As filed with the Securities and Exchange Commission on July 11,
1994
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________________
CRESTAR FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Charter)
Virginia 54-0722175
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
919 East Main Street
Richmond, Virginia 23219
804-782-5000
(Address of principal executive office, including zip code)
CRESTAR MERGER PLAN
FOR TRANSFERRED EMPLOYEES
(Full title of the Plan)
John C. Clark, III, Esq.
Secretary and General Counsel
Crestar Financial Corporation
919 East Main Street
Richmond, Virginia 23219
804-782-5000
(Name, address and telephone number including, area code, of
agent for service)
With copies to:
Lathan M. Ewers, Jr., Esq.
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
804-788-8200
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Proposed Amount of
securities to be maximum maximum registra-
to be registered offering aggregate tion fee
registered price offering
per share(1) price(1)
Common Stock, 300,000 $45.4375 $13,631,250 $4,701
$5 par value shares
Preferred 300,000 N/A N/A N/A
Share Purchase rights
Rights(2)
(1) Estimated solely for the purpose of computing the
registration fee. This amount was calculated pursuant to Rule
457(c) on the basis of $45.4375 per share, which was the average
of the high and low prices of the Common Stock as reported on the
New York Stock Exchange on July 6, 1994, as reported in the
Wall Street Journal.
(2) The Rights to purchase Participating Cumulative Preferred
Stock, Series C will be attached to and will trade with shares of
the Common Stock of the Company.
In addition, pursuant to Rule 416(c) under the Securities Act
of 1933, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the
employee benefit plan identified above.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Not required to be filed with the Securities and
Exchange Commission (the "Commission").
Item 2. Registrant Information and Employee Plan Annual
Information.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Crestar Financial
Corporation (the "Company") with the Commission (file No. 1-7083)
are incorporated herein by reference and made a part hereof: (i)
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993; (ii) the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994; and (iii) the
description of the Company's Common Stock (the "Common Stock")
contained in the Company's registration statement on Form
8-A filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendment or report
filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
the Prospectus and prior to the filing of a post-effective
amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in the Prospectus
and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of the Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that
is incorporated by reference herein modifies or supersedes such
earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of the Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Directors and officers of the Company may be
indemnified against liabilities, fines, penalties, and
claims imposed upon or asserted against them as provided in the
Virginia Stock Corporation Act and the Company's Restated
Articles of Incorporation. Such indemnification covers all costs
and expenses reasonably incurred by a director or officer. The
Board of Directors, by a majority vote of a quorum of
disinterested directors or, under certain circumstances,
independent counsel appointed by the Board of Directors,
must determine that the director or officer seeking
indemnification was not guilty of willful misconduct or a knowing
violation of the criminal law. In addition, the Virginia
Stock Corporation Act and the Company's Restated Articles of
Incorporation may under certain circumstances eliminate the
liability of directors and officers in a shareholder or
derivative proceeding.
If the person involved is not a director or officer of
the Company, the Board of Directors may cause the Company to
indemnify to the same extent allowed for directors and officers
of the Company such person who was or is a party to a proceeding,
by reason of the fact that he is or was an employee or agent of
the Company, or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise.
The Company has in force and effect a policy insuring
the directors and officers of the Company against losses which
they or any of them shall become legally obligated to pay for
reason of any actual or alleged error or misstatement or
misleading statement or act or omission or neglect or breach of
duty by the directors and officers in the discharge of their
duties, individually or collectively, or any matter claimed
against them solely by reason of their being directors or
officers, such coverage being limited by the specific terms and
provisions of the insurance policy.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No.
4.1 Restated Articles of Incorporation of the Company
(incorporated herein by reference from
Exhibit 3(a) of the Company's Annual Report on Form 10-K
for the year ended December 31, 1993 (Commission File No.
1-7083)).
4.2 Bylaws of the Company (incorporated herein by reference
from Exhibit 3(b) of the Company's Annual Report on Form
10-K for the year ended December 31, 1993 (Commission
File No. 1-7083)).
4.3 Rights Agreement dated June 23, 1989, between the Company
and Mellon Bank, N.A., as Rights Agent (Incorporated
herein by reference from Exhibit 4.1 of the Company's
current report on Form 8-K dated June 23, 1989).
4.4 Crestar Merger Plan For Transferred Employees.
5.1 Opinion of Hunton & Williams as to the legality of the
securities being registered.
5.2 The Company will submit the Crestar Merger Plan for
Transferred Employees to the Internal Revenue
Service in a timely manner and will make all changes
required by the Internal Revenue Service in order
to qualify such plan.
23.1 Consent of Hunton & Williams (included in the opinion
filed as Exhibit 5.1 to the Registration
Statement).
23.2 Consent of KPMG Peat Marwick.
25 Power of Attorney for Officers and Directors (included on
signature page).
Item 9. Undertakings
(a) The undersigned registrant hereby
undertakes:
1. To file, during any period in which offers
or sales are made, 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, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any
facts or events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information
with respect to the plan of distribution not previously disclosed
in the registration statement or any material change in such
information in the registration statement; provided, however,
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes
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 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's
annual report pursuant to 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.
(c) 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 under Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against 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
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.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Richmond, Commonwealth of Virginia, on July 11, 1994.
CRESTAR FINANCIAL CORPORATION
(Registrant)
By: s/ John C. Clark, III
John C. Clark, III,
Corporate Senior Vice
President, General Counsel
and Secretary
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities indicated on July 11, 1994.
Each of the directors and/or officers of Crestar Financial
Corporation whose signature appears below hereby appoints John C.
Clark, III, Lathan M. Ewers, Jr. and David M. Carter, and each of
them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below and to file with
the Commission, any and all amendments, including post-effective
amendments to this registration statement, making such changes in
the registration statement as appropriate, and generally to do
all such things in their behalf in their capacities as officers
and directors to enable Crestar Financial Corporation to comply
with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.
Signature Title
s/ Richard G. Tilghman Chairman of the Board and Chief
Richard G. Tilghman Executive Officer and Director
(Principal Executive Officer)
s/ James M. Wells, III President and Director
James M. Wells, III
s/ Patrick D. Giblin Vice Chairman of the Board and Chief
Patrick D. Giblin Financial Officer and Director
(Principal Financial and Accounting
Officer)
s/ Richard M. Bagley Director
Richard M. Bagley
Director
J. Carter Fox
s/ Bonnie Guiton Hill Director
Bonnie Guiton Hill
s/ Gene A. James Director
Gene A. James
s/ H. Gordon Leggett, Jr. Director
H. Gordon Leggett, Jr.
s/ Charles R. Longsworth Director
Charles R. Longsworth
s/ Patrick J. Maher Director
Patrick J. Maher
s/ Frank E. McCarthy Director
Frank E. McCarthy
s/ G. Gilmer Minor, III Director
G. Gilmer Minor, III
Director
Gordon F. Rainey, Jr.
Director
Frank S. Royal, M.D.
s/ Eugene P. Trani Director
Eugene P. Trani
s/ William F. Vosbeck Director
William F. Vosbeck
Director
L. Dudley Walker
Director
Karen Hastie Williams
SIGNATURES
The Plan. Pursuant to the requirements of the Securities
Act of 1933, Crestar Bank, as trustee for the Crestar Merger Plan
for Transferred Employees, has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Richmond, Commonwealth
of Virginia, on July 11, 1994.
CRESTAR BANK, as trustee
By: s/ Thomas P. Hogan
Name: Thomas P. Hogan
Title: Group Executive
Vice President
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
EXHIBITS
filed with
REGISTRATION STATEMENT
on
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
____________________
CRESTAR MERGER PLAN FOR
TRANSFERRED EMPLOYEES
(full title of the plan)
EXHIBIT INDEX
Exhibit No. Description
4.1 Restated Articles of Incorporation of
the Company (incorporated herein by
reference from Exhibit 3(a) of the
Company's Annual Report on Form 10-K
for the year ended December 31, 1993
(Commission File No. 1-7083)).
4.2 Bylaws of the Company (incorporated
herein by reference from Exhibit 3(b) of
the Company's Annual Report on Form
10-K for the year ended December 31,
1993 (Commission File No. 1-7083)).
4.3 Rights Agreement dated June 23, 1989,
between the Company and Mellon Bank,
N.A., as Rights Agent (Incorporated
herein by reference from Exhibit 4.1 of
the Company's current report on Form 8-K
dated June 23, 1989).
4.4 Crestar Merger Plan For Transferred
Employees.
5.1 Opinion of Hunton & Williams as to the
legality of the securities being
registered.
5.2 The Company will submit the Crestar
Merger Plan for Transferred Employees to
the Internal Revenue Service in a timely
manner and will make all changes
required by the Internal Revenue Service
in order to qualify such plan.
23.1 Consent of Hunton & Williams (included
in the opinion filed as Exhibit 5.1 to
the Registration Statement).
23.2 Consent of KPMG Peat Marwick.
25 Power of Attorney for Officers and
Directors (included on signature page).
<PAGE>
Exhibit 4.4
CONTINENTAL FEDERAL SAVINGS BANK
INVESTMENT SAVINGS PLAN
Amended and Restated as of July 1, 1989
and further
Amended as of June 24, 1994 to be the
CRESTAR MERGER PLAN
FOR TRANSFERRED EMPLOYEES
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .i
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . .1-1
ARTICLE 2 PLAN PARTICIPATION. . . . . . . . . . . . . . . . .2-1
ARTICLE 3 CONTRIBUTIONS . . . . . . . . . . . . . . . . . . .3-1
ARTICLE 4 OTHER PROVISIONS CONCERNING CONTRIBUTIONS . . . . .4-1
ARTICLE 5 INVESTMENT OPTIONS. . . . . . . . . . . . . . . . .5-1
ARTICLE 6 VESTING . . . . . . . . . . . . . . . . . . . . . .6-1
ARTICLE 7 ELIGIBILITY FOR BENEFITS. . . . . . . . . . . . . .7-1
ARTICLE 8 BENEFIT PAYMENTS TO PARTICIPANTS. . . . . . . . . .8-1
ARTICLE 9 DEATH BENEFITS. . . . . . . . . . . . . . . . . . .9-1
ARTICLE 10 CLAIMS PROCEDURES. . . . . . . . . . . . . . . . 10-1
ARTICLE 11 TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . 11-1
ARTICLE 12 TRUSTEE; TRUST FUND. . . . . . . . . . . . . . . 12-1
ARTICLE 13 FIDUCIARIES, PLAN ADMINISTRATION . . . . . . . . 13-1
ARTICLE 14 PROVISIONS CONCERNING SPONSOR AND EMPLOYERS. . . 14-1
ARTICLE 15 AMENDMENTS, TERMINATION AND MERGER . . . . . . . 15-1
ARTICLE 16 MISCELLANEOUS. . . . . . . . . . . . . . . . . . 16-1
SIGNATURES
INTRODUCTION
On May 14, 1993, Crestar Financial Corporation and Crestar
Bank became successors to CFS Financial Corporation and
Continental Federal Savings Bank, respectively, and Crestar
Financial Corporation assumed sponsorship of the Continental
Federal Savings Bank Investment Savings Plan (the "CFSB Savings
Plan"). Effective as of the close of business on July 2, 1993,
the CFSB Savings Plan was frozen as to participation and all
401(k), Matching, and Rollover Contributions under the Plan
were suspended.
The restated Plan set forth in this document reflects all
amendments adopted to the CFSB Savings Plan since the last
restatement and further amends the Plan to comply with changes in
the law up through the Omnibus Reconciliation Act of 1993. In
addition, the Sponsor intends that, after appropriate notice to
Participants, this Plan will be maintained as a frozen plan to
which no additional contributions will be made, except that
account balances may be transferred to this Plan as a result of
another qualified plan merging into this Plan. The CFSB Savings
Plan is further amended to allow for investments in employer
stock, and finally, the Plan is renamed the Crestar Merger Plan
for Transferred Employees to reflect the Sponsor's intent that
this Plan be maintained as a plan into which other plans of other
entities acquired by Crestar Financial Corporation or any of its
affiliated corporations may be merged.
ARTICLE 1
DEFINITIONS
1.1 Account means the assets or value of the Trust Fund
allocated to a Participant. A Participant may have several
Accounts in this Plan. When Account is used without
modification, it means the sum of all of the Participant's
Accounts.
SEE ALSO After-Tax Account, Basic Account, 401(k)
Account, Matching Account, Qualified Nonelective Account, Pension
Account, Profit-Sharing Account, and Rollover Account.
1.2 Active Participant means a Participant who is a Covered
Employee.
1.3 Actual Deferral Percentage or ADP is defined in Plan
section 3.6.
1.4 Administrator means the person or entity responsible for
the Plan's general administration and operation as described in
Plan article 13.
1.5 After-Tax Account means that portion of a Participant's
Account attributable to his contributions made on an after-tax
basis under a Predecessor Plan other than the Former Plan.
1.6 Alternate Payee means a Participant's Spouse, former
Spouse, child, or other dependent 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.
1.7 Annual Addition is defined in Plan section 4.3.
1.8 Annuity Starting Date means the first day of the first
period for which an amount is payable under the Plan as an
annuity or in any other form.
1.9 Average Contribution Percentage or ACP is defined in Plan
section 3.8.
1.10 Basic Account means that portion of a Participant's
Account attributable to Basic Contributions. Basic Contribution
means the Employer discretionary contribution described in Plan
article 3.
1.11 Beneficiary means one or more persons or entities
entitled to receive the Participant's undistributed
vested Account balance remaining at his death as determined in
accordance with Plan article 9.
1.12 Board means the Board of Directors of the Sponsor unless
the context clearly indicates a reference to the board of
directors of another entity. Whenever the Board is not meeting,
any action of the Board authorized or permitted under this Plan
or the Trust Agreement may be taken by the Sponsor's Executive
Committee or by any officer of the Sponsor or a Related Company
to whom the Board has delegated authority to take such action on
its behalf.
1.13 Break in Service means, effective July 3, 1993, for any
Employee who is an Active Participant on or after that date, any
Plan Year beginning on or after July 1, 1993, in which an
Employee does not complete at least one Hour of Service. For
periods prior to July 1, 1993, Break in Service mean any
Computation Period in which an Employee does not complete more
than 500 Hours of Service.
1.14 Code means the Internal Revenue Code of 1986, as amended
at the relevant time.
1.15 Committee means, effective May 14, 1993, the Benefits
Administrative Committee described in Plan article 13.
1.16 Computation Period means for purposes of vesting, the
Plan Year, and for purposes of eligibility to participate, the
12-month period beginning on the date an individual performs an
Hour of Service as an Employee and each Plan Year beginning after
such date.
1.17 Compensation means those items of an Employee's
remuneration from an Employer which are included in calculating
the Contributions and other amounts to his credit under this
Plan. For this Plan, Compensation means the Employee's total
taxable compensation during the relevant period, plus any amounts
applied by the Employer for that period under this Plan or any
other employee benefit plan pursuant to Code Sections 125,
402(a)(8), 402(h)(1)(B) and 403(b) to provide benefits, on a
pre-tax basis, for the Employee pursuant to a Salary Reduction
Election or other agreement between the Employer and the Employee
which, but for that agreement, would have been paid to the
Employee as salary or wages, plus all director fees paid to him
by an Employer.
(a) For all Plan Years beginning before January 1,
1989, Compensation exceeding $200,000 for any Plan Year for any
Employee shall be ignored if this Plan is a Top-Heavy Plan for
that Plan Year.
(b) For Plan Years beginning after December 31, 1988,
and before January 1, 1994, the annual Compensation of each
Participant which may be taken into account for determining all
benefits under the Plan for any Plan Year must not exceed
$200,000. This limitation shall be adjusted by the Secretary of
the Treasury at the same time and in the same manner as under
Code Section 415(d), except that the dollar increase in effect on
January 1 of any calendar year is effective for any Plan Year
beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective January 1,1990.
(c) For Plan Years beginning after December 31, 1993,
the annual Compensation of each Participant which may be taken
into account for determining all benefits under the Plan for any
Plan Year must not exceed $150,000, as adjusted for
cost-of-living increases in accordance with Code Section
401(a)(17). The cost-of-living adjustment in effect for a
calendar year applies to any determination period beginning in
such calendar year.
(d) If the Plan determines Compensation for a period
of time that contains fewer than 12 months, the annual
Compensation limit is an amount equal to the otherwise applicable
limit described in subsection (a), (b), or (c) as applicable, for
the calendar year in which the compensation period begins
multiplied by a fraction, the numerator of which is the number of
months in the short determination period, and the denominator of
which is 12.
(e) In determining a Participant's Compensation under
these limits, the Family Member aggregation rules under Code
Section 414(q)(6) shall apply except that Family Members shall
include only the Participant's Spouse and any lineal descendants
who have not reached age 19 before the close of the year. If as
a result of the application of such rules, the adjusted annual
Compensation limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each
such individual's Compensation as determined under this section
prior to the application of this limitation.
(f) If Compensation for any prior determination
period is taken into account in determining a Participant's
allocations for the current Plan Year, the Compensation for such
prior determination period is subject to the applicable annual
limit on Compensation as in effect for that prior period. For
this purpose, in determining allocations in Plan Years beginning
on or after January 1, 1989, the annual Compensation limit for
determination periods beginning before that date is $200,000. In
addition, in determining allocations in Plan Years beginning on
or after January 1, 1994, the annual Compensation limit in effect
for determination periods beginning before that date is $150,000.
1.18 Covered Employee means any Employee except an Employee
listed below:
(a) an Employee who is employed by a Related Company
and is not employed by an Employer;
(b) a leased employee as defined in Code Section
414(n)(2); or
(c) an Employee included in a unit of employees
covered by a collective bargaining agreement (as so determined by
the Secretary of Labor) between employee representatives and an
Employer, if retirement benefits were the subject of good faith
bargaining between such employee representatives and the
Employer, unless such agreement expressly provides for the
inclusion of such persons as Participants in the Plan; or
(d) an Employee who is a non-resident alien who has
no earned income (within the meaning of Code Section 911(b) from
an Employer which constitutes income from sources within the
United States within the meaning of Code Section 861(a)(3).
1.19 Defined Benefit Plan means any plan maintained by an
Employer or Related Company, established and qualified under Code
Section 401, other than a Defined Contribution Plan. A Defined
Benefit Plan that provides a benefit derived from employer
contributions and that is based partly on the balance of a
separate account of a participant is treated as a Defined
Contribution Plan to the extent that benefits are based on that
separate account.
1.20 Defined Contribution Plan means a plan established and
qualified under Code Section 401 which provides for an individual
account for each participant in the plan and for benefits based
solely on the amount contributed to the participants' accounts
and any income, expenses, gains, losses, realized and unrealized
appreciation, and forfeitures which may be allocated to such
accounts.
1.21 Disability means:
(a) effective, June 24, 1994, a condition entitling
a Participant to benefits under the Long-Term Disability Plan
maintained for the benefit of Employees of the Sponsor and its
Related Companies; and
(b) for periods prior to June 24, 1994, under the
Former Plan, Disability means a medically determinable physical
or mental impairment which can be expected to result in death or
be of long-continued or indefinite duration and which prevents
the Participant from engaging in any substantially gainful
employment. The existence of a Disability is to be determined by
the Administrator, based on medical evidence it deems
appropriate. The Administrator may require a disabled
Participant to submit to medical examinations by a licensed
physician (selected by the Administrator) from time to time to
establish his Disability at that time. A Participant's refusal
to submit to those examinations is sufficient grounds for the
Administrator to determine that his Disability does not then
exist.
(c) despite the preceding provisions, a
Participant's qualification for Social Security disability
benefits is sufficient evidence of his Disability for purposes of
this Plan.
1.22 Early Retirement Date is defined in Plan section 7.2
If, however, an earlier early retirement date is specified in any
Predecessor Plan that is merged into this Plan, the Early
Retirement Date shall be such earlier date for Participants who
have accounts transferred from a Predecessor Plan to this Plan.
1.23 Earnings means an Employee's earned income, wages,
salaries, fees for professional services and other amounts
received (without regard to whether an amount is paid in cash)
for personal services actually rendered in the course of
employment with an Employer maintaining the Plan to the extent
that such amounts are includable in gross income (including, but
not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable
plan as described in Treasury regulation Section 1.162-2(c)).
Earnings do not include:
(1) employer contributions to a plan of
deferred compensation to the extent the contributions are not
included in the gross income of the Employee for the taxable year
in which contributed, or Employer contributions under a
simplified employee pension plan, and any distributions from a
plan of deferred compensation;
(2) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by an Employee either becomes freely transferable
or is no longer subject to a substantial risk of forfeiture;
(3) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock
option; and
(4) other amounts which receive special tax
benefits, such as premiums for group term life insurance (but
only to the extent that the premiums are not includible in the
gross income of the Employee), or contributions made by an
Employer (whether or not under a salary reduction agreement)
towards the purchase of an annuity contract described in Code
Section 403(b) (whether or not the contributions are actually
excludible from the gross income of the Employee).
(a) For Limitation Years beginning after December 31,
1991, for purposes of applying the limitations of Plan article 4
with respect to Code Section 415 limitations on contributions and
benefits, Earnings for a Limitation Year means the Earnings
actually paid or made available during such Limitation Year.
(b) For all Plan Years beginning before January 1,
1989, Earnings exceeding $200,000 for any Plan Year for any
Employee shall be ignored if this Plan is a Top-Heavy Plan for
that Plan Year as described in Plan article 11.
(c) For Plan Years beginning after December 31, 1988,
and before January 1, 1994, the annual Earnings of each
Participant which may be taken into account for determining all
benefits under the Plan for any Plan Year must not exceed
$200,000. This limitation shall be adjusted by the Secretary of
the Treasury at the same time and in the same manner as under
Code Section 415(d), except that the dollar increase in effect on
January 1 of any calendar year is effective for any Plan Year
beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective January 1, 1990.
(d) For Plan Years beginning after December 31, 1993,
the annual Earnings of each Participant which may be taken into
account for determining all benefits under the Plan for any Plan
Year must not exceed $150,000, as adjusted for cost-of-living
increases in accordance with Code Section 401(a)(17). The
cost-of-living adjustment in effect for a calendar year applies
to any determination period beginning in such calendar year.
(e) If the Plan determines Earnings for a period of time
that contains fewer than 12 months, the annual Earnings limit is
an amount equal to the otherwise applicable limit described in
subsection (b), (c), or (d) as applicable for the calendar year
in which such determination period begins multiplied by a
fraction, the numerator of which is the number of months in the
short determination period, and the denominator of which is 12.
(f) In determining a Participant's Earnings under these
limits, the Family Member aggregation rules under Code Section
414(q)(6) shall apply except that Family Members shall include
only the Participant's Spouse and any lineal descendants who have
not reached age 19 before the close of the year. If as a result
of the application of such rules, the adjusted annual Earnings
limitation is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such
individual's Earnings as determined under this section prior to
the application of this limitation.
(g) If Earnings for any prior determination period are
taken into account in determining a Participant's allocations for
the current Plan Year, the Earnings for such prior determination
period is subject to the applicable annual limit on Earnings as
in effect for that prior period. For this purpose, in
determining allocations in Plan Years beginning on or after
January 1, 1989, the annual Earnings limit for determination
periods beginning before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or after
January 1, 1994, the annual Earnings limit in effect for
determination periods beginning before that date is $150,000.
1.24 Effective Date means for this amendment and restatement
of the Plan, July 1, 1989, except to the extent that this Plan
expressly designates that a provision in this Plan is to be
effective at an earlier or later date. The original Effective
Plan for the Former Plan is July 1, 1984.
1.25 Employee means an individual who is rendering personal
services to an Employer or a Related Company in the capacity of
an employee under general common law principles or as a sole
proprietor or partner of the Employer or a Related Company.
(a) Employee also includes any leased employee during
periods he renders services to the Employer or a Related Company
after December 31, 1986, and is required by Code Section
414(n)(2) to be considered an Employee of that Employer or
Related Company. Despite the preceding, if such leased employees
constitute less than 20% of the Employer's and any Related
Company's nonhighly compensated work force within the meaning of
Code Section 414(n)(5)(C)(ii), the term Employee shall not
include those leased employees covered by a plan described in
Code Section 414(n)(5) unless otherwise provided by the terms of
this Plan.
(b) Employee status continues during Leave of Absence
and periods during which an employee is entitled to back pay.
(c) Any person serving only as a director or independent
contractor to an Employer or a Related Company is not an
Employee.
1.26 Employer means the Sponsor and any Related Company,
individually or collectively, as applicable, or their successor
which may adopt the Plan for the benefit of some or all of its
Employees. The term Employer refers to all Employers
collectively, as if they were one entity, unless the context
clearly indicates that each Employer is referred to separately.
Prior to May 14, 1993, Employer means Continental Federal Savings
Bank, Commonwealth Investment Mortgage Corporation, Commonwealth
Investment Service Corporation, and Maryland Marine, Inc.
1.27 Entry Date means July 1 and January 1.
1.28 ERISA means the Employee Retirement Income Security Act
of 1974, as amended at the relevant time.
1.29 Excess Aggregate Contribution is defined in Plan section
3.8.
1.30 Excess Deferral is defined in Plan section 3.5.
1.31 Excess 401(k) Contribution is defined in Plan section
3.6.
1.32 Family Member, for Plan Years beginning after December
31, 1986, means a member of the family of a 5% owner or one of
the 10 Highly Compensated Employees paid the greatest Earnings
during the relevant year. For purposes of this section, the term
"family" means, with respect to any Employee, such Employee's
Spouse and lineal ascendants or descendants and the spouses of
such lineal ascendants or descendants. Except as otherwise
specified in regulations, a Family Member is not considered to be
an Employee separate from the Employee whose status under this
Plan causes the individual to be a Family Member.
1.33 Former Plan means the Continental Federal Savings Bank
Investment Savings Plan.
1.34 401(k) Account means that portion of a Participant's
Account attributable to 401(k) Contributions. 401(k)
Contribution means an Employer contribution on behalf of a
Participant equal to the amount by which the Participant has
elected to reduce his Compensation for the Plan Year pursuant to
his Salary Reduction Election. For purposes of any Predecessor
Plan or any other plan containing a cash-or-deferred arrangement
qualified under Code Section 401(k), 401(k) Contribution includes
a Participant's elective deferral under such arrangement.
1.35 Highly Compensated Employee means a highly compensated
active Employee and a highly compensated former Employee.
(a) A highly compensated active employee includes any
Employee who performs services for the Employer during the
determination year and who, during the look-back year:
(1) had Earnings in excess of $75,000 (as
adjusted pursuant to Code Section 415(d));
(2) had Earnings in excess of $50,000 (as
adjusted pursuant to Code Section 415(d)) and was a member of the
top-paid 20% group of employees (based on Earnings for the year);
or
(3) had Earnings in excess of 50% of the dollar
limitation in effect under Code Section 415(b)(1)(A) (relating to
defined benefit plans) and was an officer of the Employer.
A Highly Compensated Employee also includes:
(1) Employees who are both described in the
preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the Employee is one
of the 100 Employees who received the highest Earnings during the
determination year; and
(2) Employees who are 5% owners at any time during
the look-back year or determination year.
(b) If no officer satisfies the Earnings requirement
during either a determination year or look-year, the highest paid
officer for such year shall be treated as a Highly Compensated
Employee. The number of officers taken into account as Highly
Compensated Employees for any year will not exceed the greater of
three or 10% of the total number of Employees (after application
of the Code Section 415(q) exclusions), but no more than 50
officers.
(c) For purposes of this section, the determination year
shall be the Plan Year. The look-back year shall be the 12-month
period immediately preceding the determination year. Earnings
include amounts contributed by the Employer pursuant to a salary
reduction agreement which are not includible in the Employee's
gross income pursuant to Code Section 125, Section 402(a)(8),
Section 402(h)(1)(B), or Section 403(b).
