered Contributions on his behalf in
any whole percentage amount from one to 15 percent, inclusive, of his
Compensation; provided, however, that the total Tax-Sheltered Contributions on
behalf of a Participant shall in no event exceed any of the limitations set
forth in Article V.
(b) Supplemental Contributions. Effective
January 1, 1987, no Supplemental Contributions shall be permitted under the
Plan.
Section 4.3 Participant Elections Regarding Tax-Sheltered
Contributions.
(a) Elections Regarding Tax-Sheltered
Contributions. A Participant's Tax-Sheltered Contributions shall be made by
salary reduction in accordance with Section 4.4.
(b) Discontinuance of or Change in Percentage of
Tax-Sheltered Contributions. A Participant may (i) discontinue his
Tax-Sheltered Contributions as of the first payroll period beginning on or
after the date an appropriate written notice of such discontinuance is received
by the Administrator, or (ii) change the percentage of his Tax-Sheltered
Contributions as of the first payroll period beginning on or after any January
1, April 1, July 1 or October 1.
(c) Date of Election, Change, or Discontinuance.
Any election or change under this Section 4.3 shall be made by filing an
appropriate written notice with the Administrator no later than the December
15, March 15, June 15 or September 15, respectively, which immediately precedes
the payroll period in which the election or change is to become effective. Any
discontinuance under this Section 4.3 shall be made by filing an appropriate
written notice with the Administrator prior to the payroll period in which the
discontinuance is to become effective.
Section 4.4 Agreement to Make Tax-Sheltered Contributions. A
Participant's Tax-Sheltered Contributions shall be made pursuant to a salary
reduction agreement, which shall be a legally binding agreement, in a form
prescribed by the Administrator, whereby the Participant agrees to reduce the
Compensation otherwise payable to him thereafter, and whereby the Bank agrees
to contribute the amount of the reduction for any payroll period to the Trust
on behalf of the Participant.
-8-
<PAGE> 15
The Participant's salary reduction agreement shall provide
that if the Administrator determines that all or any part of the amount elected
by the Participant as a Tax-Sheltered Contribution may not be contributed to
the Trust because of the limitations set forth in Article V, the Bank shall not
be required to make such contributions to the Trust, and instead shall pay the
amount which is not contributed directly to the Participant as additional
taxable Compensation.
A Participant may amend or terminate his salary reduction
agreement with respect to Compensation not yet earned, as provided in Section
4.3. A Participant who has terminated his salary reduction agreement may be
permitted, in accordance with uniform and nondiscriminatory rules prescribed by
the Administrator, to enter into a new salary reduction agreement.
If a Participant is transferred to employment with the Bank or
an Affiliate which is not covered by the Plan, or if he separates from service,
his salary reduction agreement shall automatically terminate, except as
provided in Section 2.5(a).
Section 4.5 Administrator Alternatives. The Administrator
shall periodically monitor the level of Participants' Tax-Sheltered
Contributions to ensure against a violation of the limitations of Article V.
If the Administrator determines that on the basis of current levels of
Tax-Sheltered Contributions the limitations of Article V would be violated for
any Plan Year, the Administrator shall make such adjustments for the remainder
of such Plan Year in the percentage of one or more Participants' Compensation
which can be designated as Tax-Sheltered Contributions as the Administrator in
its discretion deems necessary to prevent such a violation.
Section 4.6 Rollover Contributions. No rollover
contributions shall be permitted under the Plan.
Section 4.7 Profits Not Required. The Bank shall make all
Tax-Sheltered Contributions and Qualified Nonelective Contributions (if any)
without regard to its current or accumulated earnings and profits. The Plan
continues to be a profit-sharing plan under Code Section 401(a)(27).
Section 4.8 Time of Payment of Contributions. The Bank shall
make payment of Tax-Sheltered Contributions to the Trust on a biweekly basis,
and shall make payment of Qualified Nonelective Contributions (if any) to the
Trust no later than the due date (including extensions of time) for filing the
Bank's Federal income tax return for its taxable year coincident with the Plan
Year.
Section 4.9 Irrevocability of Contributions and Exceptions.
(a) Irrevocability and Exclusive Benefit. Except
as provided in subsection (b), all Bank contributions to the Trust shall be
irrevocable, and neither such contributions nor any income therefrom shall be
used for any purpose other than the exclusive benefit of Participants or their
beneficiaries under the Plan.
(b) Circumstances of Return of Contributions.
Contributions to the Trust may be refunded to the Bank, to the extent such
refunds do not, in themselves, deprive the Plan of its qualified status, under
the following circumstances and subject to the following limitations:
(1) To the extent that a Federal income
tax deduction is claimed by the Bank for any contribution and
is
-9-
<PAGE> 16
disallowed by the Internal Revenue Service, the Trustees shall
refund to the Bank the amount so disallowed within one year of
the date of such disallowance upon presentation of evidence of
disallowance and a demand by the Bank for such refund.
(2) In the case of a Bank contribution
which is made, in whole or in part, by reason of a mistake of
fact (as, for example, incorrect information as to the
eligibility or Compensation of a Participant, or a
mathematical error), so much of such contribution as is
attributable to the mistake of fact shall be returned to the
Bank on demand, upon presentation to the Trustees of evidence
of the mistake of fact and calculation as to the impact of
such mistake. Demand and repayment must be effected within
one year after the date of payment of the contribution to
which the mistake applies.
(c) Rules for Refunds. The amount which may be
returned to the Bank is the excess of (i) the amount contributed over (ii) the
amount which would have been contributed had there not occurred a disallowance
of deduction or mistake of fact (the "excess contribution"). Earnings
attributable to the excess contribution shall not be returned to the Bank, but
losses attributable thereto shall reduce the amount to be returned. If the
return of the amount of the excess contribution would cause the amount in the
account of any Participant to be reduced to less than the balance which would
have been in the account had the excess contribution not been made, the amount
to be returned to the Bank shall be limited to the extent necessary to avoid
such reduction. All refunds under this Section 4.9 shall additionally be
limited in amount, circumstance, and timing to the provisions of ERISA Section
403(c).
Article V
LIMITATIONS ON CONTRIBUTIONS
The provisions of this Article V shall apply to Plan Years
beginning after December 31, 1986, except as otherwise specifically provided.
Section 5.1 Definitions. The following definitions shall
apply for purposes of this Article V:
(a) "Actual Deferral Percentage" shall mean the
ratio (expressed as a percentage) of Tax-Sheltered Contributions on behalf of
an Eligible Participant for the Plan Year to such Eligible Participant's
Testing Compensation for such Plan Year. For Plan Years which begin after
December 31, 1988, Actual Deferral Percentages shall be calculated to the
nearest 1/100 of one percent. For purposes of determining an Eligible
Participant's Actual Deferral Percentage, the Qualified Nonelective
Contributions (if any) made with respect to such Eligible Participant shall be
treated as Tax-Sheltered Contributions, provided the requirements of Treas.
Reg. Section 1.401(k)-1(b)(5) are satisfied.
(b) "Average Actual Deferral Percentage" shall
mean the average (expressed as a percentage) of the Actual Deferral Percentages
of the Eligible Participants in a group. For Plan Years which begin after
December 31, 1988, Average Actual Deferral Percentages shall be calculated to
the nearest 1/100 of one percent.
-10-
<PAGE> 17
(c) "Determination Year" shall mean the Plan Year
for which a determination of which Employees are Highly Compensated Employees
is being made.
(d) "Eligible Participant" shall mean an Employee
who is authorized under the terms of the Plan to have Tax-Sheltered
Contributions made to the Plan on his behalf for the Plan Year.
(e) "Excess Contributions" shall mean the amount
described in Code Section 401(k)(8)(B).
(f) "Excess Deferral Amount" shall mean the
amount of Tax-Sheltered Contributions for a calendar year which the Participant
allocates to this Plan pursuant to the claims procedure set forth in Section
5.4(b).
(g) "Family Member" shall mean an Employee who
is, during a particular Determination Year or Look-Back Year, a spouse or
lineal ascendant or descendent, or a spouse of a lineal ascendant or
descendent, of either:
(1) a five-percent owner who is an
active or former Employee; or
(2) a Highly Compensated Employee who is
one of the ten most highly compensated Employees ranked on the
basis of Testing Compensation paid by the Bank and Affiliates
during the applicable year.
(h) "Highly Compensated Employee" shall mean an
individual described in either paragraph (1) or paragraph (2) below.
(1) Look-Back Year. An Employee is a
Highly Compensated Employee if the Employee performs services
during the Determination Year and the Employee:
(A) was a five-percent owner (as
defined in Code Section 416(i)) of the Bank or an
Affiliate at any time during the Look-Back Year;
(B) received "compensation" (as
defined in Code Section 414(q)(7)) from the Bank and
Affiliates in excess of $75,000, multiplied by the
Adjustment Factor, during the Look-Back Year;
(C) received "compensation" (as
defined in Code Section 414(q)(7)) from the Bank and
Affiliates in excess of $50,000, multiplied by the
Adjustment Factor, during the Look-Back Year, and is
a member of the Top-Paid Group for the Look-Back
Year; or
(D) is an Includible Officer during
the Look-Back Year.
(2) Determination Year. An Employee is
a Highly Compensated Employee if the Employee performs
services during the Determination Year and the Employee:
(A) is a five-percent owner at any
time during the Determination Year; or
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<PAGE> 18
(B) (i) would be described in
paragraph (1)(B), (C), or (D) if "Determination Year"
were substituted for "Look-Back Year" each place such
term occurs, and (ii) is one of the 100 Employees who
receive the greatest "compensation" (as defined in
Code Section 414(q)(7)) from the Bank and Affiliates
during the Determination Year.
(i) "Includible Officer" shall mean an Employee
who (i) is an officer (within the meaning of Code Section 416(i)) of the Bank
or an Affiliate at any time during the Determination Year or Look-Back Year (as
applicable) and (ii) receives "compensation" (as defined in Code Section
414(q)(7)) from the Bank and Affiliates during the applicable year that is
greater than 50 percent of the dollar limitation in effect under Code Section
415(b)(1)(A) for the calendar year in which the Determination Year or Look-Back
Year begins. No more than 50 Employees (or, if less, the greater of three
Employees or ten percent of the Employees) shall be treated as Includible
Officers. For purposes of the preceding sentence, Employees described in Code
Section 414(q)(8) shall not be taken into account. When no officer has
compensation greater than the amount set forth above, the most highly paid
officer shall be treated as an Includible Officer.
(j) "Look-Back Year" shall mean the 12-month
period immediately preceding the Determination Year.
(k) "Non-Highly Compensated Employee" shall mean
an Employee who is neither a Highly Compensated Employee nor a Family Member.
(l) "Testing Compensation" shall mean Limitation
Compensation received while an Eligible Participant plus all amounts that are
not currently includible in the Eligible Participant's gross income by reason
of the application of Code Section 125, Section 402(a)(8), Section
402(h)(1)(B), or Section 403(b). With respect to Plan Years beginning after
December 31, 1988, the "Testing Compensation" of any Eligible Participant for
any Plan Year shall not exceed $200,000 multiplied by the Adjustment Factor.
In determining the Testing Compensation of an Eligible Participant for purposes
of this limitation, the rules of Code Section 414(q)(6) shall apply, except
that in applying such rules, the term "family" shall include only the spouse of
the Eligible Participant and any lineal descendants of the Eligible Participant
who have not attained age 19 before the close of the Plan 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 individuals
in proportion to each such individual's Testing Compensation as determined
under this subsection (1) prior to the application of this limitation.
(m) "Top-Paid Group" shall mean the top 20
percent of the Employees when ranked on the basis of Compensation from the Bank
and Affiliates during a Determination Year or Look-Back Year (as applicable).
Employees described in Code Section 414(q)(8) shall be excluded for purposes of
determining the number of employees in the Top-Paid Group.
Section 5.2 Limitations on Tax-Sheltered Contributions.
(a) Maximum Amount of Tax-Sheltered
Contributions. No Participant shall be permitted to have Tax-Sheltered
Contributions made under this Plan during any calendar year in excess of $7,000
multiplied by the Adjustment Factor.
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<PAGE> 19
(b) Average Actual Deferral Percentage. The
Tax-Sheltered Contributions on behalf of the Eligible Participants shall meet
at least one of the following two tests:
(1) The Average Actual Deferral
Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Eligible Participants
who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25.
(2) The Average Actual Deferral
Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Eligible Participants
who are Non-Highly Compensated Employees for the Plan Year
multiplied by two, provided that the Average Actual Deferral
Percentage for Eligible Participants who are Highly
Compensated Employees does not exceed the Average Actual
Deferral Percentage for Eligible Participants who are
Non-Highly Compensated Employees by more than two percentage
points.
(c) Special Rules.
(1) For purposes of this Section 5.2,
the Actual Deferral Percentage for any Eligible Participant
who is a Highly Compensated Employee for the Plan Year and who
is eligible to have elective deferrals allocated to his
account under two or more plans or arrangements described in
Code Section 401(k) that are maintained by the Bank or an
Affiliate shall be determined as if all such elective
deferrals were made under a single arrangement.
