As filed with the Securities and Exchange Commission on May 22, 2000
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SUMMIT BANCORP.
(Exact name of registrant as specified in its charter)
New Jersey 22-1903313
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
301 Carnegie Center, P.O. Box 2066, Princeton, New Jersey 08543-2066
(Address of Principal Executive Offices) (Zip Code)
SUMMIT BANCORP. SAVINGS INCENTIVE PLAN
Richard F. Ober, Jr., Esq.
Executive Vice President, General Counsel and Secretary
301 Carnegie Center, P.O. Box 2066
Princeton, N.J. 08543-2066
(Name and address of agent for service)
(609) 987-3430
(Telephone number, including area code, of agent for service)
Calculation of Registration Fee
<TABLE>
<CAPTION>
Calculation of Registration Fee
Proposed Maximum Proposed Maximum
Title of Securities to Amount to be Offering Price Per Aggregate Offering Amount of
be Registered Registered Unit(2) Price(2) Registration Fee(2)
<S> <C> <C> <C> <C>
Common Stock, 400,000 $26.28 $10,512,000 $2,776
$ .80 par value
(and associated stock
purchase rights)(1)
Participation
Interests in Summit (3) (4) (4) (4)
Bancorp. Savings
Incentive Plan
<FN>
(1) Prior to the occurrence of certain events, the stock purchase rights will
not be evidenced separately from the common stock.
(2) Pursuant to Rule 457 (h)(1) based upon the average of the high and low
prices of Summit Bancorp. common stock on May 17, 2000.
(3) Pursuant to Rule 416(c) under the Securities Act, this Registration
Statement also covers an indeterminate amount of interests to be offered or
sold pursuant to the above-referenced Plan.
(4) Pursuant to Rule 457(h)(2) no additional fee is required.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Omitted as permitted by the Note to Part I of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Omitted as permitted by the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Summit Bancorp. ("Summit" or the "Company"), the Registrant, and the
Summit Bancorp. Savings Incentive Plan (the "Plan") hereby incorporate by
reference in this Registration Statement the following documents filed with the
Securities and Exchange Commission (the "SEC"):
(a) Summit's Annual Report on Form 10-K filed pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "Exchange Act") for the fiscal year
ended December 31, 1999;
(b) Summit's Quarterly Report on Form 10-Q filed pursuant to Section
13(a) of the Exchange Act for the quarter ended March 31, 2000.
(c) The description of the Common Stock of Summit contained in Summit's
Registration Statement on Form 10 dated August 31, 1970 as supplemented by the
Registration Statement on Form 8-A filed July 27, 1999, filed pursuant to
Section 12(b) of the Exchange Act, including all amendments thereto and reports
filed under the Exchange Act for the purpose of updating such description (File
No. 1-6451); and
(d) The Plan's Annual Report on Form 11-K filed pursuant to Section
15(d) of the Exchange Act for the fiscal year ended December 1, 1998.
All documents filed by Summit and the Plan with the SEC pursuant to
Section 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 shall likewise be deemed to be incorporated herein by reference
and to be a part hereof from and as of the respective dates of filing of such
documents.
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Item 4. Description of Securities.
This item is not applicable inasmuch as the Summit Common Stock offered
is registered under Section 12 of the Exchange Act and no description of the
plan interests is required.
Item 5. Interests of Named Experts and Counsel.
The legality of the shares offered hereby is being passed upon for the
Company by Richard F. Ober, Jr., Esq., who is employed as Executive Vice
President, General Counsel and Secretary of Summit. As of May 4, 2000 Mr. Ober
owned 57,215 shares of Common Stock and options to purchase 138,569 shares of
Common Stock at a weighted average exercise price of $23.11.
The consolidated financial statements of Summit and subsidiaries as of
December 31, 1999 and 1998 and for each of the years in the three-year period
ended December 31, 1999, included in Summit's Annual Report on Form 10-K for the
year ended December 31, 1999, incorporated by reference herein, have been
incorporated by reference herein in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The financial statements of the Summit Bancorp. Savings Incentive Plan
for the years ended December 31, 1998 and 1997 included in the Plan's Annual
Report on Form 11-K for the fiscal year ended December 31, 1998, incorporated by
reference herein, have been audited by KPMG LLP independent certified public
accountants, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon such report given upon
the authority of said firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
With respect to the indemnification of directors and officers, Section 5
of Article IX of the By-Laws of the Company provides:
Section 5. Indemnification and Insurance. (a) Each person who was or is
made a party or is threatened to be made a party to or is involved in any
proceeding, by reason of the fact that he or she is or was a corporate agent of
the Corporation, whether the basis of such proceeding is alleged action in an
official capacity as a corporate agent or in any other capacity while serving as
a corporate agent, shall be indemnified and held harmless by the Corporation to
the fullest extent authorized by the laws of the State of New Jersey as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expenses and liabilities in connection therewith
and such indemnification shall continue as to a person who has ceased to be a
corporate agent and shall inure to the benefit of such corporate agent's heirs,
executors, administrators and other legal representatives; provided, however,
that except as provided in Section 5(c) of this By-Law, the Corporation shall
indemnify any such person
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seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification conferred in
this By-Law shall be a contract right and shall include the right to be paid by
the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition, such advances to be paid by the Corporation
within 20 days after the receipt by the Corporation of a statement or statements
from the claimant requesting such advance or advances from time to time;
provided, however, that the advancement of counsel fees to a claimant other than
a claimant who is or was a director or Executive Vice President or higher
ranking officer of the Corporation shall be made only when the Board of
Directors or the General Counsel of the Corporation determines that arrangements
for counsel are satisfactory to the Corporation; and provided, further, that if
the laws of the State of New Jersey so require, the payment of such expenses
incurred by a corporate agent in such corporate agent's capacity as a corporate
agent (and not in any other capacity in which service was or is rendered by such
person while a corporate agent, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding shall
be made only upon delivery to the Corporation of an undertaking by or on behalf
of such corporate agent to repay all amounts so advanced if it shall ultimately
be determined that such corporate agent is not entitled to be indemnified under
this By-Law or otherwise.
(b) To obtain indemnification under this By-Law, a claimant shall submit
to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the claimant is
entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this Section 5(b), a
determination, if required by applicable law, with respect to the claimant's
entitlement thereto shall be made as follows: (1) if requested by a claimant who
is or was a director of Executive Vice President or high ranking officers of
this Corporation, by independent counsel (as hereinafter defined) in a written
opinion to the Board of Directors, a copy of which shall be delivered to the
claimant; or (2) if the claimant is not a person described in Section 5(b)(1) or
is such a person and if no request is made by such a claimant for a
determination by independent counsel, (A) by the Board of Directors by a
majority vote of a quorum consisting of disinterested directors (as hereinafter
defined), or (B) if a quorum of the Board of Directors consisting of
disinterested directors is not obtainable or, even if obtainable, such quorum of
disinterested directors so directs, by independent counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to the claimant.
In the event the determination of entitlement to indemnification is to be made
by independent counsel at the request of the claimant, the independent counsel
shall be selected by the Board of Directors and paid by the Corporation. If it
is determined that the claimant is entitled to indemnification, payment to the
claimant shall be made within 20 days after such determination.
(c) If a claim under Section 5(a) of this By-Law is not paid in full by
the Corporation within thirty days after a written claim pursuant to Section
5(b) of this By-Law has been received by the Corporation, the claimant may at
anytime thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim, including
attorney's fees. It shall be a defense to any such act (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any is
required, has
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<PAGE>
been tendered to the Corporation) that the claimant has not met the standard of
conduct which makes it permissible under the laws of the State of New Jersey for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors or independent counsel) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because the
claimant has met the applicable standard of conduct set forth in the laws of the
State of New Jersey, not an actual determination by the Corporation (including
its Board of Directors or independent counsel) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
(d) If a determination shall have been made pursuant to Section 5(b) of
this By-Law that the claimant is entitled to indemnification, the Corporation
shall be bound by such determination in any judicial proceeding commenced
pursuant to Section 5(c) of this By-Law.
(e) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
By-Law shall not be exclusive of any other rights which any person may have or
hereafter acquire under any statute, provisions of the Certificate of
Incorporation, By-Laws, agreement, vote of shareholders or disinterested
directors or otherwise. No repeal or modification of this By-Law shall in any
way diminish or adversely affect the rights of any corporate agent of the
Corporation hereunder in respect of any occurrence or matter arising prior to
any such repeal or modification.
(f) The Corporation may maintain insurance, at its expense, to protect
itself and any corporate agent of the corporation or other enterprise against
any expense or liability, whether or not the Corporation would have the power to
indemnify such person against such expense or liability under the laws of the
State of New Jersey.
(g) If any provision or provisions of this By-Law shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (1) the validity,
legality and enforce ability of the remaining provisions of this By-Law
(including, without limitation, each portion of any section of this By-Law
containing any such provision held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (2) to the fullest
extent possible, the provisions of this By-Law (including, without limitation,
each such portion of any section of this By-Law containing any such provision
held to be invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
(h) For purposes of this By-Law:
(1) "disinterested director" means a director of the Corporation
who is not and was not a party to or otherwise involved in
the matter in respect of which indemnification is sought by
the claimant.
(2) "independent counsel" means a law firm, a member of a law
firm, or an independent practitioner that is experienced in
matters of corporation law and shall include any
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person who, under the applicable standards of professional
conduct then prevailing, would not have a conflict of
interest in representing either the Corporation or the
claimant in an action to determine the claimant's rights
under this By-Law.
(3) "corporate agent" means any person who is or was a director,
officer, employee or agent of the Corporation or of any
constituent corporation absorbed by the Corporation in a
consolidation or merger and any person who is or was a
director, officer, trustee, employee or agent of any
subsidiary of the Corporation or of any other enterprise,
serving as such at the request of this Corporation, or of
any such constituent corporation, or the legal
representative of any such director, officer, trustee,
employee or agent;
(4) "other enterprise" means any domestic or foreign
corporation, other than the Corporation, and any
partnership, joint venture, sole proprietorship, trust or
other enterprise, whether or not for profit, served by a
corporate agent;
(5) "expenses" means reasonable costs, disbursements and counsel
fees;
(6) "liabilities" means amounts paid or incurred in satisfaction
of settlements, judgements, fines and penalties;
(7) "proceeding" means any pending, threatened or completed
civil, criminal, administrative, legislative, investigative
or arbitrative action, suit or proceeding, and any appeal
therein and any inquiry or investigation which could lead to
such action, suit or proceeding; and
(8) References to "other enterprises" include employee benefit
plans; references to "fines" include any excise taxes
assessed on a person with respect to an employee benefit
plan; and references to "serving at the request of the
indemnifying corporation" include any service as a corporate
agent which imposes duties on, or involves services by, the
corporate agent with respect to an employee benefit plan,
its participants, or beneficiaries; and a person who acts in
good faith and in a manner the person reasonably believed to
be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the
corporation."
(i) Any notice, request or other communication required or permitted to
be given to the Corporation under this By-Law shall be in writing and either
delivered in person or sent by facsimile, telex, telegram, overnight mail or
courier service, or certified or registered mail, postage prepaid, return
receipt requested, to the Secretary of the Corporation and shall be effective
only upon receipt by the Secretary.
(j) This By-Law shall be implemented and construed to provide any
corporate agent described above who is found to have acted in good faith and in
a manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation the maximum indemnification,
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advancement of expenses, and reimbursement for liabilities and expenses allowed
by law.
Such provision is consistent with Section 14A:3-5 of the Business
Corporation Act of the State of New Jersey, the state of Summit's incorporation,
which permits the indemnification of officers and directors, under certain
circumstances and subject to specified limitations, against liability which any
officer or director may incur in such capacity.
Article 7 of Summit's Restated Certificate of Incorporation provides
that:
Except to the extent prohibited by law, no Director or officer of the
Corporation shall be personally liable to the Corporation or its shareholders
for damages for breach of any duty owed to the Corporation or its shareholders
provided that a Director or officer shall not be relieved from liability for any
breach of duty based upon an act or omission (a) in breach of such persons duty
of loyalty to the Corporation or its shareholders, (b) not in good faith or
involving a knowing violation of law or (c) resulting in receipt of an improper
personal benefit. Neither the amendment or repeal of this Article 7, nor the
adoption of any provision of this Restated Certificate of Incorporation
inconsistent with this Article 7, shall eliminate or reduce the effect of this
Article 7 in respect of any matter which occurred, or any cause of action, suit
or claim which but for this Article 7 would have accrued or arisen, prior to
such amendment, repeal or adoption.
Summit carries officers' and directors' liability insurance policies
which provide coverage against judgments, settlements and legal costs incurred
because of actual or asserted acts of such officers and directors of Summit
arising out of their duties as such, subject to certain exceptions, including,
but not limited to, damages based upon illegal personal profits or adjudicated
dishonesty of the person seeking indemnification. The policies provide coverage
of $50,000,000 in the aggregate.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
This Registration Statement includes the following exhibits:
5 Opinion of Richard F. Ober, Jr., Esq. regarding legality.
10 Summit Bancorp. Savings Incentive Plan.
23(a) Consent of Richard F. Ober, Jr., Esq. (included as part of Exhibit 5).
(b) Consent of KPMG LLP (Summit).
(c) Consent of KPMG LLP (the Plan).
24 Power of Attorney (contained on the signature pages to this Registration
Statement).
7
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Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration Statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement; provided, however, that paragraphs (i) and (ii) above shall
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each 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 hereby which remain unsold at the
termination of the offering.
(4) That, for 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 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described in Item 6, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange 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 such 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
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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 question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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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, there unto duly
authorized, in the Township of West Windsor and the State of New Jersey on this
18th day of May, 2000.
SUMMIT BANCORP.
By: /s/ T. Joseph Semrod
T. Joseph Semrod, Chairman of the
Board of Directors and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints T. Joseph Semrod, William J. Healy and Richard F.
Ober, Jr., and each of them, the undersigned's true and lawful attorney-in-fact
and agents, with full power of substitution and resubstitution, for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same with all exhibits thereto
and other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 18th day of May, 2000 by the
following persons in the capacities indicated.
Signatures Titles
/s/ T. Joseph Semrod Chairman of the Board
- ------------------------------ of Directors (Chief Executive Officer)
T. Joseph Semrod
/s/ William J. Healy Executive Vice President-Finance
- ------------------------------ (Principal Financial Officer)
William J. Healy
/s/ Paul V. Stahlin Senior Vice President and Comptroller
- ------------------------------ (Principal Accounting Officer)
Paul V. Stahlin
/s/ Robert L. Boyle Director
- ------------------------------
Robert L. Boyle
/s/ James C. Brady Director
- ------------------------------
James C. Brady
10
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Signatures Titles
/s/ John G. Collins Director
- ------------------------------
John G. Collins
/s/ T.J. Dermot Dunphy Director
- ------------------------------
T.J. Dermot Dunphy
/s/ Anne Evans Estabrook Director
- ------------------------------
Anne Evans Estabrook
/s/ Elinor J. Ferdon Director
- ------------------------------
Elinor J. Ferdon
Director
- ------------------------------
William M. Freeman
/s/ Thomas H. Hamilton Director
- ------------------------------
Thomas H. Hamilton
/s/ Arthur J. Kania Director
- ------------------------------
Arthur J. Kania
/s/ Francis J. Mertz Director
- ------------------------------
Francis J. Mertz
/s/ George L. Miles, Jr. Director
- ------------------------------
George L. Miles, Jr.
/s/ William R. Miller Director
- ------------------------------
William R. Miller
/s/ Raymond Silverstein Director
- ------------------------------
Raymond Silverstein
/s/ Orin R. Smith Director
- ------------------------------
Orin R. Smith
/s/ Joseph M. Tabak Director
- ------------------------------
Joseph M. Tabak
/s/ Douglas G. Watson Director
- ------------------------------
Douglas G. Watson
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Township of West Windsor, State of New Jersey, on the
18th day of May, 2000.
Summit Bancorp. Savings Incentive Plan
By: /s/ Alfred M. D'Augusta
Alfred M. D'Augusta
Chairman, Benefits Committee
Summit Bancorp.
Pursuant to the requirements the Securities Act of 1933, this
Registration statement has been signed below on the 18th day of May, 2000 by the
following persons in the capacities indicated.
/s/ Alfred M. D'Augusta
- ------------------------------
Alfred M. D'Augusta, Chairman and Member of Benefits Committee
/s/ John G. Collins
- ------------------------------
John G. Collins, Member of Benefits Committee
/s/ William J. Healy
- ------------------------------
William J. Healy, Member of Benefits Committee
/s/ Richard F. Ober, Jr.
- ------------------------------
Richard F. Ober, Jr., Member of Benefits Committee
12
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EXHIBIT INDEX
Exhibit No. Description
5 Opinion of Richard F. Ober, Jr., Esq. regarding legality.
10 Summit Bancorp. Savings Incentive Plan.
23(a) Consent of Richard F. Ober, Jr., Esq. (included as part of
Exhibit 5).
(b) Consent of KPMG LLP (Summit).
(c) Consent of KPMG LLP (the Plan).
24 Power of Attorney (contained on the signature pages to this
Registration Statement).
13
Exhibit 5
May 3, 2000
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, New Jersey 08543
Re: Registration Statement on Form S-8 of Summit Bancorp. Relating to 400,000
Shares of Summit Bancorp. Common Stock Issuable in Connection with the
Summit Bancorp. Savings Incentive Plan
Gentlemen:
This opinion is given in connection with the Registration Statement on
Form S-8 (the "Registration Statement") filed by Summit Bancorp. (the "Company")
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to an aggregate of 400,000 shares of the Company's Common
Stock, par value $ .80 per share (the "Shares"), to be issued under the Summit
Bancorp. Savings Incentive Plan (the "Plan").
I have acted as counsel for the Company in connection with the filing
of the Registration Statement. In so acting, I have made such investigation,
including the examination of originals or copies, certified or otherwise
identified to my satisfaction, of such corporate documents and instruments as I
have deemed relevant and necessary as a basis for the opinion hereinafter set
forth. In connection therewith I have assumed the genuineness of all signatures
and the authenticity of all documents submitted to me as originals and the
conformity to original documents of all documents submitted to me as certified
or photostatic copies. As to questions of fact material to such opinion, I have
relied upon representations of officers or representatives of the Company.
Based upon the foregoing, I am of the opinion that the Shares
registered pursuant to the Registration Statement and to be issued under the
Plan will, when issued in accordance with the Plan, be validly issued, fully
paid and nonassessable.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement. I further consent to any and all references to me in the
Prospectus which is part of said Registration Statement, should there be any.
Very truly yours,
/s/ Richard F. Ober, Jr.
SUMMIT BANCORP.