(d) Highly Compensated Employee also includes any former
Employee who separated from service (or was deemed to have
separated, as determined under Treasury regulations) prior to the
determination year, performs no service for the Employer during
the determination year, and was a Highly Compensated active
Employee either for the separation year or any determination year
ending on or after the Employee's 55th birthday. If the former
Employee's separation from service occurred prior to January 1,
1987, he is a Highly Compensated Employee only if he was a 5%
owner or received Earnings in excess of $50,000 during the year
of his separation from service (or the prior year) or any year
ending after his 54th birthday.
(e) If an Employee is, during a Plan Year or the
preceding Plan Year, a Family Member of either a 5% owner who is
an active or former Employee or a Highly Compensated Employee who
is one of the 10 most highly paid Highly Compensated Employees
ranked on the basis of Earnings paid by the Employer during such
year, then the Family Member and such Highly Compensated Employee
shall be aggregated. In such case, the Family Member and such
Highly Compensated Employee shall be treated as a single employee
receiving Compensation, Earnings, and Plan contributions or
benefits equal to the sum of such Compensation, Earnings and
contributions or benefits of the Family Member and such Highly
Compensated Employee.
(f) For purposes of determining whether an Employee is a
Highly Compensation Employee, the determination shall be made on
the basis of Employees of the Employers and Related Companies.
(g) The determination of who is a Highly Compensated
Employee, including the determinations of the number and identity
of the top paid 20% group, the top 100 paid Employees, the number
of officers, and relevant Earnings, must be made in accordance
with Code Section 414(q) and related Treasury regulations.
1.36 Hour of Service means:
(a) Each hour for which an employee is paid, or entitled
to payment, from an Employer for the performance of duties for an
Employer. These hours shall be credited to the employee for the
Computation Period in which the duties are performed.
(b) Each hour for which an employee is paid, or entitled
to payment, by an Employer on account of a period of time during
which no duties were performed (regardless of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty, or approved leave of absence. No more than 501
Hours of Service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in a
single Computation Period).
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an
Employer. The same Hours of Service will not be credited both
under paragraph (a) or (b), as the case may be, and under this
paragraph (c). These hours shall be credited to the employee for
the Computation Period to which the award or agreement pertains,
rather than to the Computation Period in which the award,
agreement or payment is made.
(d) No Hours of Service shall be credited to an Employee
by reason of a payment due or made under a plan solely for the
purpose of complying with applicable workers compensation or
unemployment compensation, or disability insurance laws. No
Hours of Service shall be credited by reason of a payment which
solely reimburses an Employee for medical or medically related
expenses incurred by the Employee. The determination of Hours of
Service for reasons other than the performance of duties and the
crediting of Hours of Service to Computation Periods shall be
made in accordance with Department of Labor regulation Section
2530.200b-2 and (c), which are incorporated herein by reference.
(e) Hours of Service will be credited for employment
with a Related Company. Hours of Service will also be credited
for any individual considered an employee for purposes of this
Plan under Code Section 414(n) or Code Section 414(o). Hours of
Service shall be credited as required under the provisions of the
Family and Medical Leave Act to prevent a Break in Service.
(f) Solely for purposes of determining whether a Break
in Service for participation or vesting has occurred in a
Computation Period, an individual who is absent from work for a
Maternity or Paternity Leave of Absence shall receive credit for
the Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, eight Hours of Service per day
of such absence. The total number of Hours of Service credited
under the preceding sentence shall not exceed 501, and such Hours
of Service must be credited (1) in the Computation Period in
which the absence began if the crediting is necessary to prevent
a Break in Service in that period, or (2) in all other cases, in
the following Computation Period. For purposes of this
subsection, Maternity or Paternity Leave of Absence means an
absence that began on or after December 31, 1984, (1) by reason
of the pregnancy of the individual, (2) by reason of the birth of
a child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of the
child by that individual, or (4) for purposes of caring for such
a child for a period beginning immediately following such child's
birth or placement. Despite the preceding, no credit shall be
given under this subsection unless the Employee furnishes the
Administrator information to establish information to establish
that the absence from work that the absence from work is for the
reasons indicated and the number of days for which there was such
an absence.
(g) Hours of Service will be determined on the basis of
actual hours for which an employee is paid or entitled to
payment.
1.37 Investment Manager means a person or entity that has the
power to acquire and dispose of Plan assets, that acknowledges in
writing that it is a fiduciary with respect to the Plan, and that
is either:
(a) an investment advisor registered under the
Investment Advisors Act of 1940;
(b) a bank as defined in the Investment Advisors Act of
1940; or
(c) an insurance company qualified to manage assets of
retirement plans or perform similar functions under the laws of
more than one state.
1.38 Leave of Absence means absence without pay authorized by
an Employee's Employer without loss of employment status by
reason of injury, illness, business of the Employer, vacation,
any other reason approved by the Employer in a uniform and
nondiscriminatory manner for all Employees under similar
circumstances, or service in the armed forces of the United
States; provided that in the case of service in the armed forces
of the United States, the Employee returns to the employment of
the Employer within the period during which his reemployment
rights as a veteran are protected by law.
1.39 Limitation Year means the Plan Year.
1.40 Matching Account means that portion of a Participant's
Account attributable to Matching Contributions. Matching
Contribution means the Employer contribution based on 401(k)
Contributions as described in Plan article 3 or as provided under
a Predecessor Plan.
1.41 Nonhighly Compensated Employee means an Employee who is
not a Highly Compensated Employee.
1.42 Normal Retirement Age means age 65, except that if any
earlier age is specified in a Predecessor Plan, that earlier age
shall be the Normal Retirement Age for Participants who have
accounts transferred from the Predecessor Plan to this Plan.
1.43 Normal Retirement Date means the first day of the month
coincident with or next following the date a Participant attains
Normal Retirement Age, except that it shall be any earlier date
for Participants who participated in a Predecessor Plan with an
earlier Normal Retirement Date.
1.44 Participant means an eligible Employee who has satisfied
the conditions for membership set forth in Plan article 2 and
whose Account under the Plan has not been fully distributed.
1.45 Pension Account means that portion of a Participant's
Account attributable to his accrued benefit under an employer's
money purchase pension or a defined benefit pension plan which
was all or part of the Participant's accrued benefit under a
Predecessor Plan, which is subsequently merged into this Plan.
1.46 Plan means, effective June 24, 1994, the Crestar Merger
Plan for Transferred Employees, as reflected in this document and
any subsequent amendments. Prior to June 24, 1994, Plan means
the Continental Federal Savings Bank Savings Investment Plan, a
profit sharing plan with a cash-or-deferred arrangement under
Code Section 401(k).
1.47 Plan Year means, effective July 1, 1993, the 12-month
period commencing on January 1 and ending on December 31,
annually, except that the period July 1, 1993 through December
31, 1993, shall be a short plan year of six months. Prior to
July 1, 1993, Plan Year means the 12-month period beginning on
July 1 and ending on the following June 30, annually.
1.48 Predecessor Plan means any other Defined Contribution
Plan, other than a stock bonus plan, which provides for Employer
contributions and which is amended by an Employer to adopt the
terms of this Plan or which is merged into this Plan. Unless the
context indicates otherwise, Predecessor Plan also includes the
Former Plan prior to June 24, 1994.
1.49 Profit Sharing Account means that portion of a
Participant's Account attributable to Profit Sharing
Contributions and forfeitures, if any. Profit Sharing
Contribution means the Employer contribution described in Plan
article 3 or a designated profit sharing contribution under a
Predecessor Plan.
1.50 Qualified Domestic Relations Order means a judgment,
decree, order, or approval of a property settlement agreement,
that:
(1) relates to the provision of child support,
alimony payments, or marital property rights to an Alternate
Payee;
(2) is made pursuant to a state domestic relations
or community property law;
(3) creates or recognizes the right of an Alternate
Payee to receive all or a portion of the benefit payable with
respect to the Participant under this Plan or that assigns to an
Alternate Payee the right to receive all or a portion of the
benefits payable to the Participant under the Plan;
(4) clearly specifies (i) the name and last known
mailing address (if available) of the Participant and the name
and mailing address of each Alternate Payee, unless the
Administrator has reason to know the address independently of the
order; (ii) the amount or percentage of the Participant's
benefits to be paid by the Plan to each Alternate Payee or the
manner in which such amount or percentage is to be determined;
(iii) the number of payments or period to which the order
applies; and (iv) each plan to which the order applies;
(5) does not require the Plan to provide any type
or form of benefit, or any option, not otherwise provided under
the Plan;
(6) does not require the Plan to provide increased
benefits. An order does not require the Plan to provide
increased benefits if the order does not provide for the payment
of benefits in excess of the actuarial equivalent of the benefits
to which the Participant would be entitled in the absence of the
order; and
(7) does not require the payment of benefits to an
Alternate Payee that are required to be paid to another Alternate
Payee under another order determined previously to be a Qualified
Domestic Relations Order.
(a) A Qualified Domestic Relations Order may provide for
payments to begin to an Alternate Payee on or after the date on
which the Participant attains or would have attained the earliest
retirement age (as defined in Code Section 414(p)(4)(B)),
regardless of whether the Participant has separated from service
as of that date. If the Participant dies before that date, the
Alternate Payee is entitled to benefits only if the Order
requires survivor benefits to be paid. In the case of such
Order, the amount to be paid to the Alternate Payee is computed
by using the benefit that would be payable to the Participant if
he had retired on the date on which such payments are to begin,
but taking into account only the actuarially equivalent present
value of benefits actually accrued.
(b) A domestic relations order entered before January 1,
1985, is a Qualified Domestic Relations Order if payment of
benefits pursuant to the order have begun as of such date,
regardless of whether the order satisfies the requirements of
Code Section 414(p). A domestic relations order entered before
January 1, 1985, may be treated as a Qualified Domestic Relations
Order if payment of benefits pursuant to the order have not begun
as of such date, regardless of whether the order satisfies the
requirements of Code Section 414(p).
1.51 Qualified Joint and Survivor Annuity means an immediate
annuity for the life of a Participant with a survivor annuity for
the life of the Participant's Spouse that is not less than 50%
and not more than 100% of the amount of the annuity payable
during the joint lives of the Participant and the Participant's
Spouse and that is the amount of benefit which can be purchased
with the Participant's vested Account balance. The percentage of
the survivor annuity under this Plan shall be 100% for any
Participant who is required to receive a Qualified Joint and
Survivor Annuity under Plan and fails to designate a percentage.
1.52 Qualified Preretirement Survivor Annuity means an
annuity for the life of the Participant's Surviving Spouse which
provides an amount of benefit which can be purchased with the
Participant's vested Account balance as of the applicable
Valuation Date following the Participant's death, provided that
any security interest held by the Plan by reason of a loan
outstanding the Participant for which a valid spousal consent has
been obtain, if necessary, shall reduce the Participant's Account
at his death.
1.53 Qualified Nonelective Account means that portion of a
Participant's Account attributable to Qualified Nonelective
Contributions. Qualified Nonelective Employer Contribution
means the Employer contribution described in Plan article 3.
1.54 Related Company means any entity (other than an
Employer) that belongs to one or more of the following groups to
which an Employer also concurrently belongs:
(a) a member of a controlled group of corporations as
defined in Code Section 1563(a), determined without regard to
Code Section 1563(a)(4) and 1563(e)(3)(C), of which an Employer
is a member according to Code Section 414(b);
(b) an unincorporated trade or business that is under
common control with an Employer as determined according to Code
Section 414(c);
(c) a member of an affiliated service group of which an
Employer is a member according to Code Section 414(m); or
(d) any other entity required to be aggregated with an
Employer pursuant to Code Section 414(o) and applicable
regulations.
For purposes of the provisions of Plan article 4, relating to
Code Section 415 limitations on contributions and benefits,
Related Company also includes a corporation that would be a
Related Company if the phrase "at least eighty percent" in Code
Section 1563(a) read "more than fifty percent" or an
unincorporated trade or business that would be a Related Company
if Code Section 414(c) were construed using the standard of "more
than fifty percent" instead of "at least eighty percent."
1.55 Rollover Account means the portion of a Participant's
Account attributable to Rollover Contributions accepted and
allocated under a Predecessor Plan. Rollover Contribution means
a contribution to a Predecessor Plan made by or on behalf of a
Participant attributable to the Participant's nonforfeitable
interest in contributions made by an employer under a plan that
is qualified under Code Section 401(a).
1.56 Salary Reduction Election means a Participant's
election, prior to the time he receives the Compensation to which
such election applies, to defer a portion of such Compensation
and to cause the Employer to make a 401(k) Contribution to the
Plan equal to the amount deferred.
1.57 Special Contribution means an Employer contribution
described in Plan article 3.
1.58 Sponsor means, effective May 14, 1994, Crestar Financial
Corporation and any successor to Crestar Financial Corporation,
and prior to such date means Continental Federal Savings Bank.
1.59 Spouse means the person to whom a Participant is married
by legal contract at the relevant time. Surviving Spouse means
the Participant's Spouse who survives him. Except as provided in
a Qualified Domestic Relations Order, if a Participant dies after
his Annuity Starting Date, the individual to whom the Participant
was married on his Annuity Starting Date is the Spouse even if
the Participant and the individual are not married at the
Participant's death. A Qualified Domestic Relations Order may
provide that a former Spouse will be treated as the Participant's
Spouse or Surviving Spouse for any purpose under the Plan.
1.60 Stock means the common stock of Crestar Financial
Corporation.
1.61 Suspense Account means a separate bookkeeping account
maintained to reflect the following items until they are
allocated to Participants' Accounts: (1) Employer contributions
for any Prior Plan Year that could not be allocated to any
Participant's Account at an earlier allocation date because of
the Maximum Permissible Amount for Annual Additions as described
in Plan article 4; (2) advance Employer contributions made during
the Plan Year but before they are allocated to Participants'
Accounts; and (3) any other amounts that are credited to the
Suspense Account under other Plan provisions. As of the last
Valuation Date of the Plan Year, the Suspense Account's balance
is to be added to, and allocated as part of the Employer
contributions for that Plan Year as described in Plan article 4.
1.62 Termination Date means the date on which an Employee
terminates his employment with all the Employers and Related
Companies.
1.63 Test Pay means subject to the applicable dollar limit
applied to Compensation and Earnings, the compensation received
during the Plan Year by the Employee from the Employer (other
than compensation in the form of qualified or previously
qualified deferred compensation) that is currently includible in
the Employee's gross income for federal income tax purposes;
provided that the Administrator maya elect to include in Test Pay
for any year the Employee's 401(k) Contribution and any of the
Employer contributions pursuant to the Employee's salary
reduction agreement which are not included in the Employee's
income pursuant to Code Sections 125, 401(a)(8), 401(h)(1)(B) and
403(b), or may elect to use any of the alternative definitions
permitted under Code Section 414(s) or applicable regulations.
The election shall be made on a consistent and uniform basis with
respect to all Employees and all plans of the Employer for any
particular year and must be made on a reasonable and consistent
basis from year to year. The Administrator may in its sole
discretion change this election. However, for those Plan Years
permitted under Treasury regulations, the Administrator may elect
to define Test Play for this plan as items of remuneration
received by the Employee for periods while the Employee is a
Participant in this Plan.
1.64 Trust Agreement means the agreement between the Sponsor
and the Trustee providing for the establishment and management of
the Trust Fund.
1.65 Trust Fund means the fund described in Plan article 12
which holds Plan assets and is administered by the Trustee
pursuant to the terms of the Plan and the Trust Agreement.
1.66 Trustee means the person or entity accepting in writing
the appointment by the Board to serve as trustee and any
successor to such person or entity.
1.67 Valuation Date means the last business day of each
month.
1.68 Year of Service means each Computation Period in which
an Employee completes 1,000 Hours of Service, subject to the
following subsections and to the applicable service rules for
eligibility as described in Plan article 2 and service rules for
vesting as described in Plan article 6.
(a) Unless otherwise specifically excluded, an
Employee's Years of Service includes Years of Service before the
Effective Date of this Plan and Years of Services earned during
period when he is not a Covered Employee.
(b) Despite the preceding, Years of Service prior to the
date on which a Predecessor Plan merges into this Plan are to be
determined exclusively under the terms of the Predecessor Plan.
(c) Years of Service earned during separate employment
period are to be aggregated unless Years of Service are lost
under the Break in Service rules.
(d) An Employee will be granted credit for Hours of
Service currently during any Leave of Absence with pay based on
the Hours of Service attributable to that period, up to a maximum
of 501 Hours of Service for any single, continuous paid Leave of
Absence.
ARTICLE 2
PLAN MEMBERSHIP
2.1 Conditions of Participation
(a) Special rule. Each Employee who is a Participant in
the Plan on the Effective Date shall continue to be a Participant
in the Plan thereafter, subject to the provisions of the Plan.
(b) New Participants. Prior to May 14, 1993, each
Covered Employee shall automatically become an Active Participant
in the Plan on the Entry Date immediately following his
attainment of age 21 and his completion of one Year of Service
for eligibility, provided he is a Covered Employee on such date.
If an Employee who meets the age and service requirements is not
a Covered Employee on the Entry Date, he shall become a
Participant immediately on the date he becomes a Covered
Employee.
(c) Participation frozen. Effective May 14, 1993,
participation in the Plan is frozen, and the only individuals who
are or may become Participants in this Plan are the following:
(1) Participants in the Former Plan who have
undistributed Account balances in the Plan as of May 14, 1993.
(2) Participants in a Predecessor Plan (other
than the Former Plan), which is merged into this Plan on or after
June 24, 1994 who have undistributed account balances at the time
of such merger which are transferred to this Plan.
2.2 Employment Status Changes
(a) Changing to Non-Covered Employee. If a Participant
does not terminate his employment but has a job status change
that causes him to cease to be a Covered Employee, he ceases to
be an Active Participant but he continues to be a Plan
Participant as long as he has an Account balance in the Plan.
(b) Changing to Covered Employee. If an Employee
becomes a Covered Employee due to a change in his employment
status, he begins participation in the Plan according to Plan
section 2.1(b), except that if such an Employee has already
satisfied the age and service conditions of Plan section 2.1(b),
he becomes an Active Participant on the date he becomes a Covered
Employee.
(c) Reemployment
(1) Participants. If a Participant terminates
his employment and is subsequently rehired at a time when he has
lost his prior Years of Service for eligibility, he shall be
treated as a new Employee and he shall be eligible to become an
Active Participant again when he has satisfied the provisions of
Plan section 2.1(b) after his reemployment. If a Participant
terminates his employment and is subsequently rehired at a time
when he has not lost his prior Years of Service for eligibility,
he shall become a Participant again on the day he first completes
an Hour of Service as a Covered Employee.
(2) Non-Participants. If an Employee who has
not become a Plan Participant terminates his employment with the
Employers and is subsequently rehired, he shall be eligible to
participate in the Plan in accordance with the provisions of Plan
section 2.1(b).
(d) Effective date. The provisions of this Plan section
2.2 apply only to periods prior to May 14, 1993.
2.3 Termination of Participation. An individual ceases to be
an Active Participant in this Plan when he is no longer a Covered
Employee and he ceases to participate in this Plan when his
entire Account balance is distributed to him or in the even to
his death, to his Beneficiary.
2.4 Application to Participate. Participation in the Plan is
automatic; an application to participate is not required.
2.5 Administrator Determination
In the event any question should arise as to the eligibility
of any person to become a Participant or the commencement of
participation, the Administrator shall determine such question.
The Administrator's decision shall be conclusive and binding,
except to the extent of a claimant's right to appeal the denial
of a claim.
2.6 Eligibility Service
(a) In general. Credit for completing a Year of Service
in any Computation Period is to be credited only on the last day
of that Period, regardless of when the necessary Hours of Service
were completed during that Period. An Employee who is credited
with 1,000 Hours of Service in both his initial eligibility
Computation Period and in the first Plan Year beginning after the
commencement of his initial eligibility Computation Period will
be credited with two Years of Service for eligibility.
(b) Loss of Years of Service for eligibility. An
Employee who does not have a vested right to Employer
contributions under this Plan loses credit for his prior Years of
Service for eligibility when the number of his consecutive
one-year Breaks in Service exceeds five and is also equal to or
greater than the number of his credited Years of Service for
eligibility.
ARTICLE 3
CONTRIBUTIONS
3.1 Contributions Suspended
Effective as of the close of business on July 2, 1993,
all 401(k) Contributions, Rollover Contributions and Matching
Contributions are suspended and all Salary Reduction Elections
are canceled. Effective as of the date determined by the Board
or its designee after July 24, 1994, all other contributions to
the Plan are suspended and the only contributions that may be
accepted are the transfers of accounts to this Plan from a
Predecessor Plan that is merged into this Plan.
3.2 Basic Contributions
(a) Discretionary amount. In each Plan Year the
Employer may make discretionary Basic Contributions to the Trust
Fund in such amounts as may be determined by the Employer from
time to time. The Employer has no obligation to make Basic
Contributions for any Plan Year and may completely terminate
Basic Contributions at any time.
(b) Undesignated amount. The Basic Contributions for a
Plan Year include all Employer payments designated as Basic
Contributions for that Plan Year. All other Employer payments
received between the first day of the Plan Year and the last date
by which Employer contributions must be made to the Plan to be
deductible for that Plan Year (inclusive), except (i) payments
specifically designated for other purposes, such as 401(k)
Contributions, Matching Contributions and Special Contributions;
(ii) payments made after the last day of the Plan Year which the
Employer expressly advises the Trustee are to be credited to the
next Plan Year (that is, the Plan Year in which they are paid);
and (iii) contributions paid before the date for making
deductible contributions for the prior Plan Year and credited to
that prior Plan Year, plus all other amounts credited to the
Suspense Account as of the last day of that Plan Year are deemed
to consist of an equal amount of Basic Contributions and Matching
Contributions for the Plan Year; provided, however, that the
amount in excess of the maximum amount of Matching Contributions
under Plan section 3.8 for that Plan Year shall be deemed to be
Basic Contributions for that Plan Year.
(c) Allocation. As of the last day of the Plan Year,
all Basic Contributions allocable for that Plan Year are to be
credited to the Basic Accounts of all Active Participants for the
Plan Year in proportion to each such Participant's Compensation
for the Plan Year, but not in excess of the Maximum Permissible
Amount for Annual Additions as described in Plan article 4.
(d) Effective date. The provisions of this Plan section
3.2 are effective on and after July 1, 1992, and until suspended
in accordance with Plan section 3.1.
3.3 Profit-Sharing Contributions
(a) Amount. Effective May 14, 1993, the Employers shall
contribute to the Plan from the aggregate of their current and
accumulated earnings and profits an amount on behalf of eligible
Active Participants equal to a percentage of their Compensation
determined under the table set forth below based on the Return on
Equity ("ROE") for 1993:
ROE % of Pay
Less than 7.0% 0. 0%
7.0% but less than 7.5% 1.0%
7.5% but less than 8.0% 1.5%
8.0% but less than 8.5% 2.0%
8.5% but less than 9.0% 2.5%
9.0% but less than 9.5% 3.0%
9.5% but less than 10.0% 3.5%
10.0% but less than 10.5% 4.0%
10.5% but less than 11.0% 4.5%
11.0% but less than 11.5% 5.0%
11.5% but less than 12.0% 5.5%
12.0% and greater 6.0%
(b) Special definitions. The following definitions
apply for purposes of this Plan section 3.3.
(1) Compensation for an Active Participant shall
include only the base pay as Compensation which the Participant
received during the time he had a Salary Reduction Election in
effect under this Plan on and after May 14, 1993.
(2) Return on Equity ("ROE") means the ratio of
Net Income (as reported in the Sponsor's annual report) to
Average Total Stockholders' Equity (as reported in the Sponsor's
annual report).
(c) Effective date. This Plan section 3.3 is effective
only for periods on and after May 14, 1993, during which 401(k)
Contributions are allowed to be made under this Plan.
3.4 Qualified Nonelective Contributions.
The Employer may
make Qualified Nonelective Contributions to the Plan for any Plan
Year for allocation to Qualified Nonelective Accounts. Qualified
Nonelective Contributions are neither 401(k) Contributions nor
Matching Contributions, are 100% vested when made, which a
Participant may not elect to have paid in cash instead of being
contributed to the Plan, and which are subject to the same
distribution restrictions as 401(k) Contributions. Qualified
Nonelective Contributions are to be determined by the Employer in
its discretion, and the Employer has no obligation to make such
Contributions for any Plan Year.
(a) Method. Qualified Nonelective Contributions may be
made by the Employer:
(A) by a direct contribution to the Plan which
is designated as a Qualified Nonelective Contribution and made on
or before the date by which deductible contributions may be made
by the Employer to the Plan for that Plan Year;
(B) by the Employer directing that any portion
or all of the forfeitures available for allocation for that Plan
Year be recharacterized as Qualified Nonelective Contributions
for that Plan Year; or
(C) by any combination of the foregoing.
(b) Allocation. As of the last day of each Plan Year,
all Qualified Nonelective Contributions allocable for that Plan
Year (including those designated as such after the last day of
the Plan Year) are to be credited to the Qualified Nonelective
Accounts of all Participants who are not Highly Compensated
Employees for that Plan Year in the proportion which each such
Participant's Compensation for that Plan Year bears to the total
Compensation of all such Participants for that Plan Year. Once
allocated, Qualified Nonelective Contributions may either be
treated as 401(k) Contributions, as Matching Contributions, or
both, as determined by the Administrator, for purposes of
determining each Participant's deferral percentage under the ADP
test or contribution percentage under the ACP test; provided,
however, that the same Qualified Nonelective Contribution may not
be treated as both a 401(k) and a Matching Contribution.
3.5 401(k) Contributions
(a) In general. The Employers' 401(k) Contribution for
a Plan Year is the total of all amounts deferred pursuant to
Participants' Salary Reduction Elections for that Plan Year.
Each Employer must transfer 401(k) Contributions to the Trustee
as soon as practicable after the payroll period to which they
relate but in no event more than 90 days after that date.
(b) Amount. An Active Participant may enter into a
Salary Reduction Election for the purposes of this Plan in which
he agrees with his Employer to reduce his Compensation by at
least 1% and not more than 15%, on the condition that the
Employer is to contribute an equal amount to this Plan on behalf
of the Participant for the Plan Year in which the corresponding
Compensation is reduced. 401(k) Contributions must be stated in
even increments of 1%. The Administrator may adopt policies
limiting the amount of 401(k) Contributions to be made on behalf
of any Participant and the manner in which those contributions
are to be made. Any designated 401(k) Contribution may be
effective only after the Salary Reduction Agreement is executed
and while the Participant is an Active Participant. A Salary
Reduction Agreement will become effective on the next Entry Date
after the Administrator receives it. 401(k) Contributions on
behalf of any Participant for any calendar year may not exceed
$7,000 (adjusted at the same time and in the same manner as under
Code Section 415(d)) in any calendar year.
(c) Changes in Salary Reduction Elections. A
Participant may change the rate of his salary deferral under his
Salary Reduction Election at the next Entry Date during each Plan
Year by filing a form as required by the Administrator. A
Participant may voluntarily suspend his 401(k) Contributions at
any time by giving written notice to that effect to the
Administrator, and the suspension shall be effective as soon as
administratively feasible after that notice is received by the
Administrator. 401(k) Contributions on behalf of a Participant
shall be automatically suspended for any Participant who makes a
hardship withdrawal pursuant to Plan article 7 (or pursuant to
any other qualified plan under a cash-or-deferred arrangement
under Code Section 401(k) which is maintained by an Employer or
Related Company) until the first Entry Date which is at least 12
months after the Participant receives such a withdrawal. In
addition, for the calendar year following receipt of a hardship
withdrawal, the maximum permissible amount of 401(k)
Contributions under this Plan, as determined under Code Section
401(g), shall be reduced by the amount of 401(k) Contributions
allocated to the Participant in the year in which the hardship
withdrawal was received. The Administrator shall determine any
other procedures by which a Participant may designate from time
to time the rate of 401(k) Contributions on his behalf, provided
that any such designation must apply prospectively -that is, the
designation is not to apply to Compensation earned prior to the
date that designation is filed with the Administrator.