(2) If an Eligible Participant who is a
Highly Compensated Employee is subject to the family
aggregation rules of Code Section 414(q)(6), the combined
Actual Deferral Percentage for the family group (which is
treated as one Highly Compensated Employee) shall be
determined by combining the Tax-Sheltered Contributions and
Testing Compensation of all Family Members who are Eligible
Participants and the Family Members shall be disregarded in
determining the Actual Deferral Percentage for Eligible
Participants who are Non-Highly Compensated Employees. If an
Employee is required to be aggregated as a member of more than
one family group, all Eligible Participants who are members of
those family groups that include such Employee shall be
treated as one family group.
(3) A Tax-Sheltered Contribution shall
be taken into account under subsection (b) for a Plan Year
only if it relates to Compensation that would have been
received by the Eligible Participant in such Plan Year, but
for the Eligible Participant's election to defer a portion of
his Compensation under Section 4.2.
(4) A Tax-Sheltered Contribution shall
be taken into account under subsection (b) for a Plan Year
only if it is allocated to the Eligible Participant's
Tax-Sheltered Account as of a date within such Plan Year. For
this purpose, a Tax-Sheltered Contribution shall be considered
allocated as of a date within the Plan Year if the allocation
is not contingent on participation in the Plan or the
performance of services after such date and the Tax-Sheltered
Contribution is actually paid to
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<PAGE> 20
the Trust no later than 12 months after the end of the Plan
Year to which such Tax-Sheltered Contribution relates.
(5) The determination and treatment of
the Tax-Sheltered Contributions and Actual Deferral Percentage
of any Eligible Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
Section 5.3 Qualified Nonelective Contributions. The Bank
may make (but shall not be required to make) Qualified Nonelective
Contributions on behalf of Non-Highly Compensated Employees. Such Qualified
Nonelective Contributions shall be allocated among the Tax-Sheltered Accounts
of all Non-Highly Compensated Employees in the proportion that the Testing
Compensation received by each such Non-Highly Compensated Employee for the Plan
Year bears to the total Testing Compensation received by all Non-Highly
Compensated Employees for such Plan Year. Qualified Nonelective Contributions
(and earnings thereon) may not be withdrawn on account of hardship under
Section 11.2.
Section 5.4 Distribution of Excess Deferral Amounts.
(a) In General. Notwithstanding any other
provision of the Plan, Excess Deferral Amounts, plus any income and minus any
loss allocable thereto, shall be distributed no later than April 15, 1988, and
each April 15 thereafter, to Participants who claim allocable Excess Deferral
Amounts for the preceding calendar year.
(b) Claims. A Participant's claim shall be in
writing; shall be submitted to the Administrator no later than March 1; shall
specify the Participant's Excess Deferral Amount for the preceding calendar
year; and shall be accompanied by the Participant's written statement that if
such Excess Deferral Amount is not distributed, it, when added to amounts
deferred under other plans or arrangements described in Code Section 401(k),
Section 408(k), or Section 403(b), will exceed the limit imposed on the
Participant by Code Section 402(g) for the year in which the deferral occurred.
(c) Determination of Income or Loss. A
Participant's Excess Deferral Amount shall be adjusted for income or loss to
December 31 of the taxable year for which the Excess Deferral Amount was
deferred. The income or loss allocable to a Participant's Excess Deferral
Amount shall be determined in accordance with Section 9.2.
(d) Accounting for Excess Deferral Amounts.
Excess Deferral Amounts distributed under this Section 5.4 shall be distributed
from the Participant's Tax-Sheltered Account.
Section 5.5 Distribution of Excess Contributions.
(a) In General. Notwithstanding any other
provision of the Plan, Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed within the 12-month period beginning on
the earlier of the last day of the Plan Year for which such Excess
Contributions were made or the date of the complete termination of the Plan, to
Participants on whose behalf such Excess Contributions were made for such Plan
Year. (If the Excess Contributions are distributed after the first March 15
following the Plan Year for which such Excess Contributions were made, the Bank
will be subject to a ten percent excise tax under Code Section 4979 with
respect to such Excess Contributions.) The Bank shall designate such
distributed amounts as Excess Contributions (and income).
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<PAGE> 21
(b) Determination of Excess Contributions. The
amount of Excess Contributions for a Highly Compensated Employee shall be
determined in the following manner. First, the Actual Deferral Percentage of
the Highly Compensated Employee(s) with the highest Actual Deferral Percentage
shall be reduced to the extent necessary to satisfy Section 5.2(b) or to cause
such Actual Deferral Percentage to equal the Actual Deferral Percentage of the
Highly Compensated Employee(s) with the next highest Actual Deferral
Percentage. Second, this process shall be repeated until Section 5.2(b) is
satisfied. The amount of Excess Contributions for a Highly Compensated
Employee shall equal the total of his Tax-Sheltered Contributions (and other
contributions, if any) taken into account under Section 5.2(b) less the product
of such Highly Compensated Employee's Actual Deferral Percentage as determined
under this subsection (b) multiplied by his Testing Compensation.
(c) Determination of Income or Loss. The Excess
Contributions shall be adjusted for income or loss to the last day of the Plan
Year for which such Excess Contributions were made. The income or loss
allocable to a Participant's Excess Contributions shall be determined in
accordance with Section 9.2.
(d) Accounting for Excess Contributions. Excess
Contributions distributed under this Section 5.5 shall be distributed from the
Participant's Tax-Sheltered Account.
(e) Reduction for Excess Deferrals Distributed.
The Excess Contributions which would otherwise be distributed under this
Section 5.5 shall be reduced, in accordance with regulations issued under Code
Section 401(k), by the amount of Excess Deferrals distributed to the
Participant under Section 5.4.
Section 5.6 Code Section 415 Limitations. Effective for
Limitation Years beginning on or after January 1, 1987, the following
limitations shall apply:
(a) Maximum Annual Addition. Notwithstanding any
other provision of the Plan, in no event shall the "Annual Addition" to a
Participant's account for any Limitation Year exceed the lesser of:
(1) $30,000, or, if greater, 1/4 of the
defined benefit dollar limitation set forth in Code Section
415(b)(1)(A) as in effect for the Limitation Year; or
(2) 25 percent of the Participant's
Limitation Compensation for such Limitation Year.
The "Annual Addition" to a Participant's account for any Limitation Year shall
be the sum, for such Year, of:
(1) Qualified Nonelective Contributions;
and
(2) Tax-Sheltered Contributions other
than Excess Deferral Amounts distributed in accordance with
Section 5.4.
(b) Limitation re Pension Plan. If a Participant
in this Plan is, or was at any time, also a participant in the Pension Plan,
the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction, described in paragraphs (1) and (2) below, with respect to such
Participant for any Limitation Year shall not exceed 1.0. If the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction with
respect to any Participant for any Limitation Year would otherwise exceed 1.0,
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the Participant's annual benefit under the Pension Plan shall be reduced to the
extent necessary to comply with such 1.0 limit.
(1) The Defined Benefit Plan Fraction
for any Limitation Year is a fraction, the numerator of which
is the projected annual benefit of the Participant under the
Pension Plan (determined as of the end of the Limitation
Year), and the denominator of which is the lesser of:
(A) the product of 1.25 multiplied by
the dollar limitation in effect under Code Section
415(b)(1)(A) for such Limitation Year; or
(B) the product of 1.4 multiplied by
the amount which may be taken into account under Code
Section 415(b)(1)(B) with respect to such Participant
for such Limitation Year.
For purposes of this paragraph (1), a Participant's
projected annual benefit shall be calculated under the Pension
Plan on the assumptions that he remains in the service of the
Bank until his "Normal Retirement Date" (as defined in the
Pension Plan) (or his current age, if that is later), that his
compensation continues at the same rate as in the Limitation
Year the projection is being made, and that all other factors
used to determine benefits under the Pension Plan remain the
same as in the Limitation Year the projection is being made.
(2) 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 this Plan for such Limitation Year
and for all prior Limitation Years, and the denominator of
which is the sum of the lesser of the following amounts
determined for such Limitation Year and for each prior year of
service with the Bank or Affiliates:
(A) the product of 1.25 multiplied
by the dollar limitation in effect under Code Section
415(c)(1)(A) for such Limitation Year; or
(B) 35 percent of the Participant's
Limitation Compensation for such Limitation Year.
(3) Recomputation Not Required. The
Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as an Annual Addition.
(4) Adjustment of Defined Contribution
Plan Fraction. If the Plan satisfied the applicable
requirements of Code Section 415 as in effect for all
Limitation Years beginning before January 1, 1987, an amount
shall be subtracted from the numerator of the Defined
Contribution Plan Fraction (not exceeding such numerator) as
prescribed by the Secretary of the Treasury so that the sum of
the Defined Contribution Plan Fraction and the Defined Benefit
Plan Fraction computed under Code Section 415(e)(1) (as
revised by this Section 5.6) does not exceed 1.0 for such
Limitation Year.
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(c) Aggregation Rules. For purposes of applying
the limitations of subsection (a) and subsection (b) applicable to a
Participant for a particular Limitation Year:
(1) All tax-qualified defined benefit
plans ever maintained by the Bank shall be treated as one
defined benefit plan; and all tax-qualified defined
contribution plans ever maintained by the Bank shall be
treated as one defined contribution plan; and
(2) Any tax-qualified defined benefit
plan or tax-qualified defined contribution plan maintained by
any Affiliate shall be deemed to be maintained by the Bank.
Section 5.7 Disposition of Excess Annual Additions.
(a) Determination of Estimated Limitation
Compensation. Prior to the determination of the Participant's actual
Limitation Compensation for a Limitation Year, the maximum Annual Addition may
be determined under Section 5.6(a) on the basis of the Participant's estimated
annual Limitation Compensation for such Limitation Year. Such estimated annual
Limitation Compensation shall be determined on a reasonable basis and shall be
uniformly determined for all Participants similarly situated. Any
Tax-Sheltered or Qualified Nonelective Contributions based on estimated annual
Limitation Compensation shall be reduced by any excess Annual Additions carried
over from prior years.
(b) Determination of Actual Limitation
Compensation. As soon as is administratively feasible after the end of the
Limitation Year, the maximum Annual Addition for such Limitation Year shall be
determined under Section 5.6(a) on the basis of the Participant's actual
Limitation Compensation for such Limitation Year.
(c) Disposition of Excess Annual Additions. If,
as a result of a reasonable error in estimating a Participant's Limitation
Compensation, or a reasonable error in determining the amount of Tax-Sheltered
Contributions that may be made to the Plan with respect to any Participant
under the limits of Code Section 415, or under other limited facts and
circumstances as determined by the Commissioner of Internal Revenue, the Annual
Additions for a Participant for the Limitation Year would otherwise exceed the
maximum permissible amount, then Tax-Sheltered Contributions for such
Limitation Year shall be distributed to the Participant, to the extent required
to reduce the Annual Additions to the maximum permissible amount.
Tax-Sheltered Contributions distributed in accordance with this subsection (c)
shall be disregarded for purposes of Section 5.2(b).
Article VI
PARTICIPANTS' ACCOUNTS
Section 6.1 Participants' Accounts. The Trustees shall
establish and maintain separate record accounts as described in Section 6.2 in
the name of each Participant to which items shall be credited and charged
pursuant to the provisions of the Plan.
Section 6.2 Separate Accounts. The Trustees shall establish
and maintain for each Participant three separate accounts, and shall apportion
the
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amounts allocated to the Participant's account among these accounts in the
following manner:
Bank Account: That portion of a Participant's
account allocated to his Subaccount A as of December 31, 1988,
together with any earnings and appreciation thereon, shall be
apportioned to his Bank Account.
Tax-Sheltered Account: That portion of a
Participant's account allocated to his Subaccount B as of
December 31, 1988, plus all Tax-Sheltered Contributions made
by the Bank on behalf of the Participant, and any Qualified
Nonelective Contributions which are allocated to the
Participant's Tax-Sheltered Account under Section 5.3,
together with any earnings and appreciation thereon, shall be
apportioned to his Tax-Sheltered Account.
Supplemental Account: That portion of a
Participant's account allocated to his Subaccount C as of
December 31, 1988, together with any earnings and appreciation
thereon, shall be apportioned to his Supplemental Account.
Article VII
ALLOCATION OF BANK CONTRIBUTIONS
Section 7.1 Allocation to Participants' Accounts. The
Trustees shall, as of the last business day of each calendar quarter, allocate
Tax-Sheltered Contributions and Qualified Nonelective Contributions (if any)
made under the Plan on behalf of each Participant among the Participants'
Tax-Sheltered Accounts.
Section 7.2 Schedule of Allocations. The Trustees shall, as
of the last business day of each calendar quarter, prepare a schedule showing
the amount allocated to the Tax-Sheltered Account of each Participant for such
calendar quarter.
Article VIII
INVESTMENT OF TRUST ASSETS
Section 8.1 Investment Funds. The Trustees shall maintain
within the Trust the following five Funds for the investment of Plan assets:
(a) The Certificate of Deposit Fund, to be
invested primarily in certificates of deposit of the Bank and in the money
market deposit account of the Bank and, when the Trustees determine that the
interests of the Participants so require, in certificates of deposit of other
financial institutions. The Trustees shall have the responsibility and
authority to determine the maturities and other terms of the certificates of
deposit in which the Certificate of Deposit Fund shall be invested.
(b) The Growth Fund, to be invested primarily in
common stock and securities convertible into common stock.