SAVINGS INCENTIVE PLAN
Effective as of July 1, 1983
Amended and Restated in Its Entirety as of January 1, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS.......................................................2
1.1 (Applicability of Article 1)................................2
1.2 Accounts....................................................2
1.3 Accounting Date.............................................2
1.4 Active Participant..........................................2
1.5 Annual Additions............................................2
1.6 Associated Company..........................................3
1.7 Beneficiary.................................................3
1.8 Board.......................................................3
1.9 Business Day................................................3
1.10 Code........................................................3
1.11 Committee...................................................3
1.12 Company.....................................................3
1.13 Company Stock...............................................3
1.14 Compensation................................................3
1.15 Earnings....................................................3
1.16 Effective Date..............................................4
1.17 Employee....................................................4
1.18 Employment..................................................4
1.19 Employment Date.............................................4
1.20 Entry Date..................................................4
1.21 ERISA.......................................................4
1.22 Family Member...............................................5
1.23 Highly Compensated Employee.................................5
1.24 Hour of Service.............................................5
1.25 Leave of Absence............................................5
1.26 Matched Contribution........................................5
1.27 Matching Employer Contribution..............................5
1.28 Nonhighly Compensated Employee..............................5
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TABLE OF CONTENTS
1.29 Normal Retirement Date......................................6
1.30 Participant.................................................6
1.31 Period of Participation.....................................6
1.32 Period of Service...........................................6
1.33 Period of Severance.........................................6
1.34 Permanent Disability or Permanently Disabled................6
1.35 Plan........................................................6
1.36 Plan Year...................................................6
1.37 Rollover Amount.............................................7
1.38 Severance from Service Date.................................7
1.39 Spouse......................................................7
1.40 Termination of Employment...................................7
1.41 Trust.......................................................7
1.42 Trust Agreement.............................................7
1.43 Trustee.....................................................7
1.44 Trust Fund..................................................8
1.45 Unmatched Contribution......................................8
ARTICLE 2 - PARTICIPATION, SERVICE AND REEMPLOYMENT...........................9
2.1 Participation...............................................9
2.2 Active Participants Who Become Ineligible...................9
2.3 Reemployment After a Period of Severance...................10
2.4 Interactive Telephone System...............................10
ARTICLE 3 - SAVINGS CONTRIBUTIONS AND ROLLOVER AMOUNTS.......................12
3.1 Matched Contributions......................................12
3.2 Unmatched Contributions....................................12
3.3 Matching Employer Contributions............................12
3.4 Change in Percentage of Contributions......................13
3.5 Suspensions and Contribution Resumptions...................13
3.6 Before-Tax Contribution Limitations........................13
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TABLE OF CONTENTS
3.7 Matching Employer and After-Tax Contribution Limitations...15
3.8 Remittance of Contributions................................17
3.9 Rollover Amounts...........................................17
3.10 Prior Plan Accounts........................................17
3.11 Nonreversion...............................................17
3.12 Contribution Restrictions..................................18
3.13 Return of Unmatched and Matched Contributions..............18
3.14 Adjustment for Excessive Contribution Percentage...........19
ARTICLE 4 - INVESTMENT OF CONTRIBUTIONS......................................21
4.1 Investment of Contributions................................21
4.2 Change in Current Investment Directions....................22
4.3 Sub-Fund Reallocations and Sub-Fund Transfers..............22
4.4 Rights With Respect To Company Stock.......................22
4.5 Diversification............................................23
ARTICLE 5 - VALUATION OF TRUST AND ACCOUNTS..................................24
5.1 Valuation of Accounts......................................24
5.2 Maintenance of Accounts....................................24
5.3 Statements.................................................24
ARTICLE 6 - VESTING..........................................................26
6.1 Vesting....................................................26
6.2 Plan Amendment.............................................26
ARTICLE 7 - DISTRIBUTIONS....................................................27
7.1 Distribution on Death......................................27
7.2 Distribution on Other Severance............................27
7.3 Forfeitures and Reinstatement of Forfeitures...............27
7.4 Application of Forfeitures.................................27
7.5 Method of Distribution.....................................27
7.6 Required Distribution Commencement Dates...................28
7.7 Valuation..................................................29
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TABLE OF CONTENTS
7.8 Proof of Death and Right of Beneficiary....................30
7.9 Undeliverable Distributions................................30
7.10 Interest and Dividends on Distributions....................30
7.11 Effectiveness of Voluntary Distributions...................30
7.12 Direct Rollovers...........................................30
ARTICLE 8 - WITHDRAWALS WHILE IN EMPLOYMENT..................................32
8.1 Order of Withdrawal from Accounts..........................32
8.2 Directing the Calculation of Withdrawn Amounts.............33
8.3 Restrictions; Limitations; Penalties.......................33
8.4 Hardship Withdrawals.......................................33
8.5 Procedures; Effective Dates; Payment.......................35
ARTICLE 9 - LOANS............................................................36
9.1 Availability of Loans......................................36
9.2 Loan Requirements..........................................36
9.3 Default....................................................37
9.4 Status of Participant......................................37
9.5 Prepayments and Restrictions Regarding Additional Loans....37
9.6 Source of Loan Proceeds....................................37
ARTICLE 10 - OPERATION OF THE PLAN...........................................39
10.1 Administrator..............................................39
10.2 Fiduciaries................................................39
10.3 Actions of Fiduciaries.....................................39
10.4 Procedures for Plan Operation..............................39
10.5 Funding Policy.............................................40
10.6 Assets in Trust............................................40
10.7 Expenses...................................................40
ARTICLE 11 - PLAN ADMINISTRATION.............................................41
11.1 Administration of the Plan.................................41
11.2 Action by the Committee....................................41
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TABLE OF CONTENTS
11.3 Rules and Regulations......................................41
11.4 Powers of the Board........................................41
11.5 Powers of the Committee....................................42
11.6 Information from Participants..............................42
11.7 Records....................................................42
11.8 Authority to Act...........................................43
11.9 Liability for Acts.........................................43
11.10 Compensation and Expenses..................................43
11.11 Indemnity..................................................43
11.12 Claims Procedure...........................................43
11.13 Standard of Review of Committee Decisions..................44
ARTICLE 12 - THE TRUST.......................................................45
12.1 Trust Agreement............................................45
ARTICLE 13 - AMENDMENT OF THE PLAN...........................................46
13.3 Restrictions on Amendments.................................46
ARTICLE 14 - TERMINATION OF THE PLAN.........................................47
14.1 Events Constituting Termination............................47
14.2 Allocation of Assets.......................................47
14.3 Manner of Distribution.....................................47
14.4 Liquidation of Trust Fund..................................47
14.5 Internal Revenue Service Approval for Distribution.........47
ARTICLE 15 - MISCELLANEOUS PROVISIONS........................................48
15.1 No Assignment of Benefit...................................48
15.2 No Implied Rights to Employment............................48
15.3 Mergers or Transfers.......................................48
15.4 Incapacity.................................................48
15.5 Effectuation of Interest...................................48
15.6 Domestic Relations Orders..................................49
15.7 Headings...................................................52
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TABLE OF CONTENTS
15.8 Copy of Plan...............................................52
15.9 Governing Law..............................................52
15.10 Qualified Military Service.................................52
ARTICLE 16 - TOP-HEAVY PLAN PROVISIONS.......................................53
16.1 (top-heavy testing and other provisions)...................53
16.2 (top-heavy testing and other provisions)...................53
16.3 (top-heavy testing and other provisions)...................53
16.4 (top-heavy testing and other provisions)...................54
16.5 (top-heavy testing and other provisions)...................54
ARTICLE 17 - LIMITATIONS OF ANNUAL ADDITIONS.................................55
17.1 Limitation on Annual Additions.............................55
ARTICLE 18 - ESOP STOCK......................................................57
18.1 ESOP Definitions...........................................57
18.2 ESOP Loans.................................................57
18.3 Voting and Tendering of ESOP Stock.........................60
18.4 Annual Additions...........................................60
APPENDIX A...................................................................61
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INTRODUCTION
The United Jersey Banks Profit Sharing Plan was established as of
January 1, 1956 and amended from time to time since its inception. Effective as
of December 31, 1975, all contributions to the United Jersey Banks Profit
Sharing Plan were discontinued.
Effective July 1, 1983, the United Jersey Banks Profit Sharing Plan was
amended and restated and was renamed the "United Jersey Banks Savings Incentive
Plan" (hereinafter called the "Plan"). (In 1989 the Company's name was changed
to to UJB Financial Corp., and in 1996 to Summit Bancorp.) Any eligible Employee
who had a "Regular Account" and any "Voluntary Account" in the United Jersey
Banks Profit Sharing Plan on June 30, 1983 was given the opportunity to
transfer, in multiples of 25%, the Participant's nonforfeitable interest in such
accounts to the Participant's Rollover Account and Unmatched Contribution
Account, respectively, as of the Plan's Effective Date. The Plan was thereafter
amended to include a PAYSOP Contribution feature, retroactive to January 1,
1983; however, the Company ceased making PAYSOP Contributions as of the 1986
Plan year. Effective October 31, 1995, the Plan was amended to transfer all
PAYSOP accounts (Sub-Fund E) into the Company Stock Fund (Sub-Fund B) to
streamline the Plan and to take advantage of the lapse of legal restrictions
prohibiting the transfer of such accounts and the PAYSOP section was deleted.
The Plan has also been amended to comply with certain provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 ("TEFRA"), the Deficit Reduction
Act of 1984 ("DEFRA"), the Retirement Equity Act of 1984 ("REA"), the Tax Reform
Act of 1986 and the Omnibus Reconciliation Act of 1986 and to reflect increases
in the Matching Employer Contribution and the inclusion of additional investment
funds.
From time to time the assets of savings, profit sharing or similar
plans of subsidiaries of Summit Bancorp. have been merged into the Plan and
employees of such subsidiaries have thereafter been afforded an opportunity to
participate in the Plan on the same basis as other employees of the Company.
Upon a merger of subsidiary plan assets into the Plan each participant in the
subsidiary plan became immediately and fully vested with respect to benefits
accrued under that plan. Effective March 13, 1998 the Plan was amended to
effectuate the merger of the Summit Bancorp. Employee Stock Ownership Plan
(formerly the Collective Federal Savings Bank Employee Stock Ownership Plan)
into the Plan.
The purposes of this Plan are to encourage and help Employees to save
for the future on a regular basis and to provide additional security for their
retirement. The benefits under this Plan are designed to supplement other
Company benefits payable to an Employee upon retirement, death, disability, or
other termination of employment.
It is the intention of the Company that this amended and restated Plan,
as amended from time to time, and the attendant Trust continue to meet the
requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and
that the Plan and Trust be a qualified Plan and Trust under Sections 401, 404,
and 501(a) of the Internal Revenue Code of 1986, as amended. It is further
intended that the Plan meet the requirements of Sections 401(k) and 409 of the
Code.
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ARTICLE 1
DEFINITIONS
1.1 The terms defined in this Article 1 shall have the meaning ascribed
to them in this Article 1 for purposes of the Plan.
1.2 Accounts shall mean the Participant's Matched Contribution Account,
Matching Employer Contribution Account, and if applicable, Unmatched
Contribution Account, Prior Plan Account and Rollover Account, either
collectively or singly, as the context requires. The value of a Participant's
Accounts shall be determined by the Committee or third-party administrator as of
the Accounting Date coincident with or next following the occurrence of the
event on account of which the distribution is to be made.
1.3 Accounting Date shall mean each Business Day of each calendar
month.
1.4 Active Participant shall mean a person who meets the eligibility
requirements for participation in the Plan set forth in Section 2.1 and at the
relevant point in time has in effect an Enrollment Agreement (as defined at
Section 2.1) which authorizes a Matched Contribution of at least 1%.
1.5 Annual Additions, as applied to a Participant's Accounts in any
Plan Year, shall mean the sum of:
(a) before-tax Matched Contributions and, if any, before-tax Unmatched
Contributions both made with respect to a Participant by the Company pursuant to
an Enrollment Agreement as described in Sections 3.1 and 3.2, respectively, and
Matching Employer Contributions made with respect to such Participant under
Section 3.3,
(b) any Employee after-tax contributions, and
(c) forfeitures, if any, allocated to a Participant's Accounts.
For purposes of determining the amount of a Participant's Annual
Additions, any Rollover Amount shall be excluded.
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1.6 Associated Company shall mean a corporation, a majority of whose
stock is owned by Summit Bancorp. or one of its subsidiary companies, which has
not adopted the Plan.
1.7 Beneficiary shall mean the person designated in writing by the
Participant in such form as the Committee may prescribe (which designation may
be changed from time to time) to receive benefits under the Plan payable upon
the death of a Participant. A Participant may not designate as Beneficiary any
person other than the Participant's Spouse unless either (a) the Spouse has
consented to the designation and acknowledged its effect, in a writing witnessed
by a notary public or a representative of the Committee, or (b) the Participant
has demonstrated to the satisfaction of the Committee that such consent cannot
be obtained because the Participant has no Spouse, because the Spouse cannot be
located, or because of such other circumstances as the Secretary of the Treasury
may by regulations prescribe. If the Participant has not designated a
Beneficiary or the person designated as Beneficiary fails to survive the
Participant, then the Beneficiary shall be the Participant's surviving Spouse,
if any, otherwise the person or persons, including the Participant's estate, if
applicable, determined as the beneficiary under the terms of the Company's life
insurance program.
1.8 Board shall mean the Board of Directors of Summit Bancorp.
1.9 Business Day shall mean a day on which both the New York Stock
Exchange and the Federal Reserve Bank are open.
1.10 Code shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.11 Committee shall mean the Benefits Committee appointed by the Board
to be responsible for the regular day-to-day administration of the Plan, as
provided in Article 10. The Committee is designated as the agent for the service
of legal process against the Plan.
1.12 Company shall mean either Summit Bancorp. or any other
corporation, a majority of whose stock is owned by Summit Bancorp. or one of its
subsidiary companies, which adopts the Plan and the Trust, provided the Board
authorizes such corporation to adopt the Plan.
1.13 Company Stock shall mean the common stock, par value $.80 per
share, of Summit Bancorp.
1.14 Compensation for purposes of Sections 3.6, 3.7, 3.13 and 3.14
hereof shall mean an Employee's W-2 compensation for the plan year.
1.15 Earnings shall mean the regular monthly base salary of an
Employee, excluding overtime pay,
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bonuses, contributions by a Company to any plan of benefits instituted and
maintained by such Company, and other special pay, but including any amount (a)
deferred by a Participant under an Enrollment Agreement and contributed by a
Company to the Plan as a before-tax contribution pursuant to Article 3, (b)
contributed on behalf of a Participant by a Company to a "cafeteria plan" (as
that term is defined at Section 125 of the Code) through a reduction to base
salary, (c) paid as a commission for the sale of annuities or insurance, or the
closing of mortgage loans, or (d) paid as incentive pay to proof operators.
Earnings for each calendar year shall not exceed the maximum permissible amount
of earnings as determined in accordance with Section 415(d) of the Code.
Notwithstanding the foregoing, effective January 1, 1994, a
Participant's Earnings in excess of $150,000 in any Plan Year shall not be taken
into account under the Plan for any purpose. Such $150,000 limitation shall be
adjusted in accordance with Section 401(a)(17) of the Code.
1.16 Effective Date shall mean July 1, 1983.
1.17 Employee shall mean any employee of a Company who is compensated
on a weekly, monthly, or annual salary basis, regardless of the number of the
Participant's Hours of Service (including zero), including a Participant who
receives payments during an internal search period or external search and out
placement period in accordance with the Company's policy on work force
adjustment. Any such salaried employee of a Company on a Leave of Absence shall
be considered an Employee, but any employee receiving from a Company only a
pension, severance pay, retainer, or professional fee shall not be an Employee
for purposes of the Plan. A person who acts as a director of a Company or an
Associated Company (but who is not an employee of such Company or an Associated
Company) or an employee of a Company who is a nonresident alien who receives no
earned income from U.S. sources shall not be considered an Employee. A person
who is an Employee shall be credited with Periods of Service for purposes of
Article 2 on the basis of the such person's years and months of elapsed time as
an employee of a Company or an Associated Company. Any employee of a Company who
is paid on an hourly paid basis shall not be an Employee for purpose of the
Plan. Employees shall include leased employees if required under Section 414(n)
of the Code.
1.18 Employment shall mean the Period of Service during which an
individual is an Employee.
1.19 Employment Date shall mean the date an Employee first performs or
first again performs an Hour of Service.
1.20 Entry Date shall mean the initial date an Employee in Employment
on or after the Effective Date commences participation in the Plan and shall be
determined in accordance with Section 2.1.
1.21 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, including any regulations issued pursuant
thereto.
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1.22 Family Member shall mean with respect to any Employee, such
Employee's spouse and lineal ascendants or descendants and the spouse of such
lineal ascendants or descendants.
1.23 Highly Compensated Employee shall mean any Employee who (a) was a
5-percent owner at any time during the year or the preceding year, or (b) for
the preceding year, received compensation in excess of $80,000 and was in the
top 20 percent of Employees when ranked on the basis of compensation paid during
such preceding year.
Compensation for purposes of this Section 1.23 shall mean compensation
as defined in Code Section 415(c)(3). Such $80,000 amount described above shall
be adjusted at the same time and in the same manner as under Code Section
415(d).
1.24 Hour of Service shall mean each hour for which a person is
directly or indirectly paid or entitled to payment by a Company or an Associated
Company (a) for the performance of duties or (b) on account of a period of time
during which no duties are performed because of a vacation, holiday or Leave of
Absence or (c) for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by a Company or an Associated Company. Each such
hour shall be determined in accordance with Department of Labor Regulations
2530.200b-2(b) and (c).
1.25 Leave of Absence shall mean an absence, with or without
compensation from which an employee shall have returned or may return to
performing duties for the employee's employer and which is approved by the
employee's employer, such as an absence for service with governmental agencies,
illness, accident, disability (but not Permanent Disability), temporary layoff,
educational purposes, jury duty, maternity or paternity leave of absence, other
personal leaves of absence or a military leave of absence (which means absence
for service in the Armed Forces of the United States during time of war or a
declared national emergency, provided the employee left the Participant's
employer directly to enter into the Armed Forces and returns directly to
employment with the Participant's employer during the period in which the
Participant's employment rights are protected by law).
A Leave of Absence shall be granted in a nondiscriminatory manner to
all Employees similarly situated, but except as provided in Section 1.25 and
except for illness, accident, disability, or military absence, a leave of
absence shall not exceed two years' duration.
1.26 Matched Contribution shall mean a semi-monthly contribution made
with respect to or by a Participant pursuant to Section 3.1. A Matched
Contribution shall entitle the Participant by whom or on whose behalf the
contribution was made to a Matching Employer Contribution in amounts calculated
as provided in Section 3.3.
1.27 Matching Employer Contribution shall mean the semi-monthly
contribution made by a Company in accordance with Section 3.3 for the benefit of
a Participant who has made a before-tax or after- tax Matched Contribution
pursuant to Section 3.1.
1.28 Nonhighly Compensated Employee shall mean an Employee who is not a
Highly Compensated Employee.
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1.29 Normal Retirement Date shall mean the first day of the month
coincident with or next following the Participant's 65th birthday.
1.30 Participant shall mean a person who commenced participation in the
Plan in accordance with Section 2.1 and who at the relevant point in time owns
at least one Account in the Plan with a balance greater than zero.
1.31 Period of Participation shall mean the number of years and months
(expressed as a fraction of a year) of an Employee's participation in the Plan
as an Active Participant. A month's Period of Participation is counted for each
calendar month that Matched Contributions to the Plan are made with respect to a
Participant and in which the Active Participant is credited with at least one
Hour of Service.
1.32 Period of Service shall mean, except as provided hereafter in this
Section 1.32, the period of elapsed time which begins on the Employee's
Employment Date and ends as of such Employee's Severance from Service Date. Any
period of employment while an ineligible employee of a Company or Associated
Company shall count in determining an Employee's Period of Service.
(a) In the case of a Participant who is absent from work for maternity
or paternity reasons, the 12- month period between the first and second
anniversaries of the first date of such absence shall not be considered to be a
Period of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (i) by reason of the pregnancy
of the Participant, (ii) by reason of the birth of a child of the Participant,
(iii) by reason of the placement of a child with the Participant in connection
with the Participant in connection with the adoption of the child by such
Participant, or (iv) for purposes of caring for such child for a period
beginning immediately following such placement.