(d) Excess Deferrals. An Excess Deferral means a
Participant's elective deferral for a taxable year beginning
after December 31, 1986, to the extent that such elective
deferral exceeds $7,000 (adjusted at the same time and in the
same manner as under Code Section 415(d)). This dollar
limitation does not apply to elective deferrals of amounts
attributable to service performed during 1986 and described in
Section 1105(c)(5) of the Tax Reform Act of 1986. For purposes
of this subsection, "elective deferrals, with respect to any
taxable year of a Participant means the sum of the following:
(1) any employer contribution under a qualified
cash-or-deferred arrangement (as defined in Code Section 401(k))
to the extent not includible in gross income for the taxable year
under Code Section 402(a)(8) (determined without regard to Code
Section 402(g));
(2) any employer contribution under a simplified
employee pension (as defined in Code Section 408(k)) to the
extent not includible in gross income for the taxable year under
Code Section 402(h)(1)(B) (determined without regard to Code
Section 402(g));
(3) any employer contribution to an annuity
contract under Code Section 403(b) under a salary reduction
agreement (within the meaning of Code Section 3121(a)(5)(D)) to
the extent not includible in gross income for the taxable year on
account of Code Section 401(b) (determined without regard to Code
Section 402(g)); and
(4) any employee contribution designated as
deductible under a trust described in Code Section 501(c)(18) to
the extent deductible from the individual's income for the
taxable year on account of Code Section 501(c)(18) (determined
without regard to Code Section 402(g)).
Any deferrals that, but for Code Section 402(a)(8),
402(h)(1)(B), and 403(b) would have been received or treated as
received by an individual for the taxable year are to be treated
as elective deferrals for such year.
(e) Distribution of Excess Deferrals. The Administrator
shall implement the provisions of this subsection (e) if, in a
calendar year, a Participant's 401(k) Contributions under this
Plan and elective deferrals under any other plan or arrangement
described in Code Sections 401(k), 408(k) or 403(b) which is
maintained by the Employer or any Related Company in the
aggregate result in Excess Deferrals for the Participant. The
Administrator has the discretion to implement or not implement
this subsection (e) if, in a calendar year the Participant has
Excess Deferrals, taking into account 401(k) Contributions made
to this Plan and elective deferrals made to a plan or arrangement
maintained by another employer which is not an Employer or a
Related Company, so long as the Administrator's discretion is
exercised uniformly as to Participants who are similarly situated
and so long as the Administrator does not discriminate in favor
of Highly Compensated Employees.
(1) If a Participant has Excess Deferrals in any
taxable year, the Participant may ask the Administrator to
distribute all or part of the excess from this Plan. The claim
must be submitted in writing to the Administrator no later than
March 1 following the taxable year in which the Excess Deferrals
were made. The Participant must state in the claim that Excess
Deferrals exist for the preceding taxable year and must specify
the amount of the Excess Deferral to be distributed.
(2) In any case where the Excess Deferrals occur as
the result of 401(k) Contributions made to this Plan and to any
other plan or arrangement maintained by the Employer or any
Related Company (ignoring contributions made to a plan maintained
by any other employer that is not an Employer or a Related
Company), the Administrator shall be required to distribute the
Excess Deferrals pursuant to this subsection, whether or not a
written claim is submitted by the Participant.
(3) When Excess Deferrals are to be distributed
pursuant to this subsection (e), then despite any other Plan
provision, the Administrator shall distribute the Excess
Deferrals, and the income or loss allocated thereto no later than
the April 15 following the taxable year in which the Excess
Deferrals were made. The income or loss allocable to those
Excess Deferrals shall be determined pursuant to Treasury
regulation Section 1.402(g)-1(e)(5) (or successor regulations)
but shall not include the allocable income or loss for the period
between the end of the taxable year in which the Excess Deferrals
occurred and the date of distribution.
(4) Despite any other provision of the Plan, the
Administrator shall distribute the Excess Deferrals, and the
income or loss allocated thereto, as soon as possible after the
request is made. The income or loss allocable to the Excess
Deferrals shall be determined pursuant to relevant Treasury
regulations.
3.6 Limitations on 401(k) Contributions
(a) Prohibitions. In no event may the Administrator
allow a 401(k) Contribution to be made for or allocated to a
Participant if that allocation would cause the Plan to violate
the limitations of Code Section 415 or the nondiscrimination
prohibitions of Code Section 401(a)(4). If a Participant makes a
Salary Reduction Election that produces an Excess Deferral for
that Participant, the Administrator may cause that Participant's
Excess Deferrals to be allocated and distributed in accordance
with Plan section 3.5.
(b) ADP Testing. Despite any other provision of the
Plan to the contrary, for Plan Years beginning after December 31,
1986, the Actual Deferral Percentage (ADP) for all Highly
Compensated Employees may not exceed the ADP for all Nonhighly
Compensated Employees eligible to participate for the Plan Year
determined in accordance with the following table:
If the ADP for Then the ADP for
Non-Highly Compensated Highly Compensated
Employees as a group Employees as a group
is: must not exceed:
Test 1: 2% or less 2.0 times Non-Highly Compensated
Employees Group ADP
Test 2: 2% to 7% Non-Highly Compensated Employees
Group ADP plus 2 percentage points
Test 3: 8% or more 1.25 times Non-Highly Compensated
Employees Group ADP
(1) Actual Deferral Percentage or ADP means, for
purposes of the preceding table, the average of the ratios
(calculated separately for each Employee in the respective group)
of
(A) the amount of 401(k) Contributions
(including Excess Deferrals that are distributed pursuant to
section 3.5) and Qualified Nonelective Contributions allocated to
the Account of each such Employee for the Plan Year, to
(B) the Employee's Test Pay for the Plan
Year (whether or not the Employee was a Participant for the
entire Plan Year),
(C) but excluding 401(k) Contributions that
are taken into account in the ACP test (provided the ADP test is
satisfied both with and without exclusion of those 401(k)
Contributions).
(2) An Employee who would be a Participant but
for the failure to have 401(k) Contributions made on his behalf
shall be treated as a Participant on whose behalf no 401(k)
Contributions are made.
(3) For purposes of determining the ADP of a
Highly Compensated Employee who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees for the Plan Year,
his 401(k) Contributions (and Qualified Nonelective Contributions
if treated as 401(k) Contributions under the ADP test in this
subsection (b)), and Test Pay shall include the 401(k)
Contributions (and Qualified Nonelective Contributions if treated
as 401(k) Contributions under the ADP test in this subsection
(b)) and Test Pay of Family Members. Family Members with respect
to such Highly Compensated Employees shall be disregarded as
separate Employees in determining the ADP both for Nonhighly
Compensated Employees and Highly Compensated Employees.
(4) For purposes of the ADP Test, 401(k)
Contributions and Qualified Nonelective Contributions must be
made before the last day of the 12-month period immediately
following the Plan Year to which the contributions relate.
(5) The Employer shall maintain records
sufficient to demonstrate satisfaction of the ADP test and the
amount of Qualified Nonelective Contributions used in such test.
(6) The determination and treatment of the ADP
amounts of any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
(c) Multiple plan limitations
(1) The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to
have 401(k) Contributions (and Qualified Nonelective
Contributions if treated as 401(k) Contributions for purposes of
the ADP test under subsection (b)) allocated to his Account under
this Plan and under any other qualified plan under Code Section
401(k) which is maintained by an Employer or a Related Company
shall be determined as if all his 401(k) Contributions (and, if
applicable, Qualified Non-elective Contributions) under such
plans were made under a single 401(k) arrangement. If a Highly
Compensated Employee participates in two or more such cash or
deferred arrangements that have different plan years, all cash or
deferral arrangements ending with or within the same taxable year
shall be treated as a single arrangement. Despite the preceding,
certain of such plans shall be treated as separate plans if
mandatorily disaggregated under Treasury regulations under Code
Section 401(k).
(2) In the event that this Plan satisfies the
requirements of Code Section 401(k), Section 401(a)(4), or
Section 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such
Code sections only if aggregated with this Plan, then the ADP
test in subsection (b) shall be applied by determining the ADPs
of Employees as if all such plans were a single plan. For Plan
Years beginning after December 31, 1989, plans may be aggregated
to satisfy Code Section 401(k) only if they have the same plan
year.
(d) Adjustments to 401(k) Contributions. If and to the
extent necessary to comply with the ADP test, the Administrator
may reduce or suspend any Highly Compensated Employee's rate or
amount of 401(k) Contributions (for 401(k) Contributions that
have not yet been earned). The Employer may also make Qualified
Nonelective Contributions as described in Plan section 3.4.
(e) Allocation of excess. If, after any adjustments
under subsection (d), Excess 401(k) Contributions remain, the
Administrator shall determine each Highly Compensated Employee's
share of the excess. The Administrator first lists the Highly
Compensated Employees in the order of descending ADPs, as if on
an individual basis. The Administrator then reduces the 401(k)
Contributions attributable to all Highly Compensated Employees
who deferred the highest percentage level by percentage
increments, but not below the next highest percentage level. If
the needed reduction will cause a reduction below that second
highest percentage level, all Highly Compensated Employees who
deferred that second percentage level and those whose deferral
percentages have been reduced are reduced by percentage
increments as needed. If the needed reduction will cause a
reduction below the next lower percentage level, the same
procedure is followed as to all Highly Compensated Employees who
deferred that percentage level and those whose deferral
percentages have already been reduced. The Administrator must
repeat this procedure until all Excess 401(k) Contributions have
been distributed.
(f) Distribution of Excess 401(k) Contributions.
Despite any other provisions of the Plan, Excess 401(k)
Contributions for a Plan Year and any income or loss allocable
thereto shall be distributed to the Participants on whose behalf
such Excess 401(k) Contributions were made. Such distributions
shall be made no later than the last day of the Plan Year
following the Plan Year for which the Excess 401(k) Contributions
were made. If such excess amounts are distributed more than
2-1/2 months after the last day of the Plan Year in which such
excess amounts arose, a 10% excise tax will be imposed on the
Employer maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess 401(k)
Contributions attributable to each of such Employees as
determined under subsection (e). Excess 401(k) Contributions of
Participants who are subject to the Family Member aggregation
rules shall be allocated among the Family Members in proportion
to the 401(k) Contributions (and any amounts treated as 401(k)
Contributions) of each Family Member who is combined to determine
the combined ADP.
(1) Excess 401(k) Contributions distributed under
this subsection shall be adjusted for any income or loss based on
a reasonable method of computing the allocable income or loss.
The method selected must be applied consistently to all
Participants and used for all corrective distributions under the
Plan for the Plan Year, and must be the same method that is used
by the Plan for allocating income or loss to Participants'
Accounts. Income or loss allocable to the period between the end
of the taxable year and the date of distribution may be
disregarded in determining income or loss.
(2) Excess 401(k) Contributions shall be
distributed from the Participant's 401(k) Account in proportion
to the Participant's 401(k) Contributions for the Plan Year.
Excess 401(k) Contributions attributable to Qualified Nonelective
Contributions shall be distributed from the Participant's
Qualified Nonelective Account only to the extent that such Excess
401(k) Contributions exceed the balance in the Participant's
401(k) Account.
(g) Use of Alternative Tests. Despite the preceding
provisions, if and to the extent necessary to comply with the
nondiscrimination requirements of Code Section 410(m), the
Administrator in its sole discretion elects to comply with Test 1
or 2 in subsection (b) table, and the sum of the ADP and the ACP
for Highly Compensated Employees exceeds the aggregate limit
described in Treasury regulation Section 1.401(m)-2(b)(3)(i),
then the Administrator shall not use Test 1 or 2 under the table
in subsection (b) above, but instead shall comply with Test 3 for
purposes of meeting the nondiscrimination requirements of Code
Section 401(k).
3.7 Matching Contributions
(a) Amount. For Plan Years that begin prior to July 1,
1991, the Employer shall make Matching Contributions for each
Plan Year in an amount which, when added to all other amounts
credited to the Suspense Account as of the Allocation Date is
equal to the 401(k) Contributions for that Plan Year made by each
Participant up to a maximum of 3% of the Participant's
Compensation for that Plan Year (but not exceeding the Maximum
Permissible Amount for Annual Additions for that Plan Year in
which those Matching Contributions are to be credited to the
Participant's Account). For Plan Years that begin after June 30,
1992, the Employer may, in its absolute discretion, make Matching
Contributions for each Plan Year in an amount which does not
exceed the 401(k) Contributions made on behalf of each
Participant up to a maximum of 3% of such Participant's
Compensation for that Plan Year (but not exceeding the Maximum
Permissible Amount for Annual Additions for the Plan Year in
which those Matching Contributions are to be credited to the
Participant's Account). Despite the preceding, Matching
Contributions shall not be made with respect to any 401(k)
Contributions contributed for any pay period after December 31,
1990, but before July 1, 1992. Effective as of the close of
business on July 2, 1993, all Matching Contributions are
suspended.
(b) Supplemental Matching Contributions. The Employer
may also make supplemental Matching Contributions to the Trust
Fund for any Plan Year for allocation among certain eligible
Participants, as described in this subsection. The supplemental
Matching Contribution amount for any Plan Year is to be
determined by the Employer, in its discretion, and contributed by
the time for making deductible contributions for that Plan Year.
The Employer has no obligation to make supplemental Matching
Contributions for any year and may completely terminate such
contributions at any time. As of the last date of each Plan
Year, all supplemental Matching Contributions allocable for that
Plan Year, whether contributed before or after the last day of
the Plan Year, are to be credited to the Matching Accounts of all
Participants who are Active Participants during the Plan Year and
are not Highly Compensated Employees for the Plan Year in
proportion to such Participant's Compensation for the Plan Year.
(c) Undesignated amounts. Matching Contributions for
any Plan Year include all Employer payments designated as
Matching Contributions. All Employer payments received between
the first day of the Plan Year and the last date by which
Employer contributions must be made to the Plan to be deductible
for that Plan Year (inclusive), except (i) payments specifically
designated for other purposes, such as Basic Contributions,
401(k) Contributions and Special Contributions; (ii) payments
after the last day of the Plan Year which the Employer expressly
advises the Trustee are to be credited to the next Plan Year
(that is, the Plan Year in which they are paid); and (iii)
contributions paid before the date for making deductible
contributions for the prior Plan Year and credited to that prior
Plan Year, plus all other amounts credited to the Suspense
Account as of the last day of the Plan Year are deemed to consist
of an equal amount of Basic Contributions and Matching
Contributions for the Plan Year; provided, however, that the
amounts in excess of the maximum amount of Matching Contributions
under Plan section 3.8 for that Plan Year shall be deemed to be
Basic Contributions for that Plan Year.
3.8 Limitations on Matching Contributions
(a) In general. The Administrator is to determine from
time to time whether the Matching Contributions (including
supplemental Matching Contributions) made or anticipated under
this Plan in Plan Years beginning after December 31, 1986, comply
with the nondiscrimination provisions of Code Section 414(m).
(b) ACP testing. The table in this subsection (b)
determines whether Excess Aggregate Contributions exist for a
Plan Year. Any amounts that are allocated to Matching Accounts
and any other contributions that are treated under Code Section
401(m) as matching contributions or Employee contributions for
the Plan Year and that exceed the Highly Compensated Employees'
Contribution Percentage allowances in the following table are
Excess Aggregate Contributions for the Plan Year.
If the Then the
Contribution Percentage Contribution Percentage
for Non-Highly Compensated for Highly Compensated
Employee as a group Employees as a group
is: cannot exceed:
Test 1: 2% or less 2.0 times Non-Highly Compensated
Employees Group ACP
Test 2: 2% to 8% Non-Highly Compensated Employees
Group ACP plus 2 percentage points
Test 3: 8% or more 1.25 times Non-Highly Compensated
Employees Group ACP
(1) Actual Contribution Percentage or ACP means for
a specified group of Employees for a Plan Year that begins after
1986, the average of the ratios (calculated separately for each
Employee in the group) of
(A) the sum of the Matching Contributions
allocated to the Account of each such Employee for the Plan Year,
to
(B) the Employee's Test Pay for that Plan
Year, whether or not the Employee was a Participant for the
entire Plan Year.
(2) For purposes of this subsection (b), the ACPs
shall include forfeitures of Excess Aggregate Contributions or
Matching Contributions allocated to the Participant's Account
which shall be taken into account in the Plan Year in which such
forfeiture is allocated. Forfeitures shall be included as ACP
amounts only to the extent such forfeitures are used to reduce or
supplement Matching Contributions. The Employer may include
Qualified Nonelective Contributions in the ACPs and may elect to
use 401(k) Contributions in the ACPs as long as the ADP test is
met before the 401(k) Contributions are used in the ACP test and
continues to be met following the exclusion of those 401(k)
Contributions that are used to meet the ACP test.
(3) If a 401(k) Contribution or other contribution
by an Employee is required as a condition of participation in the
Plan, any Employee who would be a Participant if such an Employee
made such a contribution shall be treated as an eligible
Participant on behalf of whom no such contributions are made.
(4) The Employer shall maintain records sufficient
to demonstrate satisfaction of the ACP test and the amount of
Qualified Nonelective Contributions used in such test.
(5) The determination and treatment of the
contribution percentage of any Participant shall satisfy such
other rules as may be prescribed by the Secretary of the
Treasury.
(c) Multiple use. For purposes of subsection (b), if
one or more Highly Compensated Employees participates in both a
qualified plan described Code Section 401(k) and a plan subject
to the ACP test maintained by the Employer or a Related Company,
and the sum of the ADP and the contribution percentage of those
Highly Compensated Employees shall be reduced (beginning with
such Highly Compensated Employee whose contribution percentage is
the highest) so that the limit is not exceeded. The amount of
such reduction shall be treated as an Excess Aggregate
Contribution. The ADP and contribution percentage of the Highly
Compensate Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not
occur if either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of
the Employees who are not Highly Compensated Employees.
(d) The contribution percentage for any Participant who
is a Highly Compensated Employee and who is eligible to have
contribution percentage amounts allocated to his Accounts under
two or more plans described in Code Section 401(a) or
arrangements described in Code Section 401(k) that are maintained
by the Employer or a Related Company, shall be determined as if
the total of such contribution percentage amounts were made under
each plan. If a Highly Compensated Employee participates in two
or more such cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or
within the same taxable year shall be treated as a single
arrangement. Despite the preceding, certain plans shall be
treated as separate plans if mandatorily disaggregated under Code
Section 401(m) regulations.
(e) In the event that this Plan satisfies the
requirements of Code Section 401(m), Section 401(a)(4), or
Section 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such
Code sections only if aggregated with this Plan, then the ACP
test shall be applied by determining the contribution percentages
of Employees as if all such plans were a single plan. For Plan
Years beginning after December 31, 1989, plans may be aggregated
in order to satisfy Code Section 401(m) only if they have the
same plan year.
(f) For purposes of determining the contribution
percentage of a Participant who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees, the contribution
percentage amounts and Compensation and Test Pay of such
Participant shall include the contribution percentage amounts and
Compensation and Test Pay for the Plan Year of the Family Members
of such Highly Compensated Employee. Family Members, with
respect to Highly Compensated Employees, shall be disregarded as
separate employees in determining the contribution percentage
both for Participants who are Highly Compensated Employees and
for all other Employees.
(g) For purposes of applying the ACP test, Employee
contributions are considered to have been made in the Plan Year
in which contributed to the trust. Matching Contributions and
Qualified Nonelective Contributions shall be considered made for
a Plan Year if made no later than the end of the 12-month period
beginning on the day after the close of the Plan Year.
(h) Distribution of excess. Despite any other provision
of this Plan, Excess Aggregate Contributions, plus any income or
loss allocable thereto, shall be forfeited, if forfeitable, or if
not forfeitable, distributed no later than the last day of each
Plan Year to Participants to whose accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions of Participants who are subject to the
Family Member Aggregation rules shall be allocated among the
Family Members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions) of
each Family Member that is combined to determine the combined
ACP. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess
Aggregate Contributions attributable to each of such Employees.
If such Excess Aggregate Contributions are distributed more than
2-1/2 months after the last day of the Plan Year in which such
excess amounts arose, a 10% excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts.
(1) Excess Aggregate Contributions distributed
under this subsection shall be adjusted for any income or loss
based on a reasonable method of computing the allocable income or
loss. The method selected must be applied consistently to all
Participants and used for all corrective distributions under the
Plan for the Plan Year, and must be the same method that is used
by the Plan for allocating income or loss to Participants'
Accounts. Income or loss allocable to the period between the end
of the taxable year and the date of distribution may be
disregarded in determining income or loss.
(2) Forfeitures of Excess Aggregate Contributions
shall be applied to reduce Employer Contributions (or, if
required under the terms of a Predecessor Plan, other than the
Former Plan, reallocated to the Accounts of Employees who are not
Highly Compensated Employees).
(3) Excess Aggregate Contributions shall be
forfeited, if forfeitable, or distributed on a pro-rata basis
from the Participant's Matching Account (and if applicable, the
Participant's After-Tax Account, the Participant's Qualified
Nonelective Account or 401(k) Account).
3.9 Rollover Contributions
(a) General. With the Administrator's approval, a
Participant may make one or more Rollover Contributions by
delivering those contributions in cash to the Trustee and by
filing any forms as required by the Administrator. Rollover
Contributions must be attributable solely to an eligible rollover
distribution as described in Code Section 402(c)(4) (or prior to
January 1, 1993, to a qualifying rollover distribution as
described in Code Section 401(a)(5)) from another qualified plan,
but may not include nondeductible amounts contributed by the
Participant or amounts attributable to contributions by the
Participant under that other plan that were deductible under Code
Section 219.
(b) Acceptability; allocation. The Participant must
establish the acceptability of any Rollover Contribution to the
satisfaction of the Administrator. Rollover Contributions must
consist of cash, unless the Administrator and Trustee agree, in
their discretion, to accept any property other than cash which
was included in the relevant eligible rollover distribution. All
Rollover Contributions are to be credited to the Participant's
Rollover Account.
(c) Administrator rules. Nothing in this Plan section
restricts the Administrator's power to adopt rules for
administrative convenience, including additional restrictions on
a Participant's right to make or withdraw Rollover Contributions.
Those rules are to have the same force and effect as if
incorporated in this Plan.
(d) Suspension. Effective as of the close of business
on July 2, 1993, no additional Rollover Contributions will be
accepted by this Plan.
3.10 Special Contributions
The Employer may be required to make Special Contributions
to the Plan under the following circumstances:
(a) to the extent provided in Plan article 6, when a
valid claim is made for benefits which were previously suspended
because the person entitled to those benefits could not be
located;
(b) to the extent described in Plan article 6, when a
rehired participant is entitled to reinstatement of a conditional
forfeiture; or
(c) to the extent described in Plan article 11, when
this Plan is a Top-Heavy Plan and a minimum top-heavy
contribution is required.
When received by the Trustee, any Special Contribution is to be
credited directly to the applicable Account of the specific
Participant(s) involved.
ARTICLE 4
OTHER PROVISIONS CONCERNING CONTRIBUTIONS
4.1 Separate Accounts
A separate Account will be established for each Participant.
Each such Account shall be divided into subaccounts as applicable
to reflect the Participant's interest in the Plan. For example,
a Participant's Account may have one or more of the following
subaccounts: 401(k) Account, Matching Account, Qualified
Nonelective Account, Profit Sharing Account, Rollover Account,
Pension Account, or any other Account deemed appropriate by the
Administrator. These separate Accounts are for bookkeeping
purposes only and no Participant or Beneficiary has any right or
interest in any specific Trust Fund asset as a result os such
separate accounting. Each Account is to be adjusted from time to
time for contributions to the Account, investment earning or
losses and allocable administrative expenses and payments from
the Account.
(a) Allocations to Accounts.
4.2 Compliance with Code Section 415
(a) Administrator adjustments. The amount of
contributions or benefits for each Participant under this Plan
and any other Qualified Plan maintained by an Employer or a
Related Company must be adjusted by the Administrator, according
to applicable Treasury regulations, to comply with the
limitations of Code Section 415 as described in the following
sections of this Plan article 4. In making such adjustments, the
Administrator must not discriminate in favor of Highly
Compensated Employees or such other individuals in whose favor
discrimination is prohibited under Code Section 401(a)(4).
(b) Aggregation of Plans. For purposes of applying the
Code Section 415 limitations on contributions and benefits, all
Defined Benefit Plans (whether or not terminated) of an Employer
and its Related Companies are treated as one Defined Benefit
Plan, and all Defined Contribution Plans (whether or not
terminated) of an Employer and its Related Companies are treated
as one Defined Contribution Plan. Effective for Limitation
Years beginning after March 31, 1984, an individual medical
account, as defined in Code Section 401(h)(6) and referred to in
Code Section 415(l)(1), will be treated as a Defined Contribution
Plan. Effective for Limitation Years that begin after December
31, 1985, with respect to Key Employees (as defined in Code
Section 419A(d)(3)), a welfare fund, as defined in Code Section
419(e), maintained by an Employer or a Related Company will be
treated as a Defined Contribution Plan.
4.3 Annual Addition Limitations
(a) Annual Addition means the sum of the following
amounts credited to a Participant's Account for the Limitation
Year:
(1) employer contributions;
(2) employee contributions;
(3) forfeitures;
(4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2), which is part of a pension or annuity plan maintained
by the Employer are treated as Annual Additions to a Defined
Contribution Plan;
(5) amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to post-retirement medical
benefits, allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3)) under a welfare benefit fund
(as defined in Code Section 419(e)), maintained by the Employer
are treated as Annual Additions to a Defined Contribution Plan;
(6) allocations under a simplified employee
pension plan;
(7) except to the extent provided in Treasury
regulations, Excess 401(k) Contributions, Excess Aggregate
Contributions, and Excess Deferrals, regardless of whether such
excess amounts are distributed or forfeited.
(b) Maximum Permissible Amount. Effective for Limitation
Years that begin after December 31, 1986, a Participant's Annual
Additions for a Limitation Year under this Plan and under all
other Defined Contribution Plans maintained by an Employer or a
Related Company may not exceed the Maximum Permissible Amount.
The Maximum Permissible Amount is the lesser of (1) or (2)
following:
(1) the greater of $30,000 or one-fourth of the
defined benefit dollar limitation on under Code Section
415(b)(1)(A) for that Limitation Year; or
(2) 25% of the Participant's Earnings for the
Limitation Year.
The limitation on Earnings referred to in paragraph (2) shall not
apply to any contribution for medical benefits (within the
meaning of Code Section 401(h) or Section 419(f)(2)) which is
otherwise treated as an Annual Addition under Code Section
415(l)(1) or Section 419A(d)(2).
(c) Annual Additions under other plans. If any
Participant in this Plan also participates in another plan
maintained by an Employer or Related Company in which he receives
Annual Additions for a Limitation Year, the Annual Additions that
may be credited to the Participant's Account under this Plan for
any such Limitation Year will not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to the
Participant's account under the other plan for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other Defined Contribution Plans are less than
the Maximum Permissible Amount and the Employer contributions and
forfeitures that would otherwise be contributed or allocated to
the Participant's Account under this Plan would result in Excess
Annual Additions for the Limitation Year, the amount contributed
or allocated will be reduced so that the Annual Additions under
all such plans for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under such other Defined Contribution Plans in the
aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the
Participant's Account under this Plan for the Limitation Year.