(c) The Ginnie Mae Portfolio Fund, to be invested
primarily in Government National Mortgage Association mortgage-backed
pass-through certificates (Ginnie Maes) that are guaranteed as to timely
payment of
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<PAGE> 25
interest and principal by the full faith and credit of the United States
Government.
(d) The Universal Life Insurance Fund, to be
invested in an individual universal life insurance contract for each
Participant who elects this Fund prior to July 1, 1990. Special rules
concerning this Fund are provided in Section 8.4.
(e) The Commonwealth Common Stock Fund, to be
invested primarily in Commonwealth Stock. Special rules concerning this Fund
are provided in Section 8.5.
The Trustees may hold, as part of the assets of each Fund,
such amounts in cash or short-term marketable securities as they, or the
Administrator, may reasonably deem necessary for the current operation of the
Plan.
Income from, and net proceeds from sales of, assets in each
such Fund shall be reinvested in the same Fund, except that after June 30,
1990, income from, and net proceeds from sales of, assets in the Universal Life
Insurance Fund shall be invested in other Funds in the manner stated in Section
8.2(a). Brokerage commissions, transfer taxes, other charges and expenses in
connection with the purchase and sale of assets held in each Fund, and any
income or other taxes payable with respect to each Fund shall be charged to
such Fund.
Section 8.2 Apportionment of Participants' Accounts Among
Funds.
(a) Apportionment of Current Contributions. By
filing a form prescribed by the Administrator with the Administrator no later
than December 15, March 15, June 15 or September 15 of each Plan Year, a
Participant may direct that the Tax-Sheltered Contributions which are credited
to his account after the last business day of the February, May, August or
November, respectively, which immediately follows such election, be apportioned
to the Certificate of Deposit Fund, the Growth Fund, the Ginnie Mae Portfolio
Fund, the Commonwealth Common Stock Fund, or (to the extent permitted in the
last sentence of this subsection (a)) the Universal Life Insurance Fund, or in
part to each such Fund in multiples of 10 percent. A new Participant may make
the apportionment described in the previous sentence to be effective as of the
January 1 or July 1 on which his participation begins by filing a form
prescribed by the Administrator with the Administrator as part of his
enrollment process. To the extent no investment direction is received from the
Participant, his Contributions shall be apportioned to the Certificate of
Deposit Fund. The apportionment of current Contributions determined under this
subsection (a) shall remain in effect from year to year until changed by the
Participant in the manner provided in this subsection (a). Notwithstanding the
foregoing, after June 30, 1990, no new Participant may direct investments to
the Universal Life Insurance Fund, and Participants as of June 30, 1990 may
only direct investments to the Universal Life Insurance Fund to the extent
necessary to pay premiums on insurance contracts purchased for such
Participants in such Fund on or before June 30, 1990. Special rules concerning
the Commonwealth Common Stock Fund are provided in Section 8.5.
(b) Reapportionment of Account Investments. A
Participant may direct that the amounts credited to his account be
reapportioned, in whole or in part, in multiples of 10 percent, to the
Certificate of Deposit Fund, the Growth Fund, the Ginnie Mae Portfolio Fund, or
the Commonwealth Common Stock Fund by filing a form prescribed by the
Administrator with the
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<PAGE> 26
Administrator no later than the December 15, March 15, June 15 or September 15,
respectively, which immediately precedes such effective date. The transfer of
amounts to be reapportioned shall take place based on an estimated valuation as
near as administratively practicable to the first day of the calendar quarter
following the redirection election, and a final transfer based on an actual
valuation will take place as of the last business day of the February, May,
August or November, respectively, which immediately follows the redirection
election. Notwithstanding the foregoing, any reapportionment of a
Participant's account invested in the Universal Life Insurance Fund shall
require that the insurance contract purchased for the Participant in such Fund
be surrendered and 100 percent of the proceeds be reapportioned to one or more
other Funds. For purposes of this subsection (b), the amounts credited to the
Participant's account as of the date of reapportionment which are invested in
the Growth Fund, the Ginnie Mae Portfolio Fund or the Commonwealth Common Stock
Fund shall be determined under Section 10.2(a), in the Certificate of Deposit
Fund shall be determined under Section 9.3, and in the Universal Life Insurance
Fund shall be determined under Section 8.4. Special rules regarding the
Commonwealth Common Stock Fund are provided in Section 8.5.
(c) Special 1993 Reapportionment. In addition to
the reapportionment provisions set forth in subsection (b), a Participant may
direct that amounts credited to his account as of May 31, 1993 be
reapportioned, in whole or in part, to the Commonwealth Common Stock Fund as of
the date the initial limited offering of Commonwealth Stock is sold to
purchasers thereof, by filing a form prescribed by the Administrator with the
Administrator no later than May 28, 1993. For purposes of this subsection (c),
the Participant shall specify which Fund(s) is (are) to be reapportioned and
the amount of each reapportionment from a Fund (in multiples of one percent of
the amount of the Participant's investment in the Fund, determined as of the
May 31, 1993 Valuation Date in accordance with Section 8.2(b)). For purposes
of this special 1993 reapportionment only, the purchase price of Commonwealth
Stock shall equal the initial limited offering price of Commonwealth Stock.
See Section 8.5(d) for additional rules concerning this special
reapportionment.
(d) Apportionment and Reapportionment Limited.
Regardless of any fluctuation which may occur in the relative value of the
amounts credited to a Participant's account in the five Funds, no apportionment
or reapportionment shall be made except upon the direction of the Participant,
and no Participant may direct that apportionment or reapportionment be made
more frequently than provided in this Section 8.2.
Section 8.3 Application of Investment Directions.
(a) Pro Rata Application. Each investment
direction made by a Participant pursuant to Section 8.2(a) shall be applied pro
rata to all of the current contributions made by and on behalf of such
Participant, and each reapportionment direction made by a Participant pursuant
to Section Section 8.2(b) and (c) shall be applied pro rata to all of the
Participant's accounts under the Plan.
(b) Time of Investment. Investments of
contributions and reinvestments of accounts to be made pursuant to Section
Section 8.2(a) and (b) as of the dates specified in Section Section 8.2(a) and
(b) shall be made on such dates or as soon thereafter as is reasonably
practicable. Neither the Trustees, the Plan, the Bank nor any Affiliate shall
have any liability to any Participant or beneficiary as a result of such
investments actually being made after the dates specified in Section Section
8.2(a) and (b).
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Section 8.4 Special Rules Concerning the Universal Life
Insurance Fund. Effective July 1, 1990, the purchase of universal life
insurance shall no longer be an optional form of investment under the Plan.
The following rules shall apply to universal life insurance purchased prior to
July 1, 1990:
(a) In the event of any conflict between the
provisions of the Plan and the terms of any insurance contract purchased for a
Participant, the Plan provisions shall control.
(b) Effective January 1, 1989, when benefits
become payable to a Participant, the Trustees shall, as elected by the
Participant, direct the insurer to convert such contract to cash or to
distribute it to the Participant.
(c) The Trustees shall apply for, hold, and own
each insurance contract purchased for a Participant and shall exercise any
right contained in the insurance contract.
(d) Each insurance contract shall provide that
the proceeds thereof shall be payable to the Trustees. The Trustees, however,
shall be required to pay over all proceeds of the insurance contract to the
Participant's designated beneficiary in accordance with the distribution
provisions of the Plan. Under no circumstances shall the Trust retain any part
of the proceeds.
Section 8.5 Special Rules Concerning the Commonwealth Common
Stock Fund.
(a) Eligible Individual Account Plan. With
respect to investments in the Commonwealth Common Stock Fund, it is intended
that this Plan shall be an eligible individual account plan within the meaning
of ERISA Section 407(d)(3), and that up to 100 percent of the assets of the
Plan may be invested in Commonwealth Stock in accordance with the provisions of
the Plan.
(b) Voting of Shares. Before each annual or
special meeting of shareholders of the Bank, there shall be sent to each
Participant (other than a Participant with no amounts in his account invested
in the Commonwealth Common Stock Fund as of the record date for proxy
solicitations) a copy of the proxy soliciting material for the meeting,
together with a form requesting instructions to the Trustees on how to vote the
shares of Commonwealth Stock credited to such Participant's account. In
addition, in the event of a tender offer for Commonwealth Stock, a copy of
offers to purchase shall be sent to each Participant together with a request
from the Trustees for instructions as to whether to tender the shares credited
to the Participant's account. Upon receipt of such instructions, the Trustees
shall vote or tender shares as instructed. Shares for which instructions are
not received shall, to the extent consistent with the Trustees' duties, not be
voted.
(c) Quarterly Adjustment of Participants'
Accounts in Commonwealth Common Stock Fund. Promptly after the preparation of
the Trustees' valuation (as provided in Section 9.1), the Trustees shall
allocate any dividends received that are attributable to Commonwealth Stock
held in Participants' accounts as of the record date of the dividend to such
accounts. Such dividends shall be invested in the Commonwealth Common Stock
Fund.
(d) Apportionment/Reapportionment of Investments
in the Commonwealth Common Stock Fund. Except for the May 31, 1993
reapportionment provided in Section 8.2(c), any apportionment or
reapportionment to or from the Commonwealth Common Stock Fund shall be based on
the value of Commonwealth
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Stock as of the Valuation Date immediately preceding the date on which such
apportionment or reapportionment is to be made. Fractional shares shall not be
purchased; any amount remaining after the purchase of a whole number of shares
shall be invested on behalf of the Participant in cash or short-term marketable
securities pursuant to Section 8.1. If the total amount apportioned or
reapportioned by Participants to the Commonwealth Common Stock Fund as of May
31, 1993 or as of any Valuation Date exceeds the amount of Commonwealth Stock
then available for purchase, investment in Commonwealth Stock shall be made pro
rata based on the dollar value of the amount designated by each Participant for
investment in the Commonwealth Common Stock Fund. Any amount not invested in
Commonwealth Stock because of the limitation of this subsection (d) shall be
invested on behalf of the Participant in cash or short-term marketable
securities pursuant to Section 8.1.
Article IX
VALUATIONS
Section 9.1 Valuation. As of each Valuation Date, the
Trustees shall determine the fair market value of all of the assets in the
Certificate of Deposit Fund, the Growth Fund, the Ginnie Mae Portfolio Fund,
the Universal Life Insurance Fund and the Commonwealth Common Stock Fund. As
soon as practicable after each such valuation, the Trustees shall deliver in
writing to the Administrator a valuation of each Fund, together with a
statement of the amount of net income or loss (including appreciation or
depreciation in the value of the Fund investments) since the previous Valuation
Date.
Section 9.2 Quarterly Adjustment of Participants' Accounts in
Certificate of Deposit Fund. Promptly after preparation of the Trustees'
valuation (as provided in Section 9.1), the Trustees shall allocate the
increase or decrease in the value of the assets in the Certificate of Deposit
Fund to the accounts of the Participants in the proportion that the amount in
the account of each Participant invested in such Fund bears to the total amount
in the accounts of all Participants invested in such Fund. In making such
allocations as of a Valuation Date, the Trustees shall exclude from
consideration any Tax-Sheltered Contributions and Qualified Nonelective
Contributions allocated to such Fund with respect to the calendar quarter
ending on such Valuation Date, but shall include any additions to a
Participant's account in such Fund during the calendar quarter resulting from
an investment reapportionment under Section 8.2(b).
Section 9.3 Net Value of Participants' Accounts in
Certificate of Deposit Fund. The net value of each Participant's account in
the Certificate of Deposit Fund shall be equal to the sum of:
(a) the value of his undivided share of the cash
and other property in such Fund, determined as of the Valuation Date specified
or, where no Valuation Date is specified, as of the Valuation Date last
preceding the event requiring such determination, and determined after the
allocation described in Section 9.2; plus
(b) simple interest on the value determined under
subsection (a) above credited through the date of distribution or
reapportionment at the rate earned by the Certificate of Deposit Fund for the
quarter ending on such Valuation Date.
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Article X
BENEFITS AND DISTRIBUTIONS
Section 10.1 Vesting in Tax-Sheltered, Supplemental, and Bank
Accounts. A Participant's right to receive after separation from service that
part of his Accrued Benefit which has been apportioned to his Tax-Sheltered,
Supplemental, and Bank Accounts shall be nonforfeitable (vested) at all times.
Section 10.2 Form and Valuation of Benefits. Except as
otherwise provided in Section 8.4, the benefits described in this Article X
shall be paid to a Participant or his beneficiary in the form of a single cash
payment. The amount of such benefits shall be determined as follows:
(a) For any amounts invested in the Growth Fund,
the Ginnie Mae Portfolio Fund or the Commonwealth Common Stock Fund, the share
balance of the portion of the Participant's account invested in the applicable
Fund shall equal the number of shares credited to the Participant's account as
of the date of benefit payment. The distribution value shall equal the share
price as of the actual liquidation date multiplied by the number of shares
liquidated.
(b) For any amounts invested in the Certificate
of Deposit Fund, the distribution value shall be based on the net value of the
portion of the Participant's account invested in such Fund as determined under
Section 9.3.
(c) For any amounts invested in the Universal
Life Insurance Fund, the distribution value shall be determined as provided in
Section 8.4.
Section 10.3 Payment of Benefits upon Normal Retirement. A
Participant may retire on his Normal Retirement Date, but if he continues
thereafter in the service of the Bank, he shall continue to participate in the
Plan until he actually retires. Subject to Section 10.7, benefits shall be
paid to a Participant who retires on or after his Normal Retirement Date not
later than 90 days after the close of the Plan Year in which he retires. Such
benefits shall be paid as provided in Section 10.2.