(b) For the purposes of Article II of the Plan, if an Employee performs
an Hour of Service with the Company or an Associated Company within 12 months
after the Employee quits, retires or is discharged, such Period of Severance
shall be considered a Period of Service. If a Participant who is absent for a
different reason quits, retires, or is discharged during such absence and
thereafter performs an Hour of Service with the Company or an Associated Company
within 12 months after the first day of the Employee's absence, such Period of
Severance shall be considered a Period of Service.
1.33 Period of Severance shall mean a period commencing on a
Participant's Severance from Service Date and ending on the Participant's
subsequent Employment Date.
1.34 Permanent Disability or Permanently Disabled shall mean a physical
or mental condition of a Participant which renders the Participant unfit to
perform the duties of the Participant's Employment, as evidenced by the
Participant's receiving from the Social Security Administration Office a
certificate of disability award, and/or the Participant's receiving disability
income payments under the Company's long- term disability program.
1.35 Plan shall mean the Savings Incentive Plan as set forth in this
document and as it may be amended from time to time.
1.36 Plan Year shall mean the period commencing on the Effective Date
and ending on
6
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December 31, 1983 and, thereafter, each 12-month period commencing on each
January 1.
1.37 Rollover Amount shall mean all or a portion of any rollover amount
or rollover contribution consisting of cash or Company Stock described in (a)
Sections 402(c) or 403(a)(4) of the Code (relating to certain distributions from
an employee's trust, or an employee annuity described in Section 401(a) or
403(a) of the Code), or (b) Section 408(d)(3) of the Code (relating to certain
distributions from an individual retirement account or an individual retirement
annuity).
For purposes of this Plan, any Rollover Amount shall be deemed an
unmatched non-elective contribution to the Plan and the contribution must be
made no later than 60 days following the date in which the Participant receives
the distributable amount.
1.38 Severance from Service Date shall mean, except as provided
hereafter in this Section 1.38, the earlier of (a) the date the Participant
quits, retires, is discharged or dies, or (b) the first anniversary of the first
date of absence for any other reason.
In the case of a Participant who is absent from work for maternity or
paternity reasons, the Severance from Service Date shall be the second
anniversary of the first date of such absence. For purposes of this paragraph,
an absence from work for maternity or paternity reasons means an absence (c) by
reason of the pregnancy of the Participant, (d) by reason of the birth of the
child of the Participant, (e) by reason of the placement of a child with the
Participant in connection with the adoption of the child by such Participant, or
(f) for purposes of caring for such child for a period beginning immediately
following such placement. In such case, the Committee may require certification
from the Participant that the leave was taken for one of the reasons enumerated
in this paragraph.
1.39 Spouse shall mean the wife or husband of a covered Employee under
the Plan who is legally married to the Employee at the time of the Employee's
Severance from Service Date.
1.40 Termination of Employment shall mean an Employee's termination of
Employment, whether voluntary or involuntary, for any reason, including, without
limitation, approval to receive long-term disability payments.
1.41 Trust shall mean the trust established or maintained under the
Trust Agreement.
1.42 Trust Agreement shall mean the agreement between Summit Bancorp.,
as the principal Company acting on behalf of any Company that adopts the Plan,
and the Trustee for the administration of the Trust Fund, including any
amendments to said agreement.
1.43 Trustee shall mean Summit Bancorp. or any successor Trustee as
appointed by the Board.
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1.44 Trust Fund shall mean all monies and property paid or delivered
to, and accepted by, the Trustee pursuant to the Trust Agreement and the Plan,
and all investments made therewith and proceeds thereof and all earnings and
profits thereon, less the payments made by the Trustee as authorized in the
Trust Agreement.
1.45 Unmatched Contribution shall mean a semi-monthly contribution made
with respect to or by a Participant pursuant to Section 3.2. An Unmatched
Contribution shall not entitle the Participant by whom or on whose behalf the
contribution was made to a Matching Employer Contribution.
1.46 Unless the context clearly indicates otherwise, the use of the
singular shall include the plural.
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ARTICLE 2
PARTICIPATION, SERVICE AND REEMPLOYMENT
2.1 Participation. Each Employee who completes a Period of
Service of at least 12 months after the Effective Date may elect to become a
Participant by submitting to the Committee an enrollment agreement in the form
prescribed by the Committee (the "Enrollment Agreement") which elects a Matched
Contribution of at least 1% and is otherwise properly completed. Effective March
1, 1999, each Employee who completes a Period of Service of at least three (3)
months after the Effective Date may elect to become a Participant by submitting
to the Committee an Enrollment Agreement which elects a Matched Contribution of
at least 1% and is otherwise properly completed. (Until such Employee completes
a Period of Service of at least 12 months, such Employee shall be referred to in
Section 3.3 and 3.16 of the Plan as a "Limited Participant.") (Where before-tax
contributions are authorized, the Enrollment Agreement shall function as a
salary deferral authorization. Where after-tax contributions are authorized, the
Enrollment Agreement shall function as a payroll deduction authorization.) Such
employee shall become a Participant as of the pay date next following the 6th
day of a calendar month, if the Committee receives a properly completed
Enrollment Agreement from the Employee by the 6th day of such calendar month, or
the pay date next following the 21st day of a calendar month, if the Committee
receives a properly completed Enrollment Agreement from the Employee by the 21st
day of such calendar month. Enrollment Agreements received after the 21st day of
a given calendar month will be deemed received by the 6th day of the following
calendar month. The Committee shall make provision for the Participant to
designate the Participant's Beneficiary on the Enrollment Agreement.
2.2 Active Participants Who Become Ineligible. An Active
Participant who for whatever reason becomes ineligible for continued
participation in the Plan as an Active Participant shall remain a Participant in
the Plan for as long as the Participant is employed by a Company or an
Associated Company, subject to the following provisions:
(a) During any such period of ineligibility, no contributions to
the Plan will be made by or with respect to the employee, and the
Participant's Period of Participation (as defined in Article 1)
shall not increase during such period, except as otherwise
provided in subsection (c), below.
(b) The Participant shall be eligible to make withdrawals from
the Plan pursuant to Article 8 while the Participant is employed
by a Company or Associated Company and, upon the Participant's
incurring a Severance from Service Date, shall be eligible to
receive a distribution of the value of the Participant's
Accounts, subject to the further provisions of Article 7.
(c) If the Participant again becomes eligible to participate in
the Plan as an Active Participant, then, subject to the
Participant's having satisfied the conditions of Section 2.1, the
Participant may again become an Active Participant in the manner
and as of the date provided for in Section 2.1. In no event,
however, shall makeup contributions for the period the
Participant was an ineligible employee be permitted.
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2.3 Reemployment After a Period of Severance. Any former Participant
who is reemployed as an Employee after a Period of Severance shall be eligible
to recommence participation in the Plan. A former Participant may recommence
participation in the Plan in the manner and as of the date provided for in
Section 2.1. The Period of Service and Period of Participation credited to the
former Participant before the Participant's Severance from Service Date shall be
restored to the Participant if the Participant's Period of Severance was shorter
than five (5) years.
2.4 Interactive Telephone System.
(a) The Committee may in its discretion utilize a toll-free
"voice response" system (a "VRS") for use in administering the
Plan. In the event the Committee institutes a VRS, it may specify
that the VRS is to be a supplemental or the exclusive means for
Participants to effect the following transactions:
(i) enrollment (to the extent otherwise permitted by
Section 2.1), including initial contribution percentage
elections made in accordance with Sections 3.1 and 3.2 and
initial investment directions given in accordance with
Section 4.1, all of which shall be effective as provided
in Section 2.1. Authorizations of before-tax contributions
over the VRS by a Participant shall function as and
constitute such Participant's salary deferral
authorization and authorizations of after-tax
contributions over the VRS by a Participant shall function
as and constitute such Participant's payroll deduction
authorization;
(ii) changes in percentage of contributions, in accordance
with, and effective as provided in, Section 3.4;
(iii) suspensions and resumptions in contributions, in
accordance with, and effective as provided in, Section
3.5;
(iv) obtaining the necessary forms to make rollovers into
the Plan, as provided in Section 3.9;
(v) changes in investment directions, in accordance with,
and effective as provided in, Section 4.1;
(vi) changes in sub-fund allocations and transfers between
sub-funds, in accordance with, and effective as provided
in, Section 4.3;
(vii) withdrawals not requiring Committee approval;
(viii) loans, in accordance with Article 9;
(ix) voluntary distributions, in accordance with Section
7.2 and effective as provided in Section 7.11.
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(b) Notwithstanding the references to forms or other written
documentation in the Sections referred to in subsection (a) above, no forms or
written documentation shall be required of a Participant using the VRS to
authorize any transaction described in subsection (a) above; provided, however,
that Participants authorizing transactions through the VRS shall be obligated to
complete any and all forms or written documentation delivered to them by the
Committee to effectuate the transactions so authorized, including without
limitation beneficiary and change of beneficiary forms, direct rollover election
forms, notes evidencing loans and forms that may be required by state or federal
governmental authorities. In the event the Committee receives conflicting
instructions with respect to any of the transactions described above, the last
instruction received in the applicable time period shall be the instruction the
Committee is authorized to act upon. In the event the Committee institutes the
VRS and specifies that the VRS shall be the exclusive means of authorizing a
transaction described above, no forms or written documentation shall be
permitted or accepted by the Committee to authorize such transactions.
(c) In addition to the authorizations of transactions described in
subsection (a) above, the Committee may authorize individuals administering the
Plan on its behalf to use the VRS in any manner which the Committee in its
discretion deems beneficial to the administration of the Plan or beneficial to
Participants or Employees.
(d) The use of the VRS by an Employee for initial enrollment in the
Plan or by a Participant for subsequent transactions under the Plan shall
function as and constitute an authorization with the same force and effect as if
such action was authorized pursuant to a writing signed by the Employee or
Participant.
(e) Participants shall receive written confirmation of each VRS
transaction as soon as practicable after the telephone call requesting the
relevant transaction.
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ARTICLE 3
SAVINGS CONTRIBUTIONS AND ROLLOVER AMOUNTS
3.1 Matched Contributions. As a Matched Contribution to the Plan,
Participants and employees eligible to become Participants may elect, by
properly completing the appropriate form specified by the Committee, to have 1%,
2%, 3%, 4%, 5% or 6% of their Earnings contributed to their Matched Contribution
Account in the Plan. Matched Contributions may be made on a "before-tax" basis,
on a "after-tax" basis or in any whole- number combination of the two. Where a
before-tax basis is elected, the contribution is considered a "reduction" in the
Participant's Earnings, the Company is deemed to make the contribution, and the
amount of the reduction is exempt from current Federal income tax and the
current income tax of some states. Where an after-tax basis is elected, the
contributed is considered an authorized deduction from the Participant's
Earnings and the amount of the deduction is subject to all current income taxes.
The Board may approve changes in the rate of Matched Contributions to the Plan
(in whole percentages of 1%) to be applied to all Participants in a uniform non-
discriminatory manner. Matched Contributions shall be adjusted automatically to
reflect increases or decreases in a Participant's Earnings as of the day on
which such increases or decreases become effective. In no event shall the
Matched Contribution percentages or amounts exceed the maximum contribution
limits allowed under the Code, or any regulations issued thereunder.
3.2 Unmatched Contributions. Except as provided otherwise in Section
3.12, participants and employees eligible to become Participants who have
elected to have a Matched Contribution of 6% made to the Plan may further elect,
by properly completing the appropriate form specified by the Committee, to have
an additional 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8% or 9% of their Earnings contributed
to their Unmatched Contribution Account in the Plan. Participants may elect to
have these "Unmatched Contributions" made on a before-tax or after-tax basis or
any whole-number combination of the two. Where a before-tax basis is elected,
the contribution is considered a "reduction" in the Participant's Earnings, the
Company is deemed to make the contribution, and the amount of the reduction is
exempt from current Federal income tax and the current income tax of some
states. Where an after-tax basis is elected, the contribution is considered an
authorized deduction from the Participant's Earnings and the amount of the
deduction is subject to all current income taxes. Subject to the maximum limits
of the Code, and any regulations issued thereunder, the Board may approve other
Unmatched Contributions to the Plan (in whole percentages of 1%). Unmatched
Contributions shall be adjusted automatically to reflect increases or decreases
in the Participant's Earnings as of the day on which such increases or decreases
become effective.
Further, without regard to the limitations in the preceding
paragraph, any undistributed amount from the Participant's "Voluntary Account"
under the Summit Bancorp. Profit Sharing Plan as was in effect on June 30, 1983
was credited as of July 1, 1983 to the Participant's Unmatched Contribution
Account and the account balances so credited to the Unmatched Contribution
Account shall be maintained and invested as if they were after-tax Unmatched
Contributions.
3.3 Matching Employer Contributions. Each Company, with respect to each
of its Active Participants during any pay period, out of its current and
accumulated earnings and profits, shall contribute to the Trust Fund for that
pay period its Matching Employer Contribution. Such Matching Employer
Contributions shall, until such time as the Board may authorize any change, be
in an amount equal to 100% of the first 3% of salary reduction constituting the
Participant's Matched Contributions and 50% of the next 3% of salary reduction
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constituting the Participant's Matched Contribution made by Active Participants
employed by that Company pursuant to Section 3.1. Any such change authorized by
the Board shall be made on a uniform and non- discriminatory basis with respect
to all Participants of a Company. Notwithstanding any other provision of the
Plan to the contrary, a Limited Participant shall be ineligible to receive a
Matching Employer Contribution under the Plan.
Any Company or Associated Company that is part of Summit Bancorp.
or an affiliated group under Section 1504 of the Code, in its sole discretion,
may make Matching Employer Contributions in any Plan Year on behalf of any such
other Company to the extent that such other Company is prevented from making a
contribution which it would otherwise have made under the Plan for such Plan
Year by reason of having no current and accumulated earnings and profits or
because such earnings and profits are less than the contribution it would
otherwise have made. Any such contributions shall be deemed for all purposes
other than deductibility under the Code to have been made by the Company
employing the Participants benefiting from the contribution.
3.4 Change in Percentage of Contributions. The percentages of Earnings
elected on appropriate forms with respect to Matched Contributions and Unmatched
Contributions, if any, will continue in effect until a Severance from Service
Date or until a Participant changes the percentages by properly completing and
filing the appropriate form with the Committee. Such change in the applicable
percentages shall become effective as of the pay date next following the 6th day
of a calendar month, if the request is made by the 6th day of such calendar
month, or the pay date next following the 21st day of a calendar month, if the
request is made by the 21st day of such calendar month. Requests made after the
21st day of a given calendar month shall be deemed made by the 6th day of the
following calendar month.
3.5 Suspensions and Contribution Resumptions. A Participant, by giving
notice to the Committee on the form prescribed by the Committee, may elect to
suspend Matched Contributions and Unmatched Contributions or resume Matched
Contributions and Unmatched Contributions following a suspension. Such
suspension or contribution resumption shall become effective as of the pay date
next following the 6th day of a calendar month, if the request is made by the
6th day of such calendar month, or the pay date next following the 21st day of a
calendar month, if the request is made by the 21st day of such calendar month.
Requests made after the 21st day of a given calendar month shall be deemed made
by the 6th day of the following calendar month. During a suspension no Matching
Employer Contributions will be made with respect to the Participant who elected
the suspension.
3.6 Before-Tax Contribution Limitations.
(a) With respect to any Plan Year the Actual Deferral Percentage
for eligible Employees who are Highly Compensated Employees shall not exceed the
greater of
(i) the Actual Deferral Percentage for the eligible
Employees who are Nonhighly Compensated Employees for the
Plan Year multiplied by 1.25, or
(ii) the Actual Deferral Percentage for the eligible
Employees who are Nonhighly Compensated Employees for the
Plan Year multiplied by 2, provided, however, that the
Actual Deferral Percentage for the eligible Employees who
are Highly Compensated Employees may not exceed the Actual
Deferral Percentage for the eligible Employees who
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are Nonhighly Compensated Employees by more than two (2)
percentage points or such lesser amount as the Secretary
of the Treasury shall prescribe to prevent the multiple
use of this alternative limitation with respect to any
Highly Compensated Employee.
(b) Notwithstanding subparagraphs (a)(i) and (ii) above, if this
Plan does not satisfy both the one hundred twenty-five percent (125%) test set
forth in subparagraph (a)(i) above, and the one hundred twenty- five percent
(125%) test set forth in Section 3.7(a)(i) below, and one or more Highly
Compensated Employees of the Company are eligible to participate in this Plan
and any other qualified plan maintained by the Company which is subject to
Section 401(m) of the Code (other than an employee stock ownership plan as
defined in Section 4975(e) of the Code), the following shall apply: The sum of
the Actual Deferral Percentage of the Highly Compensated Employees under this
Plan and the Contribution Percentage of Highly Compensated Employees under this
Plan and any other qualified plans maintained by the Company subject to Section
401(m) of the Code (other than employee stock ownership plans as defined in
Section 4975(e) of the Code) shall not exceed the greater of the following:
(i) (1)1.25 multiplied by the greater of: (A) the Actual Deferral
Percentage of the Nonhighly Compensated Employees under this
Plan; or (B) the Contribution Percentage of the Nonhighly
Compensated Employees under this Plan and any other qualified
plan maintained by the Company subject to Section 401(m) of the
Code (other than an employee stock ownership plan as defined in
Section 4975(e) of the Code); and
(2) Two (2) plus the lesser of: (A) subparagraph (1)(A); or (B)
subparagraph (1)(B) above; or
(ii) the sum of:
(1)1.25 multiplied by the lesser of: (A) the Actual Deferral
Percentage of the Nonhighly Compensated Employees under this
Plan; or (B) the Contribution Percentage of the Nonhighly
Compensated Employees under this Plan and any other qualified
plan maintained by the Company subject to Section 401(m) of the
Code (other than an employee stock ownership plan as defined in
Section 4975(e) of the Code); and
(2) Two (2) plus the greater of: (A) subparagraph (b)(i)(1)(A);
or (B) subparagraph (b)(i)(2)(B) above.
In the event this Plan exceeds the limitation of this subsection
(b), the Actual Deferral Percentage or the Contribution Percentage shall be
corrected by reducing the "Excess Contributions" of affected Highly Compensated
Employees in accordance with Section 3.13 or 3.14 hereof. For these purposes, a
Highly Compensated Employee's Excess Contributions shall be determined in the
following manner: First, the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced to the extent
necessary to satisfy the Actual Deferral Percentage test or cause such ratio to
equal the Actual Deferral Ratio of the Highly Compensated Employee with the next
highest ratio. Second, this process is repeated until the Actual Deferral
Percentage test is satisfied (the "leveling method"). The amount of Excess
Contributions for a Highly Compensated Employee is then equal to the total of
elective and other contributions taken into account for the Actual Deferral
Percentage test minus the product of the Employee's reduced deferral ratio as
determined above and the Employee's compensation.
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For purposes of applying the limitations of this subsection (b),
the Actual Deferral Percentage shall be determined after adjustment under
Section 3.13 and the Contribution Percentage shall be determined after
adjustment under Section 3.14.
(c) The Actual Deferral Percentage for a specified group of
eligible Employees for a Plan Year is the average of the ratios (calculated
separately for each eligible Employee in such group) of (i) the amount of the
Unmatched and Matched Contributions for such Plan Year to (ii) each eligible
Employee's Compensation for such Plan Year.
(d) For purposes of this Section 3.6, the Actual Deferral
Percentage for any eligible Employee who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Unmatched and Matched Contributions
allocated to his account under two or more plans or arrangements described in
Section 401(k) of the Code that are maintained by the Company shall be
determined as if all such Unmatched and Matched Contributions were made under a
single arrangement.
(e) For purposes of determining the Actual Deferral Percentage of
a Participant who is a Highly Compensated Employee, the Unmatched and Matched
Contribution and Compensation of such Participant shall include the Unmatched
and Matched Contributions and Compensation of Family Members, and such Family
Members shall be disregarded in determining the Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees.