(d) Short Limitation Year. If a short Limitation Year
is created because of an amendment changing the Limitation Year
to a different 12-consecutive month period, the Maximum
Permissible Amount for the short Limitation Year will not exceed
the applicable dollar amount under subsection (d)(1) above, as
applicable, multiplied by a fraction, the numerator of which is
the number of months in the short Limitation Year and the
denominator of which is 12.
4.4 Excess Annual Additions
(a) Amounts that would be excess. For any Limitation
Year, the Annual Additions that may be credited to the
Participant's Account under this Plan and under any other plan
maintained by an Employer or a Related Company in which he
receives Annual Additions for any such Limitation Year will not
exceed the Maximum Permissible Amount. To the extent that an
allocation or addition pursuant to this Plan or such other plans
intended for one Participant's accounts under this and all such
plans cannot be allocated or added to those accounts, it is
treated as a mistake-of-fact contribution if that is allowed by
law, and to the extent that the allocation or addition cannot be
so treated without adverse consequences to the Plan, it is
reduced to the extent necessary to bring it within the
limitations of Plan section 4.3 according to the remaining
provisions of this section.
(1) If a Participant's Annual Additions under this
Plan and such other plans would result in excess Annual Additions
for a Limitation Year, the excess amount will be deemed to
consist of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit fund as
defined in Code Section 419(e) or an individual medical account
as defined in Code Section 415(l)(2) will be deemed to have been
allocated first regardless of the actual allocation date.
(2) If an excess amount was allocated to a
Participant on an allocation date of this Plan which coincides
with an allocation date of another plan, the excess Annual
Additions attributed to this Plan will be the product of (a) the
total excess Annual Additions allocated as of such date, times
(b) the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (ii) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all other Defined Contribution Plans.
(b) Disposition of excess Annual Additions. Excess
Annual Additions will be disposed of as follows:
(1) Any nondeductible voluntary employee
contributions, to the extent they would reduce the excess amount,
will be returned to the Participant.
(2) If excess Annual Additions still exist and the
Participant is covered by the Plan at the end of the Limitation
Year, the excess amount in the Participant's Account will be used
to reduce Employer contributions (including any allocation of
forfeitures) for such Participant in the next Limitation Year,
and in each succeeding Limitation Year if necessary. If the
Participant is not covered by the Plan at the end of a Limitation
Year, the excess amount will be held unallocated in a Suspense
Account. The Suspense Account will be applied to reduce future
Employer contributions for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary.
(3) If a Suspense Account is in existence at any
time during a Limitation Year, it does not participate in the
allocation of the Trust's investment gains and losses. If a
Suspense Account is in existence at any time during a particular
Limitation Year, all amounts in the Suspense Account must be
allocated and reallocated to Participants' Accounts before any
Employer contributions or Employee contributions may be made to
the Plan for that Limitation Year. Excess amounts held in a
Suspense Account may not be distributed to Participants or former
Participants. If a Suspense Account exists according to the
provisions of this section when the Plan terminates, the Suspense
Account must be treated as not part of the Plan assets (as
allowed by applicable law) and is returned to the contributor or
contributors, pro rata according to their contributions for that
Limitation Year.
4.5 Defined Benefit Plan Participation
(a) Post-1982 Limitation Years. Effective for
Limitation Years that begin after December 31, 1982, if an
individual is participating or has participated in both this Plan
and a Defined Benefit Plan maintained by an Employer or a Related
Company, the sum of the Participant's Defined Benefit Plan
Fraction and his Defined Contribution Plan Fraction for any
Limitation Year may not exceed 1.0.
(1) For purposes of this subsection, a
Participant's Defined Benefit Plan Fraction for any year is a
fraction the numerator of which is his Projected Annual Benefit
under all such Defined Benefit Plans (determined as of the close
of the year) and the denominator of which is the lesser of
(A) the product of 1.25 multiplied by
the dollar limitation in effect under Code Section 415(b)(1)(A)
and 415(d) for the Participant for that year, or
(B) the product of 1.4 multiplied by the
largest amount that may be taken into account under Code Section
415(b)(1)(B) (including any adjustments under Code Section
415(b)) for that Participant for that year.
Despite the preceding, if the Participant was
participating as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more such Defined
Benefit Plans which were in existence on May 6, 1986, the
denominator of the Defined Benefit Plan Fraction will not be less
than the product of 1.25 multiplied by the sum of the Annual
Benefits under such plans which the Participant had accrued as of
the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the
plan after May 5, 1986. The preceding sentence applies only if
such Defined Benefit Plans, both individually and in the
aggregate, satisfied the requirements of Code Section 415 for all
Limitation Years beginning before January 1, 1987.
(2) For purposes of this subsection, a
Participant's Defined Contribution Plan Fraction for any
Limitation Year is a fraction the numerator of which is the sum
of his Annual Additions as of the close of the year for that and
all prior Limitation Years and the denominator of which is the
sum of the lesser of the following amounts determined for that
year and for each prior year of service with an Employer or a
Related Company (regardless of whether a Defined Contribution
Plan was then maintained):
(A) the product of 1.25 multiplied by
the dollar limitation in effect under Code Section 415(c)(1)(A)
(determined without regard to (c)(6)) for the Participant for
that year, or
(B) the product of 1.4 multiplied by
the amount that may be taken into account under Code Section
415(c)(1)(B) for the Participant for that year.
Despite the preceding, if a Participant was
participating as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more
Defined Contribution Plans which were in existence on May 6,
1986, the numerator of the Defined Contribution Plan Fraction
will be adjusted if the sum of this fraction and the Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the terms
of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of
the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of
the plan made after May 5, 1986, but using the Code Section 415
limitation to the first Limitation Year beginning on or after
January 1, 1987.
In applying these rules, the Annual Addition Limitation for
any Limitation Year beginning before January 1, 1987, shall not
be recomputed to treat all employee contributions as Annual
Additions.
(3) If a plan satisfied the requirements of
Code Section 415 for the last Limitation Year beginning before
January 1, 1983, according to regulations promulgated pursuant to
Section 235(g)(3) of the Tax Equity and Fiscal Responsibility Act
of 1982, an amount is subtracted from the numerator of the
Defined Contribution Plan Fraction (not exceeding that numerator)
so that the sum of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction computed under this subsection
does not exceed 1.0 for the first Limitation Year that begins
after 1982.
(b) Transition rule. The Company may elect to calculate
the Defined Contribution Plan Fraction for Limitation Years
ending after December 31, 1982, for all Qualified Plans that were
in existence on July 1, 1982, in accordance with the transition
rule of Code Section 415(e)(6).
(c) Adjustments for Top Heavy Plans. For any year in
which this Plan or any plan in this Plan's Aggregation Group is a
Top-Heavy Plan, the Defined Benefit Fraction and the Defined
Contribution Plan Fraction will be adjusted as provided in Plan
article 11 and the rules in Code Section 416(h).
4.6 Limitations on Employer Contributions
(a) Maximum deductible amount. The Employer
contributions for any Plan Year shall not exceed the maximum
deductible amount from the Employers' income for federal income
tax purposes determined under the applicable provisions of the
Code.
(b) Time of contribution. All Employer contributions
shall be delivered to the Trustee not later than the date fixed
by law for the filing of the Employers' federal income tax return
for the year for which such contributions are made (including any
extensions for filing).
(c) Trustee duties. The Trustee shall have no duty to
determine whether any contributions delivered to the Trustee
comply wit the provisions of the Plan. The Trustee shall be
accountable only for funds actually received by the Trustee.
4.7 Return of Contributions
Contributions by the Employer, including Basic, Profit
Sharing, Qualified Nonelective, and Matching Contributions, shall
be returned to the Employer in the following instances:
(a) If a contribution by the Employer is mae because of
a mistake of fact, then the contribution shall be returned within
one year after its payment upon the Employer's written request.
(b) Each contribution by the Employer is conditioned
upon the deductibility of the contribution under the applicable
provisions of the Code and to the extent of a disallowance of the
deduction for part or all of the contribution, the contribution
shall be returned within one year after such disallowance upon
the Employer's written request.
4.8 Contribution for Non-Profitable Employer
If one or more of a group of Employers is a member of an
affiliated group within the meaning of Code Section 1504 and is
prevented from making a contribution for any tax year that it
would otherwise have made under this Plan because it has no
current or accumulated earnings or net profits or because those
earnings or net profits are less than the contributions that it
would otherwise have made, then so much of the contribution that
it was so prevented from making may be made for the benefit of
that Employer's Employees who are Participants by all other
members of the group of Employers that are also members of that
affiliated group in accordance with and subject to the provisions
of Code Section 404(a)(3)(B), except as otherwise determined by
the Board.
ARTICLE 5
INVESTMENT OPTIONS
5.1 Effective Date. Effective July 1, 1994, or on such other
date as may be announced by the Administrator subsequent to June
24, 1994, all Accounts of Participants, including amounts
transferred from a Predecessor Plan, shall be invested in
accordance with the rules in this Plan article 5 and as elected
by the Participant.
(a) CrestFunds investment funds. The following
investment funds offered by CrestFunds, Inc., a registered
open-end management investment company, are available for
election by Participants:
(1) CrestFunds Cash Reserve Fund. This Fund
seeks to provide high current income consistent with the
preservation of capital and the maintenance of liquidity by
investing in high-quality, short-term money market instruments,
including floating and variable rate instruments that are
denominated in U.S. dollars and have a remaining maturity of 397
days or less. The Cash Reserve Fund seeks to maintain a constant
$1.00 share price.
(2) CrestFunds Short/Intermediate Bond Fund.
This Fund seeks to provide high current income consistent with
preservation of capital by investing in a broad range of
investment-grade fixed income debt obligations. The
Short/Intermediate Bond Fund is managed to maintain a
dollar-weighted average portfolio maturity of between three and
five years.
(3) CrestFunds Value Fund. This Fund seeks to
provide long-term capital appreciation and current income by
investing primarily in the income-producing equity securities of
companies with large market capitalizations.
(4) CrestFunds Special Equity Fund. This Fund
seeks to provide long-term capital appreciation by investing
primarily in equity securities of companies with small to medium
market capitalizations.
(b) Crestar Stock Fund. This Fund shall be managed by
the Plan's Trustee and shall be invested in Stock and cash in
accordance with the terms of the Plan and the Trust Agreement.
(c) Separate accounting. The interest of each
Participant in any of the investment funds listed in subsections
(a) and (b) shall be maintained by the Trustee so as to reflect
the portion of a Participant's Account attributable to his
contributions, including After-Tax and Rollover Contributions, as
applicable, as well as that portion of his Account attributable
to Employer contributions, including Basic, Qualified
Nonelective, Profit Sharing, and 401(k) Contributions, as
applicable. As of each Valuation Date, the Trustee shall
determine the current market value of Participants' Accounts
invested in each such fund.
5.2 Initial Investment Election
(a) Election allowed. When the investment funds
specified in Plan section 5.1 first are available to
Participants, or when an individual first becomes a Participant
in the Plan, the Participant shall submit a written election form
provided by the Administrator, indicating the Participant's
investment choices for his Account, in multiples of 10% from
among the investment funds indicated in Plan section 5.1. Each
Participant's investment election shall continue in effect until
amended or revoked in accordance with Plan section 5.3.
(b) Default election. Absent an election, a Participant
shall be deemed to have elected to have his entire Account
invested in the CrestFunds Cash Reserve Fund.
(c) Submission of elections. Participants shall submit
their election forms to the Human Resources Director or his
designee at such time and in such manner as the Human Resources
Director may announce.
5.3 Changes in Investment Elections
(a) Elections allowed. After a Participant has made the
initial investment election provided under Plan section 5.2, he
may elect to transfer 25%, 50%, 75%, or 100% of his balance in
any one investment fund to any other investment fund under the
Plan. If, however, the balance remaining in the investment fund
with respect to which a Participant elects to make a transfer is
less than $100, then as of the effective date of such transfer,
the Participant's entire balance in that investment fund will be
transferred to such other fund or funds as the Participant has
elected in accordance with the percentages designated in his
investment change election.
(b) Frequency of elections. An Active Participant may
make only one such change in his investment election during each
month, effective as of the first day of the subsequent month.
(c) Administrator directions. The Administrator shall
adopt and announce procedures regarding changes in investment
elections. The Administrator may, in its discretion, direct the
Trustee to grant permission for special elections for investment
changes to all Participants at such times as it may designate so
that Participants may restructure their investments in accordance
with any of the options set forth in section 5.1.
5.4 Crestar Stock Fund
(a) Allocation by Trustee. The Trustee shall allocate
to the Account of each Participant as of each Valuation Date out
of shares of Stock acquired by the Trustee for such purpose, the
number of full shares and such fractional interest in a share of
such Stock, calculated to the fourth decimal place, as may be
purchased by funds in such Participant's Account available and
designated for such use. Such allocation of shares shall be at
the average cost to the Trustee of the shares purchased for all
Participants' Accounts since the last preceding Valuation Date.
(b) Cash investments allowed. The Trustee may, to the
extent the Trustee deems necessary or appropriate, maintain in
cash a part of the funds available for investment in the Crestar
Stock Fund. The Trustee shall not be liable for interest on the
portions maintained in cash, but the Trustee may invest such cash
in money-market collective investment funds maintained by the
Trustee, which is readily convertible into cash and similar
investments or obligations pending investment in Stock. Although
the Trustee shall maintain a record of such short-term
investments, it shall treat such amounts as cash and allocate any
income derived from such investments on the same basis as the
allocation of dividend income specified in the following
subsections.
(c) Acquisition of Stock. Stock shall be purchased by
the Trustee from time to time out of funds held by the Trustee
under the Plan or advanced by the Employers, either on the open
market, from the Corporation's authorized but unissued Stock, or
by exercising any rights to purchase shares granted with respect
to shares of Stock held by the Trustee.
(d) Holding Stock. The Trustee shall hold, for the
purpose of allocation to the Accounts of Participants, shares of
such Stock which the Trustee has acquired due to withdrawals by
Participants and shares of such Stock forfeited by Participants.
For purposes of allocation, shares of Stock which are held by the
Trustee by reason of a forfeiture shall be deemed to have been
purchased by the Trustee on the Valuation Date coincident with
the date such shares are reallocated at their current Market
Value on such Valuation Date. Shares of Stock held by the
Trustee as a result of a withdrawal shall be deemed to have been
purchased by the Trustee as of the Valuation Date they were
valued for purposes of the withdrawal and reallocated at their
current Market Value as of such Valuation Date.
(e) SEC rules. In acquiring Stock, the Trustee shall
act in accordance with the terms of an exemption under the
Securities and Exchange Commission's Rule 10b-6, which exemption
is to be obtained from the Commission by the Corporation and
renewed from time to time as the Commission may require, and
communicated to the Trustee.
(f) Warrants, rights and options. A Participant shall
have no right to request, direct or demand the Trustee to
exercise on his behalf any rights, warrants or options issued
with respect to Stock credited to his account, and the Trustee,
in its discretion, may exercise or sell any such rights, warrants
or options. In the event such warrants, rights or options are
sold, the Account of each Participant of the Plan shall be
credited with its proportionate share of the proceeds. In the
event such warrants, rights or options are exercised by the
Trustee, each Participant's Account will be credited with the
value of such warrants, rights or options on the date of
exercise, but not the shares thereby acquired, based on the
shares credited to his accounts as of the date such warrants,
rights and options were issued.
(g) Stock dividends and Stock splits. The Trustee shall
credit Participants' Accounts with a proportionate number of
shares of Stock received by it as a result of a Stock dividend or
Stock split on the basis of the number of shares held in each
Participant's Account as of the Valuation Date next following the
ex-dividend or record date, as applicable.
(h) Investment of Income. Dividends on Stock collected
by the Trustee and earnings on temporary investments of cash
pursuant to this Plan section 5.4 shall be credited to the
Participants' Accounts, on the basis of the number of shares held
in each Participant's Account as of the Valuation Date next
following the ex-dividend or record date, as applicable and the
amounts so credited shall be invested in Stock pursuant to this
Plan section 5.4.
(i) Voting of Crestar Stock. Before each annual or
special meeting of the stockholders of the Sponsor, the Sponsor
will furnish each Participant with a copy of the proxy
solicitation material for such meeting, together with a form
addressed to the Trustee requesting the Participant's
confidential instructions on how the full shares of Stock
credited to the Participant's Account as of the most recent
Valuation Date preceding the record date for which the
allocations have been completed by the Trustee should be voted on
each matter to come before the meeting. Upon receipt of such
instructions, the Trustee shall vote such Stock as instructed.
The Trustee shall not vote any shares of Stock credited to a
Participant's Account as of the applicable Valuation Date as to
which it receives no voting instructions pursuant to the
preceding sentence. Any shares of Stock held by the Trustee
which are not credited to a Participant's Account as of the
applicable Valuation Date shall be voted by the Trustee in a
manner that it believes to be consistent with its fiduciary
duties under ERISA Section 404.
ARTICLE 6
VESTING
6.1 Fully Vested Accounts. Nothing will divest any portion
of a Participant's Account that is vested under this Plan section
6.1. However, reductions in value of the vested portion of a
Participant's Account resulting from losses attributable to the
decrease in the value of his Account because of investments or
the allocation of administrative expenses do not constitute
divestiture.
(a) Before May 14, 1993. A Participant shall be fully
vested at all times in his 401(k) Account, his Qualified
Nonelective Account, his Matching Account, and his Rollover
Account.
(b) May 14, 1993 and after. Despite the remaining
provisions of this Plan article 6, an individual who is a
Participant in the Plan on or after May 14, 1993, shall be fully
vested in his entire Account balance under the Plan.
6.2 Vesting of Other Accounts
(a) Certain events during employment. To the extent not
otherwise fully vested, a Participant's entire Account will
immediately become 100% vested if, while he is an Employee, he
dies, reaches his Normal Retirement Age, or becomes Disabled.
(b) Special vesting rule. Despite any other provision
of the Plan as in effect on July 1, 1992, a Participant is 100%
vested in his Account if he has three or more Years of Service
for vesting as of July 1, 1992.
(c) Vesting based on service. At any time, the portion
of a Participant's Account that is not then fully vested under
other provisions of the Plan shall become 100% vested when he
completes five Years of Service for vesting.
(d) Vesting on Plan termination. In the event of this
Plan's complete termination (including termination resulting from
complete discontinuance of Employer contributions), each
Participant shall be 100% vested in the non-vested portion of his
Account which has not been conditionally or permanently forfeited
by that date. In the event of a partial termination of the Plan,
each Participant with respect to whom such partial termination
has occurred shall be 100% vested in the non-vested portion of
his Account which has not been conditionally or permanently
forfeited at that date.
6.3 Amendment of Vesting Schedule
(a) Election by Participant. If the Plan's vesting
schedule is amended or if the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's
vested interest in his Account, or if the Plan is deemed amended
by an automatic change to or from a top-heavy vesting schedule as
provided in Plan article 11, each Participant with at least three
Years of Service for eligibility purposes before the end of the
election period may elect to have his vested percentage computed
under the Plan without regard to such amendment or change. For
Participants who do not have one Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall
be applied by substituting "five years" for "three years." The
period during which the election may be made begins with the date
the amendment is adopted (or deemed to be adopted) and ends on
the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective;
or
(3) 60 days after the Participant is given written
notice of the Plan amendment by the Administrator.
(b) Cutback prohibited. If the Plan's vesting schedule
is amended (or deemed to be amended), in the case of an
individual who is a Participant as of the later of the date the
amendment is adopted or the date the amendment is effective, his
vested percentage as of such date shall not be less than the
percentage computed under the Plan without regard to such
amendment.
6.4 Calculation of Vesting after Distributions. If a payment
(other than a cash-out payment as described in Plan article 8) is
made to a Participant from any Account that is not 100% vested at
that time, then the vested portion of that Account at any time
after that payment is made is to be determined exclusively under
the following formula:
Vested Portion = (P (A + D)) D
Where:
"P" is the appropriate vesting percentage specified under
Plan section 6.2 or Plan article 11 (top-heavy vesting schedule),
at the relevant time;
"A" is the Account balance at the relevant time;
"D" is the sum of all payments made from the Account as of
the relevant time; and
the "relevant time" is the date as of which the vested
portion of that Account is being determined.
The provisions of this Plan section 6.4 will no longer apply,
once the Account becomes 100% vested or the nonvested portion of
the Account is conditionally or permanently forfeited.
6.5 Forfeitures and Their Disposition
(a) Permanent forfeitures. Except as otherwise provided
in this Plan section 6.5, with respect to conditional
forfeitures, the nonvested portion of a Participant's Account
will be permanently forfeited at the later of the date he ceases
to actively work as an Employee or the date he incurs five
consecutive one-year Breaks in Service, unless he returns to
actively work as an Employee before the permanent forfeiture
occurs.
(b) Conditional forfeitures. If a former Participant
receives a cash-out payment under Plan article 8, or if he
terminates employment with no vested interest in his Account
(other than his 401(k) Account), before he incurred a permanent
forfeiture under subsection (a), the nonvested portion of his
Account will be conditionally forfeited when he receives his
cash-out distribution, or in the case of a nonvested Participant,
when he separates from service. Unless reinstated as provided in
subsection (d) below, that conditional forfeiture will become
permanent when the former Participant incurs five consecutive
one-year Breaks in Service.
(c) Disposition. When the nonvested portion of a
Participant's Account is either conditionally or permanently
forfeited, the forfeiture will be subtracted from the
Participant's Account and reallocated to the Accounts of
remaining Participants in the Plan who are eligible to receive an
allocation of such forfeitures in the Plan Year in which the
forfeiture occurs.
(d) Reinstatement of conditional forfeitures. If a
former Participant who has conditionally forfeited the nonvested
portion of his Account returns to employment with an Employer or
Related Company before the date he incurs five consecutive
one-year Breaks is Service (that is, before the date the
conditional forfeiture becomes a permanent forfeiture), the
amount of that conditional forfeiture (without adjustment for
gains or losses in the interim) is to be restored to the
Participant's Account; provided, however, that the conditional
forfeiture of a Participant who received a cash-out payment will
not be reinstated unless the Participant repays to the Plan an
amount equal to the portion of the cash-out payment. That
repayment must be made no later than the earlier of (i) the date
which is five years after the first date on which the Participant
returns to employment for an Employer or Related Company, or (ii)
the close of the first period of five consecutive one-year Breaks
in Service commencing after the cash-out-payment. The source for
any reinstated amount under this subsection may be made, as
directed by the Administrator, from forfeitures under the Plan or
income or gain to the Plan. If the restored amount is not
otherwise available, the Employer shall make a corresponding
Special Contribution for the Plan Year in which the reinstatement
is to be made.
6.6 Service Credit for Vesting
When an Employee incurs five or more consecutive one-year
Breaks in Service for vesting and the number of those consecutive
one-year Breaks equals his Years of Service for vesting, all of
his Years of Service completed prior to such Breaks shall be
disregarded in determining the vested portion of the Participant
in benefits accruing after the Break, unless the Participant then
has a vested interest in his Account.
ARTICLE 7
ELIGIBILITY FOR BENEFITS; LOANS
7.1 In General
Payments from a Participant's Account are to be made only if
authorized under this Plan article 7 and may only be made from
the vested portion of the Participant's Account (or any
subaccount), less the value of any security interest held by the
Plan by reason of a Plan loan outstanding to such Participant.
The undistributed balance of a Participant's Account is subject
to investment adjustments as described in Plan article 12 until
it is completely paid from the Plan or used to purchase an
annuity contract for the Participant or his Beneficiary.
Payments authorized under this Plan article 7 will be paid in
accordance with the provisions of Plan article 8 or 9.
7.2 Retirement. A Participant is deemed to be in
"retirement" under the following circumstances and entitled to
receive his entire Account payable under Plan article 8 as soon
as practicable following the Valuation Date that coincides with
or follows his retirement date.
(a) Normal Retirement. A Participant will be deemed to
have entered Normal Retirement when his Termination Date occurs
on or after his Normal Retirement Date.
(b) Early Retirement. A Participant will be deemed to
have entered Early Retirement when his Termination Date occurs
before his Normal Retirement Date, but on or after the date he
reaches age 55 and has 5 Years of Credit for vesting purposes
(effective for periods prior to June 24, 1994, the later of the
date he reaches age 55 or is credited with 10 Years of Service
for vesting purposes). A Participant has no Early Retirement
Date if the date described in this paragraph would occur after
his Normal Retirement Date. If a Participant's Termination Date
occurs after he has satisfied the service requirement but before
he satisfies the age requirement for Early Retirement, the
Participant will be entitled to elect to receive his Account upon
reaching age 55 if distribution of his Account has previously
been deferred under Plan article 8.
(c) Disability Retirement. A Participant will be deemed
to have entered Disability Retirement when his Termination Date
occurs because of his Disability and before he is eligible for
any other retirement date under this Plan section 7.2. A
Participant's Disability Retirement Date is the date he
terminates employment due to his Disability if this occurs before
any other retirement date in this Plan section.
(d) Late Retirement. A Participant whose Termination
Date occurs after his Normal Retirement Date is deemed to have
elected Late Retirement.
(1) If a Participant's Required Beginning Date
occurs before his actual Termination Date, he must receive or
begin to receive payments from his Account by his Required
Beginning Date as provided in Plan article 8 and in accordance
with Code Section 401(a)(9).
(2) Until such Participant's actual Termination
Date, he shall continue to have the same rights and privileges
and share in any Employer contributions and forfeitures on the
same basis as other Participants in the Plan.
7.3 Distribution on Death
When a Participant dies, his Beneficiary is entitled to
receive the undistributed balance of the Participant's vested
Account in the Plan less the value of any security interest held
by the Plan by reason of a Plan loan outstanding to such
Participant. However, to the extent, that the Participant's
Account was applied before his death to purchase an annuity
contract, his Beneficiary is entitled to receive only the
benefits payable under that contract, if any. To the extent that
the Participant's entire vested Account has been paid by the Plan
before his death, then no death benefits are payable to anyone
under this Plan on his behalf.
7.4 Pre-Retirement Termination
If a Participant's employment with the Employers ends before
any retirement date in Plan section 7.2 and for reasons other
than his Disability or death, he may elect to receive the vested
balance of his Account (less the value of any security interest
held by the Plan by reason of a loan outstanding to such
Participant) payable pursuant to Plan article 8 as soon as
practicable after the Valuation Date following his Termination
Date. The Participant may also elect to defer distribution as
provided in Plan article 8.
7.5 Payments During Employment
No payments may be made from a Participant's Account while
he is an Employee (that is, before his Termination Date), except
in the circumstances described in this Plan section 7.5 and
subject to the spousal consent requirements in subsection (e), if
applicable.
(a) Late Retirement. A Participant who continues
working after his Normal Retirement Date must receive or begin to
payments from his Account by his Required Beginning Date as
described in Plan section 7.2(d) even if he is still an Employee.
(b) Plan Termination. If the Plan is terminated as
provided in Plan article 16 and all Accounts are distributed,
Participants who are Employees may receive their vested Account
balances.
(c) In-service withdrawals. Payments may be made from
the Plan to any Participant who is an Employee under the
following circumstances except that no withdrawal may be made
from the portion of a Participant's Account that is security for
a Plan loan:
(1) After age 59 1/2. A Participant who is an
Employee may withdraw all or any part of his vested Account
balance at any time after he reaches age 59 1/2 by filing a written
request for the withdrawal with the Administrator, provided that
no distribution shall be allowed unless the balance to be
distributed has accumulated for at least 24 months preceding the
date of withdrawal or the Participant has participated in the
Plan for five or more Plan Years. Despite the preceding, a
Participant's in-service withdrawal pursuant to this subsection
may not include any Pension Account or any portion of his
Account, the distribution of which would cause the Plan to cease
to be a qualified plan under Code Section 401(a). The
Administrator may adopt and announce rules with respect to the
ordering of withdrawal payments from a Participant's Account.