Section 10.4 Payment of Benefits upon Separation Before
Normal Retirement.
(a) Except as provided in subsection (b), if a
Participant separates from service before attaining Normal Retirement Age for
any reason other than death, benefits shall not be paid to him until his Normal
Retirement Date unless the Participant consents in writing to immediate
distribution, in which case, subject to Section 10.7, his benefits shall be
paid to him not later than 90 days after the close of the Plan Year in which he
so consents. If the payment of benefits is deferred, the Trustees shall
segregate the Participant's Accrued Benefit and deposit it either (i) in the
Certificate of Deposit Fund described in Section 8.1(a), or (ii) in one or more
Federally insured savings accounts for investment until the deferred payment
date.
(b) If a Participant's Accrued Benefit does not
exceed $3,500, the Administrator, subject to Section 10.7, shall direct the
Trustee to distribute such benefit not later than 90 days after the close of
the Plan Year in which the Participant separates from service.
(c) Benefits described in this Section 10.4 shall
be paid as provided in Section 10.2.
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Section 10.5 Death. If a Participant dies before separating
from service, or after separating from service but before receiving payment of
his benefit, his Accrued Benefit shall be paid to his designated beneficiary or
beneficiaries in accordance with Section 10.6, subject to Section 10.7, not
later than 90 days after the close of the Plan Year in which the death of the
Participant occurs. Such benefits shall be paid as provided in Section 10.2.
Section 10.6 Designation of Beneficiary; Spouse's Consent to
Nonspouse Beneficiary.
(a) Designation of Beneficiary. In the event a
Participant has a surviving spouse at his death, such surviving spouse shall be
the Participant's beneficiary, unless the spouse has consented in the manner
described in subsection (b) to the payment of the Participant's Accrued Benefit
to a beneficiary other than the spouse. In the event the Participant has no
surviving spouse at his death, the beneficiary shall be the beneficiary
designated by the Participant. Any designation by the Participant and/or
consent by the Participant's spouse shall be made by a written form delivered
to the Administrator. Except as otherwise provided with respect to a surviving
spouse, a Participant may, at any time prior to his death, change his
designation of beneficiary by completing a new written form, but a designation
of beneficiary shall remain in effect until such new form is received by the
Administrator.
If a Participant dies without effectively designating a
surviving beneficiary and without a surviving spouse, the Administrator shall
designate a beneficiary, but only from among the following and only in the
order set forth: (i) surviving children, and (ii) the Participant's estate.
(b) Requirements for Spouse's Consent. To be
effective, a consent by a spouse to a Participant's designation of a nonspouse
beneficiary must be made in a writing filed with the Administrator, must
specify the particular nonspouse beneficiary (including any class of
beneficiaries or contingent beneficiary) to whom the spouse consents, must be
irrevocable, and must be witnessed by the Administrator as Plan representative
or by a notary public. Notwithstanding the foregoing, if the Participant
establishes to the satisfaction of the Administrator that such written consent
cannot be obtained because there is no spouse or the spouse cannot be located,
the Participant's designation of a non-spouse beneficiary shall be deemed a
permissible election. If the spouse is legally incompetent to give consent,
the spouse's legal guardian may give consent, even if such guardian is the
Participant. Also, if 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, spousal consent is not required unless a qualified
domestic relations order (as defined in Code Section 414(p)) provides
otherwise. Any consent required under this Section 10.6 shall be valid only
with respect to the spouse who signs the consent, or, in the event of a deemed
permissible election, the designated spouse (if any). Additionally, a
Participant may revoke a prior beneficiary designation without the consent of
his spouse at any time before the commencement of benefits. The number of
revocations or consents shall not be limited. Any new designation or change of
beneficiary shall require a new spousal consent.
Section 10.7 Requirements Concerning Distributions. All
benefit distributions under this Article X shall be subject to the following
requirements:
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(a) Before Death.
(1) Last Date for Commencement of
Benefit Payments. The payment of benefits to a Participant
under this Plan shall be made or commence not later than the
60th day after the close of the Plan Year in which the later
of the following events occurs:
(A) the Participant's attainment of
his Normal Retirement Age; or
(B) the termination of the
Participant's service with the Bank and Affiliates.
Notwithstanding the above, if the amount of payment required
otherwise to commence on a date determined under this section
or under any other section of the Plan cannot be ascertained
by such date or if the Administrator is unable to locate the
Participant or beneficiary after making reasonable efforts to
do so, a payment retroactive to such date may be made no later
than 60 days after the later of (i) the earliest date on which
the amount of such payment can be ascertained under the Plan
or (ii) the earliest date on which the Participant or
beneficiary is located.
(2) Additional Rule for Commencement of
Benefit Payments. The distribution of benefits to each
Participant who is entitled to a benefit under the Plan shall
be made or shall commence not later than April 1 of the
calendar year following the calendar year in which he attains
age 70-1/2.
(3) Duration of Benefit Payments. The
distribution of benefit payments to each Participant shall be
made, in accordance with regulations prescribed by the
Secretary of the Treasury, over a period not extending beyond
the life expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and his designated
beneficiary.
(4) Incidental Death Benefit Rule. If
the Participant's beneficiary is a person other than the
Participant's spouse, the value of the payments to be made to
the Participant shall be more than 50 percent of the value of
the total payments to be made to the Participant and his
beneficiary. This paragraph (4) shall be administered so as
to comply with the minimum distribution incidental benefit
requirements set forth in Prop. Treas. Reg. Section
1.401(a)(9)-2, or any successor thereto.
(b) After Death. If a Participant dies before
his benefit is distributed, the entire benefit of the Participant shall be
distributed by December 31 of the year containing the fifth anniversary of his
death.
(c) Regulations Control. All distributions under
this Plan shall be made in accordance with Code Section 401(a)(9) and
regulations issued thereunder. This Section 10.7 and Code Section 401(a)(9)
shall take precedence over any distribution options in the Plan inconsistent
with this Section 10.7 or Code Section 401(a)(9).
Section 10.8 Incapacitated Beneficiaries. If the
Administrator deems any person incapable of receiving any benefit to which he
is entitled by reason of minority, illness, infirmity, or other incapacity, it
may direct the Trustees to make payment to such person's legally appointed
guardian or, if
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none has been appointed, to the holder of a legally valid power of attorney
from such person. Such payments shall, to the extent thereof, discharge the
liability of the Bank, the Administrator, the Trustees, and the Trust.
Article XI
WITHDRAWALS AND LOANS
Section 11.1 Withdrawals from Supplemental Account. A
Participant may, by written application to the Administrator, elect to withdraw
all or any portion of his Accrued Benefit apportioned to his Supplemental
Account.
Section 11.2 Hardship Withdrawals from Tax-Sheltered and Bank
Accounts. A Participant in the service of the Bank who has withdrawn the total
amount of his Accrued Benefit apportioned to his Supplemental Account which he
may withdraw under Section 11.1, and who has not attained age 59-1/2, may, by
written application filed with the Administrator, make a hardship withdrawal of
all or any portion of his Accrued Benefit apportioned to his Tax-Sheltered and
Bank Accounts, subject to the following rules:
(a) A hardship withdrawal is permitted only if
(i) the hardship consists of an immediate and heavy financial need of the
Participant and (ii) the withdrawal requested is necessary to satisfy such
financial need. Hardship withdrawals may not include earnings on the
Participant's Tax-Sheltered Contributions which were not credited to the
Participant's Tax-Sheltered Account on or before December 31, 1988, and may not
include Qualified Nonelective Contributions (or earnings thereon).
(b) An immediate and heavy financial need shall
consist only of the following (plus the associated taxes and penalties
described in Section 11.2(c)(1)):
(1) expenses for medical care described
in Code Section 213(d) previously incurred by the Participant,
his spouse, or his dependents (as defined in Code Section
152), or necessary for those persons to obtain medical care
described in Code Section 213(d);
(2) costs directly related to the
purchase of a principal residence for the Participant
(excluding mortgage payments);
(3) the payment of tuition and related
educational fees for the next 12 months of post-secondary
education for the Participant or his spouse, children, or
dependents (as defined in Code Section 152);
(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;
(5) funeral expenses for the death of
the Participant's spouse, child, or dependent; or
(6) casualty losses of the Participant
not reimbursed by insurance.
(c) (1) A distribution shall be deemed
necessary to satisfy an immediate and heavy financial need if:
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(A) the distribution is not in
excess of the amount of the immediate and heavy
financial need of the Participant which amount may
include any amounts necessary to pay any Federal,
state or local income taxes or penalties reasonably
anticipated to result from the distribution; and
(B) the Participant has obtained
all distributions, other than hardship distributions,
and all nontaxable loans currently available to the
Participant under all plans maintained by the Bank or
any Affiliate.
(2) A Participant who makes a hardship
withdrawal shall not be permitted to have Tax-Sheltered
Contributions made to the Plan (or any other plan maintained
by the Bank) on his behalf for a period of 12 months after
receipt of the hardship withdrawal.
(3) A Participant who makes a hardship
withdrawal shall not be permitted to have Tax-Sheltered
Contributions made to the Plan (or any other plan maintained
by the Bank) on his behalf for the Participant's taxable year
immediately following the taxable year of the hardship
withdrawal in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of
such Participant's Tax-Sheltered Contributions for the taxable
year of the hardship withdrawal.
(d) The withdrawal shall be based on the balance
in the Participant's Tax-Sheltered and Bank Accounts determined under Section
11.6.
(e) A Participant's request for a hardship
withdrawal must be approved by the Administrator as meeting the Internal
Revenue Service rules under Code Section 401(k) at the time of withdrawal.
Section 11.3 Withdrawals from Tax-Sheltered and Bank Accounts
At and After Age 59-1/2. A Participant who has withdrawn the total amount of
his Accrued Benefit apportioned to his Supplemental Account which he may
withdraw under Section 11.1, and who has attained age 59-1/2, may elect to
withdraw all or any portion of his Accrued Benefit apportioned to his
Tax-Sheltered and Bank Accounts. There shall be no restrictions or penalty
imposed upon such withdrawal.
Section 11.4 Time of Withdrawal Payment. A Participant whose
request for a withdrawal under Section 11.2 has been approved by the
Administrator shall be entitled to receive his withdrawal payment from the
Trustees as soon as practicable after the end of the calendar quarter in which
the Administrator approves such request. A Participant filing a proper
application with the Administrator for a withdrawal under Section 11.1 or
Section 11.3 shall be entitled to receive his withdrawal payment from the
Trustees as soon as practicable after the end of the calendar quarter in which
such application is made.
Section 11.5 Source of Withdrawals from Account. Withdrawals
from a Participant's account shall be made pro rata from his investment in the
Certificate of Deposit Fund, the Growth Fund and the Ginnie Mae Portfolio Fund,
and to the extent the amounts in such Funds are not sufficient to meet the
withdrawal, first from the Participant's investment in the Universal Life
Insurance Fund under the rules set forth in Section 11.8, and lastly from the
Commonwealth Common Stock Fund.
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Section 11.6 Loans. The provisions of this Section 11.6
shall apply to loans made, renewed, renegotiated, modified, or extended on or
after January 1, 1987.
(a) A Participant in the service of the Bank
(and, effective for loans granted or renewed after October 18, 1989, a
terminated Participant, or a beneficiary who is a party in interest to the Plan
under ERISA Section 3(14)) may apply in writing, during January, April, July or
October of each year, to the Administrator for a loan from his account in the
Plan, provided the Participant has repaid in full any previous loan to him from
the Plan. The amount of any such loan shall not exceed the lesser of:
(1) $50,000 (reduced by the highest
outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which such loan
was made); or
(2) (i) with respect to loans granted or
renewed on or prior to October 18, 1989, the greater of 1/2 of
the amount of his Accrued Benefit or the amount of his Accrued
Benefit not exceeding $10,000, or (ii) with respect to loans
granted or renewed after October 18, 1989, one-half of the
amount of his Accrued Benefit.
(b) Upon receipt of a proper application, the
Administrator shall direct the Trustees to make a loan to the Participant or
beneficiary, provided such loan meets the requirements of this Section 11.6.
The Trustees shall make loans as follows:
(1) Those applied for in January shall
be made on or before the following April 30;
(2) Those applied for in April shall be
made on or before the following July 31;
(3) Those applied for in July shall be
made on or before the following October 31, and
(4) Those applied for in October shall
be made on or before the following January 31.
(c) All loans shall be repayable by their terms
within five years, except for a loan used to acquire a dwelling unit which
within a reasonable time is to be used as the principal residence of the
Participant or beneficiary requesting the loan. The determination as to
whether a dwelling unit is to be used within a reasonable time as such
principal residence shall be made at the time the loan is made. Loans to
active Participants shall be repaid by payroll deduction from the wages of the
Participant, and loans to terminated Participants and beneficiaries shall be
repaid by direct installment payments from the borrower to the Trustee,
according to an amortization schedule established by the Administrator in a
nondiscriminatory manner, commencing with the month following the month in
which the loan is made. The Participant or beneficiary shall have the right to
prepay all or any portion of the outstanding principal balance of the loan
without penalty at the end of any calendar quarter, provided that the amount of
any such prepayment shall not be less than the lesser of the outstanding
principal balance of the loan or $1,000.