(f) The determination and treatment of the Unmatched and Matched
Contributions and Actual Deferral Percentage of any Participant shall satisfy
Section 401(k)(3) of the Code and Section 1.401(k)-1(b) of the Treasury's
Proposed Regulations, and such other requirements as may be prescribed by the
Secretary of the Treasury.
3.7 Matching Employer and After-Tax Contribution Limitations. (a)
With respect to any Plan Year the Contribution Percentage for eligible Employees
who are Highly Compensated Employees shall not exceed the greater of
(i) the Contribution Percentage for the eligible Employees
who are Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25, or
(ii) the Contribution Percentage for the eligible
Employees who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2, provided, however, that the Contribution
Percentage for the eligible Employees who are Highly Compensated
Employees may not exceed the Contribution Percentage for the
eligible Employees who are Nonhighly Compensated Employees by
more than two (2) percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent the multiple
use of this alternative limitation with respect to any Highly
Compensated Employee.
(b) Notwithstanding subparagraphs (a)(i) and (ii) above, if this
Plan does not satisfy both the one hundred twenty-five percent (125%) test set
forth in subparagraph (a)(i) above, and one or more Highly Compensated Employees
of the Company are eligible to participate in this Plan and any other qualified
plan
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maintained by the Company which is subject to Section 401(m) of the Code (other
than an employee stock ownership plan as defined in Section 4975(e) of the
Code), the following shall apply: The sum of the Actual Deferral Percentage of
the Highly Compensated Employees under this Plan and the Contribution Percentage
of the Highly Compensated Employees under this Plan and any other qualified
plans maintained by the Company subject to Section 401(m) of the Code (other
than employee stock ownership plans as defined in Section 4975(e) of the Code)
shall not exceed the greater of the following:
(i) (1) 1.25 multipled by the greater of: (A) the
Actual Deferral Percentage of the Nonhighly Compensated
Employees under this Plan; or (B) the Contribution
Percentage of the Nonhighly Compensated Employees under
this Plan and any other qualified plan maintained by
the Company subject to Section 401(m) of the Code
(other than an employee stock ownership plan as defined
in Section 4975(e) of the Code); and
(2) Two (2) plus the lesser of: (A) subparagraph
(1)(A); or (B) subparagraph (1)(B) above; or
(ii) the sum of:
(1) 1.25 multipled by the lesser of: (A) the Actual
Deferral Percentage of the Nonhighly Compensated
Employees under this Plan; or (B) the Contribution
Percentage of the Nonhighly Compensated Employees
under this Plan and any other qualified plan
maintained by the Company subject to Section 401(m) of
the Code (other than an employee stock ownership plan
as defined in Section 4975(e) of the Code); and
(B) Two (2) plus the greater of: (A) subparagraph
(b)(1)(i); or (B) subparagraph (b)(1)(ii) above.
In the event this Plan exceeds the limitation of this subsection (b),
the Actual Deferral Percentage or the Contribution Percentage shall be reduced
in accordance with Section 3.13 or 3.14 hereof.
(c) The Contribution Percentage for a specified group of eligible
Employees for a Plan Year is the average of the ratios (calculated separately
for each eligible Employee in such group) of (i) the amount of the sum of
Matching Employer Contributions, Unmatched and Matched Contributions of the Plan
for such Plan Year to (ii) each eligible Employee's Compensation for such Plan
Year.
(d) For purposes of this Section 3.7, if two or more plans of the
Company to which Matching Employer Contributions, Unmatched and Matched
Contributions are made, are treated as one plan for purposes of Code Section
410(b), such plans shall be treated as one plan for purposes of this Section
3.7. In addition, if a Highly Compensated Employee participates in two or more
plans described in Code Section 401(a) or arrangements described in Code Section
401(k) which are maintained by the Company to which such contributions are made,
all such contributions shall be aggregated for purposes of this Section 3.7.
(e) The Contribution Percentage for a Highly Compensated Employee
shall be determined by including Matching Employer Contributions, Unmatched and
Matched Contributions and Compensation of Family Members.
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(f) For purposes of this Section 3.7 and Section 3.14, Highly
Compensated Employees and Nonhighly Compensated Employees shall include any
Employee eligible to have Matching Contributions, Unmatched and Matched
Contributions allocated to his Account for the Plan Year.
(g) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
3.8 Remittance of Contributions. Subject to the provisions of Section
18 hereof, Matched, Unmatched and Matching Employer Contributions made pursuant
to Sections 3.1, 3.2 and 3.3 will be remitted to the Trustee on the pay date the
contributions are made unless that day is not a Business Day in which case the
contributions will be remitted on the next Business Day. Deductions made
pursuant to Sections 3.1 and 3.2 and a Company's Matching Employer Contributions
shall be invested in accordance with the provisions found in Article 4.
Contributions may be made in cash or, to the extent necessary to fund the
Company Stock Fund (Sub-Fund B), in shares of Company Stock. For the purposes of
fixing the amount of contributions made in Company Stock, such stock shall be
valued by the Company in the manner set forth in Section 5.1(b)(i).
3.9 Rollover Amounts. Upon an Employee's request, the Committee, in its
discretion, may permit the Employee to contribute a Rollover Amount to the Trust
Fund. The Employee's request shall set forth the amount of cash and number of
shares of Company Stock to be contributed and a statement, satisfactory to the
Committee, that the contribution constitutes a Rollover Amount as defined in
Article 1. Any Rollover Amount shall be credited to a Rollover Account
established for the Employee making the Contribution. Such contribution does not
attract a Matching Employer Contribution. Further, any undistributed amount from
a Participant's "Regular Account" under the Summit Bancorp. Profit Sharing Plan
as in effect on June 30, 1983 was credited to the Participant's Rollover Account
and the account balances so credited to the Rollover Account shall be maintained
and invested as if they were a Rollover Amount from another qualified retirement
plan. Any Rollover Amount consisting of Company Stock shall be contributed
automatically to the Company Stock Fund (as hereinafter defined).
3.10 Prior Plan Accounts. The terms and provisions of the savings,
profit sharing or similar plans of certain subsidiaries of Summit Bancorp.
provided that certain amounts contributed to such plans and the investment
earnings thereon could not be withdrawn from such plans during the employment of
the participant. Upon the merger of the assets of such plans with the assets of
the Plan, amounts subject to such restriction were placed in Prior Plan Accounts
for the affected Participants. Amounts in a Prior Plan Account may not be
withdrawn by a Participant while the Participant is employed by a Company or an
Associated Company. Amounts in a Prior Plan Account will be distributed in
accordance with Article 7.
3.11 Nonreversion. The Plan is created for the exclusive benefit of
Participants and their Beneficiaries. Except as provided in subclauses (a) and
(b) below, at no time prior to the satisfaction of all liabilities under the
Plan with respect to Participants and their Beneficiaries shall any Matching
Employer Contribution or before-tax Matched and Unmatched Contributions to the
Plan or any assets of the Trust Fund ever revert to or be used by a Company.
(a) In the case of a contribution that is made by a mistake of
fact, a Company may direct the return to it of such contribution within one year
after the payment of the contribution.
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(b) Contributions by a Company are conditioned upon qualification
of the Plan under Section 401 of the Code and the deductibility of each such
contribution under Section 404 of the Code, and a Company may direct the return
to it of any contribution made to the Plan within one year of a final denial of
qualification of the Plan under the Code, or a disallowance of a deduction for
the contribution.
3.12 Contribution Restrictions. In order to lessen the likelihood that
the contribution limitations set by Sections 3.6 and 3.7 will be exceeded in any
Plan Year, and notwithstanding Section 3.2 herein, the Committee may in its
discretion reduce the percentage of Earnings that highly compensated
Participants may contribute to the Plan as Unmatched Contributions. The
Committee may designate the highly compensated Participants to be subject to the
restriction in this Section 3.12 in any manner it deems reasonable and it may
reduce the maximum percentage of Earnings contributable as Unmatched
Contributions by such Participants to any percentage deemed consistent with the
purpose of this Section 3.12.
3.13 Return of Unmatched and Matched Contributions. If the Actual
Deferral Percentage as set forth in Section 3.6 for Highly Compensated Employees
exceeds the amount permitted under Section 3.6, then the Administrator shall,
prior to the close of the Plan Year following the Plan Year for which any Excess
Contributions were made, return any excess amount to such Highly Compensated
Employees in accordance with requirements prescribed by the Secretary of the
Treasury and in accordance with the following:
(a) In the case of a Highly Compensated Employee whose Actual
Deferral Percentage is determined under the family aggregation rules of Code
Section 414(q)(6) because the Employee is either a five- percent owner or one of
the 10 most highly compensated Employees, the determination and correction of
Excess Contributions shall be made as follows: The Actual Deferral Percentage is
reduced in accordance with the "leveling method" described in Section 3.6(b) and
the Excess Contributions for Family Members are allocated among the Family
Members in proportion to the Matched and Unmatched Contributions of each Family
Member that have been combined to determine the Actual Deferral Percentage.
(b) The amount of Excess Contributions to be distributed shall be
reduced by any excess deferrals previously distributed to the Employee for the
taxable year ending in the same Plan Year in accordance with Code Section
402(g)(2), and excess deferrals to be distributed for a taxable year will be
reduced by Excess Contributions previously distributed for the Plan Year
beginning in such taxable year.
(c) The distribution of Excess Contributions will include the
income allocable thereto. Income allocable to Excess Contributions shall be
equal to the sum of the allocable gain or loss for the Plan Year and the period
between the end of the Plan Year and the date of distribution (the "Gap
Period").
Income allocable to Excess Contributions for the Plan Year shall be
determined by multiplying the income for the Plan Year allocable to Matched and
Unmatched Contributions by a fraction. The numerator of the fraction is the
Excess Contributions for the applicable Employee for the Plan Year. The
denominator of the fraction is equal to the sum of:
(i) The total Account balance of the Employee attributable to
Matched and Unmatched Contributions as of the beginning of the
Plan Year; plus
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(ii) The Employee's Matched and Unmatched Contributions for the
Plan Year.
Income on Excess Contributions for the Gap Period is equal to 10
percent of the income allocable to Excess Contributions for the Plan Year
(calculated in accordance with the preceding paragraph) multiplied by the number
of calendar months that have elapsed since the end of the Plan Year.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
3.14 Adjustment for Excessive Contribution Percentage. (a) In the event
that the Contribution Percentage for Highly Compensated Employees exceeds the
Contribution Percentage for Nonhighly Compensated Employees by more than the
permitted amount as provided in Section 3.7(a), the Administrator (on or before
the end of the Plan Year following the Plan Year for which the Contribution
Percentage is exceeded) shall direct the Trustee to distribute to the Highly
Compensated Employees the amount of Excess Aggregate Contributions (and any
income allocable to such contributions). Such distribution shall be made by
reducing the Contribution Percentage of the Highly Compensated Employee with the
highest Contribution Percentage by the amount required to cause the Employee's
Contribution Percentage to equal the Contribution Percentage of the Highly
Compensated Employee with the next highest Contribution Percentage; and this
process (the "leveling method") is repeated until the Contribution Percentage
test, described in Section 3.7 hereof, is satisfied. If there is a loss
allocable to such excess amount, the distribution shall in no event be less than
the lesser of the Participant's Account attributable to Matching Employer
Contributions, Matched and Unmatched Contributions or the Matching Employer
Contributions, Matched and Unmatched Contributions for the Plan Year. Any
adjustments under this Section 3.14 shall be made in accordance with
requirements prescribed by the Secretary of the Treasury.
(b) For purposes of this Section 3.14, "Excess Aggregate
Contributions" means, for any Plan Year, the excess of:
(i) the aggregate amount of contributions pursuant to Sections
3.7(b)(i) and 3.7(d) actually made on behalf of the Highly
Compensated Employees for such Plan Year, over
(ii) the maximum amount of such contributions permitted under the
limitations of Section 3.7.
(c) The determination of the amount of "Excess Aggregate
Contributions" with respect to any Plan Year shall be made after determining the
excess annual allocations pursuant to Section 3.6(a).
(d) In the case of a Highly Compensated Employee whose
Contribution Percentage is determined under the family aggregation rules of Code
Section 414(a)(6) because the Employee is either a five- percent owner or one of
the 10 most highly compensated Employees, the determination and correction of
Excess Aggregate Contributions shall be made as follows: the Contribution
Percentage is reduced in accordance with the "leveling method" described in
subsection (a) above and the Excess Aggregate Contributions for Family Members
are allocated among the Family Members in proportion to any Employee and
Matching Employer Contributions of each Family Member that have been combined to
determine the Contribution Percentage.
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(e) Income allocable to Excess Aggregate Contributions shall be
equal to the sum of the allocable gain or loss for the Plan Year and the period
between the end of the Plan Year and the date of distribution (the "Gap
Period").
Income allocable to Excess Aggregate Contributions for the Plan Year
shall be determined by multiplying the income for the Plan Year allocable to
Employee and Matching Employer Contributions by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions for the applicable Employee for
the Plan Year. The denominator of the fraction is equal to the sum of:
(i) The total Account balance of the Employee attributable to
Employee and Matching Employer Contributions as of the beginning
of the Plan Year; plus
(ii) The Employee's Employee and Matching Employer Contributions
for the Plan Year.
Income on Excess Aggregate Contributions for the Gap Period is equal to
10 percent of the income allocable to Excess Aggregate Contributions for the
Plan Year (calculated in accordance with the preceding paragraph) multiplied by
the number of calendar months that have elapsed since the end of the Plan Year.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
3.15 Effective January 1, 1999, with respect to the Participants in the
Plan other than the Limited Participants, the Plan shall satisfy the
requirements of the safe harbor provisions, as such requirements are prescribed
by the Secretary of the Treasury, of the Actual Deferral Percentage ("ADP") test
and the Actual Contribution Percentage ("ACP") test as an alternative to
performing and satisfying the actual ADP test and the ACP test.
3.16 Effective January 1, 1999, the term "Participant" or "Employee" in
Sections 3.6, 3.7, 3.12, 3.13 and 3.14 of the Plan shall be replaced with the
term "Limited Participant."
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ARTICLE 4
INVESTMENT OF CONTRIBUTIONS
4.1 Investment of Contributions. Each Participant will direct, at the
time the Participant submits an Enrollment Agreement, how contributions to the
Plan in each of the following separate categories shall be collectively
invested: (1) before-tax Matched and Unmatched Contributions, (2) after-tax
Matched and Unmatched Contributions, (3) an amount equal to 75% of each Matching
Employer Contribution and (4) Rollover Amounts and amounts in a Prior Plan
Account (all such contributions to the Plan are sometimes collectively referred
to as the "Discretionary Account"). Participants shall direct that contributions
to the Discretionary Account be invested in one or more of the following
investment funds:
(a) Diversified Equity Fund (Sub-Fund A) - shall be invested
primarily in common stocks, but may include other equity equivalent type
investments permitted by the Trust Agreement, and may also include temporary
cash holdings or short-term fixed income investments as permitted by the Trust
Agreement.
(b) Summit Bancorp. Stock Fund (hereinafter referred to as the
"Company Stock Fund") (Sub- Fund B) - shall be invested in Company Stock, but
may include temporary cash holdings or short-term fixed income investments as
permitted by the Trust Agreement. Such stock shall be purchased from Summit
Bancorp. or from other sources, provided that (i) if Summit Bancorp. issues to
its shareholders warrants or rights for the purchase of Company Stock, the
Trustee in its discretion may exercise any warrants or rights the Trustee may
hold and (ii) Summit Bancorp. may, at its election, contribute newly issued or
Treasury shares of Company Stock to the Trustee in lieu of an equivalent amount
of cash, as provided in Section 3.8. Any Rollover Amount consisting of Company
Stock shall be contributed automatically to the Company Stock Fund.
(c) Fixed Income Fund (Sub-Fund C) - shall be invested primarily
in all types of fixed income investments permitted by the Trust Agreement, but
may include temporary cash holdings.
(d) Money Market Fund (Sub-Fund D) - shall be invested in a money
market fund, as permitted by the Trust Agreement, but may include temporary cash
holdings.
(e) S&P 500 Index Fund (Sub-Fund E) - shall be invested in an
index fund which seeks to track the performance of the Standard and 500 Poors
Composite Stock Price Index, but may also include temporary cash holdings or
short-term fixed income investments as permitted by the Trust Agreement.
(f) Aggressive Growth Fund (Sub-Fund F) - shall be invested
primarily in common stocks of medium-sized growth companies, as permitted by the
Trust Agreement but may also include temporary cash holdings or short-term fixed
income investments, as permitted by the Trust Agreement.
(g) International Equity Fund (Sub-Fund G) - shall be invested
primarily in equity securities of issuers domiciled outside of the U.S., as
permitted by the Trust Agreement, and may also include temporary cash holdings
or short-term fixed income investments as permitted by the Trust Agreement.
Dividends, interest, and other property received by the Trustee in
respect of any investment fund shall be reinvested in the same investment fund
with respect to which it was received.
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Investment directions with respect to the Discretionary Account,
whether given on an Enrollment Agreement under this Section 4.1 or in connection
with a change in investment directions pursuant to Section 4.2, must be given in
multiples of 1% (1%, 2% 3% ..., etc.). Twenty-five percent (25%) of the Matching
Employer Contribution made with respect to each participant must be invested in
the Company Stock Fund (Sub-Fund B). In the event a participant directs the
investment of a portion of his contributions into Company Stock, a corresponding
percentage of the Matching Employer Contributions portion of the Discretionary
Account will likewise be invested in the Company Stock Fund (Sub-Account B).
4.2 Change in Current Investment Directions. Investment directions of a
Participant applicable to current contributions entering the Plan shall continue
in effect until changed by the Participant by properly completing and filing the
appropriate form designated by the Committee. Such change shall become effective
as of the paydate next following the 6th day of a calendar month, if the request
is made by the 6th day of such calendar month, or the paydate next following the
21st day of a calendar month, if the request is made by the 21st day of such
calendar month. Requests made after the 21st day of a given calendar month shall
be deemed made by the 6th day of the following calendar month.
4.3 Sub-Fund Reallocations and Sub-Fund Transfers. A Participant may
change the way that the current values of past contributions to the
Discretionary Account are invested by making a sub-fund reallocation or a
sub-fund transfer. A Participant shall effect a sub-fund reallocation by
specifying on the appropriate form designated by the Committee percentages of
the current value of the Discretionary Account which are to be invested in each
sub-fund of the Plan. A Participant shall effect a sub-fund transfer by
specifying (a) one or more sub-funds from which past contributions are to be
removed and the percentages, in multiples of 1%, of the current value of past
contributions in each such sub-fund to be so removed, and (b) one or more
sub-funds into which the past contributions so removed are to be reinvested and
the percentages, in multiples of 1%, of the past contributions so removed that
are to be reinvested in each such sub-fund. A change in investment direction
under this Section 4.3 will become effective as of the first Business Day on
which the Committee receives the appropriate form properly completed, provided
such form is received by 4:00 p.m. New Jersey Time on such Business Day. Forms
received after 4:00 p.m. on any Business Day will be deemed received the
following Business Day. For purposes of the foregoing, the current value of past
contributions shall be determined as of the Accounting Date which coincides with
the effective date of the transfer.
Any Matching Employer Contribution required to be invested in the
Company Stock Fund (Sub-Fund B), as provided in Section 4.1, may not be
reallocated or transferred under this Section 4.3, except as provided in Section
4.5 hereof.