(2) Rollover Account. A Participant may
withdraw all or any part of his Rollover Account at any time by
filing a written request for the withdrawal with the
Administrator.
(3) Before Age 59 1/2. Effective June 24, 1994, a
Participant who is an Employee who has not reached age 59 1/2 may
elect one time during each Plan Year, by filing a written request
with the Administrator, to withdraw all or part of his Account,
excluding his 401(k) Account, his Pension Account, and any
portion of his Account attributable to Employer contributions
made within the 24-month period prior to the withdrawal, or any
portion of his Account, the distribution of which would cause the
Plan to cease to be a qualified plan under Code Section 401(a).
(4) Transferred accounts. If all or part of a
Participant's Account is attributable to contributions made under
a Predecessor Plan, the Participant may make withdrawals from
that Account (or applicable portion) at any earlier time
specified in the Predecessor Plan to the extent that such right
is a protected feature under Code Sections 411(d)(6) and
401(a)(4). Such a withdrawal request must be submitted in
writing to the Administrator.
(d) Hardship withdrawals. A Participant who is an
Employee may at any time file a written request with the
Administrator for a hardship distribution. A distribution will
be on account of the Participant's hardship only if the
distribution is made on account of an immediate and heavy
financial need of the Participant which cannot be satisfied from
other resources that are reasonably available to the Participant.
A distribution will be on account of an immediate and heavy
financial need of the Participant if the event giving rise to the
distribution request is one of the deemed hardships listed below.
The Administrator shall direct that a distribution be made only
if it finds that a hardship exists and then only to the extent it
deems necessary to alleviate such hardship.
(1) Deemed hardships. Any of the following
constitutes a hardship for which a distribution will be made
available to a Participant without further approval of the
Administrator, provided the Participant substantiates the actual
expenses involved and complies with the requirements of paragraph
(d)(2) below:
(A) payment of expenses for medical care
described in Code Section 213(d) previously incurred by the
Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152) or payment necessary
for these persons to obtain medical care described in Code
Section 213(d); or
(B) payment of costs directly related to
the purchase of the Participant's principal residence (excluding
mortgage payments); or
(C) payment of tuition and related
educational fees for the next twelve months of postsecondary
education for the Participant or the Participant's spouse,
children, or dependents (as defined in Code Section 152); or
(D) payments necessary to prevent the
eviction of the Participant from his principal residence or
foreclosure on the mortgage of that residence.
(2) Other requirements. A Participant who has a
heavy or immediate financial need under this subsection must also
satisfy the following requirements:
(A) the Participant must have obtained
all distributions, other than hardship distributions, and all
non-taxable loans (determined at the time of the loan) currently
available under all plans maintained by the Employers;
(B) the Participant's Salary Reduction
Election will be suspended for 12 months after receipt of the
hardship distribution and the Participant may not make before-tax
or after-tax contributions to any other plan of an Employer (as
determined in accordance with Treasury regulations under Code
Section 401(k)) during that 12-month period; and
(C) for the Participant's taxable year
immediately following the taxable year of the hardship
distribution, the Participant may not have 401(k) Contributions
allocated to his Account under this Plan or elective
contributions to any other plan of an Employer or Related Company
in excess of the applicable limit under Code Section 402(g) for
the next taxable year minus the amount of such Participant's
401(k) Contribution allocations for the taxable year of the
hardship distribution.
(3) Amount distributable. A distribution will
be deemed necessary to satisfy the financial hardship if the
distribution does not exceed the amount required to meet the
immediate financial need created by the hardship and all
requirements relating to other withdrawals, loans and
contribution suspensions and reduction set forth in this
subsection (d) are satisfied.
(4) Accounts affected. Withdrawals pursuant to
this subsection first reduce the Participant's After-Tax
Contribution Account and then reduce his Rollover Account, his
Matching Account, his vested Basic Account, his Qualified
Nonelective Account, his vested Profit Sharing Account, and
finally his 401(k) Account. From each Account, the hardship
withdrawal shall be taken first from the Cash Reserve Fund,
second from the Short/Intermediate Bond Fund, third from the
Value Fund, fourth from the Special Equity Fund, and last from
investments in the Crestar Stock Fund unless the Administrator
determines that statutory or regulatory requirements or other
laws require a different ordering of investment funds. Despite
the preceding provisions of this paragraph to the contrary, a
Participant may not withdraw any Basic Contributions, Profit
Sharing Contributions or Matching Contributions allocated to his
Account during the 24-month period immediately preceding the
effective date of the withdrawal. After December 31, 1988,
earnings on his 401(k) Account may not be withdrawn under this
subsection (d).
(e) Spousal consent requirements. If a Participant is
married, no withdrawal may be made pursuant to this Plan section
7.5 from any portion of the Participant's Account subject to the
survivor annuity rules described in Plan sections 8.5 and 9.4
unless the Participant's Spouse gives written consent as
described in Plan section 8.5 within the 90-day period preceding
the date of withdrawal.
7.6 Distribution Restrictions for 401(k) and Qualified
Nonelective Accounts. Despite any other provisions of this Plan
to the contrary, except for payments to an Alternate Payee under
a Qualified Domestic Relations Order, no distribution or
withdrawal is permitted from a Participant's 401(k) Account or
from his Qualified Nonelective Account until after one of the
events listed below has occurred:
(a) The Participant has died.
(b) The Participant has become disabled (either
Disabled, or disabled within the meaning of Code Section 105(c)
or (d) or under any other definition of disability consistent
with Code Section 401(k)(2)(B)).
(c) The Participant has retired under the Plan or
otherwise terminated employment with the Employers.
(d) The Participant has incurred a hardship according to
Plan section 7.5.
(e) The Participant has attained age 59 1/2.
(f) The Plan terminates without the establishment or
maintenance of another Defined Contribution Plan.
(g) A Participant's Employer disposes of substantially
all of its assets (within the meaning of Code Section 409(d)(2)
used in its trade or business and that Employee continues
employment with the business that acquires the assets.
(h) A corporation disposes of its interest in the
Participant's Employer, which is a subsidiary of the selling
corporation (within the meaning of Code Section 409(d)(3)), and
the Employee continues his employment with the Employer.
A distribution cannot be made pursuant to an event described in
paragraph (f), (g) or (h) unless the distribution would be a lump
sum distribution under Code Section 402(d)(4) (without regard to
clauses (i), (ii), (iii), and (iv) of subparagraph (A),
subparagraph (B), or subparagraph (F) and, with respect to
paragraphs (f) and (g) above, the transferor corporation must
continue to maintain the Plan after the disposition.
7.7 Loans
(a) Effective Date. The provisions of this Plan
section 7.7 regarding loans are not effective until the
Administrator announces they are effective. Until then,
Participants are not allowed to borrow from their Accounts.
(b) General availability. Any Participant may apply to
the Human Resources Director in writing (on a form approved by
the Director) for a loan from his Account.
In administering this Plan's loan rules, the Director must treat
similarly situated applicants in a like manner and not
unreasonably discriminate between applicants (for example, on the
basis of age or sex), and loans must not be made available to
Highly Compensated Employees on a more favorable basis than to
other Participants. In accordance with this standard, upon
receipt of a loan application, the Director may direct the
Trustee to lend funds from the Participant's Account in the Trust
Fund under the remaining provisions of this section.
(c) Amount. No Plan loan to a Participant shall exceed
the present value of the Participant's vested Account balance. A
Participant may not receive a loan from this Plan in an amount
which, when added to the outstanding balance of all other loans
to the Participant under the Plan and under all other qualified
plans of the Employer and Related Companies, would exceed the
lesser of:
(1) $50,000 reduced by the excess, if any, of
the highest outstanding balance of loans to the Participant
during the one-year period ending on the day before the loan is
made, over the outstanding balance of loans to the Participant on
the date the loan is made, or
(2) one-half the present value of the
Participant's vested Account, or if greater, the total Account up
to $10,000.
A Participant's vested Account balance will be valued as of the
most recent available Valuation Date coinciding with or
immediately preceding the date of the loan.
(d) Additional terms. Any Plan loan to a Participant
shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently
than quarterly, over a period not extending beyond five years
from the date of the loan, unless such loan is used to acquire a
dwelling unit which within a reasonable time (determined at the
time the loan is made) will be used as the principal residence of
the Participant. Each Plan loan must contain provisions for
reasonable interest.
(e) Note; security. For any Plan loan, the Director
must direct the Trustee to obtain an appropriate note. In
addition to a Participant's promise to repay, unless the Director
has determined otherwise according to subsection (i), 50% of a
Participant's Account (exclusive of any amounts that may not be
used as security without endangering the Plan's status as a
qualified plan) secures the loan, subject to the spousal consent
requirements of subsection (f), if applicable. If a Participant
defaults on a loan made under this section, (1) the Director may
require that Participant to pay all collection costs, including
reasonable attorneys' fees incurred by the Trustee in any
collection action taken on the loan (provided that the Director's
decisions on collection costs are made on a basis that does not
impermissibly discriminate among Participants, and (2) in
addition to any other remedy provided in the loan instrument or
instruments or by law, unless the Director has determined
otherwise according to subsection (i), the Director may direct
the Trustee to make a charge against that Participant's Account
in the sequence provided in paragraph (g). The charge authorized
in the prior sentence may be any amount not exceeding the sum of
the amount required to fully repay the loan and the amount of any
collection costs described. In no event, however, may the
Director direct the Trustee to make a charge against the
Participant's Account until that Account is distributable
pursuant to this Plan article 7. If the Plan is required to
distribute benefits to a Participant before a Participant's loan
is repaid in full, the Director may direct that the distribution
be in the form of the Participant's note.
(f) Spousal consent rules. To the extent that a
Participant's Account (or subaccount) is subject to the survivor
annuity rules described in Plan sections 8.5 and 9.4, that
Account (or subaccount) may be used as security for a Plan loan
to a Participant only if the Participant's Spouse gives written
consent within the 90-day period ending on the date on which the
loan is to be so secured. That consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by a
Plan representative or notary public. Such consent is thereafter
binding on the consenting Spouse and on any subsequent Spouse
with respect to that loan. A new consent by the Participant's
Spouse shall be required if the balance of such Account (or
subaccount) is used for renegotiation, extension, renewal, or
other revision of the loan.
(g) Affect on Account. Loans pursuant to this
subsection shall reduce a Participant's Account in the following
order:
1. 401(k) Account
2. Qualified Nonelective Account
3. Vested portion of Basic Account
4. Vested portion of Profit Sharing Account
5. Vested portion of Matching Account
6. Rollover Account
7. After-Tax Contribution Account
Unless the Administrator determines that such a designation is
not consistent with statutory or regulatory requirements or other
laws, a Participant may designate that the proceeds for his loan
will be taken from one investment fund in which his Account is
invested. (For example, a Participant may specify that his loan
proceeds will be taken from his subaccounts, in the order set
forth above, that are invested in the Special Equity Fund.) If a
Participant does not (or is not permitted to) designate a fund
for this purpose, then unless otherwise announced by the
Director, the principal amount of each loan to a Participant
according to this section will be taken first from the Cash
Reserve Fund, second from the Short/Intermediate Bond Fund, third
from the Value Fund, fourth from the Special Equity Fund, and
last from the Crestar Stock Fund. (In other words, loan proceeds
will be taken first from a Participant's 401(k) Account in the
Cash Reserve Fund, second from that Account in the
Short/Intermediate Bond Fund, third from that Account in the
Value Fund, fourth from that Account in the Special Equity Fund,
and fifth from that Account invested in the Crestar Stock Fund,
then from the vested portion of his Basic Account in the Cash
Reserve Fund, et cetera.) If a Participant's designated
investment fund is inadequate to cover the loan amount, then
unless otherwise announced by the Director, the remaining loan
proceeds will be taken from his Account invested in the remaining
investment funds in the same manner as if the Participant had not
designated an investment fund from which loan proceeds were first
to be taken.
(h) Directed investment. To the extent it is consistent
with other provisions of this Plan and the Trust Agreement, all
loans made under this section are considered directed investments
of the borrowing Participant's Account and the earnings
attributable to the loan are separately accounted for and
credited to the Participant's Account from which it is made.
(i) Additional rules. The Director may adopt and
announce additional loan rules not inconsistent with the
provisions of the Plan and this section. For example, the
Director may provide that loans are available only once (or at
certain times) each Plan Year, that loans attributable to a
Participant may not be renewed or increased until all of the
outstanding loans attributable to that Participant are satisfied,
that loans may be limited to certain minimum amounts, that a loan
to an Active Participant is conditioned upon that Participant's
execution of a legally enforceable payroll-deduction form of
repayment, that a Participant's outstanding loan balance be
limited to a certain maximum amount, or that loans are
conditioned upon a Participant's agreement to pay the Plan's
administrative expenses attributable to the loan.
(j) Repayments. The Participant's principal repayments
will be credited to the Account from which the principal amount
of the loan was originally taken in the inverse order from which
the principal amount was originally taken pursuant to subsection
(g). The principal repayments credited to an Account cannot
exceed the principal amount originally taken from that
subaccount. The Participant's interest payments will be credited
to his Account pro rata according to the principal repayment
credited to the Account. Principal repayments and interest
payments will be credited pro rata to the investment funds in
which the applicable Account is then invested.
(k) Distributions before full repayment. Despite any
other provision of the Plan, the portion of a Participant's
vested Account used as security for a Plan loan to a Participant
shall be taken into account for purposes of determining the
amount of the Account balance payable at the Participant's death
or for other reasons pursuant to this Plan article 7, but only if
the reduction is used as a repayment of the loan (and the
canceled note is distributed as part of the payment). The
preceding sentence shall apply only if the Participant has
obtained the Spouse's consent if required under subsection (f)
above, or if no spousal consent if required. If less than 100%
of the Participant's entire Account is payable to the Surviving
Spouse at the Participant's death (determined without regard to
the first sentence of this subsection (k), then the Account
balance shall be adjusted by first subtracting the amount of the
security used as repayment of the loan, and then determining the
benefit payable to the Surviving Spouse.
(l) Bona fide loans only. This section authorizes only
the making of bona fide loans and not distributions. Before
resort is made against a Participant's Account for the failure to
repay a Plan loan, the Director must make all other efforts to
collect the loan as it deems reasonable and practical under the
circumstances.
7.8 Qualified Domestic Relations Order Distributions
(a) Application. This section applies to a
Participant's Account that is subject to a Qualified Domestic
Relations Order.
(b) Separate accounting. During the 18-month period
beginning on the date on which the Administrator receives a
domestic relations order (or a modification of a domestic
relations order) for determination as a Qualified Domestic
Relations Order, the Administrator must separately account for
the amounts that would have been payable to the Alternate Payee
during such period if the order had been determined to be a
Qualified Domestic Relations Order.
(c) Suspension of benefits. No benefits will be
distributed to the Participant to whom a domestic relations order
relates after the date on which the Administrator receives the
order (or modification of an order) for determination as a
Qualified Domestic Relations Order and before the earlier of (i)
the expiration of the 18-month period beginning on that date or
(ii) the date on which the Administrator determines that the
order (or modification of an order) is a Qualified Domestic
Relations Order; or (iii) the date the parties no longer intend
to pursue a Qualified Domestic Relations Order with respect to
the Participant's Account.
(d) Payment. The Trustee will make payments pursuant
to a Qualified Domestic Relations Order as soon as practicable
after the payment date specified in the Order. Such payment date
may be prior to the time the Participant is eligible to receive a
distribution from the Plan pursuant to this Plan article 7.
Payment to the Alternate Payee will be made pursuant to Plan
article 8, except that a Qualified Joint and Survivor Annuity is
not available to an Alternate Payee and his or her spouse. The
Order may not specify a payment option for the Alternate Payee
other than those provided for in Plan article 8. If a
distribution is made to an Alternate Payee who is the
Participant's Spouse or former Spouse, the Participant's
investment in the contract, i.e., his basis in the Plan, will be
allocated to that distribution on a pro rata basis in accordance
with Treasury regulations.
(e) QDRO Account. Upon determination that an order is
a Qualified Domestic Relations Order, amounts subject to the
Qualified Domestic Relations Order that are not immediately
distributable, will be segregated, as of the date the Qualified
Domestic Relations Order requires the amounts to be valued or, if
no such date is specified, as of the Valuation Date on or as soon
as practicable after the Order is determined to be Qualified,
into a separate account for the benefit of the Alternate Payee
(the "QDRO Account") in the Cash Reserve Fund. In no event may
the amount segregated into the QDRO Account exceed the vested
value of the Participant's Account balance under the Plan as of
the Valuation Date on or immediately preceding the date of
segregation. QDRO Accounts will participate in the earnings,
gains or losses of the Cash Reserve Fund in the same manner as a
Participant's Account. An Alternate Payee may not make
withdrawals from his QDRO Account and may not obtain a Plan loan
under Plan section 7.7 with respect to amounts held in his QDRO
Account.
(f) Distributions. A distribution or segregation into
a QDRO Account made pursuant to a Qualified Document Relations
Order will be charged pro rata against a Participant's Account
unless the Order provides otherwise. If a distribution is made
to Alternate Payee under a Qualified Domestic Relations Order
before any amounts are segregated pursuant to subsection (e), in
no event may the distribution exceed the vested value of the
Participant's Account balance under the Plan valued as of the
applicable Valuation Date.
ARTICLE 8
BENEFIT PAYMENTS TO PARTICIPANTS
8.1 Benefit Payments, Generally
(a) Cash-outs. If a Participant becomes entitled to a
payment from his Plan Account under Plan article 7 because he has
terminated employment or retired, and if the vested balance in
his Account does not exceed (and did not exceed at the time of
any prior distribution) $3,500, the Administrator shall direct
payment to the Participant in a single lump sum. Neither the
consent of the Participant nor the consent of the Participant's
Spouse shall be required.
(b) Prior to Normal Retirement Age. If a Participant
becomes entitled to a payment from his Plan Account in accordance
with Plan article 7 and the Participant has not reached the later
of age 62 or Normal Retirement Age, no distribution can be made
without the Participant's written consent if his vested Account
balance exceeds (or at the time of any prior distribution
exceeded) $3,500. If all or a part of the Participant's Account
is subject to the survivor annuity requirements in Plan section
8.5, the Spouse's written consent to the distribution is also
required. The failure of a Participant (and, if applicable, the
Participant's Spouse) to consent to a distribution prior to the
Participant's Normal Retirement Age shall be deemed an election
to postpone payment of his Account until any time sufficient to
satisfy subsection (c). Distributions pursuant to this
subsection (b) must comply with the requirements of Plan section
8.6.
(c) General distribution rule. Subject to the cash-out
rules in subsection (a), unless a Participant otherwise elects,
payment of his benefits shall commence no later than 60 days
after the close of the Plan Year in which occurs the latest of
(1) the earlier of his attainment of age 65 or Normal Retirement
Age; (2) his termination of employment with the Employers; or (3)
the tenth anniversary of the year in which the Participant
commenced participation in the Plan. If the benefit amount
cannot be determined before distribution is required, or if it is
not possible to distribute when required because the
Administrator has been unable to locate the Participant after
reasonable efforts, a distribution retroactive to the required
date under this subsection may be made no later than 60 days
after the earliest date on which the amount of such distribution
is finally ascertained or on which the Participant is located,
whichever is applicable.
(d) Required Beginning Date. Despite any other
provision of the Plan to the contrary, payment of each
Participant's entire interest under the Plan must be made or must
begin no later than his Required Beginning Date.
8.2 Valuation Date for Payments
A Participant's Account shall be valued as of the Valuation
Date immediately following the date the Administrator approves
payment to a Participant and distribution shall be made as soon
as practicable following that Valuation Date.
8.3 Optional Forms of Payment
(a) Optional forms. Unless the cash-out provisions of
Plan section 8.1 apply, each Participant who becomes entitled to
a payment from his Account under Plan article 7 shall have the
right to elect to have the payment made under one of the options
listed below. If a Participant fails to make an effective
payment election, the Administrator shall direct payment in a
lump sum except to the extent any portion of the Participant's
Account is required to be distributed as an annuity pursuant to
Plan section 8.5.
(1) Lump Sum. The value of the Participant's
Account, determined as of the applicable Valuation Date, shall be
paid to him in a single lump sum.
(2) Installment Payments. The value of the
Participant's Account, determined as of the applicable Valuation
Date, shall be paid to the Participant (and to his Beneficiary
after the Participant's death) in substantially equal
installments at least annually and extending over a period not
exceeding the Participant's life expectancy or the joint life
expectancies of the Participant and his designated Beneficiary.
(3) Annuity purchase. The value of the
Participant's Account, determined as of the applicable Valuation
Date, shall be applied to purchase a single-premium,
nontransferable annuity contract from a licensed insurer and
providing one of the following annuity payments. Such contract
shall provide for payments beginning not later than the
Participant's Required Beginning Date and shall comply with the
requirements of this Plan.
(A) Single life annuity. Substantially
equal monthly payments made directly to the Participant during
his lifetime only. At the Participant's death, all payments end.
(B) Qualified Joint and Survivor
Annuity. Substantially equal monthly payments made directly to
the Participant during his lifetime. At the Participant's death,
payments continue to the Participant's Surviving Spouse for the
lifetime of the Surviving Spouse. Monthly payments to the
Surviving Spouse may equal 50%, 75% or 100% of the monthly amount
payable to the Participant, as elected by the Participant.
(4) Protected benefit options. Any payment
option that is provided under a Predecessor Plan immediately
prior to the effective date of such Predecessor Plan's merger
into this Plan shall be allowed as a payment option under this
Plan for Participants who have account balances transferred from
the Predecessor Plan to this Plan, provided that such payment
options are protected benefits under Code Sections 401(a)(5) and
411(d)(6) and applicable Treasury regulations.
(b) Medium of payment
(1) Cash and Stock. A Participant or other
distributee entitled to a non-annuity payment from the Plan under
Plan article 7 or 9 shall receive the number of full shares of
Stock credited to the Participant's Account invested in the
Crestar Stock Fund at the applicable Valuation Date and cash
representing his remaining investments. Such Participant or
other distributee may, however, at the time of his withdrawal
request or within 14 days of the event requiring a payment,
request in writing to the Human Resources Director that such full
shares of Stock be sold by the Trustee and the cash proceeds
distributed to him.
(A) Crestar Stock purchase. The Trustee
may, at its option, purchase any such shares of Stock at the
market value as of the date of distribution for the benefit of
other Participants of the Plan or sell such shares on the open
market. In the event the Trustee sells such shares on the open
market, applicable charges, if any, including brokerage
commissions incident to such sale shall reduce the proceeds of
such sale which would otherwise be distributed to the
Participant.
(B) Certain officers. Despite the
preceding, except in the event of death, Disability or retirement
at Normal Retirement Date, a distributee who is an officer of an
Employer required to file reports under Section 16(a) of the
Securities Exchange Act of 1934 may not elect to have the full
shares of Stock credited to his Account distributed in cash.
(2) Annuity contract. If a Participant's
distribution is in the form of an annuity, the Trustee shall use
the Participant's Account balance to purchase a nontransferable
annuity from a licensed insurance company.
(c) Direct rollovers permitted. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit
a distributee's election with respect to a distribution of Plan
benefits, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an
eligible rollover distribution, payable on or after January 1,
1993, and in an amount of at least $500, paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this subsection (c), the following
definitions apply:
(1) Eligible rollover distribution means any
distribution of all or any portion of the balance to the credit
of the distributee, except that an eligible rollover distribution
does not include: (i) any distribution that is one of a series
of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary, or
for a specified period of ten years or more; (ii) any
distribution to the extent such distribution is required under
Code Section 401(a)(9); and (iii) the portion of any such
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and (iv) any other
distribution(s) reasonably expected to total less than $200
during a calendar year.
(2) Eligible retirement plan means an individual
retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b),
an annuity plan described in Code Section 403(a), or a qualified
plan described in Code Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to a Participant's
Surviving Spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) Distributee includes a Participant or former
Participant. In addition, the Surviving Spouse of a Participant
or a former Participant and the Spouse or former Spouse of a
Participant or former Participant who is an Alternate Payee under
a Qualified Domestic Relations Order are distributees with regard
to the interest of the Spouse or former Spouse.
(4) Direct rollover means a payment by the Plan
to the eligible retirement plan specified by the distributee.
8.4 Election Procedure
(a) Application. The provisions of this section apply
to any Participant whose Account (or subaccount) is not subject
to the survivor annuity requirements in Plan section 8.5
(b) Explanation of payment options. No less than 30
days and no more than 90 days before a Participant is to receive
a distribution from his Account, the Participant shall be given a
written notice about the payment options available. The notice
shall be given by first class mail or personal delivery and shall
contain a general explanation, written in a manner intended to be
understood by the Participant, of (1) the terms, conditions, and
material features of the payment options provided under the Plan;
(2) an explanation of the relative values of those optional
forms; (3) the Participant's right, if applicable, to postpone
distribution of his benefits until what would have been his
Normal Retirement Age; (4) the method in which his benefit will
be paid if he does not elect a form of benefit payment; (5) the
Participant's right to make, and the effect of, an election to
receive benefits under the available options; and (6) the
Participant's right to make and the effect of a revocation of any
election.
(c) Elections. A Participant's election to postpone any
distribution until what would have been his Normal Retirement Age
or his election of any payment form shall be made in writing to
the Administrator, on such forms as the Administrator may
require, during the election period. The election period is the
90 day period ending on the date on which payment of a
Participant's benefits are to be paid or are to begin. Despite
the preceding, however, a Participant cannot make an election
until he has received the explanation required by subsection (b).
Unless otherwise announced by the Administrator, any election may
be altered, amended, or revoked by the Participant during the
election period, subject to the rules of any insurance company
that may have issued or is in the process of issuing an annuity
contract and subject to the survivor annuity requirements in Plan
section 8.5, if applicable. After a Participant's election
period ends, no further elections or adjustments in the amount of
his allowance will be permitted.
8.5 Survivor Annuity Requirements
(a) Application. The requirements of this Plan section
apply to all distributions made from the Plan for any Participant
who elects at any time to receive his benefit payments in the
form of an annuity. The requirements of this Plan section also
apply to all distributions made from a Participant's Account to
the extent such Account (or subaccount) is transferred to this
Plan from a Predecessor Plan on or after January 1, 1985, under
which the Participant's benefit was required to be paid as an
annuity under Code Sections 401(a)(11) and 417.
(b) Form of distribution. Unless a Participant
described in subsection (a) has made an effective election of an
optional payment form within the 90-day period ending on his
Annuity Starting Date, his vested Account under the Plan must be
distributed in the form of a Qualified Joint and Survivor Annuity
if he is married and in the form of a single life annuity if he
is not married. The Participant may elect to have such annuity
distributed upon the attainment of the earliest retirement age
under the Plan.
(c) Election of optional form. After he has received
the explanation required by subsection (e), a Participant may
elect to waive the annuity payment at any time during the period
beginning 90 days before his Annuity Starting Date and have his
Account distribution paid under one of the options set forth in
the Plan section entitled "Forms of Benefit Payment." A
Participant may revoke any such election at any time during his
90-day election period. A Participant may elect, revoke, and
elect again as many times as he wishes as long as such actions
are taken within the 90-day election period. An election of an
optional form of benefit shall be made in writing to the
Administrator and, except as provided below, the Participant's
election shall become effective as of his Annuity Starting Date.
After the Participant's Annuity Starting Date, no further
elections will be permitted.