(d) Any loan to a Participant or beneficiary
under the Plan shall be secured by the pledge of all of the Participant's
right, title,
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and interest in the Trust; provided that, with respect to any loan to a
Participant or beneficiary granted or renewed after October 18, 1989,
immediately after the origination of such loan, not more than 50 percent of the
Accrued Benefit of the Participant or beneficiary shall be used as security for
the outstanding balance of a loan to such Participant or beneficiary. Such
pledge shall be evidenced by the execution of a promissory note by the
Participant or beneficiary which shall provide that, in the event of any
default by the Participant or beneficiary on a loan repayment, the
Administrator shall be authorized (to the extent permitted by law) to deduct
the amount of the loan outstanding and any unpaid interest due thereon from the
Participant's wages or salary to be thereafter paid by the Bank (in the case of
an active Participant), to enforce the Plan's security interest in the
Participant or beneficiary's Accrued Benefit, and to take any and all other
actions necessary and appropriate to enforce the collection of the unpaid loan.
(e) A Participant or beneficiary shall not be
entitled to any distribution of benefits under Article X or withdrawal under
this Article XI from the amounts credited to his account under the Plan that
have been used to secure a loan to him under this Section 11.6 unless and until
such loan has been completely repaid.
(f) A default shall occur if the Participant or
beneficiary fails to make any payment due under the terms of the loan in a
timely manner. In the event of a default by a Participant or beneficiary on a
loan repayment, all remaining payments of the loan shall be immediately due and
payable. In the case of any active Participant who is not entitled to a
distribution under Article X or a withdrawal under this Article XI, the
Administrator shall, to the extent permitted by law, deduct the total amount of
the loan outstanding and any unpaid interest due thereon from the wages or
salaries payable to the Participant by the Bank in accordance with the
Participant's promissory note. In the case of any Participant or beneficiary
who is entitled to a distribution under Article X or a withdrawal under this
Article XI at the time of the default, the Trustees shall deduct the total
amount of the loan outstanding and any unpaid interest due thereon from the
Participant or beneficiary's account under the Plan in order to satisfy the
amount due. In the case of an active Participant who is not entitled to a
distribution or withdrawal at the time of the default, the Trustee may delay
enforcement of the Plan's security interest in the Participant's account. In
addition, the Administrator shall take any and all other actions necessary and
appropriate to enforce the collection of the unpaid loan. For any Participant
who defaults on a loan repayment, no further contributions shall be made by or
on behalf of the Participant to the Trust until the first payroll period
commencing at least 12 complete calendar months following the correction of the
Participant's default.
(g) All loans shall be effected by documents
approved in form and terms by the Administrator.
(h) The minimum amount of any loan for which a
Participant may apply under this Section 11.6 shall be $1,000.
(i) All loans shall (i) be available to all
Participants and beneficiaries on a reasonably equivalent basis, (ii) not be
made available to Participants who are Highly Compensated Employees (within the
meaning of Section 5.1(h)) and their beneficiaries in an amount greater than
the amount made available to other Participants and beneficiaries, and (iii) be
made in accordance with this Section 11.6.
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(j) Each loan granted or renewed on or prior to
October 18, 1989, shall bear a rate of interest which is two percentage points
greater than the prime lending rate on the first business day of the July in
which the loan application is filed, as announced in The Wall Street Journal;
and each loan granted or renewed after October 18, 1989, shall bear a rate of
interest which is two percentage points greater than the prime lending rate on
the first business day of the January, April, July or October in which the loan
application is filed, as announced in The Philadelphia Inquirer, or such other
rate of interest as is determined necessary by the Administrator to ensure that
the rate of interest is commensurate with the prevailing interest rate in
effect for comparable loans at one or more banks in the community. The
interest rate and other terms of the loan shall be fixed at the time the loan
is made.
(k) Until a loan to a Participant or beneficiary
is repaid, the outstanding balance of the loan shall be treated as an
investment by such Participant or beneficiary for his account only, and the
interest paid by such Participant or beneficiary shall be credited to his
account only. The account shall not share in any other earnings of the Plan
with respect to the amount of the loan.
(l) The following rules shall apply to the
amounts a Participant borrows under this Section 11.6:
(1) Such amounts shall be borrowed first
from the Participant's Supplemental Account; then from his
Bank Account; and last from his Tax-Sheltered Account.
(2) Amounts borrowed from a
Participant's account shall be borrowed pro rata from his
investment in the Certificate of Deposit Fund, the Growth Fund
and the Ginnie Mae Portfolio Fund, and to the extent the
amounts in such Funds are not sufficient to meet the loan,
first from the Participant's investment in the Universal Life
Insurance Fund under the rules set forth in Section 11.8, and
lastly from the Commonwealth Common Stock Fund.
(3) Repayments and interest shall be
credited first to the Participant's Tax-Sheltered Account;
then to his Bank Account; and last to his Supplemental
Account.
(4) Repaid amounts and interest shall be
invested in accordance with Section 8.2(a).
Section 11.7 Valuation of Accounts. For purposes of this
Article XI, a Participant's account balance shall be valued as follows:
(a) For any amounts invested in the Certificate
of Deposit Fund described in Section 8.1(a), the value shall be determined
under Section 9.3 as of the Valuation Date last preceding the withdrawal or
loan.
(b) For any amounts invested in the Growth Fund
described in Section 8.1(b), the Ginnie Mae Portfolio Fund described in Section
8.1(c) or the Commonwealth Common Stock Fund described in Section 8.1(d), the
share balance of the portion of the Participant's account invested in the
applicable Fund shall equal the number of shares credited to the Participant's
account as of the Valuation Date last preceding the withdrawal or loan. The
value shall equal the share price as of the actual liquidation date multiplied
by such share balance.
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(c) For any amounts invested in the Universal
Life Insurance Fund, the distribution value shall be determined as provided in
Section 8.4.
Section 11.8 Withdrawals or Loans from Universal Life
Insurance Fund. Notwithstanding the foregoing sections of this Article XI, any
withdrawal or loan from a Participant's account invested in the Universal Life
Insurance Fund shall require that the insurance contract purchased for the
Participant in such Fund be surrendered and that 100 percent of the proceeds be
withdrawn or borrowed.
Article XII
TOP-HEAVY PROVISIONS
Section 12.1 Top-Heavy Definitions. The following
definitions shall apply for purposes of this Article XII:
(a) "Determination Date" shall mean, with respect
to any Plan Year, the last day of the preceding Plan Year.
(b) "Determination Period" shall mean, with
respect to any Plan Year, the Plan Year containing the Determination Date and
the four preceding Plan Years.
(c) "Key Employee" shall mean any Employee or
former Employee (and the beneficiaries of such Employee) who at any time during
a Plan Year included in the Determination Period was:
(1) An officer of the Bank or an
Affiliate having annual Top-Heavy Compensation from the Bank
and the Affiliates greater than 50 percent of the amount in
effect under Code Section 415(b)(1)(A) for such Plan Year;
(2) One of the ten Employees having
annual Top-Heavy Compensation from the Bank and the Affiliates
greater than the amount in effect under Code Section
415(c)(1)(A) and owning (or considered as owning within the
meaning of Code Section 318) both more than a 1/2 percent
interest and the largest interests in the Bank or any
Affiliate;
(3) A five-percent owner of the Bank or
any Affiliate; or
(4) A one-percent owner of the Bank or
any Affiliate having annual Top-Heavy Compensation from the
Bank and the Affiliates of more than $150,000.
For purposes of paragraph (1), no more than 50 Employees (or, if less, the
greater of three or ten percent of the Employees) shall be treated as officers.
For purposes of the preceding sentence, Employees described in Code Section
414(q)(8) shall not be taken into account. The determination of who is a Key
Employee shall be made in accordance with Code Section 416(i) and regulations
thereunder.
(d) "Non-Key Employee" shall mean any Employee
who is not a Key Employee.
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(e) "Permissive Aggregation Group" shall mean,
with respect to any Plan Year, the Required Aggregation Group plus any other
defined contribution plan or defined benefit plan which the Bank elects to
include, provided such Permissive Aggregation Group meets the requirements of
Code Section 410(a)(4) and Section 410 with such defined contribution plan or
defined benefit plan being taken into account.
(f) "Required Aggregation Group" shall mean, with
respect to any Plan Year:
(1) Each defined contribution plan and
each defined benefit plan of the Bank or any Affiliate in
which a Key Employee is or was a participant at any time
during the Determination Period (regardless of whether such
plan has been terminated); and
(2) Each other defined contribution plan
and each other defined benefit plan of the Bank or any
Affiliate which, during the Determination Period, enables any
defined contribution plan or defined benefit plan described in
paragraph (1) to meet the requirements of Code Section
401(a)(4) or Section 410.
(g) "Top-Heavy Compensation" shall mean
compensation as defined in Code Section 414(q)(7).
(h) "Top-Heavy Plan" shall mean, for any Plan
Year beginning on or after January 1, 1984, this Plan, if:
(1) this Plan is not part of a Required
or Permissive Aggregation Group, and the Top-Heavy Ratio for
the Plan exceeds 60 percent;
(2) this Plan is part of a Required
Aggregation Group and not part of a Permissive Aggregation
Group, and the Top-Heavy Ratio for the Required Aggregation
Group exceeds 60 percent; or
(3) this Plan is part of a Required
Aggregation Group and part of a Permissive Aggregation Group,
and the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
(i) "Top-Heavy Ratio" shall mean a fraction. The
numerator of the fraction is the sum of the account balances of all Key
Employees under the Plan, or, if the Plan is a member of a Required or
Permissive Aggregation Group, under all defined contribution plans in such
Required or Permissive Aggregation Group (hereinafter the "Aggregation Group"),
plus the sum of the present values of accrued benefits of all Key Employees
under all defined benefit plans in the Aggregation Group, as of the
Determination Date or, in the case of a plan other than this Plan, the
determination date under such other plan which falls within the same calendar
year as the Determination Date. The denominator of the fraction is a similar
sum determined for all Employees. For purposes of determining the fraction,
the numerator and denominator shall include any part of any account balance or
accrued benefit distributed in the Determination Period. If any individual (i)
is not a Key Employee but was a Key Employee in a prior Plan Year, or (ii) with
respect to Plan Years beginning after December 31, 1984, has not been credited
with at least one Hour of Service with the Bank or any Affiliate at any time
during the Determination Period, any account balance or accrued
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benefit of, or distribution to, such individual shall not be taken into
account.
For purposes of this subsection (i), the sum of account
balances and the present values of accrued benefits shall be determined as of
the most recent Valuation Date that falls within the 12-month period ending on
the Determination Date. Effective January 1, 1987, for purposes of determining
if this Plan, or any other Plan included in the Aggregation Group, is a
Top-Heavy Plan, the accrued benefit of a Non-Key Employee shall be determined
under (i) the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Bank and the Affiliates, or (ii) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual method of Code Section
411(b)(1)(C). The calculation of the Top-Heavy Ratio shall be made in
accordance with Code Section 416 and the regulations thereunder.
(j) "Valuation Date" shall mean, for purposes of
this Article XII, the last day of the Plan Year.
Section 12.2 Top-Heavy Rules. Notwithstanding any other
provisions of the Plan, the following rules shall apply for any Plan Year
beginning on or after January 1, 1984, in which the Plan is a Top-Heavy Plan:
(a) Minimum Benefit. The Bank contributions
allocated on behalf of any Non-Key Employee who is a Participant in this Plan
for the Plan Year shall not be less than five percent of such Participant's
Limitation Compensation. Qualified Nonelective Contributions (but not
Tax-Sheltered Contributions) on behalf of such Non-Key Employee may be counted
toward such minimum allocation. This provision shall not apply to any
Participant who is not an Employee of the Bank on the last day of the Plan
Year. The minimum benefit shall be provided even though, under other Plan
provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation, for the Plan Year,
because of his failure to make Tax-Sheltered Contributions to the Plan.
(b) Compensation Limitation. For any Plan Year
beginning before January 1, 1989, in which the Plan is a Top-Heavy Plan, only
the first $200,000 (or such larger amount as may be prescribed by the Secretary
of the Treasury) of a Participant's Compensation shall be taken into account
for purposes of determining contributions under the Plan.
(c) Impact on Maximum Benefits. Section 5.6(b)
shall be read by substituting the number "1.00" for the number "1.25" wherever
such number appears therein, except that such substitution shall not have the
effect of reducing any benefit accrued under a defined benefit plan prior to
the first day of the Plan Year in which this provision becomes effective.
Article XIII
NONALIENATION OF BENEFITS
Section 13.1 No Alienation. The right of any Participant or
beneficiary to any benefit payment shall not be subject to any voluntary or
involuntary alienation or assignment. The preceding sentence shall also apply
to the creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations order, unless
such order is determined to be either a qualified domestic relations order
("QDRO") (as defined in Code Section 414(p)) or a domestic relations order
entered before
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January 1, 1985, which the Administrator elects to treat as a QDRO. In
addition, under the provisions of Section 11.6, a Participant may pledge all or
a portion of his Accrued Benefit as security for a loan from the Trust.
Article XIV
ALLOCATION OF FIDUCIARY RESPONSIBILITIES
Section 14.1 Allocation of Responsibilities. Authority and
responsibility for management of the Plan and Trust shall be allocated among
the following persons:
(a) The Board of Directors of the Bank shall have
the exclusive authority to appoint, remove, and replace the Administrator and
the Trustees.