Participants may not authorize both a sub-fund reallocation and a
sub-fund transfer to become effective at the same time. In the event the
Committee receives conflicting instructions with respect to sub-fund
reallocations and sub-fund transfers, the last instruction received in the
applicable time period shall be the instructions the Committee is authorized to
act upon.
4.4 Rights With Respect To Company Stock. Each Participant shall have,
with respect to the Participant's interest in Company Stock held in the Company
Stock Fund (Sub-Fund B), rights consistent with rights held by the Company's
regular shareholders, including the right to direct the voting of such interests
in all circumstances where the Company's regular shareholders would be entitled
to vote Company Stock and the
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right to direct the tendering of such interests in all circumstances where the
Company's regular shareholders would be entitled to tender Company Stock;
provided, however, that voting directions must be returned such that they are
received by the Trustee at least 10 days before the date that proxies must be
returned by shareholders of record and that tender directions must be returned
such that they are received by the Trustee before expiration of the applicable
tender offer period allowing for sufficient time to permit the Trustee to
respond timely to the tender offer (shares for which directions are timely
received are referred to in this Section 4.4 as "Directed Shares").
Participants' confidential directions with respect to their interests in the
Company Stock shall be transmitted by the Participants directly to the Trustee
or its agent for tabulation. In the event there are shares of Company Stock held
in the Company Stock Fund (Sub-Fund B) for which directions have not been timely
received ("Undirected Shares"): (a) the Trustee shall vote the Undirected Shares
for, against or in abstention on a particular nomination or proposal in its
discretion as a fiduciary, and (b) the Trustee shall take such action with
respect to Undirected Shares as it determines appropriate in light of its
obligation under ERISA to exercise the discretionary judgment of a fiduciary,
and in so acting may either tender, not tender or tender a proportion of the
Undirected Shares. In the event a Participant becomes entitled to vote or tender
the Participant's interests in Company Stock held in the Company Stock Fund
(Sub-Fund B), the Trustee shall send to Participants (a) a request for voting or
tendering directions and (b) all information mailed to the Company's regular
shareholders in connection with the vote or tender offer. The Trustee shall send
the foregoing so as to permit Participants a reasonable period to respond timely
to the request for directions.
4.5 Diversification. An individual may elect, within 90 days after the
close of the first Plan Year after the Plan Year within which he becomes a
Qualified Participant and within 90 days of the close of each of the three
succeeding Plan Years, to reallocate the investment of up to 25% of the value of
his Company Stock Fund (Sub-Fund B) account attributable to Matching Employer
Contributions (to the extent such value was not subject to a prior election
pursuant to this Section) by making a sub-fund reallocation or sub-fund
transfer. Such a Qualified Participant may also elect, within 90 days of the
close of the Plan Year within which the last such election is offered, to
reallocate the investment of up to 50% of the value of his Company Stock Fund
(Sub-Fund B) account attributable to Matching Employer Contributions by making a
sub-fund reallocation or sub-fund transfer. For purposes of this Section, a
"Qualified Participant" shall mean an individual who (1) has been a Participant
for ten years and (2) has attained at least age 55.
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ARTICLE 5
VALUATION OF TRUST AND ACCOUNTS
5.1 Valuation of Accounts.
(a) As of each Accounting Date the Committee shall cause the
value of the Accounts of all Participants to be valued taking into account any
withdrawals, distributions, income earned, and increases or decreases in the
value due to the performance of the investment funds since the preceding
Accounting Date.
(b) In determining the net value of the assets of the Trust Fund,
the Trustee shall determine the current value of the Company Stock Fund
(Sub-Fund B) and assets other than cash, as follows:
(i) Market price per share of a security on the Accounting Date
shall be computed on the basis of the last reported sale price
regular way or, in case no such reported sale takes place on such
day, the average of the last reported bid and asked prices
regular way, in either case on the composite transaction
reporting system if available and if not available on the
principal national securities exchange on which the security is
admitted to trading or listed, or if not listed or admitted to
trading on any national securities exchange, the average mean of
the bid and asked prices in the over-the- counter market as
reported by the National Association of Securities Dealers
Automated Quotation System, or if not so reported, then as
reported by the National Quotation Bureau Incorporated, or by any
similar person furnishing such information.
(ii) any other assets of the Trust Fund shall be valued at their
fair market value as of the Accounting Date as determined by the
Trustee.
The Trustee's determination of the value of any asset shall be
conclusive and binding upon the Company, the Committee, and all Participants and
Beneficiaries. In making its determination of value, the Trustee may rely upon
the opinion of any appraiser or other expert that it believes appropriate to
consult.
Because there is a lapse in time between an Accounting Date and the
date on which Plan assets are actually sold or acquired in connection with
sub-fund transfers under Article 4 or distributions from the Plan under Article
7, gains or losses due to price changes during such period may occur. These
gains or losses shall be borne by the Plan and are spread among all
Participants.
5.2 Maintenance of Accounts. The Committee shall maintain a separate
Matched Contribution Account, Matching Employer Contribution Account, and if,
applicable, Unmatched Contribution Account, Prior Plan Account and Rollover
Account for each Participant. These Accounts shall include amounts contributed
under Section 3.1, 3.2, 3.3, 3.9 and 3.10 as adjusted under Section 5.1. All
distributions to a Participant or the Participant's Beneficiary and all
withdrawals paid to a Participant shall be charged against the Participant's
appropriate Accounts.
5.3 Statements. At least once each calendar year, the Committee shall
furnish each Participant a written statement of the contributions made by the
Participant and by the Participant's Company with respect to the Participant
during the Plan Year and the value of each of the Participant's Accounts. Said
statement shall contain
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such information as is necessary for the Participant to distinguish between
before-tax and after-tax contributions and investment earnings or losses
thereon.
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ARTICLE 6
VESTING
6.1 Vesting. Effective November 1, 1994, a Participant's interest in
each of the Participant's Accounts shall be fully vested at all times; provided,
however, that the Matching Employer Contribution Accounts of Participants with a
Severance from Service Date prior to November 1, 1994 shall be subject to the
forfeiture provisions under Article 7.
6.2 Plan Amendment. If an amendment to the Plan directly or indirectly
affects the computation of the vested percentage of a Participant's Account, or
if the Plan is deemed to have been amended by a change to or from a Top-Heavy
vesting schedule under Section 16.2, each Participant having three (3) or more
Years of Service may elect to have his vested percentage computed without regard
to such amendment or change. The period during which the election may be made
shall begin on the date the Amendment is adopted or deemed to be made and shall
end on the date which is sixty (60) days after the latest of the date on which:
(a) the amendment is adopted;
(b) the amendment becomes effective; or
(c) the Participant is issued written notice of the amendment by
the Company or the Committee.
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ARTICLE 7
DISTRIBUTIONS
7.1 Distribution on Death. If a Participant dies, the full value of the
Participant's Accounts shall be distributed to the Participant's Beneficiary in
a cash lump sum. The distribution to the beneficiary shall be made within 4 to 6
weeks of the date the Committee receives notice of the Participant's death, or
as soon thereafter as practicable.
7.2 Distribution on Other Severance. If a Participant's Severance from
Service Date is for any reason other than the Participant's death, the
Participant may elect, by properly completing the appropriate form specified by
the Committee, to have the entire value of the Participant's Accounts
distributed to the Participant pursuant to the method of payment chosen in
accordance with Section 7.5; provided, however, that if the current value of the
Participants' Accounts as of the Accounting Date provided for in Section 7.7(a)
does not exceed $5,000, the entire value shall be distributed to the Participant
in the method provided for at Section 7.5(a)(2). If the distribution is paid in
installments and the Participant dies before all the installments to which the
Participant is entitled are paid to the Participant, then the balance of the
installments due shall be distributed to the Beneficiary in a cash lump sum.
7.3 Forfeitures and Reinstatement of Forfeitures. If the Participant's
Severance from Service Date is prior to November 1, 1994, the nonvested portion
of the Participant's Matching Employer Contribution Account as of such Severance
from Service Date, if any, shall be forfeited as of the earlier of (a) such
Participant's receipt of a distribution of the entire vested portion of the
Participant's benefit under the Plan, or (b) if no such distribution is made,
upon the Participant's incurring a Period of Severance of at least five (5)
years or, if greater, the aggregate number of years of Service before the Period
of Severance, or (c) November 1, 1994. However, if such Participant returns to
Employment, the Participant may reinstate the previously forfeited nonvested
portion of the Participant's Matching Employer Contribution Account if and only
if the Participant pays to the Plan before the fifth anniversary of the
Participant's reemployment or the date of distribution, if earlier, an amount
equal to the vested portion of the Participant's Matching Employer Contribution
Account previously distributed to the Participant.
7.4 Application of Forfeitures. Forfeitures under Section 7.3 or which
occurred under the Collective Federal Savings Bank Employee Stock Ownership Plan
prior to its merger into the Plan shall be applied to reduce future Matching
Employer Contributions to the Plan or to pay the administrative expenses of the
Plan not paid for under the Trust Agreement.
7.5 Method of Distribution.
(a) All distributions shall be made by one of the following
methods at the election of the Participant on the form designated by the
Committee:
(i) a combination of:
(1) a lump sum payment in cash of the portion of the
Participant's Accounts invested in Sub-Funds A, C, D, E, F
and G, and
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(2) a stock certificate for whole shares (and cash for
fractional shares) of Company Stock owned by the
Participant by virtue of having all or some portion of the
Participant's Accounts invested in Sub-Fund B.
(ii) a lump sum payment in cash of the current value of
all the Participant's Accounts, or
(iii) payments of cash in annual installments over a
period selected by the Participant, from two to 15 years,
unless payment in installments will commence after the
Participant attains age 70 in which case the maximum
period for this installment method will be 10 years.
(b) In the event a Participant fails to select a method of
payment for a distribution, the Participant shall receive the relevant
distribution in the method provided for in Section 7.5(a)(ii); provided,
however, that if the current value of the Participant's Accounts as of the
Accounting Date provided for in Section 7.7(a) is greater than $5,000, then the
distribution may not be made prior to the Participant's attaining age 65 without
the Participant's consent.
7.6 Required Distribution Commencement Dates. (a) Unless a Participant
otherwise elects, a Participant's distribution shall commence no later than 60
days after the close of the Plan Year (i) in which the Participant attains the
Participant's 65th birthday, (ii) in which occurs the 10th anniversary of the
year in which the Participant commenced Plan participation, or (iii) in which
the Participant incurs a termination of Employment, whichever is last.
(b) Anything elsewhere in this Plan to the contrary
notwithstanding, unless the Participant is a current employee of the Company the
entire nonforfeitable interest of each Participant shall be either (i)
distributed to the Participant not later than the Participant's Required
Beginning Date, or (ii) distributed to or for the benefit of, the Participant,
or to, or for the benefit of, the Participant and the Participant's Beneficiary
in installments beginning not later than the Participant's Required Beginning
Date and continuing, in accordance with such regulations as the Secretary of the
Treasury may prescribe, over a period certain not extending beyond the life
expectancy of the Participant and the Participant's Beneficiary. For the purpose
of the foregoing sentence, the Participant's Required Beginning Date shall be
April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2. If distribution in installments of a
Participant's nonforfeitable interest has begun in accordance herewith, and the
Participant dies before the entire nonforfeitable interest has been distributed
to the Participant, the remaining portion of such interest shall be distributed
at least as rapidly as under the method of distribution being used as of the
date of the Participant's death. If a Participant dies before distribution in
installments of the Participant's nonforfeitable interest has begun, the entire
nonforfeitable interest shall be distributed within five years after the death
of the Participant, except such portion thereof as shall be payable in
installments to, or for the benefit of, the Participant's Beneficiary, beginning
not later than one year after the date of the Participant's death and
continuing, in accordance with such regulations as the Secretary of the Treasury
may prescribe, over a period certain not extending beyond the life expectancy of
the Beneficiary; provided, however, that if the Participant's surviving spouse
is the Participant's Beneficiary, the date on which the distributions are
required to begin shall not be earlier than the date on which the Participant
would have attained age 70 1/2, and, if the surviving spouse dies before the
distributions to the surviving spouse begin,
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this paragraph shall be applied as if the surviving spouse were the participant.
7.7 Valuation. (a) Where one of the methods of distribution set forth
at Sections 7.5(a)(i) and (ii) has been selected by a Participant, the current
value of the Participant's Accounts for purposes of the distribution shall be
the value of such Accounts as of the Accounting Date coincident with the
effective date of the distribution as set forth under Section 7.11, unless the
distribution of the Participant's Accounts is being deferred or is required
before the Participant's Severance from Service Date, in which case subsection
(c) shall apply.
(b) Where the method of distribution provided for at Section
7.5(a)(iii) has been selected by a Participant, the Participant shall also be
entitled to select, subject to any applicable restrictions contained elsewhere
in the Plan, the Accounting Date as of which the current value of such
Participant's Account shall be determined for purposes of the first installment,
provided that such Accounting Date is coincident with the last Business Day of
the given calendar month. Each successive Accounting Date which is the
anniversary of such Accounting Date shall be the Accounting Date used for
purposes of each successive installment. Until installment distributions shall
have reduced the balance in all of a Participant's Accounts to zero, the
Participant's Accounts shall be invested according to the investment directions
last selected by the Participant either in accordance with Section 4.1 or 4.3.
The amount of each installment shall be an amount equal to the current value of
the Participant's Accounts as of the relevant Accounting Date divided by the
number of installments remaining to be paid to the particular Participant,
including the installment for which the particular calculation is being made. No
Participant or former Participant shall be entitled to receive interest,
dividends or other income on the cash paid in an installment distribution
between the installment's relevant Accounting Date and the date the Participant
or former Participant receives the installment distribution.
(c) Where a distribution of a Participant's Accounts has been
deferred and applicable law subsequently requires the distribution to be made or
the Participant subsequently elects to receive the distribution, or where a
Participant's Required Beginning Date precedes that Participant's Severance from
Service Date, the current value of the Participant's Accounts for purposes of a
distribution under Sections 7.5(a)(i) or (ii) or the first installment of a
distribution under Section 7.5(a)(iii) shall be valued as of the Accounting Date
coincident with or first following, as appropriate, the Required Beginning Date
or the date the Participant elects to receive the distribution. In the event of
a deferral, and until the Accounting Date provided for in the first sentence of
this subsection (c) shall have occurred, a Participant's Accounts shall be
invested according to the investment directions last selected by the Participant
in accordance with Section 4.1 or 4.3; where the method of distribution provided
for in Section 7.5(a)(iii) has been selected the third sentence of subsection
(b) above shall apply to the Participant's Accounts after the above-mentioned
Accounting Date. Where a distribution following a period of deferral is made
under the method of distribution provided for in Section 7.5(a)(iii), the
current value of the Participant's Accounts for purposes of the second through
final installments shall be valued as of the Accounting Date which is the
anniversary Accounting Date of the Accounting Date used for purposes of the
first installment and the amount of an installment shall be calculated in
accordance with the fourth sentence of subsection (b) above. The last sentences
of subsections (a) and (b) above shall apply to distributions under this
subsection (c).
(d) Distributions, whether lump sum payments of cash and stock
pursuant to Section 7.5(a)(i), lump sum payments of cash pursuant to Section
7.5(a)(ii) or installments pursuant to Section 7.5(a)(iii), shall be made within
1 to 2 weeks of the relevant Accounting Date for the distribution, or as soon
thereafter as practicable.
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7.8 Proof of Death and Right of Beneficiary. The Committee may require
and rely upon such proof of death of the Participant and such other evidence of
the right of any Beneficiary to receive the distributable amount of a deceased
Participant's Accounts as the Committee may deem proper, and its determination
of death and of the right of such Beneficiary to receive payment shall be
conclusive and binding on all persons.
7.9 Undeliverable Distributions. In the event a check or stock
certificate, or both, representing a distribution is returned to the Company as
undeliverable at the last known address of a former Participant, an account
shall be established in Sub-Fund D in the name of the former Participant and the
following rules shall apply: (a) the amount represented by a returned check
shall be credited to such account as of the first day of the month which follows
the month in which the check is returned as undeliverable; and (b) shares
represented by a returned stock certificate shall be purchased by the Trust for
Sub-Fund B on the first occasion following return of the stock certificate that
the Trust purchases Company Stock for Sub-Fund B from Summit Bancorp. The Trust
shall pay for said shares the same price that the Trust pays Summit Bancorp. for
the balance of shares purchased for Sub-Fund B on that occasion. The proceeds of
the sale shall be credited to the account in Sub- Fund D created for the former
Participant.
7.10 Interest and Dividends on Distributions. Participants shall be
entitled to receive interest on cash sums representing a distribution pursuant
to this Article 7 during the period commencing on the day immediately following
the relevant Accounting Date for the particular distribution and ending on the
day immediately preceding the date that the distribution is made. The rate of
interest to be so paid shall be determined by the Committee in its sole
discretion. Participants shall also be entitled to receive an amount of cash
equal to the dividends declared on Company Stock representing a distribution
pursuant to Section 7.5(a)(ii) where the record date for such declared dividend
occurs after the Accounting Date for the particular distribution but before the
date that share certificates representing the aforesaid Company Stock are
registered in the Participant's name.
7.11 Effectiveness of Voluntary Distributions. Requests for
distributions made pursuant to Section 7.2 shall be made by properly completing
and filing the appropriate form with the Committee. Such distributions will
become effective as of the pay date next following the 6th day of a calendar
month, if the request is made by the 6th day of such calendar month, or the pay
date next following the 21st day of a calendar month, if the request is made by
the 21st day of such calendar month. Requests made after the 21st day of a given
calendar month shall be deemed made by the 6th day of the following calendar
month. Upon the effectiveness of a distribution request, the current value of
the Participant's Accounts for purposes of the distribution shall be determined
in accordance with Section 7.7.
7.12 Direct Rollovers This Section 7.12 applies to all distributions
made on or after January 1, 1993.
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this Section 7.12, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
(b) The following definitions shall apply to this Section 7.12:
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(i) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the Account of the distributee under the Plan, except
that an eligible rollover distribution does not include: (1) 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 Beneficiary, or for a specified period of ten years
or more; (2) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and (3) the portion
of a distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(ii) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described in Section 401(a) of
the Code, 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.
(iii) Distributee: A distributee includes a Participant or former
Participant. In addition, the Participant's or former
Participant's surviving spouse and the Participant's or former
Participant's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Section
414(p) of the Code, are distributed with regard to the interest
of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
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ARTICLE 8
WITHDRAWALS WHILE IN EMPLOYMENT
8.1 Order of Withdrawal from Accounts.
(a) Subject to the further provisions of Article 8, an Active
Participant, or a Participant who is an ineligible employee subject to Section
2.2, may make withdrawals from the Plan. Withdrawals shall always be made from
Participant's Accounts in the following order; provided, however, that a
Participant may determine the order in which withdrawals will occur from Levels
1, 2, and 3:
(i) Level 1 - Current value of after-tax contributions to the
Participant's Unmatched Contribution Account.
(ii) Level 2 - Accounts at Level 1 together with the current
value of after-tax contributions to the Participant's Matched
Contribution Account.
(iii) Level 3 - Accounts at Level 2 together with the current
value of the Participant's Rollover Accounts.
(iv) Level 4 - Accounts at Level 3 together with the current
value of the Participant's Matching Employer Contribution
Account; provided, however, that if the Participant requesting
the withdrawal has participated in the Plan for less than five
years, then the Participant shall be permitted to withdraw from
the Participant's Matching Employer Contribution Account the
current value of the Participant's entire Matching Contribution
Account minus Matching Employer Contributions made for the
benefit of such Participant during the 24 months preceding the
effective date of the withdrawal. Notwithstanding the foregoing,
under no circumstances may any Matching Employer Contributions
made on Participant Matched Contributions contributed to the Plan
after December 31, 1998 be withdrawn from the Plan pursuant to
this Article 8, by a Participant who has not attained age 59 1/2.