(d) Spousal consent. A Participant's election pursuant
to this Plan section will not become effective as of his Annuity
Starting Date unless, within the 90-day period ending on the
Annuity Starting Date, his Spouse has consented in writing to his
election and the election designates a specific optional form of
benefit payment and, if applicable, a specific non-spouse
Beneficiary (including any class of Beneficiaries or any
contingent Beneficiaries) which may not be changed without
spousal consent (or the Spouse has expressly permitted the
designations to be changed without further consent by the
Spouse). The consent of the Participant's Spouse must
acknowledge the effect of the Participant's election and must be
witnessed by a Plan representative or notary public. Despite the
preceding, the consent of the Participant's Spouse is not
required if the Participant establishes to the satisfaction of a
Plan representative that such written consent cannot be obtained
because there is no Spouse, because the Spouse cannot be located,
or because of such other circumstances as applicable Treasury
regulations may prescribe. Any consent under this subsection is
valid only with respect to the Spouse who signed the consent.
Any establishment that the consent of a Spouse cannot be obtained
is valid only with respect to that designated 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 form
of benefit, or if applicable, to a specific Beneficiary and that
the Spouse voluntarily relinquishes this right.
(e) Explanation required. No less than 30 days and no
more than 90 days before a Participant's Annuity Starting Date,
the Administrator must provide the Participant with a general
written explanation which contains the information required by
Plan section 8.4(b) and also includes an explanation of (1) the
terms and conditions of the Qualified Joint and Survivor Annuity
or single life annuity; (2) the Participant's right to make, and
the general financial effect of, an election to waive the
Qualified Joint and Survivor Annuity or single life annuity; and
(3) the rights of the Participant's Spouse. This notice shall be
given by first class mail or personal delivery.
8.6 Restrictions on Immediate Distributions
(a) Application. The consent requirements in this Plan
section 8.6 apply to any distribution of a Participant's Account
if the Account is immediately distributable; that is if, at the
time the Account is distributable under Plan article 7, (1) the
vested Account balance exceeds (or at the time of any prior
distribution exceeded) $3,500, and (2) the Participant has not
attained (or if alive would not have attained) the later of
Normal Retirement Age or age 62.
(b) Participant's consent to distribution. A
Participant must give consent in writing to any distribution of
his Account if the Account is immediately distributable. The
consent must be given within 90-day period ending on the Annuity
Starting Date. If the Participant's Account (or subaccount) is
not subject to the survivor annuity rules in Plan section 8.5,
the Spouse's consent to the distribution is not required and the
distribution may commence less than 30 days after the notice
described in subsection (d) is given, provided that:
(1) the Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice described in subsection
(d) to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(c) Consent of Participant's Spouse. If the
Participant's Account (or subaccount) is subject to the survivor
annuity rules in Plan section 8.5, the Participant's Spouse must
also given written consent to a distribution of the Participant's
Account while it is immediately distributable. Despite the
preceding, only the Participant need consent if the distribution
is in the form of a Qualified Joint and Survivor Annuity. If the
Participant is deceased, only the Surviving Spouse needs to
provide written consent to the distribution.
(d) Notice. The Administrator must notify the
Participant and the Participant's Spouse (or their survivor) of
the right to defer any distribution that is immediately
distributable. The notice must include a general description of
the material features and an explanation of the relative values
of the optional forms of payment available under the Plan in a
manner that would satisfy the notice requirements of Code Section
417(a)(3), and shall be provided no less than 30 days and no more
than 90 days prior to the Annuity Starting Date.
(e) Exceptions. Neither the consent of the Participant
nor the Participant's Spouse shall be required to the extent
that a distribution is required to satisfy Code Section 401(a)(9)
or Section 415. In addition, upon termination of this Plan if
the Plan does not offer an annuity option (purchased from a
commercial provider) and if neither an Employer nor a Related
Company maintains another Defined Contribution Plan (other than
an employee stock ownership plan as defined in Code Section
4975(e)(7)), the Participant's Account balance will, without the
Participant's consent, be distributed to the Participant.
However, if an Employer or Related Company maintains another
Defined Contribution Plan (other than an employee stock ownership
plan as defined in Code Section 4975(e)(7)), then the
Participant's Account balance will be transferred, without the
Participant's consent to the other plan if the Participant does
not consent to an immediate distribution.
8.7 Distribution Requirements under Code Section 401(a)(9)
(a) Application. Subject to the survivor annuity
requirements of Plan section 8.5, the requirements of this Plan
section 8.7 shall apply to any distribution of a Participant's
Account and will take precedence over any inconsistent provisions
of this Plan. Unless otherwise specified, the provisions of this
Plan section 8.7 apply to calendar years beginning after December
31, 1984. All distributions required under this Plan section 8.7
shall be made in accordance with the proposed Treasury
regulations under Code Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Proposed Treasury
regulation Section 1.401(a)(9)-2.
(b) Required Beginning Date. As required by Code
Section 401(a)(9), each Participant's entire interest under this
Plan must be or must begin to be distributed not later than his
Required Beginning Date. Except as provided below, a
Participant's Required Beginning Date is April 1 of the calendar
year following the calendar year in which the Participant attains
age 70 1/2.
(1) For a Participant who is not a 5%-owner (as
defined in Code Section 416(i)), who attains age 70 1/2 during the
1988 calendar year, and who has not retired as of January 1,
1989, the Required Beginning Date is April 1, 1990.
(2) For a Participant who is not a 5%-owner (as
defined in Code Section 416(i)), and who attains age 70 1/2 before
January 1, 1988, his Required Beginning Date is April 1 of the
calendar year following the later of (i) the calendar year in
which he retires or (ii) the calendar year in which he attains
age 70 1/2.
(3) For a Participant who attains age 70 1/2 before
January 1, 1988, and who is a 5%-owner (as defined in Code
Section 416(i)) of the Employer during any Plan Year that ends
with or within the calendar year in which he attains 66 1/2 or
during any later Plan Year, the Required Beginning Date is April
1 following the later of (i) the calendar year in which the
Participant attained age 70 1/2 or (ii) the earlier of the calendar
year which ends with or within the Plan Year during which the
Participant becomes a 5% owner or the calendar year in which the
Participant retires.
(4) In accordance with an appropriate election
made by a Participant by December 31, 1983, to defer distribution
in accordance with the pre-TEFRA 242(b) transition rule, which
has not been revoked or modified as provided in subsection (k)
below.
(c) Limits on distribution period. As of the first
distribution calendar year, distributions, if not made in a
single sum, may only be made over one or a combination of the
following periods:
(1) the life of the Participant;
(2) the lives of the Participant and a
designated Beneficiary;
(3) a period certain not extending beyond the
Participant's life expectancy; or
(4) a period certain not extending beyond the
life expectancy of the Participant and a designated Beneficiary.
If a Participant fails to elect a distribution method that
complies with these requirements, the Plan Administrator, in its
sole discretion, may direct distribution in any of the Plan's
required distribution methods that meets these distribution
requirements (and, if applicable, satisfies Code Sections
401(a)(11) and 417)).
(d) Distribution amount. If a Participant's Account is
to be distributed other than in a lump sum, the following rules
apply:
(1) If a Participant's Account is to be
distributed over a period described in subsection (c)(3) or
(c)(4) or a period not extending beyond the life expectancy of
the designated Beneficiary, the amount required to be distributed
in each calendar year, beginning with the first distribution
calendar year, must at least equal the quotient obtained by
dividing the Participant's Account by the applicable life
expectancy.
(2) For calendar years beginning before January
1, 1989, if the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure that
at least 50% of the present value of the amount available for
distribution is paid within the Participant's life expectancy.
(3) For calendar years beginning after December
31, 1988, the amount to be distributed each year, beginning with
distributions for the first distribution calendar year must not
be less than the quotient obtained by dividing the Participant's
Account by the lesser of (i) the applicable life expectancy or
(ii) if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from the table set
forth in Proposed Treasury regulation Section 1.401(a)(9)-2,
Q&A-4. Distributions after the death of the Participant shall be
distributed using the applicable life expectancy in subsection
(d)(1) above as the relevant divisor without regard to Proposed
Treasury regulation Section 1.401(a)(9)-2.
(4) The minimum distribution required for the
Participant's first distribution calendar year must be made on or
before the Participant's Required Beginning Date. The minimum
distribution for other calendar years, including the minimum
distribution for the distribution calendar year in which the
Participant's Required Beginning Date occurs, must be made on or
before December 31 of that distribution calendar year.
(e) Life expectancy. The life expectancy of the
Participant, and if the designated Beneficiary is the
Participant's Spouse, the life expectancy of the Spouse (other
than in the case of a life annuity) may be redetermined but not
more frequently than annually. If the Participant fails to make
an election with respect to the annual redetermination of his
life expectancy or the life expectancy of his Spouse, the
Administrator must recalculate life expectancies on an annual
basis. A Participant's election is irrevocable as of his
Required Beginning Date. Life expectancy of a non-Spouse
Beneficiary may not be recalculated.
(1) Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples
in Table V or VI, as applicable, of Treasury regulation Section
1.72-9.
(2) For purposes of this section, life
expectancies are calculated using the attained age of the
Participant (or designated Beneficiary) as of the Participant's
(or designated Beneficiary's) birthday in the applicable calendar
year reduced by one for each calendar year which has elapsed
since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy
shall be the life expectancy as so recalculated. The applicable
calendar year shall be the first distribution calendar year, and
if life expectancy is being recalculated, such succeeding
calendar year.
(f) Annuity purchase. If a Participant's benefit is
distributed in the form of an annuity purchased from an insurance
company, distributions under the annuity contract must comply
with the requirements of Code Section 401(a)(9) and applicable
Treasury regulations.
(g) Death during payment period. If a Participant dies
after distribution of his interest has begun according to a
method that satisfies the requirements of subsection (c) but
before his entire interest has been distributed, then the
remaining portion of his interest must be distributed at least as
rapidly as under the method of distribution being used as of the
date of the Participant's death.
(h) Death before any payments. If a Participant dies
before distribution of his interest has been made or has begun
according to a method that satisfies the requirements of
subsection (c), then the entire interest of the Participant must
be distributed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the extent
that an election is made to receive the distributions in
accordance with (1) or (2) below:
(1) If any portion of the Participant's interest
is payable to or for the benefit of a designated Beneficiary,
that portion will be distributed according to Treasury
regulations over the life of the designated Beneficiary (or over
a period not extending beyond the life expectancy of the
designated Beneficiary), and distributions begin not later than
December 31 of the calendar year immediately following the
calendar year in which the Participant died; or
(2) If the designated Beneficiary is the
Participant's Surviving Spouse, the date distributions are
required to begin in accordance with paragraph (1) above shall
not be earlier than the later of (i) December 31 of the calendar
year immediately following the calendar year in which the
Participant died and (ii) December 31 of the calendar year in
which the Participant would have attained age 70 1/2. If the
Surviving Spouse dies before the distributions to the Spouse
begin, then paragraph (1) will apply as if the Surviving Spouse
were the Participant.
If the Participant does not made an election
pursuant to this subsection (h) before his death, the designated
Beneficiary must elect the method of distribution no later than
the earlier of (1) December 31 of the calendar year in which
distributions would be required to begin under this subsection,
or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of the Participant's death. If the
Participant has no designated Beneficiary, of if the designated
Beneficiary does not elect a method of distribution, distribution
of the Participant's entire interest must be completed by
December 31 of the calendar year containing the fifth anniversary
of the Participant's death. For purposes of this subsection,
distribution of a Participant's Account is considered to begin on
the Participant's Required Beginning Date (or, if the provisions
of the last sentence of subsection (h)(2) apply, the date
distribution is required to begin to the Surviving Spouse
pursuant to paragraph (2) above).
(i) Distribution calendar year. A distribution calendar
year is a calendar year for which a minimum distribution is
required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the
Participant's Required Beginning Date. For distributions
beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are
required to begin pursuant to this Plan section 8.7.
(j) Participant's benefit. The Participant's benefit is
his Account balance as of the last Valuation Date in the calendar
year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the Account balance as
of dates in the valuation calendar year after the Valuation Date
and decreased by distributions made in the valuation calendar
year after the Valuation Date. If, however, any portion of the
minimum distribution for the first distribution calendar year is
made in the second distribution calendar year on or before the
Required Beginning Date, the amount of the minimum distribution
made in the second distribution calendar year shall be treated as
if it had been made in the immediately preceding distribution
calendar year.
(k) Pre-TEFRA election transition rule. Despite the
preceding provisions of this Plan section and subject to the
election procedures described in this Plan article, distribution
on behalf of a Participant, including a 5% owner, may be made in
accordance with his pre-TEFRA 242(b) election if such election
was allowed under a Predecessor Plan and complies with the
requirements of this subsection.
(1) The Participant had an accrued benefit under
the Plan as of December 31, 1983, and made a written distribution
designation under the transition rule provided in Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act of
1982, which satisfies the following requirements:
(A) The distribution designation was in
writing, was signed by the Participant, and was made before
January 1, 1984.
(B) The method of distribution selected
in the designation is one which would not have disqualified the
Plan under Code Section 401(a)(9) as in effect on December 31,
1982, and the actual distribution conforms with the method
selected in the designation.
(C) The designation specifies the time
at which distribution will commence, the period over which
distributions will be made, and for any distribution upon the
Participant's death, the Beneficiaries of the Participant listed
in the order of priority.
(D) The designation has not been revoked
at the time distribution is to begin in accordance with the
designation. Any change in the designation will be considered a
revocation of the designation, but the mere substitution or
addition of another Beneficiary (one not named in the
designation) under the designation is not a revocation as long as
the substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the measuring life).
(E) The designation qualified for the
special transition rule under applicable Treasury regulations
relating to Code Section 401(a)(9).
If a distribution designation or the method of
distribution specified in the designation fails to meet all of
these requirements or if a distribution designation is revoked or
deemed to be revoked, then distribution of the Participant's
benefit must be made as otherwise provided under the Plan.
(2) A distribution upon death will not be covered
by this transition rule unless the information in the pre-TEFRA
242(b) election contains any other information required by the
Secretary of the Treasury.
(3) If a Participant revokes a pre-TEFRA 242(b)
election, any subsequent distribution must satisfy the
requirements of this Plan section, Code Section 401(a)(9), and
applicable Treasury regulations. If the revocation occurs after
the date distributions would otherwise have been required to
begin under this Plan section, then the total amount not yet
distributed, which, but for the pre-TEFRA 242(b) election, would
have been required to have been distributed to satisfy Code
Section 401(a)(9) and applicable Treasury regulations, must be
distributed by the end of the calendar year following the
calendar year in which such election is revoked. For calendar
years beginning after December 31, 1989, such distributions must
satisfy the minimum distribution incidental requirements of
applicable Treasury regulations.
(4) If a Participant has a pre-TEFRA 242(b)
election with respect to any amount that is transferred or rolled
over to this Plan, distribution of such amounts shall be subject
to the requirements of applicable Treasury regulations.
8.8 Receipt for Payment. The Trustee may refuse to make a
distribution or payment to any person who is, in its judgment,
incapable for any reason of giving a valid receipt for such
distribution or payment and, unless a claim has been made by a
duly appointed guardian or other personal representative for such
person, may make such payment or a partial payment to any person,
institution or agency which, in the judgment of the Trustee, is
then contributing toward or furnishing the support of such
person, and the receipt of such payee shall be a complete
discharge to the Trustee.
8.9 Payments to Minors and Incompetents
If any Plan benefits become payable to a Participant or
Beneficiary who is a minor or who, in the opinion of the
Administrator, is not legally capable of giving valid receipt and
discharge for such benefits, that payment may be made for the
benefit of the Participant or Beneficiary to such person as the
Administrator in its discretion designates, including the
guardian or legal representative of the Participant or
Beneficiary. Such payments shall, to the extent made, be deemed
a complete discharge of any liability for such payment under the
Plan, and the Trustee may make the payment without obligation to
require bond or to see to the further application of payments.
8.10 Unclaimed Benefits
If the Plan cannot make payments of any amount to a
Participant or Beneficiary within five years after the amount
becomes payable because the person's identity or whereabouts
cannot be determined by the end of the five-year period, all
amounts that would have been payable to that Participant or
Beneficiary must be segregated by the Administrator and then
dealt with according to the laws of the state by which this Plan
is governed that pertain to abandoned intangible personal
property held in a fiduciary capacity. No payment shall
thereafter be due from this Plan to the extent that the person's
benefit has been paid to someone else pursuant to the escheat
laws of any jurisdiction.
ARTICLE 9
DEATH BENEFIT PAYMENTS
9.1 General Provisions on Death Benefits
(a) Application. The provisions of this Plan article 9
relating to death benefits apply to the distribution of the
Account of any Participant who dies before his entire vested
Account has been distributed. To the extent that a Participant's
Account has been applied to purchase an annuity contact, his
Beneficiary is entitled to receive only the benefits payable
under the annuity contract, if any. Following a Participant's
death, his undistributed Account balance in the Plan shall
continue to be adjusted for gains or losses and administrative
expenses in accordance with the provisions of the Plan governing
the adjustment of Account balances for other distributions.
(b) Death before Annuity Starting Date. Upon the death
of a Participant before his Annuity Starting Date, the entire
undistributed vested balance of his Account (less the value of
any security interest held by the Plan by reason of a Plan loan
outstanding to such Participant) shall be distributed to the
Participant's Beneficiary in accordance with the provisions of
this Plan article 9. Such distribution shall be made as soon as
practicable after the Administrator receives satisfactory
evidence of the Participant's death, based on the value of the
Participant's undistributed vested Account balance as soon as
practicable following the Valuation Date following the
Administrator's determination that all requirement have been
satisfied with respect to the payment of death benefits to the
Beneficiary.
(c) Death after Annuity Starting Date. If a Participant
dies after his Annuity Starting Date, any undistributed vested
balance in the Participant's Account will be distributed to his
Beneficiary as provided in this Plan article 9 except if a
Participant has elected an annuity form of payment under Plan
article 8. In that case, the death benefits, if any, will be
provided in accordance with the terms of the Participant's
annuity contract.
(d) Restrictions on payments. Despite any other
provision of this Plan article 9, payment of any death benefits
under the Plan must comply with the Code section 401(a)(9)
restrictions as described in Plan article 8 and applicable
Treasury regulations. The Administrator is sot obligated to
direct the payment of death benefits until the Administrator
receives satisfactory evidence of the Participant's death.
9.2 Designation of Beneficiary
(a) Designation. Except as provided in subsection (b),
a Participant may designate a Beneficiary or Beneficiaries,
indicating single, multiple, primary, or secondary Beneficiaries.
Each designation must be in writing, signed by the Participant,
delivered to the Administrator, and if applicable under
subsection (b), be consented to by the Participant's spouse.
Each designation is revocable. A Participant's Beneficiary
designation or change in a Beneficiary designation is not
effective until received by the Administrator. The
Administrator, the Trustee, and an Employer are not liable for a
failure to make a Beneficiary change between the time requested
and the Participant's death unless the failure is willful or from
substantial negligence; and one party is not liable for the
failure of another party.
(b) Married Participant
(1) Survivor Annuity requirements. If a
Participant is married and if the distribution of all or part of
his Account is subject to the annuity rules in the section of
Plan article 8 entitled "Survivor Annuity Requirements," the
Participant's Beneficiary (for that portion of his Account) is
his Surviving Spouse unless the Spouse consents as provided in
that section or in Plan section 9.3 to the Participant's
designation of another Beneficiary.
(2) Non-annuity requirements. If a Participant is
married and no part of his Account is subject to the section in
Plan article 8 entitled "Survivor Annuity Requirements," the
Participant's Beneficiary is his Surviving Spouse unless the
Spouse consents to the Participant's designation of a different
Beneficiary. The Spouse's consent must be in writing, must
acknowledge the effect of the Participant's election, and must be
witnessed by a Plan representative or a notary public. With the
Surviving Spouse's consent, the provisions of subsection (b) are
effective for that Participant. If the Administrator is
satisfied that the consent described in this subsection may not
be obtained because the Participant has no Spouse, because the
Spouse cannot be located, or because of such other circumstances
as applicable regulations may prescribe, the provisions of
subsection (b) are effective;
(c) Qualified Domestic Relations Order. To the extent
provided in a Qualified Domestic Relations Order, the Alternate
Payee recognized by such Order as the Participant's Beneficiary
shall be the Participant's Beneficiary at his death.
(d) No designation. If the provisions of subsection (c)
do not apply, and if there is no valid Beneficiary designation by
the Participant (together with a valid spousal consent described
in subsection (b), if applicable) or if the designated
Beneficiary or Beneficiaries fail to survive the Participant or
are no longer in existence at his death, Beneficiary means the
Participant's Surviving Spouse, and if there is no Surviving
Spouse, the Participant's estate.
9.3 Payment Form for Death Benefits
(a) Cash Outs. If the vested balance in a deceased
Participant's Account does not exceed (and at the time of any
prior distribution did not exceed) $3,500, the Administrator
shall direct payment to the Beneficiary in a single lump sum. No
consent of the Beneficiary (including a Surviving Spouse) is
required before such distribution is made.
(b) Spouse's consent. If the value of a deceased
Participant's Account exceed (or at the time of any prior
distribution exceeded) $3,500, the Surviving Spouse must consent
to any distribution made before the date on which the
Participant would have attained the later of Normal Retirement
Age or age 62. The requirements of Plan section 8.6 shall apply.
(c) 401(a)(9) restrictions. Death benefits must begin
or be paid within the time specified and in accordance with Code
401(a)(9) as described in Plan article 8 and applicable Treasury
regulations.
(d) Beneficiary election. Subject to the preceding
subsections, any death benefits payable to a Beneficiary because
the Participant dies before his Annuity Starting Date may be paid
in any payment option allowed under Plan article 8 and elected by
the Beneficiary other than a Qualified Joint and survivor Annuity
with such Beneficiary's spouse. If the Participant did not
specify a payment option and the Beneficiary does not make a
payment election, any death benefits will be distributed to the
Beneficiary in a lump sum. If the Participant dies after his
Annuity Starting Date, benefits will be paid in the payment
method elected by the Participant and in effect at his death.
Despite the preceding, if the payment form in effect is an
installment option (not an annuity), the Beneficiary may elect to
receive a lump sum payment of the remaining installments, if any.
9.4 Qualified Preretirement Survivor Annuity
(a) Application. The provisions of this Plan section
apply only to a Participant whose Account (or subaccount) is
subject to the survivor annuity rules described in Plan section
8.5, and who has a Surviving Spouse at his death before his
Annuity Starting Date. The provisions of this Plan section apply
only to the portion of the Participant's Account that is subject
to the annuity rules.
(b) Form of payment. If such a Participant has a vested
interest in his Account and if he is married on the date of his
death, his Surviving Spouse shall be entitled to receive a
Qualified Preretirement Survivor Annuity unless an effective
waiver has been made pursuant to this Plan section. Subject to
the cash-out rules in Plan section 9.3, the Surviving Spouse
shall receive such benefit in the form of an annuity contract
providing payments for his or her lifetime unless such Surviving
Spouse elects otherwise. The Surviving Spouse may elect to have
the annuity contract distributed within a reasonable time after
the Participant's death.
(c) Waiver of annuity. After the Participant has
received the explanation required by subsection (e), the
Participant may elect in writing at any time during his election
period to waive the Qualified Preretirement Survivor Annuity
coverage and to have the remaining provisions of this Plan
article 9 apply with respect to the payment of any death benefits
to the Surviving Spouse or to name a non-Spouse Beneficiary. A
Participant may revoke any such election at any time during his
election period. A Participant may elect, revoke, and elect
again as long as such actions are taken within the election
period. For purposes of this Plan section 9.4, a Participant's
election period begins on the first day of the Plan Year in which
he attains age 35 and ends on the date of his death. If a
Participant's Termination Date occurs before the beginning of
such election period, his election period shall begin on the his
Termination Date with respect to his Account balance as of his
Termination Date. If the Administrator announces and provides
the written explanation required by subsection (e), a Participant
may waive the Qualified Preretirement Survivor Annuity coverage
before the first day of the Plan Year in which he attains age 35,
but on the first day of the Plan Year in which he attains age 35,
his waiver becomes invalid and the Qualified Preretirement
Survivor Annuity coverage is automatically reinstated; any new
waiver on or after that date is subject to the full requirements
of this Plan section.
(d) Spousal consent. A Participant's election to waive
the Qualified Preretirement Survivor Annuity coverage shall not
take effect at his death unless, during his election period (as
described in subsection (c) above), his Surviving Spouse
consented in writing to such election and the election designates
a specific nonSpouse Beneficiary (including any class of
Beneficiaries or any contingent Beneficiaries) which may not be
changed without spousal consent (or the Surviving Spouse has
expressly permitted the designations to be changed without
further consent). The Surviving Spouse's consent must
acknowledge the effect of the Participant's election and must be
witnessed by a Plan representative or notary public. Despite the
preceding sentence, the consent of a Surviving Spouse is not
required if it is established to the satisfaction of a Plan
representative that such written consent cannot be obtained
because there is no Surviving Spouse, because the Surviving
Spouse cannot be located, or because of such other circumstances
as applicable Treasury regulations prescribe. Any consent under
this provision is valid only with respect to the Spouse who
signed the consent. Any establishment that the consent of a
Spouse cannot be obtained is valid only with respect to that
designated 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 that the Spouse voluntarily
elects to relinquish such right. If a Participant's waiver of
the Qualified Preretirement Survivor Annuity is effective upon
his death, any amounts payable under the Plan on behalf of such
Participant after his death will be distributed as provided in
Plan section 9.3.
(e) Explanation required. The Administrator must
provide each Participant with a general written explanation of
(1) the terms and conditions of the Qualified Preretirement
Survivor Annuity coverage described in this section; (2) the
terms, conditions, and other material features of any optional
payment forms for death benefits under this Plan article 9; (3)
an explanation of the relative values of those forms; (4) the
Participant's right to make, and the effect of, an election not
to receive such Qualified Preretirement Survivor Annuity
coverage; (5) the rights of the Participant's Spouse; and (6) the
right to make, and the effect of, a revocation of the waiver.
The explanation must be provided during whichever of the
following periods ends last:
(1) the period beginning on the first day of the
Plan Year in which the Participant attains age 32 and ending with
the close of the Plan Year preceding the Plan Year in which the
Participant attains age 35.
(2) a reasonable period ending after the
individual becomes a Participant.
(3) a reasonable period after the Participant
first becomes subject to the survivor annuity requirements.
(4) a reasonable period ending after separation
from service in the case of a Participant who separates from
service before attaining age 35.
For purposes of paragraphs (2), and (3), a reasonable period is
the end of the two-year period beginning one year prior to the
date of the applicable event and ending one year after that date.
For purposes of paragraph (4), notice must be provided within the
two-year period beginning one year prior to separation and ending
one year after separation; and if the Participant later returns
to employment with the Employer, the applicable period for that
Participant shall be redetermined under the rules stated above.
ARTICLE 10
CLAIMS PROCEDURES
10.1 Claims Procedure
(a) Submission of claims. Claims for benefits under the
Plan must be submitted to the Human Resources Department (prior
to May 14, 1994, to the Administrator) or such persons as it may
designate in writing who shall have the initial responsibility
for determining the eligibility of any Participant or Beneficiary
for benefits. All claims for benefits shall be made in writing
and shall set forth the facts which such Participant or
Beneficiary believes to be sufficient to entitle him to the
benefit claimed. The claims reviewer may adopt forms for the
submission of claims for benefits in which case all claims for
benefits shall be filed on such forms.
(b) Response to claim. On receipt of a claim, the
claims reviewer must respond in writing within 90 days. If
necessary, the first notice to the claimant must indicate any
special circumstances requiring an extension of time for the
decision on the claim. The extension notice must indicate the
date by which the reviewer expects to give a decision. An
extension of time for processing may not exceed 90 days after the
end of the initial 90-day period.