(b) The Administrator shall have sole
responsibility for the administration of the Plan. The Administrator shall be
a "named fiduciary" of the Plan for purposes of ERISA Section 402(a)(1).
(c) The Trustees shall have sole responsibility
for the management and control of the Trust assets, subject to the provisions
of Article VIII.
Section 14.2 No Joint Responsibility. It is the purpose of
the Plan and the Trust Agreement to allocate to each of the fiduciaries
identified in Section 14.1 exclusive responsibility for prudent execution of
the functions assigned to him and no responsibility for execution of functions
assigned to others. Whenever one such fiduciary is required by the Plan or the
Trust Agreement to follow the directions of another such fiduciary, the two
fiduciaries shall not be deemed to have been assigned a shared responsibility,
but the fiduciary giving the directions shall have sole responsibility for the
functions assigned to him, including issuing such directions, and the fiduciary
receiving the directions shall have the sole responsibility for the functions
assigned to him, including following such directions insofar as they are on
their face proper under the Plan and the Trust Agreement and under applicable
law.
Section 14.3 Co-Fiduciary Liability. A fiduciary shall not
be liable for a breach of fiduciary responsibility by another fiduciary to whom
other fiduciary responsibilities have been assigned under the Plan except under
the following circumstances:
(a) if he participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other fiduciary, knowing such
act or omission is a breach;
(b) if, by his failure properly to discharge his
own fiduciary responsibilities, he has enabled such other fiduciary to commit a
breach; or
(c) if he has knowledge of a breach by such other
fiduciary, unless he makes reasonable efforts under the circumstances to remedy
the breach.
Section 14.4 Employment of Advisors. A fiduciary identified
in Section 14.1 may employ one or more persons to render advice with regard to
such fiduciary's responsibilities under the Plan.
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Section 14.5 Standards of Fiduciary Conduct. Each fiduciary
described in this Article XIV shall act solely in the interest of the
Participants and beneficiaries and:
(a) for the exclusive purpose of providing
benefits to Participants and their beneficiaries and defraying reasonable
expenses of administering the Plan;
(b) with the care, skill, prudence, and diligence
that a prudent man acting in a like capacity and familiar with such matters
would use under the circumstances;
(c) by diversifying the investments of the Trust
so as to minimize the risk of large losses, unless under the circumstances it
is clearly prudent not to do so; and
(d) in accordance with the terms of the Plan and
Trust Agreement and the provisions of ERISA.
Article XV
THE ADMINISTRATOR
Section 15.1 Appointment. The Board of Directors of the Bank
shall appoint an Administrator to administer the Plan, or, in lieu of making
such an appointment, may determine that the Bank shall be the Administrator of
the Plan. Any Administrator appointed by the Board shall serve without
additional compensation at the pleasure of the Board.
Section 15.2 Responsibilities of Administrator. The
Administrator shall have sole responsibility for administration of the Plan,
and shall supervise and control the operation of the Plan in accordance with
its terms. The Administrator shall have the responsibility, power, and
authority to do all things necessary to accomplish that purpose, including, but
not limited to, the responsibility, power, and authority to do the following:
(a) To construe and interpret the terms and
provisions of the Plan;
(b) To adopt such rules and regulations under the
Plan as he may consider desirable for the administration of the Plan;
(c) To determine all questions of eligibility for
participation under the Plan;
(d) To determine all questions concerning the
amount, time, and manner of payment of benefits under the Plan;
(e) To prescribe procedures to be followed by
Employees, Participants, and beneficiaries under the Plan;
(f) To prepare and distribute appropriate
information concerning the Plan;
(g) To issue directions to the Trustees
concerning all benefits which are to be paid from the Trust pursuant to the
Plan; and
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(h) To keep such records, make such reports, and
do such other acts as he deems appropriate in order to comply with ERISA and
government regulations thereunder.
Section 15.3 Plan Records. The Administrator shall maintain
records containing all relevant data pertaining to Participants and their
rights under the Plan. Records pertaining solely to a particular Participant
shall be made available to him for examination during business hours upon
request.
Section 15.4 Benefit Claims. The Administrator shall make
all determinations as to the right of any person to a benefit under the Plan.
If the Administrator denies in whole or part any claim for a benefit under the
Plan by a Participant or a beneficiary, the Administrator shall furnish the
claimant with notice of the decision not later than 90 days after receipt of
the claim, unless special circumstances require an extension of time for
processing the claim. If such an extension of time for processing is required,
written notice of the extension shall be furnished to the claimant prior to the
termination of the initial 90-day period. In no event shall such extension
exceed the period of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Administrator expects to render the
final decision. The written notice which the Administrator shall provide to
every claimant who is denied a claim for benefits shall set forth in a manner
calculated to be understood by the claimant:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan
provisions on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary; and
(d) appropriate information as to the steps to be
taken if the claimant wishes to submit his claim for review.
If the Administrator does not furnish a notice of claim denial
within 180 days from the date on which the claim was filed, the claim shall be
deemed to be denied for purposes of the following appeals procedure.
A claimant or his authorized representative may request a
review of the denied claim by the Administrator. Such request shall be made in
writing and shall be presented to the Administrator not more than 60 days after
receipt by the claimant of written notification of the denial of a claim, or
the date on which the claim is deemed to be denied if no notice is given. The
claimant shall have the right to review pertinent documents and to submit
issues and comments in writing. The Administrator shall make his decision on
review not later than 60 days after receipt of the claimant's request for
review, unless special circumstances require an extension of time, in which
case a decision shall be rendered as soon as possible but not later than 120
days after receipt of the request for review. The decision on review shall be
in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based. It is intended
that the claims procedure of this Plan be administered in accordance with the
claims procedure regulations of the Department of Labor.
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Section 15.5 Funding Policy. The Administrator shall, at
least annually, estimate the amount of the benefit payments which the Plan will
be required to make, taking into account anticipated Participant retirements
and terminations and all other relevant factors, and, on the basis of such
estimate, determine the Plan's need for liquidity. The Administrator shall
report each such determination in writing to the Trustees for consideration in
the formulation of the investment policy for the Trust.
Section 15.6 Discretionary Authority. The Administrator
shall have sole discretion to carry out its responsibilities under this Article
XV to construe and interpret the provisions of the Plan and to determine all
questions concerning benefit entitlements, including the power to construe and
determine disputed or doubtful terms. To the maximum extent permissible under
law, the Administrator's determinations on all such matters shall be final and
binding upon all persons involved.
Section 15.7 Contracting for Services. The Administrator may
contract for legal, accounting, clerical, and other services necessary to carry
out his responsibilities under the Plan.
Section 15.8 Delegation of Administrative Responsibility. If
the Bank is designated by the Board of Directors of the Bank, pursuant to
Section 15.1, to be the Administrator, the Board of Directors may, by
resolution, delegate to any person or entity any of the powers or duties
imposed upon the Bank as Administrator. To the extent of any such delegation,
the delegate shall become a "named fiduciary" of the Plan. Any action by the
Board of Directors delegating any of the powers or duties imposed upon the Bank
as Administrator shall not constitute a delegation of the Bank's responsibility
as Administrator, but rather shall be treated as the manner in which the Bank
has determined internally to discharge such responsibility.
Article XVI
THE TRUSTEES
Section 16.1 Trust Assets. The Trust which is a part of this
Plan shall consist of all of the assets of the Plan on December 31, 1988, and
all amounts thereafter contributed under the Plan, and the earnings and
appreciation thereon, less payments made by the Trustees under the Plan and the
Trust Agreement entered into pursuant to the Plan.
Section 16.2 Investment Responsibility. Subject to the
provisions of Article VIII, the Trustees shall have the exclusive
responsibility and authority to hold, invest, reinvest, and administer the
Trust assets in accordance with the terms of the Plan and the Trust Agreement.
Except as provided in Section 14.3, the Trustees shall not be liable for
following proper directions of the Administrator which are in accordance with
the terms of the Plan and the Trust Agreement and not contrary to law.
Section 16.3 Benefit Payments. The Trustees shall make all
benefit payments under the Plan from the Trust upon the written instructions of
the Administrator. Except as provided in Section 14.3, the Trustees shall not
be liable for following proper directions of the Administrator which are in
accordance with the terms of the Plan and the Trust Agreement and not contrary
to law.
Section 16.4 Removal and Resignation. The Board of Directors
of the Bank may remove any Trustee at any time upon delivery of any written
notice called for in the Trust Agreement; and any Trustee may resign at any
time upon
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<PAGE> 44
delivery of such notice to the Board of Directors. Upon such removal or
resignation of a Trustee, the Board of Directors may appoint a successor
Trustee in accordance with the Trust Agreement.
Article XVII
PLAN AMENDMENT, MERGER, CONSOLIDATION, OR TERMINATION
Section 17.1 Amendments. The Bank shall have the right to
amend this Plan at any time, subject to the following limitations:
(a) No such amendment may cause any part of the
Trust assets to be used for or diverted to any purpose other than the exclusive
benefit of the Participants or their beneficiaries.
(b) No such amendment shall cause any reduction
in the amount of any Participant's Accrued Benefit. For purposes of this
subsection (b), an amendment which has the effect of (i) eliminating or
reducing an early retirement benefit or a retirement-type subsidy, or (ii)
eliminating an optional form of benefit, with respect to benefits attributable
to service before the amendment, shall be treated as reducing accrued benefits
as provided in Code Section 411(d)(6) and the regulations thereunder.
(c) No such amendment shall change any vesting
schedule unless, in the case of an Employee who is a Participant on (i) the
date the amendment is adopted, or (ii) the date the amendment is effective, if
later, the nonforfeitable percentage of such Participant's right to his Accrued
Benefit is not less than such percentage computed under the Plan without regard
to such amendment. Furthermore, no such amendment shall otherwise change any
vesting schedule unless each Participant having three or more years of service
is permitted to elect, in accordance with regulations prescribed by the
Secretary of the Treasury, to have the nonforfeitable percentage of his Accrued
Benefit determined under the Plan without regard to such amendment; provided,
that no such election shall be given to any Participant whose nonforfeitable
percentage under the Plan as amended cannot at any time be less than such
percentage determined without regard to such amendment.
Section 17.2 Merger or Transfer of Assets or Liabilities.
This Plan and Trust shall not be merged or consolidated with, nor shall any
assets or liabilities be transferred to, any other plan and trust, unless the
benefits payable to each Participant if the Plan were terminated immediately
after such action would be equal to or greater than the benefits which would
have been payable to each Participant if the Plan had been terminated
immediately before such action.
Section 17.3 Discontinuance of Contributions or Termination.
The Bank shall have the right to discontinue its contributions hereunder and to
terminate or partially terminate this Plan by delivery of written notice to the
Trustees of such action. In addition, this Plan shall terminate automatically
in the event of a default, as defined in Title IV of the National Housing Act,
by the Bank and all obligations of the Bank hereunder shall thereupon end.
Upon complete discontinuance of the Bank's contributions, or
termination or partial termination of the Plan, the rights of all affected
Participants to benefits accrued to the date of such discontinuance or
termination shall continue to be nonforfeitable.
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<PAGE> 45
Upon final termination of the Plan, the Administrator shall
direct the Trustees to distribute all assets remaining in the Trust, after
payment of any proper expenses, to the Participants in accordance with the
Accrued Benefits of such Participants as of the date of such termination.
Subject to Section 10.7, each such distribution shall be made in a single cash
payment as soon as practicable following the termination.
Notwithstanding the foregoing, amounts credited to a
Participant's Tax-Sheltered Account shall not be distributed under this Section
17.3 except upon the termination of the Plan without the establishment or
maintenance of another defined contribution plan within the meaning of Code
Section 401(k)(10)(A)(i) and regulations issued thereunder.
Article XVIII
RELATING TO THE PARTICIPATING EMPLOYERS
Section 18.1 Action by Board of Directors. Any action
required or permitted to be taken under the Plan by the Bank or by the Board of
Directors of the Bank shall be by resolution of the Board of Directors, or by a
duly authorized committee of the Board of Directors of the Bank, or by a person
or persons authorized by resolution of such Board of Directors or of such
committee. Each participating employer under Section 18.2 appoints the Board
of Directors of the Bank as its agent to exercise on its behalf any action
required or permitted to be taken under the Plan by the Bank.
Section 18.2 Participating Employers. Any Affiliate, with
the consent of the Board of Directors of the Bank, may adopt the Plan and
become a participating employer thereunder:
(a) by filing with the Board of Directors of the
Bank, the Administrator, and the Trustees a certified copy of a resolution of
such Affiliate's board of directors providing for its adoption of the Plan and
stating its election to become a party to the Trust; and
(b) by filing with the Administrator and the
Trustees a certified copy of a resolution of the Board of Directors of the Bank
providing for its consent to such adoption.
Article XIX
MISCELLANEOUS
Section 19.1 Application of Plan. Except as otherwise
expressly provided, this amended and restated Plan shall not apply to any
person who retired or otherwise separated from the service of the Bank and
Affiliates before January 1, 1989. The right of any such person to any benefit
or otherwise shall be governed solely by the provisions of the Plan in effect
on the date of such retirement or other separation from service.