(v) Level 5 - Accounts at Level 4 together with (1) if there is
determined to be a hardship in accordance with Section 8.4
hereof, the fixed amount which represents the current value as of
December 31, 1988 of before-tax contributions to the
Participant's Unmatched Contribution Account and Matched
Contribution Account made on or before December 31, 1988 plus the
amount which represents before-tax contributions to the
Participant's Unmatched Contribution Account and Matched
Contribution Account made after December 31, 1988, or (2) if the
Participant has attained age 59 1/2, the current value of
before-tax contributions to the Participant's Unmatched
Contribution Account and Matched Contribution Account.
(b) "Current value" for purposes of the Plan means the value,
determined as of the valuation date made applicable to a specific Plan
transaction or activity by another provision of the Plan, of particular
contributions made to the Plan together with the net investment earnings
thereon, all as reduced by distributions, withdrawals or loans made with respect
to particular contributions and net earnings thereon.
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8.2 Directing the Calculation of Withdrawn Amounts. Each Participant
shall be permitted to withdraw only the value of that particular Participant's
Accounts, subject to the further provisions of this Article 8. A Participant
shall indicate the amount to be withdrawn in one of the following ways: (a) a
specified dollar amount, or (b) the maximum amount available for withdrawal in
the Participant's Accounts.
8.3 Restrictions; Limitations; Penalties.
(a) A withdrawal by a Participant of any or all of the
Participant's Matching Employer Contribution Account or the current value of
before-tax or after-tax contributions to the Participant's Matched Contribution
Account shall result in a suspension of Matching Employer Contribution made for
the benefit of that Participant for a period commencing on the first pay period
ending after the effective date of the withdrawal. Matching Employer
Contributions shall recommence following a suspension as of the first pay period
ending in the month which follows by four calendar months the month in which the
withdrawal became effective.
(b) Following a withdrawal no suspension or other waiting period
is required by a Participant prior to requesting another withdrawal.
(c) Where a Participant's Accounts are invested in more than one
Sub-Fund, any withdrawal requested by such a Participant shall be deemed a
request that funds be withdrawn from all Sub-Funds on a pro rata basis.
(d) A Participant may withdraw no less than the lesser of (i) the
current value of the Participant's Accounts (not including the current value of
the Participant's before-tax Matched and Unmatched Contributions) or (ii) $500,
unless the withdrawal is a hardship withdrawal pursuant to Section 8.4 of this
Plan.
8.4 Hardship Withdrawals. In the event a Participant who has not
attained age 59 1/2 requests a withdrawal which would require a withdrawal of
any or all of the current value of before-tax contributions to the Participant's
Matched or Unmatched Contribution Accounts, the request must be reviewed by the
Committee. The Committee shall approve such a request for withdrawal if the
Participant meets the requirements of (a) and (b) below:
(a) Deemed immediate and heavy financial need. A Participant may
make a withdrawal from his or her before-tax Matched or Unmatched Contribution
Accounts if the Participant is deemed to have an immediate and heavy financial
need. The Committee's determination of whether the Participant is deemed to have
an immediate and heavy financial need shall be made solely on the basis of
evidence furnished by the Participant.
A distribution is deemed to be on account of an immediate and
heavy financial need of the Participant only if the distribution is for:
(i) expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his or her spouse or any
of his or her dependents (as defined in Code Section 152) or
necessary for these persons to obtain such medical care;
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(ii) costs directly related to the purchase of a principal
residence of the Participant (excluding mortgage payments);
(iii) the payment of tuition, related educational fees and room
and board expenses for the next 12 months of post-secondary
education for the Participant or his or her spouse, children or
dependents (as defined in Code Section 152); or
(iv) payments necessary to prevent the eviction of the
Participant from his or her principal residence or foreclosure on
the mortgage on that principal residence.
(b) Distribution deemed necessary to satisfy financial need. The
distribution is deemed necessary to satisfy an immediate and heavy financial
need of a Participant only if all of the following requirements are satisfied:
(i) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The amount
of an immediate and heavy financial need may include any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution.
(ii) The Participant has obtained all other distributions (other
than hardship distributions) and all nontaxable (at the time of
the loan) loans currently available under the Plan and all other
plans maintained by the Company.
(iii) The Plan and any other plan maintained by the Company will
limit the Participant's before-tax Matched and Unmatched
Contributions for the calendar year immediately following the
calendar year of the hardship distribution to the applicable
limit under Code Section 402(g) for such next calendar year, less
the amount of such contributions made on behalf of the
Participant for the calendar year of the hardship distribution.
(iv) The Participant is prohibited from making a Matched or
Unmatched Contribution to the Plan or any other plan maintained
by the Company (including a stock purchase plan and any other
plan set forth in Reg. Section 1.401(k)-1(d)(2)(iv)(B)(4)) for
the 12-month period beginning with the date the Participant
receives the distribution.
As soon as practicable after the Committee's determination that a
deemed immediate and heavy financial need exists with respect to the
Participant, the Administrator will direct the Trustee to pay to the Participant
the amount necessary to meet the need created by the hardship (but not in excess
of the value of the vested portion of the Participant's Accounts).
In no event may a hardship withdrawal be made from a Participant's
Matching Contribution Account.
(c) After-tax Withdrawals. A request for a withdrawal by a
Participant which would not require a withdrawal of some or all of the current
value of before-tax contributions to the Participant's Matched or Unmatched
Contribution Account need not be reviewed or approved by the Committee.
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8.5 Procedures; Effective Dates; Payment. To make a withdrawal, a
Participant must request such by properly completing and filing with the
Committee the form designated by the Committee together with supporting
documents, if required. Requests for withdrawals will be effective as of the pay
date next following the 6th day of a calendar month, if the request is made by
the 6th day of such calendar month, or the pay date next following the 21st day
of a calendar month, if the request is made by the 21st day of such calendar
month. Requests made after the 21st day of a given calendar month shall be
deemed made by the 6th day of the following calendar month. For purposes of this
Article 8, the value of a Participant's Accounts, where the determination of
such is necessary, shall be the value determined as of the effective date of the
withdrawal.
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ARTICLE 9
LOANS
9.1 Availability of Loans. A Participant may apply to the Committee for
a loan under this Plan. The Committee may approve loans to Participants in a
uniform and non-discriminatory manner. Upon receipt of a Participant's
application and approval thereof, the Committee shall instruct the Trustee to
make a loan to such Participant if such loan meets the requirements of Section
9.2. Notwithstanding the foregoing, the Committee shall not make a loan to a
Participant who has requested such if on the date the loan is to be made the
Participant (a) is not an Employee, or (b) is an Employee on a Leave of Absence.
9.2 Loan Requirements. A loan shall not be made to a Participant
pursuant to this Article 9 unless such loan, when added to the outstanding
balance of all other loans from the Plan:
(a) Is equal to or greater than $1,000;
(b) Does not exceed the least of (i) $50,000, reduced by the
excess (if any) of - (A) the highest outstanding balance of loans from the Plan
during the 1-year period ending on the day before the date on which such loan is
made, over (B) the outstanding balance of loans from the Plan on the date on
which such loan is made, or (ii) fifty percent (50%) of the current value
(determined by reference to the most recent Account valuation available at the
time of the Participant's loan application) of the Participant's Accounts. In
the event an application of the foregoing formula results in a maximum loan
amount determined by clause (ii) and if in the opinion of the Committee the
current value of the Participant's Accounts as of the date of the loan
application has decreased more than minimally from the current value used for
purposes of the foregoing formula, the Committee may in its discretion cause the
maximum loan amount to be determined by using where appropriate in clause (ii) a
current value as of the date of the loan application rather than the date as
presently set forth in said clause. For purposes of clause (ii), the current
value of the Participant's Accounts shall be determined without regard to any
accumulated deductible employee contributions as defined in Section 7(o)(5)(B)
of the Code.
(c) Is exempt from the tax imposed by Section 4975 of the Code by
reason of Section 4975(d)(1) of the Code;
(d) Is adequately secured by (i) a portion of the Participant's
Accounts, and/or (ii) such other or additional security as the Committee may in
its sole discretion require;
(e) Bears interest, payable periodically as determined by the
Committee to the Trust Fund or to such account or accounts in the Trust Fund as
the Committee shall determine and at such rate as the Committee shall determine.
(f) Is, by its terms, required (i) to be amortized in level
payments made at least quarterly by means of payroll deduction over the term of
the loan (or, if payroll deduction ceases to be available with respect to a
particular borrower, by other means deemed appropriate by the Committee), and
(ii) to be repaid upon the earlier of the date the Participant's employment
terminates, the date of the Participant's death, or the expiration of a fixed
term of not more than five years; provided, however, that the Committee
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may extend the five year term in the case of loans used to acquire, construct,
reconstruct or substantially rehabilitate any dwelling unit which within a
reasonable time is to be used (determined at the time the loan is made) as the
principal residence of the Participant. In no event may a loan be amortized in
payments occurring less than quarterly.
(g) Is made pursuant to a promissory note to be executed by the
Participant, on a form containing such terms and provisions as the Committee
shall in its sole discretion determine;
(h) Satisfies the requirements of Section 408(b)(1) of ERISA and
the Department of Labor's regulations promulgated thereunder;
(i) Is made in accordance with specific provisions set out by the
Committee; and
(j) Meets such other requirements as the Committee may set.
9.3 Default. If any loan granted to a Participant pursuant to this
Article 9 or any scheduled amortized repayment is not repaid on the date
required under Section 9.2(f), the Committee may, without prior notice to the
Participant, direct the Trustee to, to the extent permitted by law, sell, redeem
or otherwise dispose of such collateral as the Participant has given for the
loan and apply the proceeds thereto to the repayment of the loan.
Notwithstanding the foregoing, loan repayments will be suspended under this Plan
as permitted under Section 414(u)(4) of the Code.
9.4 Status of Participant. If a Participant receives a loan under this
Article 9, his status as a Participant in the Plan and his rights with respect
to his Plan benefits shall not be affected, except to the extent that the
Participant has used his interest in his Account Balance as security for the
loan, pursuant to Section 9.2.
9.5 Prepayments and Restrictions Regarding Additional Loans.
(a) Partial prepayment of loans shall not be permitted.
(b) The Committee shall not make a loan if the Participant
submitting the request for the loan owes principal or interest under more than
one previous loan made pursuant to this Article 9. The Committee may make a loan
if the Participant submitting the request for the loan owes principal or
interest under one previous loan made pursuant to this Article 9 provided that
(i) the requested second loan satisfies the requirements set forth herein at
Sections 9.2(a) and (c) through (f), (ii) the principal amount of the requested
second loan, together with the remaining outstanding principal of the previous
existing loan, does not exceed the amount limitation imposed by Section 9.2(b)
herein.
(c) Portions of a Participant's Accounts subject to the security
interest provided for at Section 9.2(d) shall not be available for withdrawal
pursuant to Article 8 of the Plan.
9.6 Source of Loan Proceeds.
(a) The cash to satisfy requests for loans shall be obtained by
withdrawing assets from the
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Accounts of the Participant who requested the loan in the following order:
First - The current value of before-tax contributions to the
Participant's Matched and Unmatched Contribution Accounts.
Second - The current value of contributions in the Participant's
Matching Employer Contribution Account.
Third - The current value of after-tax contributions to the
Participant's Matched and Unmatched Contribution Accounts.
Fourth - The Participant's Rollover Account.
(b) Where a Participant's Accounts are invested in more than one
Sub-Fund, any loan requested by such Participant shall be deemed a request that
funds be withdrawn from all Sub-Funds on a pro rata basis.
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ARTICLE 10
OPERATION OF THE PLAN
10.1 Administrator. The Administrator of the Plan is the Committee.
10.2 Fiduciaries. The fiduciaries, who shall have authority to control
and manage the operation and administration of the Plan, are as follows:
(a) Summit Bancorp.;
(b) The Board and the Committee, which shall have the authority
and duties specified in Article 10 hereof; and
(c) The Trustee, which shall have the authority and duties
specified in the Plan and Trust Agreement.
10.3 Actions of Fiduciaries. Any fiduciary with respect to the Plan:
(a) may serve in more than one fiduciary capacity with respect to
the Plan;
(b) may employ one or more persons to render advice or to perform
a service with regard to or to carry out any responsibility that such fiduciary
has under the Plan; and
(c) may rely upon any direction, information, or action of any
other fiduciary, acting within the scope of its responsibilities under the Plan,
as being proper under the Plan.
10.4 Procedures for Plan Operation.
(a) The adoption, amendment, and termination of the Plan and
appointment of certain fiduciaries to carry out the operation and administration
of the Plan shall be the responsibility of the Board. The procedures for
amending and terminating the Plan and for appointing such fiduciaries are set
forth in Articles 10 through 14.
(b) The responsibilities of Summit Bancorp., the Board, the
Committee, and the Trustee for the operation and administration of the Plan and
Trust Agreement are allocated among them by virtue of the several Articles of
this Plan and the Trust Agreement, wherein their respective duties are
specified.
(c) Each fiduciary shall have only such authority and duties as
are specifically given to it under the Plan and the Trust Agreement, and shall
be responsible for the proper exercise of its own authority and duties, and
shall not be responsible for any act or failure to act of any other fiduciary.
(d) The basis upon which payments are to be made to the Plan and
from the Plan are set forth in Articles 3 through 11 of the Plan.
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10.5 Funding Policy. The funding policy under the Plan, and the
procedures for carrying out such policy and method, shall be in accordance with
Articles 3, 4 and 10.
10.6 Assets in Trust. Except as otherwise permitted under the Plan all
assets of the Plan shall be held in trust by the Trustee who upon acceptance of
such office shall have exclusive authority and discretion to manage and control
the assets of the Plan, subject to the terms of the Plan and Trust Agreement.
Subject to the terms of the Trust Agreement, the Trustee may be empowered to
enter into an insurance contract with an insurance company to provide for the
investment of all or a portion of the investment funds described in Article 4 of
the Plan.
10.7 Expenses. The reasonable expenses incident to the operation of the
Plan; fees for professional services with respect to the Plan and the costs of
such other technical or clerical assistance as may be required shall be paid out
of the Trust Fund, to the extent not paid for by a Company.
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ARTICLE 11
PLAN ADMINISTRATION
11.1 Administration of the Plan. The administration of the Plan shall
be vested in the Board and the Committee. The Board shall be responsible for the
executive functions of the Plan's administration. The Committee shall be
responsible for the regular day-to-day administration of the Plan and shall be
made up of at least 3 persons who shall be appointed by the Board. The Committee
members may include persons who are not Participants in the Plan. The Committee
members shall elect a chairman, who need not be a Participant, and shall appoint
a secretary who need not be a Participant or a member of the Committee. The
Board may remove or replace any member of the Committee at any time in its sole
discretion, and any Committee member may resign by delivering a written
resignation to the Board, which resignation shall become effective upon its
delivery or at any later date specified therein. If at any time there shall be a
vacancy in the membership of the Committee the remaining member or members of
the Committee shall continue to act until such vacancy is filled by an
individual appointed by the Board.
11.2 Action by the Committee. The Committee shall hold meetings upon
such notice, at such notice, at such place or places, and at such times as its
members may from time to time determine. A majority of its members at the time
in office shall constitute a quorum for the transaction of business. All actions
taken by the Committee at any meeting shall be by vote of the majority of its
members present in person or by means of conference telephone or any means of
communication by which all persons participating in the meeting are able to hear
each other at such meeting, except that the Committee also may act without a
meeting by a consent signed by a majority of its members. Any member of the
Committee who is a Participant in the Plan shall not vote on any question
relating exclusively to himself.
11.3 Rules and Regulations. Subject to the terms of the Plan, the
Committee may from time to time adopt such by-laws, rules, and regulations as
the Committee shall deem appropriate for the administration of the Plan and for
the conduct and transaction of its business and affairs.
11.4 Powers of the Board. The Board shall have such powers as may be
necessary to discharge its duties under the Plan, including the power:
(a) to receive and review the periodic audit of the Plan made by
a Certified Public Accountant where mandated by ERISA;
(b) to review the investment policy of the Trustee from time to
time;
(c) to receive and review periodic accountings of the Trustee;
(d) to engage another independent investment manager or managers
and such other professional advisor or advisors as it may deem necessary or
desirable;
(e) to receive and review periodic reports from the Committee;
and
(f) to review any Committee matters for which the Committee
desires such a review.
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11.5 Powers of the Committee. The Committee shall have such powers as
may be necessary to discharge its duties under the Plan, including the power:
(a) in its sole discretion, to interpret and construe the Plan,
to determine all questions with regard to Employment, eligibility, service,
Earnings, withdrawals, distributions, and such other factual matters as date of
birth and similarly related matters for the purpose of the Plan. The Committee's
determination of all questions arising under the Plan shall be conclusive upon
all Participants, the Board, the Company, the Trustee, and other interested
parties;
(b) to prescribe procedures to be followed by Participants and
Beneficiaries filling applications for benefits;
(c) to prepare and distribute to Participants information
explaining the Plan;
(d) to appoint or employ individuals to assist in the
administration of the Plan (including a third-party administrator) and any other
agents it deems advisable, including counsel, accountants and clerical service
as they may require in carrying out the provisions of the Plan and applicable
law;
(e) to instruct the Trustee to make disbursements pursuant to the
Plan;
(f) to receive and review reports of disbursements from the Trust
Fund made by the Trustee;
(g) to appoint from their number such committees with such powers
as they shall determine, and to authorize one or more of their number to
exercise any of the Committee's powers, ministerial or discretionary, necessary
to carry out the provisions of the Plan;
(h) to require from the Trustee written accountings, and such
other information as the Committee may request from time to time, in accordance
with the Trust Agreement; and
(i) to request reports and information from the Trustee.
The Committee shall have no power to add to, subtract from, or
modify any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements for
eligibility for a benefit under the Plan.
11.6 Information from Participants. Each Participant shall be required
to furnish to the Committee, in the form prescribed by it, such personal data,
affidavits, authorizations to obtain information, and other information as such
Committee may deem appropriate for the proper administration of the plan.
11.7 Records. The Committee and the third-party administrator shall
keep accurate records and minutes of its own proceedings and actions. The
Committee shall prepare, or cause to be prepared, such periodic reports to the
U.S. Labor Department and the Internal Revenue Service as may be required
pursuant to ERISA. The Committee shall prepare a report annually with respect to
its operations for the
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preceding year and shall deliver a copy thereof to the Board.
11.8 Authority to Act. The Committee may authorize one or more of its
members, officers, or agents to sign on its behalf any of the instructions,
directions, notifications, or communications to the Trustee, and the Trustee may
conclusively rely thereon and the information contained herein.
11.9 Liability for Acts. No member of the Committee, a member of the
Board, nor the Trustee shall be personally liable for any error or omission or
commission unless such error results from gross negligence, willful misconduct,
or lack of good faith; nor shall any person be personally liable for any act of
gross negligence, willful misconduct, or lack of good faith of any other
fiduciary member or any other fiduciary, to the fullest extent permissible by
law.
11.10 Compensation and Expenses. Unless authorized by the Board, a
member or officer of the Committee shall not be compensated for his service, but
shall be reimbursed for reasonable expenses incident to the performance of such
service.
11.11 Indemnity. All Directors, officers, employees of a Company
(including members of the Committee) shall be indemnified by the Company to the
fullest extent permitted by the by-laws of the Company. The Trustee, its
officers and employees, shall also be indemnified by the Company against any and
all liabilities arising by reason of any act or failure to act made in good
faith pursuant to the provision of the Plan or Trust Agreement, including
expenses reasonably incurred in the defense of any claim relating thereto.