(c) Denied claims. If a claim is wholly or partially
denied, written notice must be given to the claimant within that
time provided in subsection (b). If notice that a claim has been
denied is not furnished within that time, the claim is deemed
denied. An adverse notice must be written in a manner calculated
to be understood by the claimant and must include (1) each reason
for denial; (2) specific references to the pertinent provisions
of the Plan or related documents on which the denial is based;
(3) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why that material or information is needed; and
(4) appropriate information about the steps to be taken if the
claimant wishes to submit the claim for review.
10.2 Review of Denied Claims
(a) Review request. Within 60 days after receiving a
notice of a denied claim for benefits (or within 60 days of the
date a claim is deemed denied under Plan section 10.1(c)), a
claimant or his duly authorized representative may request in
writing to the Human Resources Director (or to the Administrator
prior to May 14, 1993) that the denied claim be reviewed. The
claimant may request that the Committee review the denied claim.
(b) Possible hearing. The Human Resources Director (or
prior to May 14, 1994, the Administrator) or the designated
reviewer must determine whether there will be a hearing. The
claimant and an authorized representative are entitled to be
present and heard at any hearing that is used as part of the
review. Before any hearing, the claimant or a duly authorized
representative may review all Plan documents and other papers
that affect the claim and may submit issues and comments in
writing. Any hearing must be scheduled to give sufficient time
for this review and submission, and the claimant must be advised
of the schedule and deadlines for submission.
(c) Time limitations on review. The decision on review
must be furnished to the claimant in writing within 60 days after
the request for review is received, unless special circumstances
require an extension of time for processing. If an extension is
required, written notice of the extension must be furnished to
the claimant before the end of the 60-day period and the decision
then must be given as soon as possible, but not later than 120
days after the request for review was received. The decision on
review must be written in a manner calculated to be understood by
the claimant and must include specific reasons for the decision
and specific references to the pertinent provisions of the Plan
or related documents on which the decision is based. If the
decision on review is not received by the claimant within the
time required in this subsection, the claim is deemed denied on
review.
(d) Allowances for committee review. If a denied claim
is reviewed by a committee that has regularly scheduled meetings
at least quarterly, the rules in this subsection govern the time
for the decision on review and supersede the rules in subsection
(c). If the claimant's written request for review is received
more than 30 days before a meeting of the committee, a decision
on review must be made at the next meeting after the request for
review has been received. If the claimant's written request for
review is received 30 days or less before a meeting of the
committee, the decision on review must be made at the second
meeting after the request for review has been received. If an
extension of time is required, written notice of the extension
must be furnished to the claimant before the extension begins.
If notice that a claim has been denied on review is not received
by the claimant within the time required in this subsection, the
claim is deemed denied on review.
(e) Determination final. Except for a written request
for review of a denied claim, all good-faith determinations by
the claim reviewer designated under this Plan section 10.2 are
conclusive and binding on all persons, and there is no right of
appeal.
ARTICLE 11
TOP-HEAVY PROVISIONS
11.1 Top-Heavy Years
The provisions of this Plan article 11 apply only for Plan
Years in which this Plan is a Top-Heavy Plan according to the
determination described in Plan section 11.02.
11.2 Top-Heavy Determination
(a) Procedures. The determination of whether this Plan
is a Top-Heavy Plan for a Plan Year beginning after December 31,
1983, is made according to Interests (as described in Plan
section 11.3) as of that Plan Year's Top-Heavy Determination
Date, based on the related Top-Heavy Valuation Date, according to
the procedures required in this Plan section.
(b) Top-Heavy Plan. If this Plan is not part of an
Aggregation Group, it is a Top-Heavy Plan if, as of the Top-Heavy
Determination Date, the Interests of all Key Employees in the
Plan exceed 60% of the combined Interests of all Participants in
the Plan.
(c) Top-Heavy Group. If this Plan is part of an
Aggregation Group, the determination of whether this Plan and
each plan in the Aggregation Group is a Top-Heavy Plan is
determined according to the procedures required in this
subsection, applying each subparagraph in numerical sequence.
(1) As of each plan's Top-Heavy Determination
Date, separately determine the Interests of all Key Employees in
each plan in the Aggregation Group and the Interests of all
participants in each plan in the Aggregation Group.
(2) The Interests of all Key Employees in each
plan that is part of the Aggregation Group are added to the
Interests of all Key Employees in each other plan in the
Aggregation Group. The Interests of all participants in the
plans are totaled in the same manner. The Interests are
determined as of the plans' Top-Heavy Determination Dates that
fall within the same calendar year.
(3) The Aggregation Group is a Top-Heavy Group
if, after application of paragraph (2), the Interests of all Key
Employees in the Aggregation Group exceed 60% of the combined
Interests of all participants under all plans in the Aggregation
Group.
(4) A plan that is part of an Aggregation Group
is a Top-Heavy Plan for a plan year if it belongs to a Required
Aggregation Group that is part of a Top-heavy Group for that plan
year.
(d) Permissive aggregation. The Administrator may
create a Permissive Aggregation Group, but a Qualified Plan may
not be part of a Permissive Aggregation Group unless all
Qualified Plans within the Permissive Aggregation Group continue
to meet the requirements of Code Sections 401(a)(4) and 410 with
each added Qualified Plan taken into account.
(e) Individuals disregarded. If at any time during the
five-year period ending on the applicable Top-Heavy Determination
Date an individual has not performed services for an Employer or
Related Company maintaining this Plan or a plan that is a part of
this Plan's Aggregation Group, the Interest of such individual is
not taken into account for purposes of this section. Former Key
Employees are excluded entirely under this section.
11.3 Interests Measured
(a) Defined Contribution Plan. An individual's
Interest in a Defined Contribution Plan is equal to his account
balance for that plan (according to paragraphs (1) and (2)) for
the Top-Heavy Determination Date and (to the extent not already
included in determining his account balance) all distributions
(excluding amounts attributable to deductible employee
contributions) with respect to that individual from the account
during the five-year period ending on the Top-Heavy Determination
Date.
(1) For purposes of subsection (a), an individual's
account balance in a Qualified Plan not subject to Code Section
412 (that is, a non-pension plan) is his actual account balance
(excluding amounts attributable to deductible employee
contributions) on the Top-Heavy Valuation Date and all
contributions actually made after the Top-Heavy Valuation Date
but on or before the Top-Heavy Determination Date. However, for
such a Qualified Plan's first plan year, the amount determined in
the preceding sentence must be added to the amount of any
contributions made after the Top-Heavy Determination Date that
are allocated as of a date in that first plan year.
(2) For purposes of subsection (a), an individual's
account balance in a Defined Contribution Plan that is subject to
Code Section 412 (that is, a pension plan) is his actual account
balance (excluding amounts attributable to deductible employee
contributions) on the Top-Heavy Valuation Date, all contributions
due as of the Top-Heavy Determination Date (that is,
contributions that would be allocated as of a date not later than
the Top-Heavy Determination Date, even though those amounts are
not yet required to be contributed), and--for the plan year that
contains the Top-Heavy Determination Date--all amounts actually
contributed (or due to be contributed) after the Top-Heavy
Valuation Date but before the expiration of the extended payment
period in Code Section 412(c)(10).
(b) Defined Benefit Plan. An individual's Interest in a
Defined Benefit Plan is equal to the present value (determined
according to paragraph (1)) of his cumulative accrued benefit
for that Plan as of the Top-Heavy Determination Date and (to the
extent not already included in determining his cumulative accrued
benefit) all distributions from that plan with respect to that
individual during the five-year period ending on the Top-Heavy
Determination Date.
(1) There are no specific prescribed actuarial
assumptions that must be used for determining the present value
of a cumulative accrued benefit. The assumptions used must be
reasonable and need not relate to the Qualified Plan's actual
investment and other experience. The assumptions need not be the
same as those used for minimum funding purposes or for purposes
of determining the actuarial equivalence of optional benefits
under the plan. For purposes of this Plan, if a Qualified Plan
does not specify the actuarial assumptions it uses for
determining the present value of a cumulative accrued benefit,
the assumptions used must be those used in the Qualified Plan for
purposes of determining the actuarial equivalence of optional
benefits under the plan (or, if no optional benefits are
available, those used for minimum funding purposes), except that
the interest assumption must be (as described in 29 C.F.R.
section 2619.26(c)(2)(iv)) the PBGC interest rate for immediate
annuities in effect on the Top-Heavy Valuation Date as set forth
in Appendix B (as amended) to Part 2619 of 29 C.F.R. If a
Qualified Plan specifies the actuarial assumptions it uses for
determining the present value of its cumulative accrued benefit,
those assumptions govern for purposes of this Plan as to that
Qualified Plan's cumulative accrued benefits.
(1) The present value must be computed using an
interest and a post-retirement mortality assumption but
consistent with paragraph (1). Pre-retirement mortality and
future increases in costs of living (but not in the maximum
dollar amount permitted by Code Section 415(d)) may also be
assumed. However, assumptions as to future withdrawal or future
salary increases may not be used.
(2) In the case of a Defined Benefit Plan that
provides a joint and survivor annuity within the meaning of Code
Sections 401(a)(11) and 417 as a normal form of benefit, for
purposes of determining the present value of the cumulative
accrued benefit, the participant's spouse may be assumed to be
the same age as the participant.
(3) Unless a Defined Benefit Plan provides for a
nonproportional subsidy according to paragraph (7), the present
value must reflect a benefit payable beginning at the Qualified
Plan's normal retirement age (or attained age, if later).
Benefits not relating to retirement benefits, such as
pre-retirement death and disability benefits and post-retirement
medical benefits, must not be taken into account. Subsidized
early retirement benefits and subsidized benefit options must not
be taken into account unless they are nonproportional subsidies
according to paragraph (7).
(4) If a Defined Benefit Plan provides for a
nonproportional subsidy, the benefit should be assumed to begin
at the age at which the benefit is most valuable.
(5) If two or more Defined Benefit Plans are
being tested, the actuarial assumptions used for all Qualified
Plans within an Aggregation Group must be the same. If paragraph
(1) of this subsection would otherwise cause the preceding
sentence to be violated, the Administrator must select one
Qualified Plan's assumptions and use them as adjusted according
to the other paragraphs in this subsection.
(7) For purposes of this subsection, a subsidy
is nonproportional unless the subsidy applies to a group of
employees that would independently satisfy the requirements of
Code Section 410(b).
11.4 Minimum Benefits for Top-Heavy Plans
(a) Superseding effect. For any Plan Year in which this
Plan is a Top-Heavy Plan, the provisions of this section
supersede conflicting Plan provisions regarding contributions and
allocations under the Plan.
(b) Aggregation of plans. For purposes of this section,
all Defined Contribution Plans that are part of an Aggregation
Group with this Plan are treated as one Defined Contribution
Plan, and all Defined Benefit Plans that are part of an
Aggregation Group with this Plan are treated as one Defined
Benefit Plan. According to the other provisions of this article,
the Administrator may elect to cause the Employers to satisfy the
minimum benefit requirements of this section in this Plan, within
any one or more of the other Qualified Plans in this Plan's
Aggregation Group, or by aggregating amounts from this Plan and
one or more of those other Qualified Plans.
(c) Eligible Non-Key Employees. Each Non-Key Employee
who is a Participant with regard to this Plan, who is eligible
for an allocation of contributions that the Employer or a Related
Company might make (or who would be eligible except that after
becoming a Participant he subsequently fails to complete 1,000
Hours of Service (or the equivalent) during the Plan Year), and
who has not separated from service at the end of the Plan Year
must receive the minimum benefit required by Code Section
416(c)(2), as described in this section. A Non-Key Employee may
not fail to receive such minimum benefit because he is excluded
from Plan participation (or is ineligible for an allocation under
the Plan) merely because his compensation is less than a stated
amount or merely because of a failure to make mandatory or
elective contributions under the Plan.
(d) Minimum benefit. This Plan will satisfy the
minimum benefit required by Code Section 416(c)(2) if the sum of
Employer contributions and forfeitures allocated to the Account
of each eligible Non-Key Employee Participant under the Plan for
each Plan Year in which the Plan is a Top-Heavy Plan equals the
amount in paragraphs (1) or (2), as applicable.
(1) The minimum benefit applicable to an
eligible Non-Key Employee Participant who does not participate in
a Defined Benefit Plan that is part of this Plan's Required
Aggregation Group is the lesser of
(A) 3% of such Non-Key Employee
Participant's Earnings for that Plan Year; or
(B) the highest percentage at which
Employer contributions and forfeitures are allocated to any Key
Employee for the Plan Year under this Plan or any plan within
this Plan's Required Aggregation Group. The highest percentage
will be determined as the ratio of the sum of employer
contributions made (or required to be made without regard to
waivers granted pursuant to Code Section 412(d)) and forfeitures
allocated to such Key Employee's account divided by his Earnings
for the Plan Year. This subparagraph does not apply if this Plan
is part of a Required Aggregation Group and if this Plan enables
a Defined Benefit Plan included in such Required Aggregation
Group to meet the requirements of Code Section 401(a) or Section
410.
(2) The minimum benefit applicable to an eligible
Non-Key Employee Participant who participates in a Defined
Benefit Plan that is part of this Plan's Required Aggregation
Group is 5% of his Earnings for that Plan Year but only to the
extent he does not receive the Defined Benefit Plan minimum
benefit required by Code Section 416(c)(1) in that Defined
Benefit Plan.
(e) Offset for other allocations. An individual's
minimum benefit that is required from this Plan for a Plan Year
is equal to the full benefit described in paragraph (d) reduced
by the total of all allocations received for the Plan Year from
any Employer contributions or from forfeitures from any other
Defined Contribution Plan included in this Plan's Required
Aggregation Group.
(f) Excluded amounts. In determining a Non-Key
Employee's minimum-benefit entitlement and in determining whether
that entitlement has been satisfied, any employer contribution
attributable to a salary reduction election under Code Section
401(k) may not be taken into account.
11.5 Top-Heavy Vesting
(a) Vested percentage. Except as provided in subsection
(d), the following table applies to all Accounts not otherwise
fully vested in any Plan Year for which this Plan is a Top-Heavy
Plan:
Years of Service Vested Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(b) Years of service. For purposes of subsection (a),
years of service are computed in the same manner as service for
vesting purposes is otherwise computed under the Plan.
(c) No decrease in vested percentage. No decrease in a
Participant's vested percentage may occur in the event the Plan's
status as a Top-Heavy Plan changes for any Plan Year. If the
Plan's vesting schedule shifts into or out of the schedule under
subsection (a) for any Plan Year because of a change in the
Plan's top-heavy status, such a shift is an amendment to the
vesting schedule and the election in Plan section 6.3 applies.
(d) Participants excepted. The provisions of this Plan
section do not apply to the Accounts of any Participant who does
not have an Hours of Service after the Plan has initially become
top-heavy and such Participants' Account balance attributable to
Employer contributions and forfeitures, if any, will be
determined without regard to this section.
11.6 Contribution and Benefit Limitations
(a) Superseding effect. For any Plan Year in which this
Plan is a Top-Heavy Plan, the provisions of this section
supersede conflicting Plan provisions regarding limitations on
contribution and benefits under this Plan.
(b) Required adjustments. Paragraphs 2(B) and 3(B) of
Code Section 415(e) will be applied by substituting "1.0" for
"1.25," and paragraph 6(B)(i) of Code Section 415(e) will be
applied by substituting "$41,500" for "$51,875" unless the
requirements of paragraphs (1) and (2) below are met with respect
to the Plan.
(1) The minimum benefit requirement of Plan
section 11.4(d)(1) is applied by substituting "4%" for "3%" and
the minimum benefit requirement of Plan section 11.4(d)(2) is
applied by substituting "7.5%" for "5%."
(2) This Plan would not be a Top-Heavy Plan as
determined under Plan section 11.2 if "90%" were substituted for
"60%" each place it appears.
11.7 Top Heavy Definitions
For purposes of applying the provisions of this Article 12,
the following definitions apply:
(a) Determination Date means for any Plan Year the last
day of the preceding Plan Year or, in the case of the first Plan
Year of the Plan, the last day of that Plan Year.
(b) Determination Period means the period of five
consecutive Plan Years ending on the Determination Date.
(c) Key Employee means, as of any Determination Date,
any Employee or former Employee (or Beneficiaries of such
Employee) who, for any Plan Year in the Determination Period:
(1) has annual Earnings in excess of 50% of the
dollar amount under Code Section 415(b)(1)(A) (relating to
defined benefit plans) and is an officer of the Employer;
(2) has Earnings in excess of the dollar
limitation under Code Section 415(c)(1)(A) (relating to defined
contribution plans) and is one of the Employees owning one of the
ten largest interests in the Employer;
(3) is a more than 5% owner of the Employer; or
(4) is a more than 1% owner of the Employer and
has Earnings of more than $150,000.
The constructive ownership rules of Code Section 318 (or the
principles of that section, in the case of an unincorporated
Employer) will apply to determine ownership in the Employer. The
number of officers taken into account under clause (1) will not
exceed the greater of 3 or 10% of the total number (after
application of the Code Section 414(q) exclusions) of Employees,
but no more than 50 officers. The Administrator will make the
determination of who is a Key Employee in accordance with Code
Section 416(i)(1) and the regulations under that Code section.
(d) Non-Key Employee means an Employee who does not meet
the definition of Key Employee.
(e) Permissive Aggregation Group means the Required
Aggregation Group plus any other qualified plans maintained by
the Employer, which, when considered as a group, would continue
to satisfy the requirements of Code Sections 401(a)(4) and 410.
The Administrator will determine the Permissive Aggregation
Group.
(f) Required Aggregation Group means (1) each qualified
plan of the Employer in which at least one Key Employee
participates or participated at any time during the Determination
Period (regardless of whether the plan has terminated); and (2)
any other qualified plan of the Employer which enables a plan
described in clause (1) to meet the requirements of Code Section
401(a)(4) or 410.
ARTICLE 12
TRUSTEE; TRUST FUND
12.1 Trustee
(a) Appointment, removal. The Board shall have the power
to appoint the Trustee, to remove the Trustee at its discretion
upon 30 days' advance written notice, unless the Trustee agrees
to a shorter period, to appoint a successor to any Trustee who
has resigned or been removed, and to appoint a co-Trustee or
co-Trustees with the consent of the Trustee or Trustees then
serving. The appointment of any Trustee or co-Trustee shall
become effective upon such Trustee's written acceptance of the
appointment.
(b) Resignation. Any Trustee or co-Trustee may resign
by giving at least 30 days' advance written notice to the Board,
unless the Board agrees to a shorter time.
(c) General duties. The Trustee shall hold and invest
the assets of the Plan in the Trust Fund established pursuant to
the Trust Agreement. The Trustee shall further carry out all
duties assigned to it by the Plan or the Trust Agreement.
12.2 Trust Agreement
The Sponsor and the Trustee have established a Trust
Agreement providing for the administration of the Trust Fund.
The Sponsor may, from time to time, enter into such further
agreements with the Trustee or other parties and make such
amendments to the Trust Agreement as deemed necessary or
desirable to carry out the Plan, and may take any other steps and
execute any other instruments as the Sponsor deems necessary or
desirable to put into effect or carry out the Plan.
12.3 Trust Fund
(a) Trustee duties, generally. The Trustee shall accept
and receive all sums of money paid to it from time to time by the
Employers and shall hold, invest, reinvest, manage and administer
such monies and the increments, increases, earnings and income
thereon as a Trust Fund for the exclusive benefit of those
entitled to receive benefits under the terms of the Plan.
(b) General Trust Fund. The General Trust Fund is the
portion of the Trust Fund consisting of all Plan assets and
liabilities which have not been separated for investment purposes
into a Segregated Fund. All assets held in the General Trust
Fund are invested together as one fund, except for any assets
which may be segregated for investment purposes and invested in a
Segregated Fund.
(c) Segregated Funds. A Segregated Fund is a group of
assets which have been segregated from the General Trust Fund for
separate investment as a common fund for a specific purpose under
this Plan. Segregated Funds may be established under other Plan
provisions. The Administrator may also establish any other
Segregated Funds from time to time for any purpose it deems
desirable or appropriate under this Plan, provided that
participation in each fund is made available on a
nondiscriminatory basis to all Participants (and Beneficiaries)
who are similarly situated. The Administrator may establish and
enforce any rules it deems necessary or appropriate for the
convenient administration of the Segregated Funds and of the Plan
generally. Each Segregated Fund is to be charged with all fees
and expenses directly attributable to that Fund, as well as any
portion of the general administrative fees and expenses of the
Plan that the Administrator determines to be equitable.
(d) Separate Investment Funds
(1) Establishment. The Administrator may direct
the Trustee from time to time to establish one or more Segregated
Funds to be known as Separate Investment Funds, with defined
investment objectives. The Participants' Accounts are to be
invested among the General Fund and any Separate Investment Funds
made available from time to time in the proportions which each
Participant may direct by written election filed with the
Administrator.
(2) Participant elections. All Active
Participants are eligible to make investment elections on the
first day of each calendar quarter (January 1, April 1, July 1,
and October 1), or more frequently if permitted by the Sponsor
using the form provided by the Administrator. New investment
elections and changes to prior elections are to be given effect
as soon as administratively feasible following the Participant's
election based on the Participant's Account at that time.
Effective June 24, 1994, the provisions of Plan article 5
identify the Separate Investment Funds available for election by
Participants and the rules relating to Participants' investment
directions.
(e) Investment Manager. The Committee may, as a named
fiduciary for this purpose, appoint an Investment Manager for all
or part of the Trust Fund. In that event, the Investment Manager
shall have complete control and responsibility over all matters
pertaining to the investment of the assets under its control,
including brokerage, if any, and timing of Stock purchases
pursuant to the terms of the Plan.
12.4 Valuation of Accounts
(a) At each Valuation Date. As of each Valuation Date,
the Trust Fund shall be valued on the basis of the current fair
market value of its assets and liabilities. Each Participant's
Account (and each respective subaccount) is to be adjusted by the
Administrator as of each Valuation Date to reflect its
proportionate share of investment adjustments for any funds in
which it participates, and payments, transfers, withdrawals and
contributions occurring since the last Valuation Date, as
follows:
(1) Any distribution made to or on behalf of a
Participant since the last Valuation Date is to be deducted from
the Participant's Account from which such distribution was made.
(2) The value of all monies, securities and
other property in each Participant's Account shall be valued by
the Trustee at the then fair market value. In determining such
value, all income or loss calculated under the method of
accounting of the Trust shall be included and all administrative
expenses allocated to such Account shall be deducted.
(3) Each Participant's Account shall be
increased by that portion of the contributions and forfeitures,
if any, allocated to his Account.
(4) To the extent that funds attributable to a
Participant's Account were transferred since the last Valuation
Date or are to be transferred between investment funds, the
Account from which the funds were transferred shall be decreased
and the Account to which the funds were transferred shall be
increased.
Despite the preceding, the Administrator may alter
the valuation procedures, in its discretion, in any manner it
deems necessary or desirable to achieve an equitable allocation
among the Accounts but no such procedure shall discriminate in
favor of Highly Compensated Employees.
(b) Crestar Stock Fund. Any Stock acquired by the
Trustee during the period between Valuation Dates shall be
credited to each Participant's Account on the Valuation Date
coinciding with or next following such acquisition. For purposes
of determining the number of shares of Stock and cash credited to
a Participant's Account on any date other than a Valuation Date,
the number of shares of Stock and cash credited to the
Participant's Account on the last preceding Valuation Date shall
be used. Such value so determined shall be reduced based on net
withdrawals and distributions subsequent to such Valuation Date
and increased by subsequent contributions by the Participant and
the Employer and transfers to the Crestar Stock Fund.
12.5 Annual Accounting. The Trustee shall, as soon as
practicable after the end of each Plan Year, render to the
Sponsor and the Administrator an accounting for the Plan and the
Trust Fund.
12.6 Statement of Participants' Accounts. The Administrator
shall, as soon as practicable after the last Valuation Date of
each Plan Year, deliver to the Human Resources Director for
distribution to each Participant a statement setting forth the
Account of each Participant in the Plan as of that Valuation
Date. In the discretion of the Administrator, statements may be
provided more frequently, such as semi-annually or quarterly.
ARTICLE 13
FIDUCIARIES; PLAN ADMINISTRATION
13.1 Named Fiduciaries; Allocation of Fiduciary
Responsibility
(a) Named Fiduciaries. The Sponsor and the
Administrator are the Named Fiduciaries of the Plan within the
meaning of ERISA Section 402. Only the Sponsor may designate
other Named Fiduciaries not named in this Plan.
(b) Delegation of responsibility. All
responsibilities not specifically delegated to another fiduciary
remain with the Sponsor including designating all additional
fiduciaries not named in this Plan or the Trust Agreement. The
Sponsor has the power to delegate fiduciary responsibilities not
specifically delegated by the terms of this Plan or the Trust
Agreement and to designate fiduciaries and nonfiduciaries to
carry out fiduciary responsibilities in order to provide for the
orderly operation and administration of the Plan. Any
allocation, delegation, or other assignment of duties previously
made is hereby confirmed and shall continue until such time as it
is revoked, modified, or altered by the Sponsor. The Sponsor may
permit any person to whom any authority or control has been
granted to further allocate, delegate, or assign any or all such
duties to such other person or entity as the Sponsor may specify.
A person or entity serving as a fiduciary with regard to the Plan
may serve in more than one fiduciary capacity and may employ one
or more persons to render advice with regard to his fiduciary
responsibilities hereunder. To the extent allowed by law, each
fiduciary's responsibility is limited to the duties allocated or
designated to it.
(c) Shared responsibility. This Plan and the Trust
Agreement allocate to each fiduciary the individual
responsibilities assigned. Responsibilities are not shared by
fiduciaries unless the sharing is provided specifically in the
Plan or the Trust Agreement. Whenever one fiduciary is required
by the Plan or the Trust Agreement to follow the directions of
another fiduciary, the two have not been assigned to share the
responsibility. The fiduciary giving directions bears the sole
responsibility for those directions and the responsibility of the
fiduciary receiving those directions is to follow those
directions as long as on their face the directions are not
improper under applicable law.
13.2 Administrator
(a) Appointment. The Sponsor may appoint one or
more persons to serve as Administrator at the Sponsor's pleasure.
Persons appointed as Administrator may include Employees,
Participants, or the Trustee. During any period when no person
is currently serving as Administrator, the Sponsor is charged
with the Administrator's duties. When two or more persons are
serving concurrently as Administrator, they are jointly
responsible for all of the Administrator's duties, except to the
extent specific duties may have been allocated between.
(b) Resignation, removal. A person serving as
Administrator may resign at any time by giving advance written
notice to the Sponsor. The Sponsor may, in its discretion,
remove any person serving as Administrator, with or without
cause, by giving that person advance written notice of his
removal. Any individual who is an employee of an Employer when
appointed as Administrator is automatically removed at his
Termination Date without the necessity of any notice, unless his
continued appointment is expressly requested by the Sponsor. The
Sponsor shall notify the Trustee of all appointments,
resignations or removals of Administrators.