Section 19.2 Undivided Interest in Trust. Contributions to
the Trust and all income and profits realized thereon shall be held by the
Trustees in such Trust. No Participant shall be entitled to any specific
property of the Trust, but only to an undivided interest therein to the extent
provided in the Plan.
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<PAGE> 46
Section 19.3 No Right to Employment. The Plan and Trust do
not confer upon any Participant or other Employee any right to be continued in
the employ of the Bank, and the Bank expressly reserves the right to terminate
the employment of any Employee, whether or not a Participant, whenever the
interest of the Bank, in its sole judgment, may so require.
Section 19.4 Plan Expenses. Except as provided in the Trust
Agreement, the expenses of the Plan shall be paid out of the Trust, unless paid
by the Bank.
Section 19.5 Applicable Laws. Construction and
administration of this Plan and of the Trust Agreement shall be governed by
ERISA and other applicable Federal law and, to the extent not governed by
Federal law, by Pennsylvania law.
Section 19.6 Headings. The headings of articles and sections
are for reference only. In the event of a conflict between a heading and the
content of an article or section, the content of the article or section shall
control.
Section 19.7 Gender and Number. The masculine pronoun
wherever used shall include the feminine and neuter, and the singular may
include the plural, and vice versa, as the context may require.
Article XX
DIRECT ROLLOVERS
Section 20.1 Introduction. This Article XX 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 Article XX, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
Section 20.2 Definitions.
(a) Eligible Rollover Distribution. An eligible
rollover distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9) and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. 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
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.
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<PAGE> 47
(c) Distributee. A distributee includes an
Employee or former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified domestic relations order,
as defined in Code Section 414(p), are distributees with regard to the interest
of the spouse or former spouse.
(d) Direct Rollover. A direct rollover is a
payment by the Plan to the eligible retirement plan specified by the
distributee.
IN WITNESS WHEREOF, COMMONWEALTH SAVINGS BANK has caused these
presents to be duly executed this 22nd day of November, 1994.
Attest: COMMONWEALTH SAVINGS BANK
/s/ Leroy D. Todd, Jr. By:/s/ Charles H. Meacham
- ----------------------------- ----------------------------------
ComNet Mortgage Services, Inc., hereby acknowledges this
amendment and restatement of the Plan this 22nd day of November, 1994.
Attest: COMNET MORTGAGE SERVICES, INC.
/s/ Frank E. Plenskofski By:/s/ Russell I. Wakal
- ----------------------------- ----------------------------------
-41-
<PAGE> 48
AMENDMENT NO. 1
TO THE
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
- --------------------------------------------------------------------------------
WHEREAS, Commonwealth Savings Bank (the "Bank") maintains the
Commonwealth Savings Bank Voluntary Investment Plan (the "Plan");
WHEREAS, Section 17.1 of the Plan provides that, subject to certain
inapplicable limitations, the Bank may amend the Plan at any time;
WHEREAS, the Bank wishes to amend the Plan to remove certain language
concerning g participants who terminate employment and defer the distribution
of Plan benefits;
NOW, THEREFORE, the Plan shall be amended as follows:
Effective January 1, 1994, the last sentence of Section 10.4 (a) is
hereby deleted in its entirety.
IN WITNESS WHEREOF, Commonwealth Savings Bank has caused these
presents to be duly executed this 13 day of December 1994.
Attest: COMMONWEALTH SAVINGS BANK
/s/ LEROY D. TODD, JR. By: /s/ CHARLES H. MEACHAM
- ---------------------------- ----------------------
Leroy D. Todd, Jr. Secretary Charles H. Meacham,
President
ComNet Mortgage Services, Inc., hereby acknowledge this
Amendment No. 1 to the plan this 13 day of December, 1994.
Attest: COMNET MORTGAGE SERVICES, INC.
/s/ FRANK E. PLENSKOFSKI By:RUSSELL I. WAKAL
- ------------------------- -----------------
Frank E. Plenskofski, Russell I. Wakal.
Secretary President
<PAGE> 49
AMENDMENT NO. 2
TO THE
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
- --------------------------------------------------------------------------------
WHEREAS, Commonwealth Savings Bank (the "Bank") maintains the
Commonwealth Savings Bank Voluntary Investment Plan (the "Plan");
WHEREAS, Section 17.1 of the Plan provides that, subject to
certain inapplicable limitations, the Bank may amend the Plan at any time;
WHEREAS, the Bank wishes to amend the Plan to specifically
exclude severance pay from the definition of "Compensation" under the Plan and
to revise the definition of "Testing Compensation" to comply with the
requirements of OBRA '93;
NOW, THEREFORE, effective January 1, 1994, the Plan shall be
amended as follows:
1. The first sentence of Section 1.9 of the Plan is hereby
deleted in its entirety and replaced by the following:
"Compensation" shall mean the total wages or salary actually payable to
an Employee by the Bank for any period (prior to any reduction for
Tax-Sheltered Contributions under the Plan or for contributions made by
salary reduction, pursuant to the Participant's election, to a
cafeteria plan maintained by the Bank under Code Section 125(c)),
excluding severance payments, and including bonus, overtime, incentive,
or other extra pay; provided, however, that "Compensation" shall
exclude all bonuses paid on or after January 1, 1990, including bonuses
paid under the Management by Objective Program.
2. Subsection (l) of Section 5.1 of the Plan is hereby deleted in
its entirety and replaced by the following:
(l) "Testing Compensation" shall mean Limitation Compensation
received while an Eligible Participant plus all amounts that are not
currently includible in the Eligible Participant's gross income by
reason of the application of Code Section 125, Section 402(a)(8),
Section 402(h)(1)(B), or Section 403(b). With respect to Plan Years
beginning after December 31, 1988 and before January 1, 1994, the
"Testing Compensation" of any
<PAGE> 50
Eligible Participant for any Plan Year shall not exceed $200,000
multiplied by the Adjustment Factor. For Plan Years beginning on and
after January 1, 1994, the "Testing Compensation" of any Eligible
Participant taken into account under the Plan shall not exceed $150,000
multiplied by the Adjustment Factor. In determining the Testing
Compensation of an Eligible Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except
that in applying such rules, the term "family" shall include only the
spouse of the Eligible Participant and any lineal descendants of the
Eligible Participant who have not attained age 19 before the close of
the Plan Year. If, as a result of the application of such rules, the
above limitation is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Testing Compensation as determined under this subsection (1) prior to
the application of the limitation.
IN WITNESS WHEREOF, Commonwealth Savings Bank has caused these
presents to be duly executed this 23rd day of February, 1995.
Attest: COMMONWEALTH SAVINGS BANK
/s/ LEROY D. TODD, JR. By:/s/ CHARLES H. MEACHAM
- ------------------------------ -----------------------------
Leroy D. Todd, Jr., Secretary Charles H. Meacham, President
ComNet Mortgage Services, Inc., hereby acknowledges this Amendment No.
2 to the Plan this 23rd day of February, 1995.
Attest: COMNET MORTGAGE SERVICES, INC.
/s/ THEODORE AICHER By: /s/ RUSSELL I. WAKAL
- ------------------------------ -----------------------------
Theodore Aicher, Secretary Russell I. Wakal President
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<PAGE> 51
AMENDMENT NO. 3
TO THE
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
- --------------------------------------------------------------------------------
WHEREAS, Commonwealth Savings Bank (the "Bank") maintains the
Commonwealth Savings Bank Voluntary Investment Plan (the "Plan");
WHEREAS Section 17.1 of the Plan provides that, subject to
certain inapplicable limitations, the Bank may amend the Plan at any time;
WHEREAS, the Bank wishes to amend the Plan to remove the
exclusion of part-time employees from participation under the Plan;
NOW, THEREFORE, effective July 1, 1995, the Plan shall be
amended as follows:
1. The definition of "Part-Time Employee" at Section 1.18 of the
Plan is hereby deleted in its entirety and the remaining sections in Article 1
of the Plan are hereby renumbered accordingly.
2. The second sentence of subsection (a) of Section 2.5 of the
Plan is hereby deleted in its entirety.
3. The introductory paragraph of Section 3.2 of the Plan is hereby
deleted in its entirety and replaced by the following:
"Any other Employee of the Bank (except for any Leased Employee) shall
be eligible to participate in the Plan in accordance with the following
rules:"
IN WITNESS WHEREOF, Commonwealth Savings Bank has caused these
presents to be duly executed this 23rd day of May, 1995.
Attest: COMMONWEALTH SAVINGS BANK
/s/ LEROY D. TODD, JR. By:/s/ CHARLES H. MEACHAM
- ----------------------------- ----------------------
Leroy D. Todd, Jr., Secretary Charles H. Meacham,
President
<PAGE> 52
ComNet Mortgage Services, Inc., hereby acknowledges this
Amendment No. 3 to the Plan this 23rd day of May, 1995.
Attest: COMNET MORTGAGE SERVICES, Inc.
/s/ THEODORE AICHER By:/s/ RUSSELL I. WAKAL
- -------------------------- ---------------------------
Theodore Aicher, Secretary Russell I. Wakal,
President
-2-
<PAGE> 53
AMENDMENT NO. 4
TO THE
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
- --------------------------------------------------------------------------------
WHEREAS, Commonwealth Savings Bank (the "Bank") maintains the
Commonwealth Savings Bank Voluntary Investment Plan (the "Plan");
WHEREAS, Section 17.1 of the Plan provides that, subject to
certain inapplicable limitations, the Bank may amend the Plan at any time;
WHEREAS, on or about July 29, 1995 the Bank will purchase the
assets of certain of the branches of Fidelity Federal and as of that date will
employ certain former Fidelity Federal employees;
WHEREAS, the Bank desires to amend the Plan to count prior
service with Fidelity Federal for former Fidelity Federal employees hired by
the Bank on or about July 29, 1995 for purposes of Years of Eligibility Service
under the Plan and to provide that the former Fidelity Federal employees who
meet the eligibility requirements as of October 1, 1995 will become
participants in the Plan as of October 1, 1995;
WHEREAS, the Bank desires to amend the Plan to include
language allowing for rollovers into the Plan from other eligible plans.
NOW, THEREFORE, effective August 1, 1995, the Plan shall be
amended as follows:
1. Section 1.1 of the Plan shall be deleted in its entirety
and replaced with the following:
"Section 1.1 "Accrued Benefit" shall mean the total of the amounts
credited to a Participant's Tax-Sheltered Account, Supplemental
Account, Bank Account, and Rollover Account."
<PAGE> 54
2. New Section Section 1.23 and 1.24 are added to the Plan
and the remaining Sections in Article 1 of the Plan are hereby renumbered
accordingly:
"Section 1.23 "Rollover Account" shall mean the account established
and maintained pursuant to Section 4.6 to which the Rollover
Contributions made by an Employee are allocated.
Section 1.24 "Rollover Contributions" shall mean the rollover
contributions made by an Employee."
3. Section 2.3(a) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
"Notwithstanding the foregoing, for each Employee of the Bank who
was an employee of Fidelity Federal immediately prior to the
acquisition of certain branches of Fidelity Federal by the Bank and
who is in the active employ of the Bank on August 1, 1995, Hours of
Service with Fidelity Federal shall be taken into account for
purposes of determining such Employee's Years of Eligibility Service
hereunder."
4. Section 3.3 of the Plan shall be amended by adding a new
sentence to the end thereof as follows:
"Notwithstanding the foregoing, an Employee of the Bank who was an
employee of Fidelity Federal immediately prior to the acquisition of
certain branches of Fidelity Federal by the Bank and who is in the
active employ of the Bank on October 1, 1995 shall become a
Participant as of October 1, 1995, provided such Employee has met
the eligibility requirements of Section 3.2."
5. Section 4.6 of the Plan shall be deleted in its entirety
and replaced with the following:
"Section 4.6 Rollover Contributions. An Employee, with the prior
approval of the Administrator, may contribute to the Trust any
property which either is (i) a direct transfer of an eligible
rollover distribution under Code Section 401(a)(31); (ii) rolled
over by the Employee after his receipt of such amount from a plan
qualified under Code Section 401(a); or (iii) rolled over from a
"conduit" Individual Retirement Account (as defined in Code Section
408) established by the Employee upon his receipt of such amount
from a plan qualified under Code
-2-
<PAGE> 55
Section 401(a) (provided, however, that any amount rolled over to
the Plan qualifies as an "eligible rollover distribution" as defined
by Code Section 402 at the time of the rollover). The amount of
cash or the fair market value of any other property transferred to
the Trust pursuant to this Section shall be credited to the
Employee's Rollover Account as of the Valuation Date next following
such transfer or rollover.
An Employee who wishes to roll over property pursuant to
clause (ii) or (iii) above must do so no later than 60 days after
receiving a distribution from the distributing plan or Individual
Retirement Account.
An Employee who has not satisfied the participation
requirements of Article III shall be permitted to make a Rollover
Contribution to the Plan, subject to the approval of the
Administrator, provided that the Administrator has determined that
such rollover or transfer meets the requirements of this Section.