11.12 Claims Procedure.
(a) Any claim for payment of benefits under the Plan shall be
made in writing to the Committee. If any claim for benefits is wholly or
partially denied, the Committee shall, within 90 days after receipt of the
claim:
(i) notify the claimant, in writing, of such denial, setting
forth the specific reasons therefor; and
(ii) afford such claimant a reasonable opportunity for a full and
fair review of the decision denying the claim.
(b) Notice of such denial shall set forth, in addition to the
specific reasons for the denial, the following:
(i) reference to pertinent provisions of the Plan;
(ii) such additional material or information as may be necessary
to perfect the claim, along with an explanation of why such
material or information is necessary.
(iii) an explanation of the claims review procedure;
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(iv) advice that such claimant or the claimant's authorized
representative may request the opportunity to review pertinent
plan documents and submit a statement of issues and comments.
(c) Within 60 days following advise of denial of a claim, upon
request made by any claimant for a review of such denial, the Committee shall
take appropriate steps to review its decision in light of any further
information or comments submitted by such claimant. The Committee shall be
empowered to hold a hearing at which such claimant or the claimant's authorized
representative shall be entitled to present the basis for the claim for review.
(d) The Committee shall render a decision within 60 days after
claimant's request for review (which may be extended to 120 days if
circumstances so require provided written notice of such extension is furnished
to the claimant prior to the commencement of such extension) and shall advise
claimant in writing of its decision on such review, specifying its reasons and
identifying appropriate provisions of the Plan.
11.13 Standard of Review of Committee Decisions. In addition to any
other powers granted in the Plan to the Committee, the Committee shall have
discretionary authority to determine whether and to what extent participants and
beneficiaries are entitled to benefits, and to construe disputed or doubtful
Plan terms. The Committee shall be deemed to have properly exercised such
authority unless they have abused their discretion under the Plan by acting
arbitrarily and capriciously.
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ARTICLE 12
THE TRUST
12.1 Trust Agreement. Each Company has entered or will enter into a
Trust Agreement with the Trustee, and the Trustee shall receive the
contributions to the Trust Fund paid over by each Company pursuant to the Plan
and shall hold, invest, reinvest, and distribute each investment fund in
accordance with the terms and provisions of the Trust Agreement. Summit Bancorp.
may, by action of the Board, remove any Trustee and appoint any successor
Trustee. The Trust Agreement may provide that the Trust Fund thereunder may be
used to fund this Plan and other qualified plans maintained by any Company or
any Associated Company which meet the requirements of Section 401(a) of the
Code.
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ARTICLE 13
AMENDMENT OF THE PLAN
13.1 Amendment of Plan. (a) The Board of Directors shall have the right
at any time, subject to the limitations hereinafter provided, to amend in whole
or in part any or all provisions of the Plan.
(b) The Benefits Committee of the Company shall also have the
right to amend the Plan in any respect to the extent that the annual cost of any
such amendments to the Plan adopted during any Plan Year by the Committee,
determined without regard to the effective date of such amendments, does not
exceed Two Hundred Fifty Thousand Dollars ($250,000). In addition, the Benefits
Committee may also amend the Plan to the extent required (i) to accomodate the
merger into the plan of, or the transfer of assets to the Plan from, the defined
contribution plan of a company acquired by the Company (provided however, that
amendments to or actions taken in the administration or operation of such plans
shall be subject to the first sentence of this subsection), (ii) to include as
eligible Employees under the Plan any individuals who become Employees as the
result of an acquisition by the Company, and to establish the terms of such
eligibility, and (iii) to make changes to the Plan necessary to comply with any
changes in law or regulations governing the continued qualification of the Plan.
13.2 Procedure for Amendment. Any amendment adopted by the Board of
Directors of the Company shall be so adopted by resolution of the Board of
Director at a regular meeting of the Board of Directors or special meeting
called for such purpose or by unanimous written consent. Any amendment adopted
by the Committee shall be so adopted by resolution of the Committee at a regular
meeting of the Committee or special meeting called for such purpose or by
unanimous written consent. Each amendment of the Plan shall become effective on
the date specified in the relevant resolution or consent.
13.3 Restrictions on Amendments. No amendment of the Plan may be made
which shall either:
(a) deprive any Participant or Beneficiary of any part of an
Account as constituted at the time of such amendment; or
(b) result in the reversion to any Company of any part of the
Trust Fund contrary to the provisions of the Plan.
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ARTICLE 14
TERMINATION OF THE PLAN
14.1 Events Constituting Termination. It is expressly declared to be
the desire and intention of each Company to continue the Plan and Trust in
existence for an indefinite period of time. However, circumstances not now
anticipated or foreseeable may arise in the future, as a result of which a
Company may deem it to be impractical or unwise to continue the Plan and the
Trust established hereunder, and each Company therefore reserves the right to
discontinue contributions thereunder or to terminate the Plan (insofar as it
affects the Company's employees) at any time. Such discontinuance of
contributions under the Plan or termination of the Plan shall be adopted by such
Company's board of directors, by resolution of such board of directors at a
regular meeting of the board of directors or special meeting called for such
purpose or by unanimous written consent.
14.2 Allocation of Assets. Upon the full termination of the Plan,
permanent discontinuance of contributions thereto, or upon partial termination
of the Plan with respect to a group of Participants, the benefits of
Participants affected thereby shall become fully vested and nonforfeitable to
the extent such benefit is not already fully vested and nonforfeitable.
14.3 Manner of Distribution. Subject to the foregoing provisions of
this Article 14, any distribution after termination of the Plan shall consist of
the following: (a) a cash lump sum of the value of assets in Sub-Funds A, C, D,
E, F and G; and (b) certificates for whole shares of Company Stock in Sub-Fund B
and cash in lieu of fractional shares.
14.4 Liquidation of Trust Fund. The Trust Agreement and the Trust Fund
shall continue in existence after the termination of the Plan for such period of
time as may be required to complete the liquidation thereof in accordance with
the terms of this Article 14.
14.5 Internal Revenue Service Approval for Distribution. The Benefits
Committee may, in its sole discretion, request from the Internal Revenue Service
a determination that the proposed distribution of assets will not result in the
discrimination prohibited by Section 401(a)(4) of the Code. In the event the
Benefits Committee requests such a determination, and notwithstanding any
provision of the Plan or of the Trust Agreement to the contrary, no person shall
have any right or claim under this Article before the Internal Revenue Service
shall determine that the proposed distribution of assets does not result in the
discrimination prohibited by Section 401(a)(4) of the Code.
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ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 No Assignment of Benefit. (a) No benefit under the Plan, nor any
other interest hereunder of any Participant or Beneficiary shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution, or levy of any transfer, sell,
mortgage, pledge, hypothecate, commute, or anticipate the same, except as
provided by law.
(b) The provisions of Section 15.1 shall not be applicable to an
order or requirement to pay monies to the Plan, which arises under a judgment,
order, decree or settlement arising from certain crimes or violations of ERISA
committed by the Participant with respect to the Plan, provided the judgment,
order, decree or settlement agreement expressly provides for an offset of all or
part of the amount ordered or required to be paid to the Plan against the
Participant's Plan benefits.
15.2 No Implied Rights to Employment. Neither this Plan, the payment of
contributions by a Company to the Trust Fund, nor the payment of any benefits
pursuant to the Plan shall be construed to create any obligation upon such
Company to continue to make contributions to the Plan or to give any present or
future eligible Employee any right to continued employment.
15.3 Mergers or Transfers. There shall be no merger or consolidation
with, or transfer of assets or liabilities of the Plan to, any other plan unless
each Participant in the Plan would, if the Plan terminated after such merger,
consolidation, or transfer of assets or liabilities, receive a benefit
immediately thereafter equal to or greater than the benefit that the Participant
would have been entitled to receive immediately before such merger,
consolidation, or transfer if the Plan had then terminated.
15.4 Incapacity. If the Committee determines that a person entitled to
receive any benefit payment is under a legal disability or is incapacitated in
any way so as to be unable to manage personal financial affairs, such Committee
may direct the Trustee to make payments to such person's legal representative or
to a relative or other person for such person's benefit, or to apply the payment
for the benefit of such person in such manner as the Committee considers
advisable. Any payment of a benefit in accordance with the provisions of this
subparagraph shall be a complete discharge of any liability to make such
payment.
15.5 Effectuation of Interest. In the event it should become impossible
for the Company, the Board, or the Committee to perform any act required by the
Plan, the Company, the Board, or the Committee may perform such other act as
they in good faith determine will most nearly carry out the intent and purpose
of the Plan.
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15.6 Domestic Relations Orders.
(a) Definitions.
(i) The term "domestic relations order" means any judgment,
decree, or order (including approval of a property settlement
agreement) which:
(1) relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former
spouse, child, or other dependent of a Participant;
(2) is made pursuant to a state domestic relations law
(including a community property law); and
(3) which meets the requirements of subparagraph (b).
(ii) The term "alternate payee" means any spouse, former spouse,
child, or other dependent of a Participant who is recognized by a
domestic relations order as having a right to receive all, or a
portion of, the benefits payable under the Plan with respect to
such Participant.
(b) Requirements.
The provisions of Section 15.1 of the Plan shall not be applicable to a
domestic relations order and payment of benefits shall be made in accordance
with the terms of such order provided that such order:
(i) creates or recognizes the existence of an alternate payee's
right to, or assigns to an alternate payee the right to, receive
all or a portion of the benefits payable to a Participant under
the Plan;
(ii) clearly specifies
(1) the name and the last known mailing address (if any)
of the Participant and the name and mailing address of
each alternate payee covered by the order;
(2) the amount or percentage of the Participant's benefits
to be paid by the Plan to each such alternate payee or the
manner in which such amount or percentage is to be
determined;
(3) the number of payments or period to which such order
applies; and
(4) the name of each plan to which such order applies;
(iii) provides that any benefits to be paid pursuant to the order
shall be valued as of the
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Plan Accounting Date which next follows by more than 5 business
days the date the order is received by the Committee (the "QDRO
Valuation Date"). If the order specifies a date as of which it
was to be effective for purposes of identifying the property
subject to the order (the "Award Date") and if the month and year
of such Award Date differs from the month and year that the order
is received by the Committee, then the identification of assets
subject to the order and the initial determination of their value
shall be made as of the Plan Accounting Date which was coincident
with or next following the Award Date (the "Division Date") and
investment earnings and losses, if any, accrued to the Account
during the period from the Distribution Date to the QDRO
Valuation Date shall be allocated on a pro rata basis to the
Participant and the alternate payee based on their pro rata
interests in the Account as of the Distribution Date as required
by the order. If the order does not specify an Award Date, or if
it specifies an Award Date which is in the same month and year as
the date the order is received by the Committee, then the
Division Date applicable to such order shall be the QDRO
Valuation Date;
(iv) does not require the Plan to provide any type or form of
benefit, or any option, not otherwise provided under the Plan;
(v) does not require the Plan to provide increased benefits
(determined on the basis of actuarial value); and
(vi) does not require the payment of benefits to an alternate
payee which are required to be paid to another alternate payee
under another order previously determined to be a domestic
relations order.
(c) Payments Prior to Separation From Service.
A domestic relations order shall not be considered as failing to meet
the requirements of subsection (iii) of subparagraph (b) solely because such
order requires that payment of benefits be made to an alternate payee:
(i) in the case of any payment before a Participant has separated
from service, on or after the date on which the Participant
attains (or would have attained) the earliest retirement age (as
defined below);
(ii) in the case of any payment before a Participant has
separated from service on or after the date on which the
Committee determines such order is a domestic relations order;
(iii) as if the Participant had retired on the date on which such
payment is to begin under such order (but taking into account
only the value of the Participant's current Accounts and not
taking into account the value of any subsidy of the Company for
early retirement); and
(iv) in any form in which such benefits may be paid under the
Plan to the Participant (other than in the form of a joint and
survivor annuity with respect to the alternate payee and his
subsequent spouse).
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For purposes of this subparagraph (c), the term "earliest
retirement age" means the earlier of:
(1) the date on which the Participant is entitled to a
distribution under the Plan, or
(2) the later of:
(A) the date of Participant attains age 50, or
(B) the earliest date on which the Participant could
begin receiving benefits under the Plan if the
Participant separated from service.
(d) Former Spouse.
To the extent provided in any domestic relations order:
(i) the former spouse of a Participant shall be treated as a
surviving spouse of such Participant for purposes of Section
401(a)(11) and 417 of the Code (and any spouse of the Participant
shall not be treated as a spouse of the Participant for such
purposes); and
(ii) if married for at least one year to the Participant, such
surviving former spouse shall be treated as meeting the
requirements of Section 417(d) of the Code.
(e) Notice.
The Committee shall promptly notify a Participant and any other
alternate payee of the receipt of a domestic relations order and of the Plan's
procedure for determining whether the order qualifies as a domestic relations
order under this Section 15.6. Within a reasonable period of time after the
receipt of such order, the Committee, in accordance with such procedures as it
shall from time to time establish, shall determine whether such order qualifies
as a domestic relations order under this Section 15.6 and shall notify the
Participant and each alternate payee of such determination.
During any period of time in which the issue of whether a
domestic relations order qualifies as a domestic relations order under this
Section 15.6 is being determined by the Committee, by a court of competent
jurisdiction, or otherwise, the Committee shall separately account for the
amounts (hereinafter in the paragraph referred to as the "segregated amounts")
which would have been payable to the alternate payee during such period if the
order had been determined to be a domestic relations order under this Section
15.6. If within the eighteen (18) month period beginning with the date on which
the first payment would be required to be made under the order, such order is
determined to be a domestic relations order under this Section 15.6, the
Committee shall pay the segregated amounts (increased or decreased by any
investment earnings or losses thereon) to the person or persons entitled
thereto. If within the eighteen (18) month period beginning with the date on
which the first payment would be required to be made under the order, it is
determined that such order is not a domestic relations order under this Section
15.6, or the issue as to whether such order so qualifies is not resolved, then
the Committee shall pay the segregated amounts
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(increased or decreased by any investment earnings or losses thereon) to the
person or persons who would have been entitled to such amounts if there had been
no order. Any determination that an order is a domestic relations order under
this Section 15.6 which is made after the end of the eighteen (18) month period
beginning with the date on which the first payment would be required to be made
under the order, shall be applied prospectively only.
15.7 Headings. The headings of Articles and Sections of this Plan are
for convenience of reference only, and in case of any conflict between any such
headings and the text of this Plan, the text shall govern.
15.8 Copy of Plan. A copy of the Plan shall be available for inspection
by an Employee or other persons entitled to benefits under the Plan at
reasonable times at the office of Summit Bancorp.
15.9 Governing Law. Except as otherwise required by law, the Plan and
all matters arising thereunder shall be governed by the laws of the State of New
Jersey.
15.10 Qualified Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code.
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ARTICLE 16
TOP-HEAVY PLAN PROVISIONS
16.1 Anything elsewhere in this Plan to the contrary notwithstanding,
the provisions of this Article 16 shall apply to the Plan for any Plan Year
beginning after December 31, 1983, if, on the last day of the preceding Plan
Year, either (a) the aggregate of the Participant Account and Matching Employer
Contributions Account for Participants who are Key Employees exceeds 60 percent
of the present value of the aggregate of the aforementioned Accounts for all
Participants, or (b) the sum of (i) the present value of the aggregate of the
Participant Account and Matching Employer Contributions Account for Participants
who are Key Employees under the Plan, (ii) the present equivalent actuarial
value, to be determined by the Committee, of the accumulated accrued benefits of
Key Employees under all other qualified defined benefit plans included in the
Aggregation Group, and (iii) the cumulative accrued benefits of Key Employees
under all qualified defined contributions plans included in the Aggregation
Group, exceed 60 percent of the sum of (i) the present value of the
aforementioned Accounts of all Participants under the Plan and (ii) the present
equivalent actuarial value of the accumulated accrued benefits of all
Participants under all other qualified defined contribution plans included in
the Aggregation Group. For the purpose of the foregoing sentence the present
value of the aggregate of the Participant Account and Matching Employer
Contributions Account of each Participant under the Plan shall be increased by
the amount of the aggregate distributions, if any, made with respect to the
Participant under the Plan during the five-year period ending on the last day of
the preceding Plan Year; and the present equivalent actuarial value for the
accumulated accrued benefit of each Participant under all other qualified
defined benefits plans and the cumulative accrued benefit of each Participant
under any qualified defined contribution plan shall be increased by the amount
of the aggregate distributions, if any, made with respect to the Participant
under such other plan during that five- year period. The term "Aggregation
Group" shall mean all plans to which the Company contributes in which a Key
Employee is a participant and all other plans to which the Company contributes
that enable any such plan to meet the requirement of Section 401(a)(4) or
Section 410 of the Code. If a Participant is not a Key Employee for any Plan
Year, but was a Key Employee in a prior Plan Year the accrued benefit with
respect to such Participant shall not be taken into account. For any Plan Year
beginning after December 31, 1984, the Participant Account and Matching Employer
Contributions Account of any Participant or former Participant who has not
during the five-year period ending on the last day of the preceding Plan Year
received from the Company any compensation (other than benefits under the Plan)
shall not be taken into account.
16.2 In any Plan Year for which the provisions of this Article 16 apply
and thereafter, each Employee who is a Participant during that Plan Year shall
have a nonforfeitable right, in the event of a Termination of Employment
pursuant to Section 1.36, to receive the value of that Employee's Matching
Employer Contribution Account computed as of the date the particular Employee
ceases to be an Employee (including benefits accrued before the provisions of
this Article 16 apply).
16.3 In any Plan Year for which the provisions of this Article 16
apply, if the Matching Employer Contributions Account of any Participant who is
not a Key Employee is less than the Applicable Percentage, as defined in Section
16.6, of such Participant's Annual Compensation from the Company not in excess
of $200,000 for years in the Participant's Testing Period, then a Matching
Employer Contributions, plus any forfeitures allocated to such Participant's
Matching Employer Contributions Account shall be made in an
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amount equal at the last day of that Plan Year to such Applicable Percentage of
the Participant's Annual Compensation for the years in the Participant's Testing
Period.
16.4 In any Plan Year for which the provisions of this Article 16
apply, the figure "1.0" shall be substituted for the figure "1.25" in Article 16
for the purpose of determining an Employee's "defined benefit plan fraction" and
"defined contribution plan fraction."
16.5 For purposes of this Article, the following definitions shall
apply.
(a) "Applicable Percentage" means in respect of any Participant,
3 percent.
(b) "Annual Compensation" means for purposes of this Article
only, Earnings as defined in Section 1.15 but including any overtime, bonuses
and other special pay or remuneration reportable to the Internal Revenue Service
on Form W-2 for Federal income tax purposes, but shall not include before-tax-
contributions to this Plan.
(c) "Key Employee" means an Employee, former Employee or the
Beneficiary of any Employee, who, at any time during the Plan Year or any of the
four preceding Plan Years, is or was (i) one of the 50 highest paid Employees
and also an officer of the Company whose compensation from the Company for the
Plan Year exceeds $45,000 (or such other amount as shall be 50 percent of the
amount determined under Section 415(b)(1)(A) of the Code), or (ii) one of the
ten employees of the Company whose compensation from the Company for the Plan
Year exceeds the amount provided under Section 415(c)(1)(A) of the Code, and who
owns the largest interest in the Company, or (iii) the owner of more than five
percent of the outstanding stock of the company (or stock possessing more than 5
percent of the total combined voting power of all stock of the Company), or (iv)
an owner of 1 percent or more of the outstanding stock of the Company (or stock
possessing more than 1 percent of the total combined voting power of all stock
of the Company) whose compensation from the Company for the Plan Year is more
than $150,000. Any Employee who is not a Key Employee shall be deemed a Non-Key
Employee.