(c) Powers and duties. The Administrator shall be
responsible for the operation and administration of the Plan,
except to the extent its duties are allocated to or assumed by
other persons or entities under the Plan. The Administrator must
administer the Plan by its terms and has all powers necessary to
do so. The Administrator's powers and responsibilities are to be
exercised in the Administrator's sole discretion and include, but
are not limited to the following:
(1) to adopt rules and procedures it deems
desirable for the efficient administration of the Plan as long as
those rules, regulations and procedures apply uniformly to all
persons in similar circumstances;
(2) to determine all questions arising in the
Plan's administration, interpretation and application, including
questions about the status and rights of Employees, Participants,
Beneficiaries and any other persons;
(3) to decide any dispute arising under the Plan,
but no Administrator may participate in any matter involving any
questions relating solely to his own participation or benefits
under the Plan;
(4) to advise the Sponsor about the known future
need for funds to be available for distribution in order that the
Trust Fund investments may be established accordingly;
(5) to correct defects, supply omissions, and
reconcile inconsistencies to the extent necessary to effectuate
the Plan;
(6) to advise the Sponsor of the maximum deductible
contribution to the Plan for each fiscal year;
(7) to direct the Trustee concerning all payments
which are to be made out of the Trust Fund pursuant to the Plan's
provisions;
(8) to maintain all bookkeeping accounts necessary
under the Plan for keeping track of each Participant's interest
in the Plan, including the source of all contributions, the
vested interest, and applicable Account adjustments, except to
the extent that the Trustee has, by written agreement with the
Sponsor, assumed responsibility for maintaining any part or all
of the Participants' Accounts;
(9) to confer with the Trustee and the Sponsor on
the settling of any claims against the Trust Fund;
(10) to file all reports with government agencies,
Participants and other parties as may be required by law, whether
such reports are initially the obligations of the Sponsor, an
Employer, or the Plan;
(11) to maintain all records necessary to determine
the rights and interests of any Employee under this Plan,
including his eligibility, Participant status, service and
Beneficiaries;
(12) to have all other powers necessary or
desirable to discharge its duties as Administrator.
(d) Administrator action conclusive. Any action on
matters within the Administrator's discretion shall be final and
conclusive except as provided in Plan article 10 regarding review
of denied claims.
13.3 Duties of the Benefits Department
Effective May 14, 1993, the Benefits Department of
Crestar Bank is responsible for handling the day-to-day
operations of the Plan including: the enrollment of
Participants; the distribution of booklets, notices and other
information regarding the Plan; maintaining Beneficiary
designation forms; explaining the optional forms of payments that
may be elected by a Participant under the Plan; processing
investment election and payment election forms executed by
Participants; and communicating all other matters relating to
participation and entitlement to benefits to such individuals or
entities or the Committee as may be necessary to enable them to
discharge their duties under the Plan. The Benefits Department
shall also review and monitor the performance of persons and
entities appointed by the Administrator or the Committee to serve
in various capacities with regard to the Plan and report its
findings annually to the Committee.
13.4 Benefits Administrative Committee
(a) Effective date. The provisions of this Plan
section 13.4 are effective May 14, 1993.
(b) Membership. The chief executive officer of the
Sponsor shall appoint a Benefits Administrative Committee that
shall serve pursuant to this Plan section. The chief executive
officer shall have the power to remove a member of the Committee
at his discretion. Any member of the Committee may resign by
giving notice in writing to the chair of the Committee or the
chief executive officer at any time or may be removed at any time
and for any reason by the chief executive officer. In the event
of a removal, or if for any other reason there are less than
three Committee members serving at any time, the chief executive
officer shall, as soon as practicable, appoint a new member or
members so that there shall be a minimum of three members.
(c) Officers. The chief executive officer of the
Sponsor shall appoint a chair of the Committee from among its
members. The Committee may appoint a secretary to keep a record
of the acts of the Committee. The secretary may, but need not,
be a member of the Committee. The secretary may perform any and
all purely ministerial acts which may be delegated to the
secretary by the Committee.
(d) Meetings, actions. The Committee may, but need
not, call or hold formal meetings. The Committee acts by a
majority of its members in office at the time and may take action
either by a vote at a meeting or in writing without such a
meeting. The action of the majority shall constitute the action
of the Committee and shall have the same effect for all purposes
as if assented to by all members in office at the time. In the
event of a deadlock or other situation preventing majority
agreement, the chief executive officer of the Sponsor or his
delegate shall decide the matter. The Committee shall maintain
adequate records of its decisions. The Committee may select a
chairman from among its members and may select a secretary, who
need not be a member of the Committee.
(e) Authorized representative. The Committee may
authorize any one or more of its members or its secretary to sign
any documents on its behalf or to perform solely ministerial
acts, but such person shall not exercise any discretion over
matters delegated to him without obtaining the concurrence of a
majority of the members. The Committee must evidence this
authority by an instrument signed by all its members or by a
resolution passed by the Committee. The Trustee and each
Employer must accept and rely upon any document executed by such
authorized individual as representing action of the Committee
until the Committee files a written revocation of that
authorization with the Trustee.
(f) Powers of the Committee. The Committee shall have
control of all duties specifically allocated to it under the Plan
or which are delegated to it by the Administrator and shall have
all necessary powers to carry out its duties. including the
following, which shall be exercised in the Committee's
discretion:
(1) to construe the Plan and to determine all
questions about the Plan; and
(2) to normally review and recommend all
proposed action regarding substantial changes in the Plan which
must be passed on by the Board or the Executive Committee and
make its recommendations regarding such proposals to the
appropriate entity.
In exercising its duties, the Committee shall at all times act in
a uniform, equitable and nondiscriminatory manner in construing
provisions of the Plan as they relate to Participants and
Beneficiaries in similar circumstances. Notwithstanding its
powers granted hereunder, the Committee shall have no power to
modify in any way any provision of the Plan.
(g) Agents and counsel. The Committee may engage
agents to assist it in its duties, and may consult with counsel,
who may be counsel for the Sponsor, with respect to the meaning
or construction of this document and its obligations hereunder or
with respect to any action, proceeding, or question of law
related to the Plan.
(h) Compensation. The Employers shall pay the
reasonable expenses incurred by the Committee in carrying out its
duties and responsibilities under the Plan, including reasonable
legal and accounting expenses. Should the Employers fail to pay
these expenses, they shall be paid by the Trustee out of the
Trust Fund. The Sponsor agrees to supply such stenographic or
administrative assistance as may be necessary to assist the
members of the Committee in the performance of its duties and
responsibilities.
(i) Rules and regulations. The Committee may
formulate rules and regulations not inconsistent with the purpose
of the Plan as it may deem necessary to enable it to carry out
its duties.
(j) Indemnification. The Committee shall be
indemnified by the Employers for any liability and expenses
incurred in respect of any suit or proceeding it or its members
may incur in connection with the performance of their duties
under the Plan.
(k) Plan participation. A member of the Committee
who is also a Participant of the Plan shall abstain from any
action which directly affects him specifically as a Participant.
In the event of an abstention, matters shall be decided by the
remaining members of the Committee. Nothing herein, however,
shall prevent any member of the Committee who is also a
Participant or Beneficiary of the Plan from receiving any benefit
to which he may be entitled, so long as the benefit is computed
and paid on a basis that is consistently applied to all other
Participants or Beneficiaries.
13.5 Funding Policy. The Administrator shall establish a
funding policy and method to carry out the objectives of the
Plan. In formulating and maintaining such policy, the
Administrator shall consult with such advisors when and as it
deems necessary to review the Plan's liquidity needs, the
anticipated level of annual contributions and any material
changes thereto occurring during the year.
13.6 Expenses Compensation. Each Employer shall pay its
share of the reasonable expenses incurred in the administration
of the Plan and may be reimbursed by the Trustee from the Trust
Fund for any reasonable administrative expenses that may be paid
from Plan assets. If any Employer should, for any reason, fail
to pay administrative expenses, they shall be paid by the Trustee
out of the Trust Fund. No employee of any Employer shall be
entitled to compensation for his services with respect to the
Plan other than his normal compensation received as an employee
of an Employer.
13.7 Directions to Trustee. All directions from the
Administrator to the Trustee shall be in writing from either the
chief executive officer of the Sponsor or the Chair of the
Committee or such other persons as may be appointed in writing by
such persons. The Trustee may rely on directions from such
persons and shall act in accordance therewith, unless it knows or
should know that the directions constitute a breach of such
person's or its own obligations under the Plan.
13.8 Indemnification; Limitation on Liability
As permitted by law and as limited by any written
agreement between the Employer and a non-Trustee fiduciary, the
Employer must indemnify each Employee who serves as a non-Trustee
fiduciary (but not a corporate fiduciary) against expenses,
claims, and liability arising out of being a fiduciary, except
expenses, claims, and liability arising out of the fiduciary's
own gross negligence, wilful misconduct, or bad faith. The
Employer may obtain insurance against acts or omissions of a
non-Trustee fiduciary. If the Employer fails to obtain insurance
to indemnify, an individual non-Trustee fiduciary may obtain
insurance and be reimbursed according to the Plan, as permitted
by law. At its own expense, the Employer is entitled to defend
or maintain, either in its own name or in the name of the
fiduciary, any suit or litigation arising under this Plan with
respect to any individual non-Trustee fiduciary.
13.9 Exercise of Discretion by Fiduciaries
(a) Exclusive discretion. In discharging the duties
assigned to it under the Plan, the Administrator, the Committee,
and the Benefits Department and any other fiduciary have the
discretion to interpret the Plan; adopt, amend, and rescind rules
and regulations pertaining to their duties under the Plan; and to
make all other determinations necessary or advisable for the
discharge of their duties under the Plan. The express grant in
the Plan of any specific power to a fiduciary with respect to any
duty assigned to it under the Plan must not be construed as
limiting any power or authority of the fiduciary to discharge its
duties. Whenever under the provisions of the Plan any fiduciary
is given any discretionary power, that fiduciary's discretionary
authority is absolute and exclusive, and, subject to the Plan's
appeals procedures for denied claims, his decisions made in good
faith are binding upon all parties and persons concerned,
including but not limited to all persons having or claiming any
interest or benefits under this Plan.
(b) Nondiscrimination. The fiduciaries must
exercise their discretion and make their determinations in a
uniform and consistent manner for all Participants and
Beneficiaries and may not permit discrimination in favor of
Highly-Compensated Employees. The fiduciaries must discharge
their duties with respect to the Trust in the manner prescribed
by Title I, Part 4, of ERISA. To the extent appropriate, any
discretionary action taken under this Plan must be consistent
with any prior discretionary action taken under similar
circumstances.
13.10 Bonding of Fiduciaries
Every Trustee or other fiduciary must be bonded to the
extent, if any, required by ERISA. If the law requires bond, the
Trustee or Plan Administrator must secure the minimum (or any
greater amount set by the Employer) and obtain reimbursement
pursuant to the terms of the Plan.
ARTICLE 14
PROVISIONS CONCERNING SPONSOR AND EMPLOYERS
14.1 Joinder of Employers
(a) Procedure. The adoption of, and joinder in,
this Plan by any Employer, other than the Sponsor, is subject to
the Sponsor's express approval and is to be evidenced either by
that Employer's execution of this Plan or by its execution of a
separate adoption agreement with the Sponsor. By adopting and
joining in this Plan, each Employer agrees: (1) to make all
Employer contributions and pay all expenses incurred under the
Plan with respect to its Employees (unless paid or reimbursed to
the Employer from the Trust Fund); (2) to maintain all personnel
records necessary for the Plan's proper administration; (3) to
provide on a timely basis all notices, records and information
required for Plan administration purposes; and (4) to abide by
the terms of the Plan and the Trust Agreement.
(b) Agreement. Each adoption agreement with an
Employer, along with any amendments made from time to time, is by
this reference incorporated into and made a part of the Plan and,
in the event of any conflict between the terms of the adoption
agreement and other Plan terms, the Plan is to be controlling,
except as provided in the next sentence. An adoption agreement
may also contain special provisions concerning the eligibility,
service credit, contributions and other aspects of Plan
membership which are to apply only the Employees of the Employer
executing that Agreement, in which case those special provisions
are to supersede any conflicting Plan provisions.
14.2 Delegation of Sponsor's Authority
All of the rights and obligations granted or imposed on
the Sponsor, as such, by this plan, may be transferred and
assumed by any other Employer as a successor Sponsor by written
agreement between the Employer which is then acting s Sponsor and
that successor Sponsor. Upon the Sponsor's dissolution,
liquidation, bankruptcy or insolvency, all the rights and
obligations granted or imposed on the Sponsor, as such, by this
Plan, may be assumed by any one of the other Employers by a
written agreement to that effect executed by all of the remaining
Employers.
14.3 Separate Amendments by an Employer
By action of its board and with the Sponsor's approval,
any Employer may amend this Plan in any manner which affects the
Plan's application only as to that Employer and its Employees,
provided that the amendment would comply with the restrictions in
Plan article 15 if made by the Sponsor and such amendment would
not cause the Plan to lose its qualified status under the
applicable provisions of the Code. Any such amendment must be
made in the form of an amendment to the Plan document or that
Employer's adoption agreement and executed by the appropriate
officers of both the Sponsor and that Employer.
14.4 Termination of Employer's Participation
An Employer will cease to be an Employer (and its
Employees will cease to be Covered Employees) when any of the
following events occur:
(a) When the Sponsor, in its discretion, terminates
that Employer's right to participate a an Employer under the
Plan, provided that the Sponsor gives written notice of that
termination to the affected Employer at least 60 days prior to
the effective date of such termination (unless the parties agree
to a shorter notice period);
(b) Upon the Employer's consolidation, merger,
reorganization or the sale of substantially all of its property,
unless the successor entity resulting from that transaction
either qualifies as a Related Company of the Sponsor or any other
Employer (ignoring that entity's relationship with the Employer
affected by that transaction) or contractually assumes (with the
Sponsor's approval) that Employer' obligations under this Plan at
the time the transaction occurs;
(c) Upon the Employer's legal dissolution or
liquidation (other than as part of its consolidation, merger or
reorganization) or a judicial determination that it is bankrupt
or insolvent; or
(d) When that Employer's Board, by written
resolution, terminates its continued participation in, and its
further responsibilities as an Employer under this Plan, provided
that the Employer gives the Sponsor written notice of that
termination at least 90 days prior to that termination's
effective date (unless the parties agree to a shorter notice
period).
Upon termination of an Employer' participation under this
Section, the Trustee is to dispose of that portion of the Trust
Fund assets attributable to the Accounts of the affected
Participants in the manner directed by the Sponsor, subject to
Plan article 15.
ARTICLE 15
AMENDMENT, TERMINATION, AND MERGER
15.1 Amendment
(a) Authority of Sponsor. The Sponsor reserves the
right to amend this Plan at any time and from time to time, in
whole or in part, subject to the following subsections.
(b) Retroactive changes. An amendment may be made
retroactively if it is necessary to bring the Plan or the Trust
Agreement into conformity with the Code and Code regulations or
with any other statute or regulation applicable in order to
permit an Employer to deduct for income tax purposes all (or as
much as the law might allow) money and property contributed to
the Trust Fund.
(c) Consent required. No amendment may increase the
duties or liabilities of the Trustee or the Administrator without
their respective written consents.
(d) Cutback prohibited. No amendment may deprive
any Participant or any Beneficiary of any of the benefits to
which he is entitled under this Plan and the Trust with respect
to benefits accrued prior to the effective date of the amendment.
Except as provided by statute or applicable Treasury regulations,
no amendment (including a change in the actuarial basis for
determining optional or early retirement benefits) may decrease a
Participant's accrued benefit under the Plan other than an
amendment described in Code Section 412(c)(8) or ERISA Section
4281. A Plan amendment that has the effect of eliminating or
reducing an early retirement benefit or a retirement-type subsidy
(as defined in Treasury regulations) or eliminating an optional
form of benefit with respect to benefits attributable to service
before the amendment shall be treated as reducing accrued
benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a Participant
who satisfies (either before or after the amendment) the
pre-amendment conditions for the subsidy. In general, a
retirement-type subsidy is a subsidy that continues after
retirement, but does not include a qualified disability benefit,
a medical benefit, a social security supplement, or a death
benefit (including life insurance).
(e) No diversion. No amendment may provide for the
use of funds or assets held under this Plan and Trust other than
for the exclusive benefit of Participants and Beneficiaries or
for defraying the reasonable expenses of administering the Plan,
except as provided in Plan section 4.7 or this Plan article.
(f) No discrimination. No amendment may be made
that would cause the Plan to discriminate in favor of Highly
Compensated Employees.
(g) Third party rights. Any third party will be
protected in assuming that this Plan and the Trust Agreement have
not been amended until it has received notice of the amendment.
15.2 Termination
(a) Authority of Sponsor. While the Sponsor expects
to continue the Plan indefinitely, continuance of the Plan is not
assumed as a contractual obligation. The Sponsor reserves the
right to discontinue Employer contributions and to terminate the
Plan and Trust at any time.
(b) Required action. The Sponsor may terminate the
Plan and Trust at any time by action of the Board. The Plan
shall terminate automatically on the bankruptcy, insolvency, or
legal dissolution of the Sponsor or on the termination of
business by the Sponsor.
(c) Notice. Notice of a termination must be given
to the Participants, the Administrator, the Trustee, the
Employers, and all necessary authorities. If any authority's
approval is necessary, termination is effective according to that
approval; otherwise, the date of the notice or a later date
contained in the notice is the termination date for purposes of
this Plan article.
(d) Discontinuance of contributions. Each Employer
has the right at any time to reduce or discontinue its
contributions to this Plan. If there is a complete
discontinuance of contributions from all Employers, all Accounts
that were then forfeitable become fully vested. A discontinuance
of Employer contributions is not a termination of the Plan unless
the Sponsor gives the notice described in subsection (c).
(e) Rights of Participants. If, after the
Commissioner of the Internal Revenue has determined initially
that the Plan and Trust meet the qualification requirements of
the Code, this Plan and Trust should be terminated (in whole or
in part) pursuant to the provisions of this Plan article and
determined in a manner consistent with legal authorities, each
Participant (in the case of a complete termination) or each
affected Participant (in the case of a partial termination) shall
be fully vested in his accrued benefit under the Plan as of the
date of such termination, to the extent then funded.
15.3 Plan Termination Distributions
(a) Distributions. When the Plan terminates, as
required by ERISA Section 403(d)(1), the Administrator must
direct the Trustee to allocate the assets of the Trust Fund
(exclusive of any Suspense Account established pursuant to Plan
article 4) among the Participants and Beneficiaries according to
the order specified in ERISA Section 4044. The Trust Fund is the
only source from which a claimant may satisfy any claim based on
a Participant's Account or on his entitlement to assets; he has
no other recourse. After providing for payment of any expenses
properly chargeable against the Trust Fund, and confirming
compliance with all other precedent requirements of law, the
Administrator may direct the Trustee to distribute assets
remaining in the Trust Fund. Assets in any Suspense Account
established pursuant to Plan article 4 must be returned to the
contributing Employers in kind. Except as specifically provided
by law, benefits payable to Participants, Surviving Spouses, or
Beneficiaries must be distributed as provided in Plan articles 7,
8, and 9.
(b) Continuation of Trust. Unless the Sponsor
specifies otherwise, when the Plan terminates, the Administrator
must determine whether immediate or deferred liquidation of the
Trust Fund is in the best interests of the Participants. The
Administrator must communicate that decision to the Participants
and the Trustee, indicating the expected liquidation date or the
terms under which the Trust Fund will continue. If all of the
Employers have resigned sponsorship of the Plan, until actual
liquidation of the Trust Fund, the Administrator must assume all
powers and duties of the Employers (except duties relating to
contributions each Plan Year). Despite the preceding, if the
Sponsor or another Employer, or a Related Company establishes or
maintains another Defined Contribution Plan (other than an
employee stock ownership plan as defined in Code Section
4975(e)(7)), Trust Fund assets may not be liquidated and
distributed to Participants and their Beneficiaries except as
allowed under Code Section 401(k) and any other Code provisions
restricting such distributions on termination.
(c) No further rights. The Trustee must transfer or
deliver property to the Participants, Surviving Spouses, or
Beneficiaries or transfer property to another qualified plan
according to the Administrator's directions, either without
endorsement or endorsed as the Administrator directs. A Trustee
will have no further right, title, or interest in property
distributed. After all distributions are completed, each Trustee
is discharged from all obligations under the Trust Agreement.
Except by statute, no Participant, Surviving Spouse, or
Beneficiary has any further right or claim.
(d) Expenses. After the Plan's termination,
expenses must be paid from the Trust Fund unless at least one of
the Employers affirmatively agrees to pay the expenses.
15.4 Merger, Consolidation, or Succession
(a) Continuation by successor employer. If an
Employer is merged or consolidated with any other business or is
succeeded by a corporation or other legal entity that acquires
substantially all the Employer's assets, the surviving or
purchasing corporation or legal entity may elect to continue this
Plan as to that Employer's Participants.
(b) No continuation. If the Sponsor is liquidated
or merged or consolidated with another company or other legal
entity and the Plan is not continued, the Administrator or a
person designated by the Sponsor succeeds to the functions of the
Sponsor and its Board under the Plan and the Trust Agreement,
including the function of naming a new Administrator. If the
Plan has no Administrator and none has been designated as
provided in this subsection, the Trustee may appoint an
Administrator.
(c) Restrictions. No merger or consolidation with,
or transfer of assets or liabilities to this Plan or from this
Plan to any other Qualified Plan shall be made, unless each
Participant would receive immediately after such event a benefit
(determined as if the Plan had terminated at that time) that is
equal to or greater than the benefit he would have been entitled
to receive under the Plan immediately before such event had the
Plan terminated at that time.
ARTICLE 16
MISCELLANEOUS
16.1 Exclusive Benefit
This Plan has been created for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan and
except as permitted by law, under no circumstances shall any
corpus or income of the Trust Fund or any Plan assets be used for
or diverted to any other purpose. Despite the preceding, the
restrictions of this section shall not prevent the return to an
Employer of any Employer contributions in accordance with the
terms of this Plan.
16.2 No Contract or Inducement
The Plan shall not be deemed to constitute a contract
between any Employer and an Employee, or to be consideration or
inducement for, the employment of any Employee by any Employer.
Nothing contained in the Plan shall be deemed to give any
Employee the right to be retained in the service of any Employer
or to interfere with the rights of such Employer to discharge or
to terminate the service of any Employee at any time without
regard to the effect such discharge or termination may have on
any rights under the Plan.
16.3 No Guarantees
Neither the Trustee, the Sponsor, nor any other Employer
in any way guarantees the payment of any benefit or amount that
may become due under the Plan to any Participant or retired
Participant, or to the legal representative or Beneficiary of any
such Participant or retired Participant. Neither the Trustee,
the Sponsor, nor any other Employer guarantees the payment by any
insurance company of any benefit or amount that may be due under
any policy or contract. Each Participant, retired Participant,
or legal representative or Beneficiary of any deceased or retired
Participant, shall look solely to the assets of the Trust Fund
for the payment of benefits under the Plan.
16.4 Non-Alienation of Benefits
(a) Prohibitions. Except as specifically provided
in Code Section 401(a) and subsection (b), no benefit payable
under the Plan will be subject in any manner to anticipation,
assignment, garnishment, or pledge, and any attempt to
anticipate, assign, garnish or pledge the same will be void. No
benefits will be in any manner liable for or subject to the
debts, liabilities, engagements or torts of any Participant. If
any Participant is adjudicated bankrupt or attempts to
anticipate, assign, or pledge any benefits, then, in the
discretion of the Committee, such benefits will cease, and the
Committee will have the authority to cause the same or any amount
thereof to be held or applied to or for the benefit of such
Participant, his spouse, his children or other dependents, or any
of them, in such manner and in such proportion as the Committee
may deem proper.
(b) QDRO exception. Despite any other Plan
provisions to the contrary, the Administrator must comply with
the terms of a Qualified Domestic Relations Order as described in
Plan article 7. The Plan is not liable for any payments pursuant
to a domestic relations order until the Administrator has
received the order and determined that it is a Qualified Domestic
Relations Order.
16.5 Changes in Capital Structure
The existence of the Plan shall not limit or in any way
affect the right of the Sponsor and its Related Companies to
change their capital structure or their accounting practices in
any form or manner the Sponsor or a Related Company may deem
advisable.
16.6 Errors and Omissions
(a) In general. It shall be the responsibility of
those individuals and entities charged with the administration of
the Plan to see that it is administered in accordance with its
terms so long as it is not in conflict with the ERISA. In the
event an innocent error or omission is discovered in the
operation or administration of the Plan which, in the judgment of
the Committee would cost more to correct than is warranted by the
error or omission and which in such Committee's judgment did not
result in discrimination in operation in favor of the prohibited
group of officers, shareholders and highly compensated Employees,
then, to the extent such adjustment will not, in such committee's
judgment, result in discrimination in operation in favor of
individuals in such prohibited group, the compensation committee
may authorize such equitable adjustments as it deems necessary or
desirable to correct the error or omission, including but not
limited to the authorization of additional Employer contributions
designed, in a manner consistent with the goodwill intended to be
engendered by the Plan, to put Participants in the same relative
position they would have been in but for such error or omission.
Any contribution made pursuant to this section shall be
considered a Special Contribution.
(b) Mistaken 401(k) Contributions. If a mistake is
made and the Trustee receives funds that are nominally a 401(k)
Contribution but that should have been paid directly to a
Participant, those funds must not be allocated to that
Participant and must be returned to that Participant according to
the provisions in this Plan governing Excess Deferrals and Excess
401(k) Contributions. If those funds cannot be returned entirely
to that Participant, then to the extent possible, those funds
must be returned to the contributor according to subsection (a).
To the extent that the funds cannot be returned to the
contributor, they must be considered as soon as possible to be a
401(k) Contribution or some other Employer contribution, as
elected by the contributor, for the first Plan Year for which the
funds may be allocated. The appropriate Employer must pay an
additional identical amount (excluding appropriate withholding
according to law) directly to the Participant who should have
received those Funds.
16.7 Construction
(a) Interpretation consistent with law. This Plan
has been created for the exclusive purpose of providing benefits
to Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan. The Plan shall be
interpreted in a manner consistent with applicable provisions of
the Code and of ERISA.
(b) Definitions. Any term with an initial capital
not expected by normal capitalization rules is a defined term
according to the definitions of the Plan and the Trust Agreement
and the Code and ERISA.
(c) Governing law. This Plan must be construed,
enforced, and administered in accordance with the laws of the
Commonwealth of Virginia (including Virginia's choice-of-law
rules, except to the extent those laws would require application
of the law of a state other than Virginia), except to the extent
that the laws of the United States of America take precedence and
preempt state laws.
(d) Headings and subheadings. The headings and
subheadings in this Plan have been inserted for convenience of
reference only and are to be ignored in any construction of the
provisions of the Plan.
(e) Construction rules. In the construction of the
Plan the masculine shall include the feminine and the singular,
the plural in all cases where such meanings are indicated by the
context.
(f) Invalid provisions. If any provision of this
Plan is determined to be invalid or not enforceable, that fact
does not affect the validity or the enforceability of any other
provision.
<PAGE>
Exhibit 5.1
July 11, 1994
Board of Directors
Crestar Financial Corporation
919 East Main Street
Richmond, Virginia 23219
Crestar Financial Corporation --
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Crestar Financial Corporation, a
Virginia corporation (the "Company"), in connection with the
filing of a registration statement under the Securities Act of
1933, as amended, with respect to 300,000 shares of the Company's
Common Stock, par value $5.00 per share (the "Shares"), to be
offered pursuant to the Crestar Merger Plan for Transferred
Employees (the "Plan").
In rendering this opinion, we have relied upon, among other
things, our examination of the Plan and of such records of the
Company and certificates of its officers and of public officials
as we have deemed necessary. In connection with the filing of
such registration statement, we are of the opinion that:
1. The Company is duly incorporated, validly existing
and in good standing under the laws of the Commonwealth of
Virginia; and
2. The Shares have been duly authorized and, when issued
in accordance with the terms of the Plan, will be legally issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to such
registration statement.
Very truly yours,
s/ Hunton & Williams
Hunton & Williams
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Crestar Financial Corporation:
We consent to the use of our report incorporated herein by
reference, which report appears in the December 31, 1993 annual
report on Form 10-K of Crestar Financial Corporation. Our report
refers to changes in accounting for postretirement benefits other
than pensions and accounting for income taxes.
s/ KPMG Peat Marwick
Richmond, Virginia
July 11, 1994