The Administrator shall establish a Rollover Account, as applicable,
for any such Employee, in accordance with the provisions of this
Section. In no event shall such Employee become eligible to have
Tax-Sheltered Contributions made on his behalf or to receive
allocations of Qualified Nonelective Contributions prior to
fulfilling the eligibility requirements of Article III and any other
requirements for such contributions under the Plan. "
6. Section 6.2 of the Plan shall be deleted in its entirety
and replaced with the following:
"Section 6.2 Separate Accounts. The Trustees shall establish and
maintain for each Participant four separate accounts, and shall
apportion the amounts allocated to the Participant's account among
these accounts in the following manner:
Bank Account: That portion of a Participant's account
allocated to his Subaccount A as of December 31, 1988,
together with any earnings and appreciation thereon, shall be
apportioned to his Bank Account.
Tax-Sheltered Account: That portion of a Participant's
account allocated to his Subaccount B as of December 31, 1988,
plus all Tax-Sheltered Contributions made by the Bank on
behalf of the Participant, and any Qualified Nonelective
Contributions which are allocated to the Participant's
-3-
<PAGE> 56
Tax-Sheltered Account under Section 5.3, together with any
earnings and appreciation thereon, shall be apportioned to his
Tax-Sheltered Account.
Supplemental Account: That portion of a Participant's
account allocated to his Subaccount C as of December 31, 1988,
together with any earnings and appreciation thereon, shall be
apportioned to his Supplemental Account.
Rollover Account: That portion of a Participant's
account consisting of Rollover Contributions made by an
Employee under Section 4.6, together with any earnings and
appreciation thereon, shall be apportioned to his Rollover
Account.
7. The first sentence of Section 8.2(a) of the Plan shall be
deleted in its entirety and replaced with the following:
"By filing a form prescribed by the Administrator with the
Administrator no later than December 15, March 15, June 15 or
September 15 of each Plan Year, a Participant may direct that the
Tax-Sheltered Contributions, Qualified Non-Elective Contributions
and Rollover Contributions which are credited to his account after
the last business day of the February, May, August or November,
respectively, which immediately follows such election, be
apportioned to the Certificate of Deposit Fund, the Growth Fund, the
Ginnie Mae Portfolio Fund, the Commonwealth Common Stock Fund, or
(to the extent permitted in the last sentence of this subsection
(a)) the Universal Life Insurance Fund, or in part to each such Fund
in multiples of 10 percent."
8. The second sentence of Section 9.2 of the Plan shall be
deleted in its entirety and replaced with the following:
"In making such allocations as of a Valuation Date, the Trustees
shall exclude from consideration any Tax-Sheltered Contributions,
Qualified Nonelective Contributions and Rollover Contributions
allocated to such Fund with respect to the calendar quarter ending
on such Valuation Date, but shall include any additions to a
Participant's account in such Fund during the calendar quarter
resulting from an investment reapportionment under Section 8.2(b)."
-4-
<PAGE> 57
9. Section 10.1 of the Plan shall be deleted in its entirety
and replaced with the following:
"Section 10.1 Vesting in Tax-Sheltered, Supplemental, Bank and
Rollover Accounts. A Participant's right to receive after
separation from service that part of his Accrued Benefit which has
been apportioned to his Tax-Sheltered, Supplemental, Bank and
Rollover Accounts shall be nonforfeitable (vested) at all times.
10. Section 11.1 of the Plan shall be deleted in its entirety
and replaced with the following:
Section 11.1 Withdrawals from Supplemental Account and Rollover
Account. A Participant may, by written application to the
Administrator, elect to withdraw all or any portion of his Accrued
Benefit apportioned to his Supplemental Account and his Rollover
Account.
11. The opening paragraph of Section 11.2 of the Plan shall
be deleted in its entirety and replaced with the following:
"A Participant in the service of the Bank who has withdrawn the
total amount of his Accrued Benefit apportioned to his Supplemental
Account and Rollover Account which he may withdraw under Section
11.1, and who has not attained age 59-1/2, may, by written
application filed with the Administrator, make a hardship withdrawal
of all or any portion of his Accrued Benefit apportioned to his
Tax-Sheltered and Bank Accounts, subject to the following rules:"
12. The first sentence of Section 11.3 of the Plan shall be
deleted in its entirety and replaced with the following:
"A Participant who has withdrawn the total amount of his Accrued
Benefit apportioned to his Supplemental Account and Rollover Account
which he may withdraw under Section 11.1, and who has attained age
59-1/2, may elect to withdraw all or any portion of his Accrued
Benefit apportioned to his Tax-Sheltered and Bank Accounts."
-5-
<PAGE> 58
IN WITNESS WHEREOF, Commonwealth Savings Bank has caused this
Amendment No. 4 to be duly executed this 26th day of June, 1995.
Attest: COMMONWEALTH SAVINGS BANK
/s/ LEROY D. TODD, JR. By:/s/ CHARLES H. MEACHAM
- ------------------------------ ------------------------------
Leroy D. Todd, Jr., Secretary Charles H. Meacham,
President
ComNet Mortgage Services, Inc., hereby acknowledges this
Amendment No. 4 to the Plan this 26th day of June, 1995.
Attest: COMNET MORTGAGE SERVICES, INC.
/s/ THEODORE AICHER By:/s/ RUSSELL I. WAKAL
- ------------------------------ ----------------------------
Theodore Aicher, Secretary Russell I. Wakal,
President
-6-
<PAGE> 59
AMENDMENT NO. 5
TO THE
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
- --------------------------------------------------------------------------------
WHEREAS, Commonwealth Savings Bank (the "Bank") maintains the
Commonwealth Savings Bank Voluntary Investment Plan (the "Plan");
WHEREAS, Section 17.1 of the Plan provides that, subject to
certain inapplicable limitations, the Bank may amend the Plan at any time;
WHEREAS, the Bank desires to amend the Plan in order to
reflect the transition to a daily valuation environment on January 1, 1996, to
provide that participants can change contribution elections and investment
elections daily and to allow for loan applications at any time.
NOW, THEREFORE, effective as of the Plan's conversion to a
daily valuation environment on or about January 1, 1996, the Plan is hereby
amended as follows:
1. Section 1.32 of the Plan (as renumbered pursuant to
Amendment No. 4) shall be deleted in its entirety and replaced with the
following:
"Valuation Date shall mean the last business day of each calendar
quarter and, for purposes of Section 8.2(c), May 31, 1993; provided,
however, that effective January 1, l996, Valuation Date shall mean any
date on which the stock market is open."
2. Section 4.3(b) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
"Effective on January 1, 1996, a Participant may change the percentage
of his Tax-Sheltered Contributions at any time during the Plan Year."
3. Section 4.3(c) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
<PAGE> 60
"Effective on January 1, 1996, any election, change or discontinuance
under this Section 4.3 shall be made via telephonic direction or in
accordance with such procedure as may be established by the
Administrator and communicated to Participants."
4. Section 8.1 shall be amended in its entirety as follows:
"The Trustee shall maintain within the Trust such Funds as the Bank
may direct the Trustee in writing to so maintain for the investment of
Participants' Accounts. The Bank shall notify Participants and
Beneficiaries of the Funds as may be available for investment of
Accounts under the Plan.
"The Trustees may hold, as part of the assets of each Fund, such
amounts in cash or short-term marketable securities as they, or the
Administrator, may reasonably deem necessary for the current operation
of the Plan.
"Income from, and net proceeds from sales of, assets in each such Fund
shall be reinvested in the same Fund, except that after June 30, 1990,
income from, and net proceeds from sales of, assets in the Universal
Life Insurance Fund shall be invested in other Funds in the manner
stated in Section 8.2(a). Brokerage commissions, transfer taxes, other
charges and expenses in connection with the purchase and sale of
assets held in each Fund, and any income or other taxes payable with
respect to each Fund shall be charged to such Fund."
5. Section 8.2 of the Plan shall be amended to treat each
reference to "the Certificate of Deposit Fund, the Growth Fund, the Ginnie Mae
Portfolio Fund, the Commonwealth Common Stock Fund or the Universal Life
Insurance Fund" as references to Funds available for investment direction under
the Plan, which shall be available for investment direction pursuant to rules
established by the Administrator and communicated to Participants and
Beneficiaries.
6. Section 8.2(a) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
"Notwithstanding the foregoing, effective on January 1, 1996, via
telephonic direction or in accordance with such procedure as may be
established by the Administrator and communicated to Participants, at
any time during the Plan Year, a Participant may direct that the
Tax-Sheltered
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Contributions which are credited to his account subsequent to his
election, be apportioned to Funds available for investment direction
under the Plan in multiples of 5 percent."
7. Section 8.2(b) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
"Notwithstanding the foregoing, effective on January 1, 1996, a
Participant may direct that the amounts credited to his account be
reapportioned, in whole or in part, in multiples of 5 percent, to
Funds available for investment direction under the Plan, via
telephonic direction or in accordance with such procedure as may be
established by the Administrator and communicated to Participants, at
any time during the Plan Year. The transfer of amounts to be
reapportioned shall take place as near as administratively practicable
to the date of the redirection election."
8. The first sentence of Section 11.6(a) of the Plan shall
be amended by deleting said sentence in its entirety and replacing it with the
following:
"Effective on January 1, 1996, a Participant in the service of the
Bank (and, effective for loans granted or renewed after October 18,
1989, a terminated Participant, or a beneficiary who is a party in
interest to the Plan under ERISA Section 3(14)) may apply in writing
at any time during the Plan Year, to the Administrator for a loan from
his account in the Plan, provided the Participant has repaid in full
any previous loan to him from the Plan."
9. Section 11.6(b) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
"Notwithstanding the foregoing, upon receipt of a proper application
filed on or after January 1, 1996, the Administrator shall direct the
Trustee to make a loan as near as administratively practicable after
the date the loan application is filed, provided such loan meets the
requirements of this Section 11.6."
10. Notwithstanding the foregoing amendments, however, it is
understood that the Administrator may impose a temporary freeze an transfers
and withdrawals to effectuate the change to a daily valuation system.
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<PAGE> 62
IN WITNESS WHEREOF, Commonwealth Savings Bank has caused this
Amendment No. 5 to be duly executed this, 22nd day of January, 1996.
Attest: COMMONWEALTH SAVINGS BANK
/s/ LEROY D. TODD, JR. By:/s/ CHARLES H. MEACHAM
- ----------------------------- ---------------------------
Leroy D. Todd, Jr., Secretary Charles H. Meacham,
President
ComNet Mortgage Services, Inc., hereby acknowledges this
Amendment No. 5 to the Plan this 22 day of January, 1996.
Attest: COMNET MORTGAGE SERVICES, INC.
/s/ THEODORE AICHER By:/s/ PATRICK J. WARD
- -------------------------- ----------------------
Theodore Aicher, Secretary Patrick J. Ward,
Acting President
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<PAGE> 63
AMENDMENT NO. 6
TO THE
COMMONWEALTH SAVINGS BANK
VOLUNTARY INVESTMENT PLAN
(As Amended and Restated Effective as of January 1, 1994)
- --------------------------------------------------------------------------------
WHEREAS, Commonwealth Savings Bank (the "Bank") maintains the
Commonwealth Savings Bank Voluntary Investment Plan ("the Plan");
WHEREAS, Section 17.1 of the Plan provides that, subject to
certain inapplicable limitations, the Bank may amend the Plan at any time;
WHEREAS, on or about June 28, 1996 certain of the branches of
Meridian Bank will be merged with the Bank and as of that date the Bank will
employ certain former Meridian Bank Employees;
WHEREAS, the Bank desires to amend the Plan to count prior
service with Meridian Bank for former Meridian Bank employees hired by the Bank
on or about June 28, 1996 for purposes of Years of Eligibility Service under
the Plan and to provide that the former Meridian Bank employees who meet the
eligibility requirements as of July 1, 1996 will become participants in the
Plan as of July 1, 1996;
NOW, THEREFORE, effective June 11, 1996, the Plan shall be
amended as follows:
1. Section 2.3(a) of the Plan shall be amended by adding a
new sentence to the end thereof as follows:
"Notwithstanding the foregoing, for each Employee of the Bank who
was an employee of Meridian Bank immediately prior to the
acquisition of certain branches of Meridian Bank by the Bank and who
is in the active employ of the Bank on June 28, 1996, Hours of
Service with Meridian Bank as recognized by Meridian Bank as of such
date shall be taken into account for purposes of determining such
Employee's Years of Eligibility Service hereunder."
2. Section 3.3 of the Plan shall be amended by adding a new
sentence to the end thereof as follows:
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<PAGE> 64
"Notwithstanding the foregoing, an Employee of the Bank who was an
employee of Meridian Bank immediately prior to the acquisition of
certain branches of Meridian Bank by the Bank and who is in the
active employ of the Bank on June 28, 1996 shall become a
Participant as of July 1, 1996, provided such Employee has met the
eligibility requirements of Section 3.2."
IN WITNESS WHEREOF, Commonwealth Savings Bank has caused this
Amendment No. 6 to be duly executed this 11th day of June, 1996.
Attest: COMMONWEALTH SAVINGS BANK
/s/ LEROY D. TODD, JR. By:/s/ CHARLES H. MEACHAM
- ------------------------------- ----------------------------
Leroy D. Todd, Jr., Secretary Charles H. Meacham,
President
ComNet Mortgage Services, Inc., hereby acknowledges this
Amendment No. 6 to the Plan this 11th day of June 1996.
Attest: COMNET MORTGAGE SERVICES, INC.
/s/ THEODORE AICHER By:/s/ PETER A. KEHOE
- ------------------------------- ---------------------------
Theodore Aicher, Secretary Peter A. Kehoe,
President
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