(d) "Testing Period" means, in respect of any Participant, the
period of consecutive years (not exceeding five (5), and disregarding any year
of Employment in which ended a Plan Year for which the provisions of this
Article 16 were not applicable, any year of Employment completed in a Plan Year
beginning before January 1, 1984, and any year that begins after the close of
the last Plan Year for which the provisions of this Article 16 were applicable)
during which the Participant had the greatest aggregate compensation from the
Company.
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ARTICLE 17
LIMITATIONS OF ANNUAL ADDITIONS
17.1 Limitation on Annual Additions. Notwithstanding anything contained
herein, the Annual Additions to the Accounts of any Participant shall not exceed
the lesser of $30,000 (or such other dollar amounts which result from
cost-of-living adjustments determined as of each January 1 of the Plan Year and
as issued under Treasury Regulations pertaining to Section 415(d) of the Code)
or 25% of the Participants' total compensation earned during the Plan Year.
If the Annual Additions to a Participant's Accounts must be
reduced under this Section, the Committee shall determine the method by which
contributions shall be altered in order that this limitation shall not be
exceeded.
In the case of a Participant who is a participant in a qualified
defined benefit plan maintained by a Company, the sum of the "defined benefit
plan fraction" and the "defined contribution plan fraction" in any Plan Year
shall not exceed 1.0. For purposes of applying the limitations of this Section
17.1, the following rules shall apply:
(a) the terms "defined benefit plan fraction" shall mean a
fraction, the numerator of which is the annual projected benefit payable under
the defined benefit plan, determined without regard to the limitation imposed by
Section 415(b)(1) of the Code, and the denominator of which is the lesser of:
(i) the product of 1.25 times the greater of the dollar limitation in effect
under Section 415(b)(1)(B) of the Code for such year or the Participant's
accrued benefit (not in excess of the dollar limitation then in effect for the
Plan) as of the close of the last Plan Year before January 1, 1983; or (ii) the
product of 1.4 multiplied by the amount which may be taken into account under
Section 415(b)(1)(B) for the Code with respect to the Participant' provided that
the defined benefit plan fraction shall never be deemed to exceed 1.0.
(b) the term "defined contribution plan fraction" shall mean a
fraction, the numerator of which is the sum of the Annual Additions to the
Participant's Accounts under the Company for any Plan Year, and all prior Plan
Years, and the denominator of which is the sum of the lesser of the following
amounts determined for such Plan Year and each prior year of service with the
Company: (i) the product of 1.25 multiplied by the dollar limitation in effect
under Section 415(c)(1)(A) of the Code for such year (determined without regard
to Section 415(c)(6) of the Code); or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under Section 415(c)(1)(B) of the Code
with respect to such Participant for such year, and taking into account the
transition rules for years ending prior to January 1, 1983 prescribed under
ERISA and the Code, including the rules of Section 415(e)(3) of the Code, as
amended by TEFRA, unless the Committee elects to apply the rules of Section
415(e)(6) of the Code, as amended by TEFRA.
In the event the limitations prescribed above are exceeded with respect
to any Participant who participates in a qualified defined benefit plan
maintained by a Company, the Participant's benefit under the defined benefit
plan shall first be adjusted before making any adjustments under the Plan.
For purposes of this Section, all qualified defined benefit plans
maintained by a Company or
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Associated Company shall be treated as a single plan, and all qualified defined
contribution plans maintained by a Company or Associated Company shall be
treated as a single plan. Associated Company shall have the meaning set forth in
Section 1.7.
In the event that the limitations with respect to Annual Additions
prescribed hereunder are exceeded with respect to any Participant and such
excess arises as a consequence of (1) the allocation of forfeitures (2) a
reasonable error in estimating a Participant's annual Compensation, (3) a
reasonable error in determining the amount of elective deferrals (within the
meaning of section 402(g)(3) of the Code) that may be made with respect to any
individual under the limits of Section 415 of the Code, or (4) other limited
facts and circumstances that the Commissioner finds justify the availability of
such remedy, the excess amounts will not be considered as Annual Additions in
that limitation Year if the excess amounts: (A) are allocated and reallocated to
other Participants pursuant to Treasury Reg. ss. 1.415-6(b)(6)(i); (B) are used
to reduce Employer Matching Contributions for the next Limitation Year and
succeeding Limitation Years, if necessary, pursuant to Treasury Reg. ss.
1.415-6(b)(6)(ii); (C) are held unallocated in a suspense account for the
Limitation Year and allocated and reallocated to all Participants in the next
Limitation Year, pursuant to Treasury Reg. ss. 1.415.6(b)(6)(iii); or (D) are
distributed or returned to the Participant pursuant to Treasury Reg. ss.
1.415-6(b)(6)(iv).
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ARTICLE 18
ESOP STOCK
Notwithstanding anything in the Plan to the contrary, the following
provisions shall apply to the common shares of Summit Bancorp. held by the Plan
as the result of the merger into the Plan of the Summit Bancorp Employee Stock
Ownership Plan, formerly the Collective Federal Savings Bank Employee Stock
Ownership Plan ("Collective ESOP"), which occurred as of March 13, 1998.
18.1 ESOP Definitions. For purposes of this Article, the following
definitions shall apply:
(a) "ESOP Loan" shall mean any loan or other extension of credit
the proceeds of which are used by the Trustee, or were used by the trustee of
the Collective ESOP, to finance the acquisition of ESOP Stock (or stock for
which ESOP Stock was substituted), or to refinance an ESOP Loan.
(b) "ESOP Loan Contributions" shall mean any contribution by the
Company which shall be used to fund the payment of any ESOP Loan.
(c) "ESOP Stock" shall mean Company Stock held by the Plan which
was previously held by the Collective ESOP.
(d) "ESOP Suspense Account" shall mean the account under which
ESOP Stock purchased with an ESOP Loan is held until released and allocated to
Participants pursuant to this Article 18.
18.2 ESOP Loans.
(a) Terms. The ESOP Trustee may purchase ESOP Stock with the
proceeds of an ESOP Loan. The terms of each ESOP Loan must, at the time the loan
is made, be at least as favorable to the Plan as the terms of a comparable loan
resulting from arm's length negotiations between independent parties. Each ESOP
Loan shall be for a specific term and shall bear a reasonable rate of interest.
An ESOP Loan may be secured by a pledge of the ESOP Stock acquired with the
proceeds of such ESOP Loan (or acquired with the proceeds of a prior ESOP Loan
which is being refinanced). No other Plan assets may be pledged as collateral
for an ESOP Loan, and no lender shall have recourse against Trust assets other
than (i) collateral given for the loan, (ii) ESOP Loan Contributions, and (iii)
earnings attributable to such collateral and the investment of such ESOP Loan
Contributions. An ESOP Loan shall not be payable on demand except in the event
of default. In the event of default of an ESOP Loan, the value of Plan assets
transferred in satisfaction of the loan shall not exceed the amount of default.
If the lender is a disqualified person within the meaning of Code Section
4975(e)(2), the ESOP Loan must provide for a transfer of Plan assets on default
only upon and to the extent of the failure of the Plan to meet the payment
schedule of the ESOP Loan. Payments of principal and/or interest on any ESOP
Loan shall be made by the Trustee only from ESOP Loan Contributions, from
earnings attributable to such ESOP Loan Contributions, from any cash dividends
received by the Plan with respect to ESOP Stock acquired with the proceeds of an
ESOP Loan, from the proceeds of an ESOP Loan and, if permitted by the Trustee,
from any cash dividends received by the Plan with respect to ESOP Stock held in
the ESOP portion of this Plan which was acquired other than
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with the proceeds of an ESOP Loan. The Trustee shall enter into any loan
transaction only in conformity with the provisions hereof.
(b) Qualification as ESOP. The ESOP portion of the Plan is
designed to invest primarily in "qualifying employer securities" as defined in
Code regulation ss. 54.4975-12, and to meet the qualification requirements of
Code section 4975(e)(7).
(c) Proceeds. ESOP Loan proceeds shall be used by the Trustee
within a reasonable time after receipt to acquire ESOP Stock or to repay a prior
ESOP Loan. In acquiring ESOP Stock, the Trustee shall take all appropriate and
necessary measures to ensure that the Plan pays no more than "adequate
consideration" (within the meaning of Section 3(18) of ERISA) for such
securities. All ESOP Stock acquired with the proceeds of an ESOP Loan shall be
placed in an ESOP Suspense Account established by the ESOP Trustee of the Plan.
To the extent required for the purpose of pledging such ESOP Stock as collateral
for the ESOP Loan, the shares held as collateral in the ESOP Suspense Account
may be physically segregated from other Plan assets. Any pledge of ESOP Stock
must provide for the release of the shares so pledged as payments on the ESOP
Loan are made by the Trustee and such securities are allocated to Participants.
(d) Puts, Calls, etc. Except as otherwise provided in Section
409(1) of the Code and regulations promulgated thereunder, no ESOP Stock
purchased with the proceeds of an ESOP Loan shall be subject to any put, call or
other option or any buy-sell or similar agreement while held by and when
distributed from the Plan, whether or not the Plan constitutes an "employee
stock ownership plan" within the meaning of Section 4975(e)(7) of the Code at
such time and whether or not the ESOP Loan has been repaid at such time.
(e) Suspense Account. All ESOP Stock acquired with the proceeds
of an ESOP Loan shall initially be credited to the ESOP Suspense Account,
whether or not such shares are pledged to a creditor to secure the ESOP's
obligations arising from such transaction. ESOP Stock acquired by the Plan as a
result of the merger into the Plan of the Collective ESOP shall be credited to
the ESOP Suspense Account only to the extent such ESOP Stock was held in a
suspense account pursuant to the Collective ESOP. The ESOP Suspense Account
shall be maintained as a subaccount within the Plan.
(f) Amortization Sources. The Company shall from time to time
make ESOP Loan Contributions to the Trust in accordance with the terms of the
Plan. ESOP Loan amortization payments shall be made by the Trustee from the
following sources:
(i) Dividends on ESOP Stock held in the ESOP Suspense Account;
(ii) Dividends on other ESOP Stock acquired with the proceeds of
an ESOP Loan;
(iii) ESOP Loan Contributions which must be made when an ESOP
Loan payment is due which is not satisfied by (a) or (b) above;
and
(iv) In the event of a sale or other disposition of ESOP Stock or
other assets held in the ESOP Suspense Account, the proceeds from
such sale or other disposition.
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(g) Release and Allocation.
(i) Release. As soon as practicable after each ESOP Loan
amortization payment is made, a number of shares of ESOP Stock
acquired with the proceeds of such ESOP Loan and held in the ESOP
Suspense Account shall be released from the ESOP Suspense
Account. The total number of shares so released shall equal the
number of shares of ESOP Stock held in the ESOP Suspense Account
with respect to such ESOP Loan immediately prior to the release
multiplied by a fraction. The numerator of the fraction shall be
the amount of principal and interest paid by the Plan on such
ESOP Loan in such loan amortization payment. The denominator of
the fraction shall be the sum of the numerator plus the principal
and interest to be paid on such ESOP Loan for all future
amortization payments. The number of future payments under such
ESOP Loan must be definitely ascertainable and must be determined
without taking into account any possible extensions or renewal
periods. If the effective interest rate under the ESOP Loan is
variable, the interest to be paid in future periods must be
computed by using the interest rate applicable as of the due date
of the current amortization payment. The shares that are released
from the ESOP Suspense Account pursuant to this Section
18.2(g)(i) shall be allocated to Participants' ESOP Accounts, in
the manner specified in Sections 3.3, 4.1 and 18.2(g)(ii) hereof.
(ii) Dividend Allocation. As soon as practicable following each
ESOP Loan amortization payment made in whole or in part with
dividends on ESOP Stock and the related calculation of the shares
of ESOP Stock that are released from the ESOP Suspense Account as
a result of such payment, a portion of the shares so released
shall be transferred to each Participant's individual ESOP
Account as appropriate to obtain the result that each
Participant's individual ESOP Account will be credited with
shares of ESOP Stock with a fair market value equal to the amount
of the cash dividend paid on shares allocated to each
Participant's individual ESOP Account. Any quarterly dividends
paid on ESOP Stock shall be deemed to be attributable to ESOP
Stock in a Participant's ESOP Account provided such ESOP Stock is
allocated to such Participant's ESOP Account as of the last day
of such quarter. The number of shares so transferred to each
Participant's individual ESOP Account to replace the cash
dividends paid on the shares of ESOP Stock allocated to such
Participant's individual ESOP Account shall equal the total
number of shares released with respect to such ESOP Loan
amortization payment multiplied by a fraction. The numerator of
the fraction shall be the amount of cash dividends paid on shares
of ESOP Stock acquired with the proceeds of an ESOP Loan and held
in the Participant's individual ESOP Account, as the case may be,
on the dividend record date, which dividends were used by the
Trustee in making the ESOP Loan amortization payment. The
denominator of the fraction shall be the amount of the fair
market value of the total number of shares released as a result
of the ESOP Loan amortization payment. The value of such
transferred shares shall be allocated to each Participant's
individual ESOP Account as soon as practicable on a pro rata
basis in accordance with the number of shares in his individual
account on the dividend record date. For purposes of this Section
18.2, the fair market value of ESOP stock shall be, at any
relevant time, its market vaue as determined in accordance with
Section 5.1 hereof.
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(iii) Match Allocation. If not sooner transferred, all shares of
ESOP Stock that have been released from the ESOP Suspense Account
as a result of ESOP Loan amortization payments made during a
month that have not and will not be transferred pursuant to
Section 18.2(g)(ii) shall be transferred to the appropriate ESOP
Account pursuant to this Section 18.2(g)(iii) as soon as
practicable following the end of the month. Such shares of ESOP
Stock shall be applied to satisfy the Company's obligations to
Participants under Sections 3.3 and 4.1 hereof. The shares of
ESOP Stock shall be applied to satisfy the Company's obligations
under Sections 3.3 and 4.1 for the month in which the shares were
released except that if shares have not been allocated to a
Participant's individual accounts in satisfaction of the
Company's obligations under Sections 3.3 and 4.1 hereof, for a
month prior to the month in which the shares were released, such
shares shall be applied in satisfaction of such prior month
allocations.
18.3 Voting and Tendering of ESOP Stock. Participants shall have the
same rights with respect to the voting and tendering of ESOP Stock as they have
with respect to Company Stock pursuant to Section 4.4 hereof. Shares of ESOP
Stock which are held in the ESOP Suspense Account, and shares of ESOP Stock
allocated to Participants' accounts, for which no directions on either voting or
tendering are timely received by the Trustee, shall be subject to the same
provisions as Undirected Shares, as that term is defined in Section 4.4 hereof.
18.4 Annual Additions. If no more than one-third (1/3) of the ESOP Loan
Contributions to the Plan for any Plan Year is allocated to the accounts of
Participants who are Highly Compensated Employees, a Participant's Annual
Additions, as defined in Section 1.6 hereof, shall not include forfeitures of
ESOP Stock acquired with the proceeds of an ESOP Loan or ESOP contributions
which are deductible under Code Section 404(a)(9)(B) and charged against such
Participant's account.
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APPENDIX A
Notwithstanding any other provision of the Plan, this Appendix A
shall apply to any individual who becomes an Employee of the Company as a result
of the Company's acquisition of the New Canaan Bank and Trust Company (the
"Former New Canaan Employees"). Such Former New Canaan Employees who were
previously participants in the New Canaan Bank & Trust Qualified Retirement and
401(k) Benefit Plan (the "New Canaan Plan") may receive distributions of that
portion of their Plan account which came into the Plan as a result of the merger
of the Plan with the New Canaan Plan in the following payment forms, which are
in addition to those described in the Plan:
(1) Life Annuity Option -Monthly benefit payments for as long as the
Participant lives. No death benefits are payable after death.
(2) Contingent Annuitant Option -Reduced monthly benefit payments for
as long as the Participant lives. Upon death, the Participant's
beneficiary will receive 100%, 66-2/3%, or 50% (the Participant chooses
the applicable percentage) of the monthly amount that was being paid to
the Participant.
(3) Life Annuity with Payments Certain Option - Monthly benefit
payments for as long as the Participant lives. If the Participant dies
before receiving 60 or 120 monthly payments (the Participant chooses
the number), the Participant's beneficiary will receive the remainder
of the payments.
(4) Joint and Survivor Annuity Option - Monthly benefit payments to the
Participant and the Participant's beneficiary. When the Participant or
the Participant's beneficiary dies, the survivor will continue to
receive for life 100%, 66-2/3% or 50% (the Participant chooses the
applicable percentage) of the monthly amount that was being paid to the
Participant and the Participant's beneficiary.
(5) Full Cash Refund Option - Monthly benefit payments for as long as
the Participant lives. When the Participant dies, the Participant's
beneficiary will receive a lump-sum payment equal to the amount
remaining from the purchase of this benefit
(6) Installment Option - Equal monthly payments over a period selected
by the Participant, which cannot exceed the life expectancy of the
Participant and the Participant's beneficiary. If the Participant dies
before receiving all of the payments, the Participant's beneficiary
will receive the remainder of the payments. If the monthly installment
is less than $100, the Participant may not elect this option.
Married Participants will need their spouse's written
consent, as described below, to select Options 1-4.
Married Participants will need their spouse's written consent, as
described below, to select Options 5 and 6 only if they wish to name a
beneficiary other than their spouse.
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The Company shall fulfill its obligation to provide benefits in a form
described under this Appendix A by the purchase of an applicable annuity or
installment option from Allmerica Life Assurance Company ("Allmerica") based
upon Allmerica's then current annuity rates.
Spousal Consent Requirements: The following requirements must be met in
order for the spouse's consent to be effective in connection with the
Participant's choice of distribution option, if applicable: (A) the
Participant's spouse must consent in writing to the election; (B) with respect
to Option 5 or 6, the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may not be changed
without spousal consent (or the spouse expressly permits designations by the
Participant without any further spousal consent); (C) the spouse's consent
acknowledges the effect of the election; and (D) the spouse's consent is
witnessed by a Plan representative or notary public. If it is established to the
satisfaction of a Plan representative that there is no spouse or that the spouse
cannot be located, a waiver will be deemed a qualified election.
Any consent by a spouse obtained under this provision (or establishment
that the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse. A consent that permits designations by the Participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse at any
time before the commencement of benefits. The number of revocations shall not be
limited.
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Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Summit Bancorp.
We consent to the use of our report dated January 18, 2000, relating to the
consolidated balance sheets of Summit Bancorp and subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of income,
shareholders equity and cash flows for each of the years in the three-year
period ended December 31, 1999, which report appears in the December 31, 1999
Annual Report on Form 10-K of Summit Bancorp, incorporated by reference in the
Registration Statement on Form S-8 of Summit Bancorp. We also consent to the
reference to our firm under the caption "Interests of Named Experts and
Counsel."
/s/ KPMG LLP
Short Hills, New Jersey
May 16, 2000
Exhibit 23(c)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Summit Bancorp.
We consent to the use of our report dated June 18, 1999, relating to the
statement of net assets available for the benefits of the Summit Bancorp Savings
Incentive Plan as of December 31, 1998 and 1997 and the related statements of
changes in net assets available for the benefits for the years ended December
31, 1998 and 1997, which report appears in the December 31, 1998 Annual Report
on Form 11-K of Summit Bancorp Savings Incentive Plan, incorporated by reference
in the Registration Statement on Form S-8 of Summit Bancorp. We also consent to
the reference to our firm under the caption "Interests of Named Experts and
Counsel."
/s/ KPMG LLP
Short Hills, New Jersey
May 16, 2000
